Federal Court Blocks Nexstar-TEGNA Broadcast Merger, Citing Anticompetitive Effects in 31 Local Markets

The case centers on Nexstar's completed acquisition of TEGNA, which closed March 19, 2026 — the same day the U.S. Department of Justice announced early termination of its antitrust review and the FCC's Media Bureau approved the license transfers. Nexstar is already the largest owner of local broadcast television stations in the United States, with 164 stations across 114 Designated Market Areas reaching 70 percent of American households and annual revenues of approximately $5.4 billion. TEGNA, the second-largest owner of English-language broadcast stations, owns 64 stations across 51 DMAs and reached 40 percent of U.S. households in 2025. The combined entity would control 228 stations reaching 80 percent of television households in 132 local markets.

DIRECTV, LLC filed suit the evening before the deal closed, followed the same day by a coalition of eight states and the Commonwealth of Virginia, all alleging the merger violates Clayton Act Section 7. DIRECTV, a distributor that purchases retransmission consent licenses to carry local broadcast stations to its subscribers, contends Nexstar's purpose in acquiring TEGNA is to drive up the fees it can extract from DIRECTV and other distributors, forcing them to raise prices on their subscribers. The plaintiff states, suing as parens patriae, assert the merger creates a broadcast behemoth that will raise prices for television consumers and degrade the quality and quantity of broadcast content such as local news and sports.

The court defined the relevant product market as retransmission consent licenses for Big Four broadcasting stations and the relevant geographic markets as individual DMAs. On market definition, the court rejected Nexstar's argument that Big Four stations are complements rather than substitutes, citing Nexstar's own SEC filings stating that it competes against in-market broadcast station operators and TEGNA's 10-K acknowledging that it competes with fellow broadcasters for carriage fees. The court also declined to include streaming and digital services in the product market, crediting testimony from DIRECTV's Chief Content Officer Rob Thun that DIRECTV has no reasonable alternative sources for Big Four broadcast programming and that networks direct DIRECTV to obtain content from local affiliates.

On the merits, the court found that plaintiffs established a prima facie case of anticompetitive harm. DIRECTV's expert, Dr. Carl Shapiro, a Professor of Economics at the University of California Berkeley and former Deputy Assistant Attorney General for Economics at the DOJ Antitrust Division, calculated that the merger gives Nexstar a combined market share of 30 percent or greater in all 31 overlap markets, exceeding 50 percent in 16 of those markets. Dr. Shapiro further calculated that post-merger HHIs range from 3,361 to 7,422 across the 31 overlap markets, with HHI increases ranging from 413 to 3,433 points — all far above the thresholds in the Merger Guidelines that trigger a structural presumption of harm to competition. A separate analysis by Olga Haislip, a Research Data Specialist at the California Department of Justice's Antitrust Law Section, reached similar conclusions across 13 overlap DMAs using both retransmission revenue data and television ratings data.

The court found particularly significant that the merger would give Nexstar additional Big Four affiliates in 31 DMAs where it already owns at least one such station, creating 27 new duopolies and 3 new triopolies. Plaintiffs presented evidence that Nexstar has an established track record of consolidating newsrooms when it owns more than one station in a DMA and that Nexstar's own investor materials describe acquisitions as a way to gain scale and leverage with the ultimate aim of raising prices. The court also noted that Nexstar's blackout threats become substantially more coercive when it controls two or three Big Four affiliates in a single market, because subscribers risk losing access to multiple sources of live sports and local news simultaneously.

The court had issued a temporary restraining order on March 27, 2026, requiring Nexstar to preserve TEGNA as a separate and independent entity. The preliminary injunction extends those hold-separate terms pending adjudication on the merits. The court consolidated the DIRECTV action with the plaintiff states' action on March 31, 2026, though it subsequently struck its earlier order requiring a consolidated complaint, permitting the parties to maintain separate complaints.