Local TV station merger plan challenged by states on grounds it would reduce competition
Local news and cable pricing could be threatened in affected markets, the states claim
Do consumers care who owns their local TV stations? Maybe not but if there’s too much concentration — too many stations owned by the same company — consumer advocates say that can affect the price the station charges cable subscribers and also influence the local news content, sports coverage and other essential services.
That’s the case with the Nexstar-Tegna merger, which would combine two of the biggest owners of local TV stations in the country; the attorneys general of eight states are challenging that in court.
Nexstar is currently the country’s largest local television broadcasting group, controlling more than 200 stations in 116 U.S. markets reaching 220 million people. Tegna — formerly the Tribune Company — owns 64 television stations in 51 different media markets. If the merger is completed, 31 media markets across the country where Nexstar and Tegna each own competing stations would see diminished competition.
80% of U.S. households
The merged entity would own 265 television stations across 44 states and the District of Columbia, reaching ~80% of U.S. households. The deal would combine many local stations that currently compete against each other, potentially affecting subscription prices, advertising rates, programming decisions and news coverage.
The merger would give Nexstar control over an unprecedented 221 “Big 4” stations. The Big 4 stations are the well-known local stations affiliated with the FOX, NBC, ABC, and CBS networks. Big 4 stations usually are the highest ranked in terms of audience share and ratings, largely because of unique offerings such as local news, sports, and highly ranked primetime programs.
In many markets, local news is still hotly competitive and stations put a lot of time and money into their local news operation. Opponents of the merger say they’ll have little incentive to do that if the merger goes through.
There’s also the little matter of retransmission rights, sports blackouts and other complex inside jargon that comes into play. Less competition can mean higher fees for popular sports programs, for example.
A variety of options
“Competition among local TV stations allows consumers to enjoy a variety of affordable options for quality coverage of news, sports, and more,” said New York Attorney General Letitia James. “This illegal merger threatens local news and could raise fees for consumers by combining hundreds of TV stations under the same owner. I’m suing to stop Nexstar’s illegal merger with Tegna to keep cable bills down and ensure New Yorkers can access the independent local news options they count on.”
Illinois Attorney General Kwame Raoul pointed to the St. Louis market — which includes 14 counties in southwestern Illinois. Nexstar already owns the FOX- and CW-affiliated stations, while TEGNA owns the NBC-affiliated station. Nexstar has already reportedly cut newsroom and on-air staff at WGN-TV, Chicago, in anticipation of the merger, raising serious concerns about what more consolidation could mean for local journalism across the state.
The AGs quoted a recent study, which found that Nexstar is the worst offender of “news duplication,” a practice in which station owners air identical local news content across multiple stations. Nexstar also has an established track record of consolidating newsrooms when it owns more than one station in each media market.
These tactics eliminate independent news operations and diminish diversity in news coverage at a time when local news is already under threat. If the merger succeeds, communities would face fewer choices for local news in media markets across the country.
Attorney General James and the coalition allege that the proposed merger violates the federal Clayton Act by unlawfully limiting competition. The lawsuit seeks a court order declaring the merger illegal and preventing it from being carried out.
Joining James in filing this lawsuit are the attorneys general of California, Colorado, Connecticut, Illinois, North Carolina, Oregon, and Virginia.