[Federal Register Volume 61, Number 160 (Friday, August 16, 1996)]
[Notices]
[Pages 42652-42661]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-20860]
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DEPARTMENT OF JUSTICE
Antitrust Division
United States v. Jacor Communications, Inc. et al.; Proposed
Final Judgment and Competitive Impact Statement
Notice is hereby given pursuant to the Antitrust Procedures and
Penalties Act, 15 U.S.C. Section 16 (b) through (h), that a proposed
Final Judgment, Stipulation and Competitive Impact Statement have been
filed with United States District Court for the Southern District of
Ohio in United States of America v. Jacor Communications, Inc. et al.,
Civil Action C-1-96-757. The Complaint in this case alleged that the
proposed acquisition of Citicasters, Inc. by Jacor Communications, Inc.
would tend to lessen competition substantially in the sale of radio
advertising in Cincinnati, Ohio and the surrounding areas in violation
of Section 7 of the Clayton Act, 15 U.S.C. Sec. 18. The proposed Final
Judgment requires Jacor to divest within six months of the filing of
the Final Judgment one of Cincinnati radio stations, WKRQ-FM, it will
acquire from Citicasters. The proposed Final Judgment further requires
defendants to ensure that, until the divestiture mandated by the decree
has been accomplished, WKRQ will be operated as a viable, ongoing
business and kept separate and apart from Jacor's other Cincinnati
radio stations. Finally the proposed Final Judgment requires Jacor to
give the United States prior notice as to certain future radio station
acquisitions in Cincinnati or agreements that would grant Jacor the
right to sell advertising time for Cincinnati stations that are not
owned by Jacor.
Public comment is invited within the statutory 60-day comment
period. Such comments, and responses thereto, will be published in the
Federal Register and filed with the Court. Comments should be directed
to Donald J. Russell, Chief, Telecommunications Task Force, Antitrust
Division, Department of Justice, 555 4th Street, NW., Room 8104,
Washington, DC 2001.
Constance K. Robinson,
Director of Operations.
In the United States District Court for the Southern District of Ohio
United States of America, Plaintiff, v. Jacor Communications,
Inc. and Citicasters, Inc., Defendants.
No. C-1-96-757 (Antitrust)
Stipulation
Judge Weber
Filed: 8/5/96
[[Page 42653]]
It is stipulated by and between the undersigned parties, by their
respective attorneys, that:
A. The parties to this Stipulation consent that a Final Judgment in
the form attached may be filed and entered by the Court, upon any
party's or the Court's own motion, at any time after compliance with
the requirements of the Antitrust Procedures and Penalties Act (15
U.S.C. Sec. 16), without further notice to any party or other
proceedings, provided that Plaintiff has not withdrawn its consent,
which it may do at any time before entry of the proposed Final Judgment
by serving notice on the defendants and by filing that notice with the
Court.
B. If Jacor enters into a local marketing agreement or time
brokerage agreement (``LMA'') for WKRQ with another person that has
entered into a written agreement to acquire the WKRQ Assets
(``broker'') and the person and LMA have been approved by the
Plaintiff, Jacor need not comply with Sections VIII (A), (C), (D), (F),
(G), (H), (K), (M), or (N) of the Final Judgment, provided that the LMA
includes the following provisions:
(1) Jacor shall not sell advertising time for WKRQ or any other
station owned by the broker;
(2) If Jacor has any employee working at WKRQ, each such employee
shall not sell advertising time, or participate in programming or
financial decisions of the broker, and Jacor shall ensure that each
such employee does not influence or attempt to influence, directly or
indirectly, any decision related to programming or the sale of
advertising time by the broker, except to the extent necessary for
Jacor to fulfill its obligations as the licensee under applicable FCC
rules and policies related to LMAs;
(3) Each such employee shall not have access to WKRQ confidential
information, including marketing sales, pacing or rate information
related to the sale of advertising time on radio stations in the
Cincinnati area, and shall not communicate or otherwise disclose any
information related to the sale of advertising on WKRQ or the format or
programming at WKRQ to anyone at Jacor;
(4) Each such employee shall not be employed by another Jacor
Cincinnati Radio Station except that Jacor employees may provide
technical and administrative services to WKRQ;
(5) No officer, director or employee of Jacor shall be an officer,
director or employee of the broker;
(6) The broker shall hold no interest in Jacor at the time it
enters into the LMA, unless plaintiff agrees otherwise in writing;
(7) Jacor shall not hold an interest in the broker, and shall not
receive compensation related to profits earned by the broker from
advertising sales of WKRQ;
(8) Jacor shall exercise no right of control under the LMA to
oversee the programming, personnel, operations or finances of WKRQ,
without providing 14 days prior notice to plaintiff, except that if
Jacor is required to take action to fulfill its obligations as the
licensee under applicable FCC rules and policies related to LMAs, Jacor
may take immediate action after notifying plaintiff. Such action shall
be limited in scope and time to what is necessary to correct the
problem and shall be consistent with FCC rules and policies;
(9) Jacor shall take all steps necessary to preserve the WKRQ
Assets in good working condition within the bounds of its rights and
obligations under the LMA; and
(10) Jacor and the broker shall enter into no agreement or
understanding that limits competition between WKRQ and the Jacor
Cincinnati radio stations.
