Key Points
- A multi-state coalition led by California and New York launched antitrust litigation against Nexstar’s $6.2 billion Tegna purchase
- The merged entity would control 60% of American television households, significantly exceeding the statutory 39% threshold
- FCC Chair Brendan Carr and President Trump have expressed support for the transaction
- DirecTV launched separate litigation, expressing concerns about potential carriage fee increases
- Nexstar prepares investment-grade bond offering for next week to secure deal financing
Eight state attorneys general launched coordinated antitrust litigation Wednesday seeking to prevent Nexstar Media Group from completing its proposed $6.2 billion Tegna acquisition. Federal court in Sacramento received the filing.
Nextstar Media Group, Inc., NXST
The coalition—featuring California, Colorado, and New York among others—contends the transaction would generate excessive market power in local broadcasting. California Attorney General Rob Bonta emphasized that consolidation reduces diverse perspectives in community journalism.
Nextar currently holds the position as America’s leading local television station operator. Tegna maintains top-five status, controlling or managing 64 broadcast facilities nationwide.
Regulatory statutes limit individual companies to 39% coverage of American television households. The proposed Nexstar-Tegna combination would achieve 60% penetration, necessitating regulatory framework modifications.
FCC Chair Brendan Carr has expressed willingness to advance the transaction toward approval. President Trump has voiced endorsement of the combination through Truth Social, suggesting an enlarged Nexstar would provide balance against what he characterized as “the Fake News National TV Networks.”
State prosecutors allege the consolidation would escalate subscription costs for cable and satellite television consumers. Their filing further contends the merger would diminish local news programming quality.
New York Attorney General Letitia James stated her pursuit of an injunction encompassing all 44 states where both companies maintain broadcasting operations. She anticipates additional states joining the litigation across party boundaries.
California’s Bonta highlighted that Nexstar has declined to propose station divestitures to address competitive concerns.
Satellite Provider Launches Parallel Legal Challenge
DirecTV, serving over 8 million pay-television subscribers, initiated separate litigation in Sacramento federal court. The satellite distributor contends Nexstar would leverage enhanced market position to escalate fees charged to content distributors.
“Nexstar will black out stations or threaten to do so as means of coercing the multichannel video programming distributor to agree to its pricing demands,” DirecTV stated in its complaint.
Nextar and Tegna have yet to provide public statements regarding the litigation.
The Justice Department’s antitrust division maintains an ongoing review of the proposed transaction. A DOJ representative did not provide updates on the review’s current status.
Debt Offering Advances Despite Legal Challenges
Nextar continues advancing deal financing arrangements despite mounting legal obstacles. The broadcaster plans to access investment-grade bond markets as early as next week, according to informed sources.
Bank of America has signaled to market participants that Nexstar will obtain a second investment-grade assessment from Fitch, enabling the high-grade debt issuance to proceed. Nexstar is simultaneously evaluating high-yield unsecured note options as part of comprehensive financing arrangements.
The debt structure aims to refinance $5.73 billion underwritten by Bank of America, JPMorgan Chase, and Goldman Sachs. Wednesday marked the deadline for a $2.75 billion leveraged loan component associated with the transaction.
Nextar holds noninvestment-grade issuer classifications from both S&P and Moody’s, though its secured obligations carry BBB- ratings from S&P—the minimum investment-grade threshold. The broadcaster requires a second high-grade assessment on secured debt to execute the investment-grade bond strategy.
Nextar reached agreement last August to acquire Tegna in the $6.2 billion transaction. NXST shares declined 4.73% following disclosure of the lawsuit.
