KTLA-TV owner Nexstar violated court order, a federal judge finds
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A federal judge blasted KTLA-TV Channel 5’s owner, the Texas-based Nexstar Media Group, on Thursday for violating a court order and for failing to disclose key information.
U.S. District Judge Troy L. Nunley found that Nexstar’s actions violated terms of an April preliminary injunction that was designed to prevent the media company from moving forward with its $6.2-billion takeover of rival TV station group Tegna Inc. and meddling with its management.
The judge called Nexstar’s actions “brazen.” He demanded the company begin submitting monthly reports and said a special master would be appointed to help manage the antitrust case and monitor Nexstar for compliance.
And Tegna’s recently constituted board — filled with high-level Nexstar officials — must be dissolved.
A Nexstar spokesman wasn’t immediately available for comment.
Nexstar unveiled its Tegna takeover a year ago. At the time, TV stations were lobbying the Federal Communications Commission to relax station ownership rules, a move that occurred Thursday in a split decision.
Last spring, California Atty. Gen. Rob Bonta and seven other state attorneys general challenged Nexstar’s proposed acquisition, alleging the roll-up of more than 250 local TV stations would violate a U.S. antitrust law intended to protect consumers and competitive markets.
Bonta and other plaintiff states argued the consolidation would lead to local newsrooms shuttering, particularly in smaller markets, such as Sacramento and Indianapolis, where Nexstar would own multiple network affiliates.
The judge ruled that Nexstar “must immediately cease all ongoing action” to consolidate Tegna stations.
Despite Bonta’s lawsuit, Nexstar hurried the next day to finalize its purchase of Virginia-based Tegna and swallow the operation. Tegna disbanded, its shareholders were paid and top Tegna executives exited.
Nunley, who is based in Sacramento, is overseeing the case. He initially issued a restraining order, followed by a more lengthy preliminary injunction that ordered Nexstar to halt its integration while the court case was pending.
Tegna should continue to operate as a separate business unit — free from the influence of Nexstar, the judge ruled.
Nexstar Media Group has closed its deal to buy Tegna, despite opposition from some state attorneys general.
But on the day that Nunley issued the restraining order, Nexstar formed a new Tegna board filled with Nexstar officers, including Chief Executive Perry Sook, Chief Financial Officer Lee Ann Gliha, and later Mike Biard, a former Fox executive who joined Nexstar in 2023 as chief operating officer.
Nexstar countered that while Nunley’s order said Nexstar employees were restricted from serving as “officers,” it didn’t expressly say they couldn’t serve on Tegna‘s board as “directors.”
“Defendants cannot convincingly argue that having Nexstar executives serve on TEGNA’s Board complies with the preliminary injunction,” Nunley wrote in Thursday’s order, adding that Nexstar’s position was “entirely disingenuous.”
Nexstar now must dissolve the board.
“It is shocking that Defendants think installing a Board of Directors comprised primarily of Nexstar executives would not create influence over Tegna management,” Nunley wrote.
A lawsuit opposes Nexstar’s proposed $6.2-billion deal to acquire Tegna, which would give the merged company 80% coverage of the U.S.
He also admonished Nexstar for not providing that information in any of the hearings or in its filings with the court. “Defendants have a duty of candor to the Court under California Rule of Professional Conduct,” Nunley wrote.
His order was designed “to preserve Tegna as a separate and distinct, independently managed business unit from Nexstar,” Nunley wrote. “Nexstar’s control of the Tegna Board will undoubtedly allow it to influence Tegna’s management and obtain access to Tegna’s confidential information.”
Bonta, in a statement, said: “We thank the court for its attention to this matter and look forward to arguing our case and blocking this merger.”
