Nexstar falls 2.6% as states sue to block $6.2B Tegna deal
Eight attorneys general file antitrust lawsuits challenging FCC-approved merger creating largest US broadcast group
Nexstar Media Group shares fell 2.6% on Thursday after federal regulators approved its $6.2 billion acquisition of Tegna, only for a coalition of eight state attorneys general to immediately file antitrust lawsuits seeking to block the transaction that would create America's largest local television operator.
The stock declined to $223.05 on elevated trading volume as investors weighed the regulatory approval against significant legal uncertainty. The Irving, Texas-based broadcaster, which has a market capitalization of $6.95 billion, closed the deal following clearance from both the Federal Communications Commission and the Department of Justice, according to a company announcement.
The FCC's approval required a waiver of the 39% national broadcast ownership cap—a restriction designed to prevent excessive media consolidation. Without the waiver, the merger would have been prohibited under current rules. The combined entity will control 265 full-power television stations reaching more than 80% of U.S. television households, according to regulatory filings.
"FCC Chairman Brendan Carr has publicly supported the merger but noted it would require waiving or changing current television-station ownership rules," according to documents reviewed during the approval process.
Yet on the same day the deal closed, attorneys general from New York, California, Oregon, Colorado, Illinois, North Carolina, Virginia, and Connecticut filed separate federal lawsuits alleging the merger violates the Clayton Act by substantially lessening competition in local television markets. DirecTV also filed its own antitrust challenge.
The legal actions contend that Nexstar and Tegna are direct competitors in 31 media markets where both companies currently own stations. "The merger would significantly limit competition in local television markets by creating the largest broadcast station group in the country," New York Attorney General Letitia James said in a statement.
Central to the states' concerns is Nexstar's market power in retransmission consent negotiations—the fees broadcasters charge cable and satellite providers to carry their signals. The lawsuits allege that by eliminating a major competitor, the combined company could demand significantly higher fees, costs that would ultimately be passed to consumers.
More troubling for cable subscribers, the attorneys general warn that Nexstar could initiate blackouts of multiple "Big Four" network affiliates (ABC, CBS, NBC, and FOX) in local markets if providers refuse to pay inflated fees—a tactic Nexstar has employed in past negotiations.
The legal challenges also raise concerns about local news quality. Nexstar is cited as a major practitioner of "news duplication," where identical local news content airs across multiple stations in the same market, and has a history of consolidating newsrooms after acquisitions. "These tactics would eliminate independent news operations and diminish diversity in news coverage," the coalition argued in court filings.
The deal, first announced in August 2025 and approved by Tegna shareholders in November, comes as the broadcast industry faces declining advertising revenue and increased competition from streaming platforms. For Nexstar, which reported $4.95 billion in trailing twelve-month revenue, the acquisition promised greater scale and negotiating leverage with cable providers.
Analysts maintain a largely positive outlook on the stock despite the legal challenges, with five analysts rating it a buy and one giving it a strong buy, according to market data. The consensus target price of $269 represents roughly 21% upside from current levels, assuming the merger withstands legal scrutiny.
The divergence between federal approval and state opposition creates an unusual regulatory dynamic. While the FCC and DOJ have signed off on the transaction, the states' lawsuits could force the company to divest stations in overlapping markets or potentially unwind the deal entirely—a process that could take years to resolve through the courts.
President Trump had publicly endorsed the merger in February, posting "Get that deal done!" on social media, to which FCC Chairman Carr reportedly responded, "Let's get it done." However, presidential support does not prevent states from enforcing federal antitrust laws.
For shareholders, the outcome of these legal challenges will determine whether the $6.2 billion bet on broadcast consolidation delivers the promised synergies or becomes a costly legal battle with an uncertain resolution.