Most merger fights happen before a deal closes.
This one is happening after - and it could end with the largest TV station owner in America forced to give back what it just paid $6.2 billion for.
Nexstar paid $6.2 billion for Tegna and closed the deal on March 19, after both the Federal Communications Commission and the Department of Justice's antitrust arm signed off.
The combined company instantly became the largest owner of local TV stations in America.
Then on April 17, federal judge Troy Nunley issued a preliminary injunction, ruling the combined company would control too much of the local TV market and was "presumed likely to violate antitrust laws."
The result: Nexstar legally owns Tegna but can't merge the two operations - they're being run separately under court order.
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The lawsuit was brought by DirecTV and 13 state attorneys general - including California, New York, Massachusetts, and Pennsylvania.
Their argument: a Nexstar/Tegna combination would reach 80% of US TV households, with critics saying that scale leads to newsroom cuts, layoffs, and higher fees that cable and satellite providers like DirecTV have to pay to carry local channels.
Think of it like one giant landlord owning most of the apartments in a city. The landlord controls who pays what rent.
DirecTV's stake is more direct - as a satellite TV provider, it pays Nexstar fees to carry local stations, and a bigger Nexstar means more leverage at the negotiating table.
On the company's earnings call Thursday, CEO Perry Sook laid out a three-front legal plan.
First, Nexstar appealed the preliminary injunction to the Ninth Circuit Court of Appeals. Second, there's a trial coming in California federal court.
A separate challenge to the FCC's approval is also pending in the D.C. Circuit, with responses due May 11.
The company brought in antitrust lawyer Beth Wilkinson to handle the cases, and Sook told analysts: "We believe we will prevail on the merits of this case."
If the courts force a divestiture, Nexstar has to either sell Tegna stations or unwind the deal entirely. That's a major operational headache for a company that just paid $6.2 billion in cash.
The financial impact is already showing up - Sook skipped Nexstar's usual long-term earnings forecast on the call, citing the legal limbo as the reason.
Sook described the legal map as a "complete laundry list of all threatened and pending litigation," with three courts and a regulator now weighing the future of a deal that's already closed.
If Nexstar wins, it controls 80% of US TV households. If it loses, the company has to figure out how to undo a deal it already paid for.
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