Attorneys representing DirecTV in a Sacramento U.S. federal district court have asked for a modification of its order that effectively puts a pause on Nexstar Media Group’s ability to fully integrate the assets it acquired from TEGNA.
The 15-page petition, from no less than twelve attorneys representing DirecTV, comes as TEGNA stations spent the last several days restoring their familiar logo to newscasts and websites, as TEGNA Inc. is effectively a subsidiary of Nexstar until the courts decide what’s next.
The modification includes several requests from the direct broadcast satellite TV service provider, which asserts a fully merged Nexstar and TEGNA will lead to higher retransmission consent fees due to less competition in the marketplace.
It comes after the Sacramento court issued a Temporary Restraining Order against Nexstar from integrating the TEGNA properties; Nexstar is maintaining the status quo through a “hold-separate” order.
Nexstar told the Sacramento court compliance with the TRO is “particularly difficult” and could cause “operational harm” due to the “many” integration steps that it has “already completed” post-closing.
To little surprise, DirecTV’s attorneys balked, stating, “Nexstar should not be allowed to complain that a situation it knowingly created in the face of this litigation is purportedly rendered more difficult or costly by a hold-separate order that it surely understood it might face.”
Yet, DirecTV has little objection to most of the modification and clarification proposals Nexstar offered with respect to the TRO. For the DBS provider, wording is the key concern. “A few of Nexstar’s proposals are overbroad, and should be narrowed to effectuate the purposes of the hold-separate order,” DirecTV attorneys state.
For instance, DirecTV’s legal team argues, “Nothing in the TRO prevents Nexstar from investing in more local news in acquisition markets, which would have the effect of increasing such programming ‘in the aggregate.’ Nor does the TRO prevent TEGNA from making similar investments. While Nexstar describes its plans for ‘provid[ing] the former TEGNA stations with access to Nexstar’s Washington, D.C. news bureau,’ its FCC commitments impose no such obligations.”
Then, there is the statement that Nexstar has agreed to “offer those MVPDs with which Nexstar has an existing retransmission consent agreement” that expires after the TEGNA Closing Date and before November 30, 2026, an extension of this agreement at the existing rates through November 30. Again, DirecTV argues, nothing in the TRO prevents Nexstar from offering such an extension. “The ‘existing retransmission consent’ agreements that Nexstar is a party to covered Nexstar’s stations, and Nexstar can offer renewal of retransmission consent for those stations on any terms it wishes (just as it could before consummating the merger).”
With TEGNA’s day-to-day operations still separate from Nexstar, DirecTV is asking the court to bar Nexstar from appointing current employees, or former employees employed within the prior six months, as TEGNA officers. Conversely, no TEGNA officer shall be an officer of Nexstar.
Lastly, DirecTV takes aim at the post-merger employment roster for former TEGNA stations.
“[G]iven that TEGNA’s staffing is central to its on-going viability as an independent competitor, DirecTV requests that the court require that Nexstar provide additional details and frame any authority to reduce the size of TEGNA’s workforce narrowly,” DirecTV asks. “In particular, Nexstar should be permitted to execute such layoffs only to the extent that it provides a declaration under penalty of perjury from a TEGNA employee with personal knowledge that a workforce reduction reasonably detailed as to the functional areas to be impacted and the scale of the reduction was planned prior to the announcement of the Nexstar-TEGNA transaction based on an assumption of continued separate operations.”
For DirecTV and its dozen lawyers, “Without answers to these questions—and without a more narrowly framed authorization—Plaintiffs and the Court are left with no assurance that any workforce reductions Nexstar seeks to make would have occurred absent the merger and therefore no assurance that such staffing reductions would preserve TEGNA’s ability to compete rather than diminish it—although the latter outcome seems more likely.”
