A federal judge is being asked to clarify that Nexstar is prohibited from having its executives serve on the board of Tegna, as plaintiffs contend that it violates an injunction that has out a pause on the merger of the two broadcast station groups.
A coalition of state attorneys general, as well as DirecTV, filed a motion in federal court on Wednesday to clarify that the injunction “does not permit Nexstar to appoint its current or recent former employees, executives, consultants, or other personnel to Tegna’s Board.”
In April, U.S. District Judge Troy Nunley issued a preliminary injunction to halt the merger for the time being as the legal proceedings play out. But Nexstar had already closed the Tegna transaction, meaning that they were required to hold their operations separately.
In their filing, the plaintiffs, which include the states of California and New York, cited the judge’s order that Tegna had to operate as a “separate and distinct, independently managed business unit from Nexstar,” and that Nexstar “must place and maintain internal controls and procedures to prevent the sharing of competitively sensitive information.”
The plaintiffs pointedto the presence of Nexstar CEO Perry Sook and others on the board of Tegna.
“These Nexstar executives have already taken part in managing Tegna’s strategy: They have approved Tegna’s budget, which was developed from forecasts that surely contain Tegna’s competitively sensitive information and which would not have been shared with Nexstar is the two companies were independent competitors.” They also said that Sook has “openly touted” that Tegna operates as a “subsidiary of Nexstar,” which “In his view means that Tegna senior management must ‘report to the Board’ and can ‘have conversations’ with Nexstar executives.”
In response to the filing, Nexstar said in a statement that it “has scrupulously complied with the Court’s hold-separate order. Tegna continues to operate independently, and Nexstar has no involvement in Tegna’s retransmission consent negotiations, content decisions, staffing, or other day-to-day operations. Nexstar’s executives’ service on Tegna’s Board is consistent with the Court’s order and is critical to ensuring that Nexstar can continue to satisfy its financial reporting obligations while the hold-separate requirements are in place.”
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