Nexstar and Tribune have settled with the Justice Department to get their proposed $6.4 billion merger approved.
The FCC must still complete its public interest review of the merger, which goes beyond antitrust issues.
Specifically, Justice filed a civil antitrust suit against the deal in the U.S. District Court for the District of Columbia Wednesday (July 31) , but at the same time filed the settlement that, if accepted by the court and they almost always are, would resolve the suit because Justice says the spin-offs remedy the competitive harms--higher retrans and spot prices--that are alleged in the complaint.
The broadcasters have agreed to divest TV stations in 13 markets to get that approval, which was based in part on the assertion that without those, the combined company "would likely charge cable and satellite companies higher retransmission fees to carry the combined company’s broadcast stations, resulting in higher monthly cable and satellite bills for millions of Americans," as well as higher spot prices in the divestiture markets.
“Without the required divestitures, Nexstar’s merger with Tribune threatens significant competitive harm to cable and satellite TV subscribers and small businesses,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “I am pleased, however, that we have been able to reach a resolution of the Division’s concerns, thanks in part to the parties’ commitment to engage in good faith settlement talks from the outset of our investigation.”
The settlement also resolves challenges by the attorneys general of Illinois, Pennsylvania and Virginia.
The markets are Davenport, Iowa; Des Moines, Iowa; Ft. Smith, Arkansas; Grand Rapids, Michigan; Harrisburg, Pennsylvania; Hartford, Connecticut; Huntsville, Alabama; Indianapolis, Indiana; Memphis, Tennessee; Norfolk, Virginia; Richmond, Virginia; Salt Lake City, Utah; and Wilkes-Barre, Pennsylvania.
Nexstar will have to sell either one of its stations, or one of Tribune's, in each of those markets.