Our new antitrust case is about TV

And a Ticketmaster update

The CEO of Ticketmaster/Live Nation just finished testifying.

If you remember, last week I told you that our antitrust case against them had hit a rough patch.

The USDOJ, which had been leading the case alongside 40 state AGs, suddenly cut a cheap deal behind closed doors and bailed.

On their way out the door, they said we could join their deal if we wanted. I declined. So did the vast majority of the other AGs. We told Ticketmaster we’d see them back in court, and the trial resumed a few days later. It’s still going on, and I’ll report back on it soon.

Nexstar + Tegna = Largest TV Company Ever

Now from one antitrust case to another.

We started this case last week. My bet is you haven’t heard about it, but it’s a big one.

Here’s the situation:

The biggest TV company in the country is trying to buy one of its biggest competitors. If it does, it’s going to raise prices, downsize a lot of local news, and control a huge chunk of the news our country sees every day.

The big company here is called Nexstar. You probably haven’t heard of it, but it owns about 200 stations, including Fox, ABC, CBS, and NBC stations all across the country.

The second biggest TV company is Sinclair. It’s got about 180 stations.

The third biggest is Tegna, and that’s the one Nexstar is trying to buy. If it does, it will become the biggest TV company in American history and will reach 80% of American homes.

No single company has ever controlled that much of American broadcast television, and North Carolina would be the second-most impacted state in the country, especially in Charlotte, Greensboro, and our northeastern counties.

Take a look:

Why does this matter?

Say Nexstar owns both the Fox and CBS stations where you live. Now they can go to your cable company and say, “Pay our new price or we pull both channels.” Your cable company is going to pay. And you’re going to see it on your next bill.

Nexstar knows that once it buys out one of its biggest competitors, if you want to watch local news or football on the weekend, you’re going to have to pay more.

Nexstar has already told its investors that if this deal goes through, it’s going to make $135m by raising prices and another $165m by finding “synergies,” which is another way of saying, “laying off local reporters.”

Higher bills are not the only consequence. When Nexstar buys a competitor in the same city, it “consolidates” the newsrooms, effectively removing one of them. The company has an internal name for this: the “Consolidation Playbook.”

In Indianapolis, for example, Nexstar owns both the FOX and CBS affiliates. Two stations that are supposedly competitors now share the same anchors, the same reporting team, the same news director, and the same website.

If all this sounds like it should trigger some antitrust laws, it does.

The federal government has a standard index to measure whether a merger concentrates too much power in one company. The USDOJ and the FTC have used it for decades. Courts rely on it.

When a merger pushes concentration past a certain threshold and increases it by more than 100 points, it’s presumed illegal. In every single NC market affected by this deal, the merger doesn’t just cross the legal threshold, it obliterates it.

So last week, I joined a number of AGs and we filed a lawsuit to block the merger.

Then things took a quick turn.

As soon as we filed, Nexstar hit the gas to try to close the deal before a court could stop them.

It was remarkable. Less than 24 hours after we filed our lawsuit, the FCC, which would normally block a merger like this, suddenly waived its rules and let it happen. Then the USDOJ reportedly dropped its investigation and basically said, “Go right ahead.”

For all of that to happen in 24 hours is very strange. Now Nexstar is declaring victory and saying the deal is done.

Not so fast.

We have now filed an emergency motion that basically says, “Hey judge, they’re trying to get around you. They know the law is not on their side, and the last thing they want is for you to hear our case. That’s exactly why you should. Let’s take a breath before they’re allowed to walk off the field as the biggest TV company in American history. Let’s see if these antitrust rules were written for a reason, because I bet they were.”

We used more formal language than that, but that’s the gist of it.

Our motion is pending right now. Will update you soon.

Best,

Jeff