TV Station Owners Settle Justice Department Antitrust Allegations -- 2nd Update
June 18 2019 - 12:35PM
Dow Jones News
By Lillian Rizzo
A group of five television station owners on Monday agreed to
settle Justice Department charges that they used third-party firms
to illegally coordinate on sales of local advertising spots.
CBS Corp., Cox Enterprises Inc., E.W. Scripps Co., Fox Corp.,
and Tegna Inc. all agreed to consent decrees barring them from
sharing certain competitively sensitive information for the next
seven years, according to court documents filed Monday. In
addition, each company is required to adopt rigorous antitrust
compliance and reporting measures.
Court papers didn't indicate any financial penalties as part of
the settlement.
The Justice Department alleged the TV station owners shared
advertising information among themselves regarding spot advertising
revenues in local markets.
Pricing for spot advertising is negotiated by advertisers and
the companies, and often, the advertisers "play off" the stations
against each other to receive competitive revenues. Cox's sales rep
firm, Cox Reps Inc., is among the top two sales reps firms that
represents hundreds of stations throughout the U.S. The Justice
Department alleges Cox Reps, another sales rep firm and the
stations shared station-specific revenue pacing data.
The government said such pacing data, which compares sales
bookings against prior-year results, gave station owners insights
into each station's remaining spot ad inventory.
The civil complaint alleged the data was shared two ways: both
through the sales reps firms and, in some regions, directly between
station employees.
"Vigorous competition among broadcast stations allows American
businesses across the country to obtain competitive advertising
rates," Assistant Attorney General Makan Delrahim, the Justice
Department's top antitrust official, said in a statement. "The
unlawful sharing of information reduced that competition and
thereby harmed businesses that rely on competitive rates to best
serve their customers."
Spokeswomen for Tegna and E.W. Scripps said the companies each
disagreed with the Justice Department's allegations but each
determined the settlement was in its best interest.
Representatives for the other companies didn't immediately
respond to comment. Fox Corp. and Wall Street Journal parent News
Corp share common ownership.
The civil complaint against CBS, Cox and the other companies was
filed this month, adding to an earlier complaint made against
Sinclair Broadcast Group Inc., Tribune Media Co., Raycom Media
Inc., Meredith Corp., Griffin Communications LLC and Dreamcatcher
Broadcasting LLC -- which also agreed to consent decrees -- in
November.
Authorities caught wind of the ad-sales firms' sharing
information on their clients' behalf last year during a previously
unrelated review of Sinclair's plans to acquire Tribune, which
later never went through. The Wall Street Journal earlier reported
that information of Sinclair and others provided to Justice
Department officials led them to open a separate investigation into
the station groups' ad-sales practices.
Write to Lillian Rizzo at Lillian.Rizzo@wsj.com
(END) Dow Jones Newswires
June 18, 2019 12:20 ET (16:20 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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