Antitrust Law Daily Nexstar and Tribune must divest televisions stations to resolve Justice Department concerns over proposed $6.4 billion merger
Thursday, August 1, 2019

Nexstar and Tribune must divest televisions stations to resolve Justice Department concerns over proposed $6.4 billion merger

By Jody Coultas, J.D.

A settlement agreement reached with the Department of Justice, if approved by the court, will require the merging companies to divest stations in thirteen markets around the country.

To settle a complaint filed by the Justice Department’s Antitrust Division and the Attorneys General of Illinois, Pennsylvania, and Virginia, Nexstar Media Group Inc. and Tribune Media Company have agreed to divest broadcast television stations in thirteen markets as a condition of resolving a challenge to the proposed $6.4 billion merger between Nexstar and Tribune, the Justice Department announced (U.S. v. Nexstar Media Group Inc., Case No. 1:19-cv-02295).

Nexstar owns 171 television stations in 100 local markets and reported revenues of $2.8 billion last year. Tribune owns 44 television stations in 33 local markets and earned more than $2 billion last year. In December of last year, Nexstar announced that it had agreed to buy Tribune in a deal that would make it the largest local television station operator in the U.S.

The Antitrust Division and Attorneys General filed a complaint in the federal district court in the District of Columbia to block the proposed merger, arguing that the combined company would likely charge cable and satellite companies higher retransmission fees to carry the combined company’s broadcast stations. The merger would also enable the company to charge local businesses and advertisers higher prices for spot advertising in the divestiture markets.

If approved by the court, the settlement agreement would remedy the competitive harms alleged in the complaint. Specifically, the divestitures would resolve antitrust concerns related to the licensing of retransmission consent and the sale of broadcast television spot advertising that would otherwise result from the merger. Nexstar must sell one or more stations currently owned by either Nexstar or Tribune in each of the thirteen markets.

The markets at issue are centered in Davenport, Iowa; Des Moines, Iowa; Ft. Smith, Arkansas; Grand Rapids, Michigan; Harrisburg, Pennsylvania; Hartford, Connecticut; Huntsville, Alabama; Indianapolis, Indiana; Memphis, Tennessee; Norfolk, Virginia; Richmond, Virginia; Salt Lake City, Utah; and Wilkes-Barre, Pennsylvania.

Companies: Nexstar Media Group Inc.; Tribune Media Company

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