Nexstar, State AGs Propose Special Master for Antitrust Compliance

Nexstar Media Group and a coalition of state attorneys general have presented their plans to a federal judge for appointing a special master to oversee compliance with an order related to an antitrust lawsuit. This special master would be tasked with ensuring Nexstar adheres to the court's directives while the merger with Tegna remains under scrutiny. The parties have proposed a fee of $1,500 per hour for the special master's services, reflecting the complexity and demands of the oversight role. However, despite this agreement on the hourly rate, significant disagreements persist between Nexstar and the state AGs regarding other crucial aspects of the special master's responsibilities and the scope of their authority.

The antitrust lawsuit aims to block Nexstar's proposed merger with Tegna, a transaction that would have created a substantial broadcast station group with nearly 260 stations. Earlier this year, a federal judge issued an unusual order mandating that Nexstar and Tegna must remain separate entities, even though Nexstar had already completed the transaction. This judicial intervention underscores the seriousness of the antitrust concerns raised by regulators and the states. The proposed special master is intended to act as an independent monitor, ensuring that Nexstar does not integrate Tegna's assets or operations in a manner that circumvents the court's order or further consolidates market power in ways that harm competition.

The state attorneys general, representing a unified front in their opposition to the merger's full integration, are seeking robust oversight to prevent any actions by Nexstar that could prejudice the ongoing legal proceedings or solidify its market position prematurely. Their proposals likely focus on detailed reporting requirements, access to Nexstar's internal communications and operational data, and the ability to investigate potential violations of the separation order. The specific details of these proposed powers and reporting mechanisms are areas where Nexstar and the states are reportedly at odds, reflecting Nexstar's potential desire for a more limited oversight role versus the states' demand for comprehensive accountability.

Nexstar, on the other hand, while agreeing to the necessity of a special master, is likely advocating for a scope of oversight that is narrowly tailored to the specific terms of the court's separation order. The company may be seeking to limit the special master's ability to delve into broader business strategies or to impose operational changes beyond what is strictly required to maintain the legal separation of the two companies. The differing perspectives highlight the delicate balance the court must strike: ensuring compliance with its order without unduly impeding Nexstar's legitimate business operations or the ongoing legal process. The judge will ultimately decide the precise mandate and powers of the special master, taking into account the proposals from both Nexstar and the state attorneys general.