A California federal judge held off on deciding whether Nexstar Media Group Inc. can resume its integration of Tegna Inc. following an hourslong hearing on whether a merger creating the largest local TV operator in the US violates antitrust law.

US District Judge Troy L. Nunley in Sacramento said he would issue a written order shortly on whether to extend a two-week halt to the deal. Nunley’s March 27 order required Nexstar to continue operating Tegna as a separate company while he considers two antitrust lawsuits seeking to prevent the companies from combining.

Nexstar and Tegna closed their $3.5 billion deal March 19 after getting approval from the US Justice Department and the Federal Communications Commission. A group of states, led by California, and satellite television company DirecTV filed separate suits, alleging the merger will hurt competition for broadcast television in dozens of markets around the country.

Nexstar is already the largest owner of local broadcast stations, including 14 geographic regions where it owns two or three affiliates that air content from the so-called Big Four — Walt Disney Co.’s ABC, Paramount Skydance Corp.’s CBS, Fox Corp. or Comcast Corp.’s NBC.

The deal expands Nexstar’s reach to more than 80% of US households, according to the lawsuits. The combined company would control 228 broadcast stations in 132 local markets, including 27 new areas where it would own two of the Big Four affiliates and three where it would control three of the four, the states and DirecTV said.

Rising fees

Alex Okuliar, a lawyer for Nexstar, argued that DirecTV and the states were wrong to focus on concentration in local geographic markets since negotiations between station owners like Nexstar and distributors like DirecTV take place on the national level.

“There are no negotiations on specific markets,” said Okuliar, adding that the retransmission agreements are “portfolio-wide.”

DirecTV and others need to carry local broadcast stations because they carry sports and local news content that viewers demand, said Glenn Pomerantz, a lawyer for the satellite TV company. He disputed that DirecTV can simply get content deals with national players like Disney and Netflix Inc.

“Netflix isn’t going to give us the sports that people watch. They can’t give us the local news,” he said.

The prices that Nexstar can charge DirecTV and other companies that air its content has risen dramatically, Pomerantz said.

While the companies avoided using numbers, since distribution deals are generally confidential, Nunley offered his own observations: In 2019, distributors paid $9.64 per subscriber per month for all content from all Big 4 stations, the judge said. By 2025, the amount per subscriber per month had increased to $19.30, he said, an annual growth rate of more than 12%.

Nexstar’s Okuliar said those fees have increased because streaming services like Amazon.com Inc.’s Prime have made the market for content more competitive.

“The value and cost of content has gone up,” Okuliar said. “As a consequence, our rates have gone up over time.”

Laura Antonini, a lawyer for the state of California, argued that the merger would reduce the output, variety and quality of local broadcast news. She cited a University of Delaware study that found that Nexstar airs the most duplicated news content among all US TV broadcasters.

“Nexstar has an established track record of consolidating newsrooms,” Antonini said. “They are going to be duplicating news. That’s extremely harmful to democracy and to citizens of this state.”

Nexstar’s Okuliar dismissed the arguments related to local news as “allegations and suppositions,” and read off a list of awards that Nexstar’s journalists won in recent years. He urged the judge to consider the FCC’s finding that the deal was in the public interest.

The cases are California v. Nexstar Media Group, 26-at-487, US District Court, Eastern District of California (Sacramento); DirecTV v. Nexstar, 26-at-488, US District Court, Eastern District of California (Sacramento).

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