The Chief U.S. District Judge overseeing the antitrust case lobbed against Nexstar Media Group and TEGNA for their regulatorily-approved merger — which he effectively blocked with a restraining order forcing a “hold separate” situation for the entities — has ruled that TEGNA’s Board of Directors cannot be comprised of Nexstar C-Suite leaders.
Troy Nunley late Wednesday clarified his Preliminary Injunction on behalf of DirecTV and a coalition of state Attorneys General led by California’s Rob Bonta by stating his April 17 decision prohibits current and former Nexstar officers, employees, directors, consultants, or other affiliated personnel from serving on TEGNA’s board.
The request for Nunley’s clarification of what the preliminary injunction bars came after press reports in May that Nexstar executives were in key board seats and that TEGNA management remaining post-merger, according to Bloomberg, only served in “limited roles.”
As of June 12, Nexstar disclosed to the court that its five-member TEGNA Board is comprised exclusively of current and former Nexstar executives: Perry Sook (Nexstar’s Chief Executive Officer); Michael Biard (Nexstar’s President and Chief Operating Officer); Lee Ann Gliha (Nexstar Exec. Vice President and Chief Financial Officer); Elizabeth Ryder (Nexstar Executive Vice President/General Counsel and Secretary to Nexstar Board of Directors); and Timothy Busch, a former President of Nexstar Broadcasting Inc. and Nexstar consultant.
Sook on May 7 told investors that “we have the ability to appoint management inside of TEGNA” as they “operate as a subsidiary.” However, Nunley sees it much differently. In his ruling issued on Thursday afternoon, he explained that his court’s order allowed Nexstar to appoint or reappoint TEGNA officers only “to the extent necessary to permit TEGNA to fulfill its obligations under this Order,” prevented Nexstar from appointing “current Nexstar employees, or former employees employed within the prior six months, as TEGNA officers,” and stated that “no TEGNA officer shall be an officer of Nexstar.
Furthermore, Nunley chided Nexstar for a “hyper-technical reading that the Order does not contain a similar prohibition” on Nexstar employees or officers serving as TEGNA directors, calling it “entirely disingenuous — especially given that the Order refers to officers because that is how Nexstar worded its modification request … It is shocking that Defendants think installing a Board of Directors comprised primarily of Nexstar executives would not create influence over TEGNA management. This undermines TEGNA as an independent entity and violates the preliminary injunction.”
What does this mean for Nexstar and TEGNA? They have 10 days to file a status report with the court and immediately take “all actions necessary” to comply with the preliminary injunction as it pertains to the TEGNA board.
Furthermore, a clearly irate Nunley ordered Nexstar to ensure compliance with the preliminary injunction as clarified by providing the state AGs and DirecTV with the following documents and information on a monthly basis, beginning within ten days and continuing until final judgment:
- TEGNA Board Meeting Minutes
- Any material changes to TEGNA budgets, forecasts, or strategic operating plans
adopted or approved by TEGNA in the preceding month - Any periodic financial or operational reports (however titled or styled) presented
to the TEGNA Board - Any change in TEGNA’s directors or officers
The order dated August 5 was entered into the court docket on Thursday.
