What’s at stake in this case?
Nexstar Media Group, the largest owner of local broadcast stations in the country, purchased the second largest owner, Tegna, which eight states and others contend would raise consumer prices and have other anticompetitve effects harming affordability.
What has happened in this case?
Shortly after the announcement of the proposed merger last year, the Federal Communications Commission (FCC) and the Department of Justice (DOJ) began reviews of its effects on competition, as required by federal law. President Trump personally and publicly supported it, in order to “knock out the Fake News” that he alleges is broadcast on local stations. Both agencies approved the merger, despite an FCC rule that ordinarily prohibits a single entity from owning tv stations serving more than 39% of the national market. Under the merger, Nexstar would reach more than 54%.
Eight states and Direct TV filed a federal lawsuit in California to stop the merger. They contend that the merger will “drive up the cost of television service to tens of millions of Americans, shutter local newsrooms around the country, substantially reduce competition in dozens of local markets, and reduce the quality of news,” plus have other harmful effects.
After granting a temporary restraining order to pause the merger, Chief judge Troy Nunley of the Eastern District of California, who was nominated by President Obama, held an in-person hearing in April on whether to grant a preliminary injunction to stop the merger until the case is concluded. Judge Nunley concluded that the states and Direct TV were “likely to prevail” on their contentions concerning the harm that the merger would cause and stopped the merger from going forward in his April 17 decision in In re Nexstar-Tegna Merger Litigation. Nexstar has already announced it will appeal.
Why is the decision important?
Judge Nunley’s ruling to stop the Nexstar merger will prevent price increases to millions of Americans, improving affordability of news and other media. It will help preserve local news media and stop Trump’s effort to squelch it. We do not know what will happen on appeal, where Trump judges on the Ninth Circuit may well play an important role. The case also illustrates the importance of our federal courts to affordability issues and the significance of having fair-minded judges on the federal bench.
