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KTLA-TV owner Nexstar violated court order, a federal judge finds

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.

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.

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.

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.”

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FCC will vote on lifting TV ownership cap next month

TV station ownership groups may finally get their wish to own more outlets.

Federal Communications Commission Chairman Brendan Carr announced Wednesday that the agency will vote next month to end the rule that allows companies to own no more than two TV stations in a single market. The cap also limits the national coverage of any station owner to 39% limit of the U.S.

Carr said the agency will consider a “case by case” review on station merger and acquisition deals that would result in exceeding the current limits. The commission, which has two Republicans and one Democrat, will vote on Aug. 6.

“Previously, the cap operated as a blanket prohibition on any and all deals that would combine stations in [excess] of the 39% limit — regardless of whether it was a good deal or bad deal for the country,” Carr wrote on the right-wing website Breitbart. “Our new proposal would allow the FCC to approve deals that exceed the 39% cap, but only if doing so would promote the public interest.”

TV station owners and its lobbying group the National Assn. of Broadcasters have been clamoring for a change in the rule, citing the changes in technology that have occurred since the ownership limit. The 39% threshold was set in 2004 when streaming video was still a nascent business.

The station groups say the ability of tech companies such as Google and Netflix to reach every consumer in the U.S. puts them at a disadvantage. At the same time, streaming now accounts for more than 40% of all viewing, according to Nielsen, pulling consumers away from traditional TV. TV stations are also seeing their share of carriage fees from cable and satellite companies shrink due to cord-cutting.

The station groups also argue that declining viewership and revenue make it more challenging to support multiple local TV.news operations in a single market.

But proposed changes to the cap limits have been met with push back from consumer groups and state government officials. They have said station consolidation will result in journalist layoffs and fewer voices for the communities they serve.

Earlier this year, a group of attorneys general filed suit to block Nexstar Media Group’s proposed $6.2-billion acquisition of Tegna, arguing it violates a 112-year-old U.S. antitrust law by knocking out a major competitor. The deal would give Irving, Texas-based Nexstar control of 265 television stations across the country, up from 164. And, in dozens of markets, including San Diego and Sacramento, Nexstar would own multiple TV network affiliates.

U.S. District Court Chief Judge Troy L. Nunley issued a preliminary injunction in April that forbids Nexstar — which owns KTLA-TV Channel 5 in Los Angeles — and Tegna, from combining operations. Nexstar is appealing.

Carr’s proposal would largely put the FCC in charge of picking winners and losers on a case-by-case basis.

When faced with a merger proposal, Carr said the commission would consider such issues as commitment to local journalism and “viewpoint diversity.”

Carr has made his name by threatening to pull the over-the-air broadcast licenses of TV stations that irritate President Trump with their coverage and commentary.

In April, the FCC called for an early review of the licenses for Disney’s eight broadcast TV stations, a day after Trump demanded that ABC fire late-night host Jimmy Kimmel over a joke about First Lady Melania Trump.

Carr also questioned whether ABC’s daytime show “The View,” where negative Trump commentary is rampant, should qualify as a bona fide news program that is exempt from giving equal time to qualified candidates.

Carr’s Breitbart column also reiterated his view that large media companies such as Disney and NBCUniversal parent Comcast hold too much sway over their affiliates.

“New York and Hollywood interests have steamrolled those local TV stations and the broader media market in recent years in ways that run directly counter to the regulatory framework that Congress and the FCC put in place,” he wrote. “Their national programs naturally reflect the values of the New York and Hollywood executives that produce them. This power imbalance has contributed to a steady decline in locally produced news — and with it, a weakening of the public’s trust in the media.”

How owning more stations would give groups leverage in their dealings with networks is unclear. The networks control the rights to the NFL — the No. 1 TV ratings attraction for broadcast television by a mile. Stations pay the networks compensation for those games, which they use when negotiating the carriage fees they receive from cable and satellite companies.

Times staff writer Meg James contributed to this report.

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