AG Jackson fighting proposed TV merger

Attorney General Jeff Jackson says North Carolina would be one of the most affected states in the country under Nexstar’s proposed $6.2 billion acquisition of Tegna, combining two of the largest local television broadcast companies in the country

In a release, Jackson notes that more than two million TV households across Charlotte, the Triad, and the northeastern North Carolina region would be impacted.

“Nexstar wants to buy one of its biggest competitors, gain more control over local news stations and Sunday afternoon NFL broadcasts, and charge millions of North Carolina families more for television. That’s exactly why antitrust laws exist, and I’m going to court to stop it,” said Jeff Jackson.

Nexstar and Tegna are two of the largest TV broadcasters in the country. This acquisition would combine them into a single company owning over 260 television stations across 44 states, reaching roughly 80 percent of American households, double the FCC’s 39 percent national ownership cap.

The combined company would control over 220 affiliates of FOX, NBC, ABC, and CBS.

In the affected areas, Nexstar and Tegna both own stations, meaning in those areas the merger would remove a competitor.  The merger would lead to ownership of two of the major network affiliates in Charlotte, the Piedmont Triad and in the Hampton Roads, Virginia area.  The Outer Banks and parts of northeast North Carolina are in the Norfolk-based market. North Carolina is among the most affected states in the country because the merger creates overlaps in some of the state’s largest TV markets.

Together, these markets represent over two million TV households. The Charlotte and Greensboro markets alone account for nearly half of all TV households in North Carolina.

Jackson contends that if Nexstar owns additional stations in a market, it can threaten to black out two of four major channels at once if your provider won’t pay the new price. Your cable or satellite company will have no real choice but to pay. That cost goes directly onto your monthly bill.

Nexstar already charges the highest average retransmission fees of any broadcaster in the country. And Nexstar’s own chief financial officer told investors there are “about $300 million of synergies” in this merger – and that roughly 45 percent of those savings would come from collecting higher fees from cable and satellite companies. That’s approximately $135 million extracted from TV providers, and ultimately from families, every year.

Higher bills are not the only consequence. When Nexstar buys a competitor in the same city, it “consolidates” the newsrooms—effectively removing one of them. The company has an internal name for this: the “Consolidation Playbook.”

In Indianapolis, for instance, Nexstar owns both the FOX and CBS affiliates. Those two stations – supposedly competitors – now share the same anchors, the same reporting team, the same news director, and the same website.

That pattern is central to the deal’s economics. Nexstar’s chief financial officer told investors the overlap stations are “an area where there’s a significant portion of those synergies” – meaning the company plans to collapse two newsrooms into one wherever it can.

The federal government measures market concentration using a standard index. A merger is presumed illegal when the post-merger concentration exceeds 1,800 on this index and the merger increases it by more than 100 points.

Jackson says in every single North Carolina market affected by this deal, the merger far surpasses the threshold the federal government uses to determine whether a proposed merger is likely to have anticompetitive effects, such as higher prices or lower quality.

The lawsuit asks the court to permanently block the merger under Section 7 of the Clayton Act, the federal antitrust law that governs mergers.

Attorney General Jackson is joined by the attorneys general of California, Colorado, Connecticut, Illinois, New York, Oregon, and Virginia.