By Michaela Gordoni
DirecTV just filed an antitrust suit that claims Nexstar Media’s bid to buy Tegna violates antitrust laws that would harm consumers.
Attorney generals for California, Colorado, Connecticut, Illinois, New York, North Carolina, Oregon and Virginia also filed a joint suit, Variety reported.
“If this merger moves forward, cable prices will spike for consumers in New York and across the country,” said Letitia James, New York attorney general, on Thursday.
The DirecTV complaint says the Nexstar-Tegna merger represents a concentration of broadcast media “without precedent” and will “irreparably drive up consumer costs, reduce local competition, shutter local newsrooms, and increase both the frequency and duration of blackouts of key local teams and network programming.”
“DirecTV supports the action taken by the states and has determined it is necessary to join this effort to protect competition and consumers,” Michael Hartman, DirecTV’s general counsel and chief external affairs officer, said. “We have consistently made clear that this merger is anticompetitive and not in the public interest and, if it goes forward, will trigger a wave of similar consolidation.”
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President Donald Trump and FCC chairman Brendan Carr support the merger. Trump believes mergers like this help eliminate “fake news.”
Nexstar owns 164 full-power local broadcast stations across 114 Nielsen-rated media markets, and reaches approximately 70% of U.S. households. If it acquires Tegna’s 64 stations, it would reach 80% of households. Nexstar would also have ownership of two or more affiliates of ABC, CBS, Fox and NBC in more than 30 markets in over 25 million U.S. homes.
The complaint claims the merger will “exacerbate the already sharp rise in retransmission consent fees charged by local station groups.”
Nexstar has said the merger is needed to better compete with tech companies like Meta and Google, which have a trump card over local programming, Deadline reported.
DirecTV says retransmission fees have increased more than 5000% over the past 20 years, from approximately $214.6 to an approximate $11.9 billion.
“The acquisition would give Nexstar control of 228 broadcast stations reaching 80% of television households in 132 local markets and increase concentration in dozens of local markets by more than 10 times the amount that is presumptively unlawful under the antitrust laws,” the DirecTV complaint states. “That enormous increase in market power will enable Nexstar to raise prices and reduce the amount, variety and quality of local news without having to worry about losing business to competition.”
“By acquiring Tegna’s competing stations, Nexstar will deprive distributors and consumers of the benefits of competition: lower prices and higher quality. Instead, Nexstar will be able to raise prices and reduce quality. DirecTV and its subscribers will end up paying more for less. The antitrust laws forbid acquisitions that substantially lessen competition, enabling acquirers to charge more while offering less.”
America’s Communications Association (ACA Connects), a trade group representing small and midsize TV and broadband providers, agrees with DirecTV.
“We agree that the proposed Nexstar-Tegna deal would hand even more market power to the nation’s largest broadcast conglomerate — power that history shows will be abused to drive up carriage fees and raise television bills for hardworking Americans,” Grant Spellmeyer, president and CEO of America’s Communications Association, said. “This further skewing of the marketplace will hit smaller cable operators and their largely rural customer base the hardest.”
Nexstar could get unprecedented market power through this merger — and it’s definitely going to hurt some consumers if it doesn’t get blocked.
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