Nexstar plans to appeal the ruling, which is a blow to the White House that had backed the deal, with California Attorney General Rob Bonta calling the merger "illegal, plain and simple".
Nexstar Media Group Inc. was ordered by a California federal judge to keep operating Tegna Inc. as a separate company until he has issued a final judgment on whether to allow a merger that would create the largest local TV operator in the US.
US District Judge Troy L. Nunley in Sacramento on Friday extended an order he imposed last month to maintain the status quo as the case makes its way to trial. He did not set a trial date.
In a 52-page ruling, the judge said that allowing Nexstar to move ahead with its integration of Tenga would hurt DirecTV and the state plaintiffs, reduce competition and result in newsroom layoffs and shutdowns. Nunley said the merger is likely to increase retransmission rates, referring to the fees local broadcasters charge for content from cable companies, which can lead to higher bills for consumers.
Nexstar and Tegna closed their $3.5 billion deal March 19 after receiving approval from the US Justice Department and the Federal Communications Commission. In the same week, a group of states, led by California, and satellite television company DirecTV filed separate suits, alleging the merger will hurt competition for broadcast television in dozens of markets around the country.
The ruling is a blow to the White House, which had backed the deal. President Donald Trump posted on social media earlier in the year that the agreement should be approved.
"This is a critical win in our case," California Attorney General Rob Bonta said in a statement. "This merger is illegal, plain and simple. The federal government may have thrown in the towel, but we'll keep fighting for consumers, for workers, for affordability, and for our local news."
Nexstar is already the largest owner of local broadcast stations, including 14 regions where it has two or three affiliates that air content from the so-called Big Four -- Walt Disney Co.'s ABC, Paramount Skydance Corp.'s CBS, Fox Corp. and Comcast Corp.'s NBC.
According to the lawsuits, the deal expands Nexstar's reach to more than 80% of US households. The combined company would control 228 broadcast stations in 132 local markets, including 27 new areas where it would own two of the Big Four affiliates and three where it would control three of the four; the states and DirecTV said. Nunley ruled that "the merger is presumed likely to violate antitrust laws based on the combined firm market share alone."
Nexstar said in a statement that it plans to appeal the ruling.
The cases are California v. Nexstar Media Group, 26-at-487, US District Court, Eastern District of California (Sacramento); DirecTV v. Nexstar, 26-at-488, US District Court, Eastern District of California (Sacramento).