For purposes of this Stipulation, the term ``broker'' means the
person who enters into the LMA and the written agreement to acquire the
WKRQ Assets, the person's successors and assigns and its subsidiaries,
affiliates, parents, directors, officers, managers, agents and
employees acting for or on behalf of any of them. This provision will
survive the entry of the Final Judgment and terminate after the
divestiture ordered by Section IV of the Final Judgment is completed.
C. The parties recognize that there could be a delay in obtaining
approval by or a ruling of a government agency related to the
divestiture required by Section IV of the Final Judgment,
notwithstanding the diligent and good faith efforts of Jacor and any
prospective owner of the WKRQ Assets. The Department will, in the
exercise of its sole discretion, acting in good faith, give special
consideration to extending the time period specified in Section IV of
the Final Judgment provided that:
(1) Jacor has entered into a definitive agreement to divest the
WKRQ Assets and such agreement and the prospective purchaser have been
approved by the Department;
(2) All papers necessary to secure any governmental approvals and/
or rulings to effectuate such divestiture (including but not limited to
FCC, SEC and IRS approvals or rulings) have been filed with the
appropriate agency;
(3) Receipt of such approvals are the only closing conditions that
have not been satisfied or waived; and
(4) Jacor has demonstrated that neither it nor the prospective
owner of the WKRQ Assets is responsible for any such delay.
D. The parties understand that nothing in the Final Judgment should
be construed to require the trustee appointed pursuant to Section V of
the Judgment to directly or indirectly control, supervise, direct or
attempt to control the operations of WKRQ, without receiving the prior
approval of the FCC. Such operations, including complete control and
supervision of all of the programs, employees, finances, operations and
policies of WKRQ, shall remain solely the responsibility of defendants,
subject to its obligations set forth in Section VIII of the Final
Judgment, or the responsibility of the broker, subject to the rights
and limitations described in Paragraph (C), above. Nothing in this
paragraph shall change or limit the right of the trustee to sell the
WKRQ Assets pursuant to Section V of the Final Judgment.
E. The parties shall abide by and comply with the provisions of the
proposed Final Judgment pending entry of the Final Judgment, and shall,
from the date of the filing of this Stipulation, comply with all the
terms and provisions of the proposed Final Judgment as though the same
were in full force and effect as an order of the Court; provided,
however, the Citicasters need not comply with Section V or Sections
VIII(B) through VIII(N) until the Jacor/Citicasters Transaction has
been consummated; provided further that, prior to the consummation of
the Transaction, Jacor shall take no action to impede or influence
Citicasters' compliance with Section VIII(A); and provided, further,
that Citicasters need not comply with Sections IV(B) through IV(D)
until the earlier to occur of the consummation of the Transaction or
ten business days following issuance of all FCC approvals required as a
condition to the consummation of the Transaction, except that, prior to
the time Citicasters' obligation to comply with Sections IV(B) through
IV(D) arises, Citicasters shall use all reasonable efforts to cooperate
with Jacor's efforts to divest the WKRQ Assets.
F. Jacor shall prepare and deliver reports in the form required by
the provisions of paragraph B of Section VII of the proposed Final
Judgment commencing no later than September 1,1996, and every thirty
days thereafter pending entry of the Final Judgment.
[[Page 42654]]
G. In the event plaintiff withdraws its consent, as provided in
paragraph (A) above, or if the proposed final Judgment is not entered
pursuant to this Stipulation, this Stipulation shall be of no effect
whatever, and the making of this Stipulation shall be without prejudice
to any party in this or any other proceeding.
H. All parties agree that this agreement can be signed in multiple
counter-parts.
Dated: August 2, 1996.
For the Plaintiff:
Nancy M. Goodman,
Assistant Chief, Telecommunications Task Force.
Andrew S. Cowan,
Attorney, Telecommunications Task Force, U.S. Department of Justice,
Antitrust Division, 555 4th Street N.W., Room 8104, Washington, DC
20001, (202) 514-5621.
For the Defendant:
Thomas B. Leary,
Counsel for Jacor Communications, Inc.
Tom D. Smith,
Counsel for Citicasters, Inc.
Whereas, plaintiff, the United States of America, having filed its
Complaint herein on August 5, 1996, and plaintiff and defendants, by
their respective attorneys, having consented to the entry of its Final
Judgment without trial or adjudication of any issue of fact or law
herein, and without this Final Judgment constituting any evidence
against or an admission by any party with respect to any issue of law
or fact herein;
And whereas, defendants have agreed to be bound by the provisions
of this Final Judgment pending its approval by the Court;
And whereas, the essence of this Final Judgment is prompt and
certain divestiture of certain assets to assure that competition is not
substantially lessened;
And whereas, plaintiff requires Jacor to make certain divestitures
for the purpose of remedying the loss of competition alleged in the
Complaint;
And whereas, defendants have represented to plaintiff that the
divestitures ordered herein can be made and that Jacor will later raise
no claims of hardship or difficulty as grounds for asking the Court to
modify any of the divestiture provisions contained below;
And, therefore, before the taking of any testimony, and without
trial or adjudication of any issue of fact or law herein, and upon
consent of the parties hereto, it is hereby ordered, adjudged, and
decreed as follows:
I. Jurisdiction
This Court has jurisdiction over each of the parties hereto and the
subject matter of this action. The Complaint states a claim upon which
relief may be granted against the defendants under Section 7 of the
Clayton Act, as amended (15 U.S.C. Sec. 18).
II. Definitions
As used in this Final Judgment:
A. ``Jacor'' means defendant Jacor Communications, Inc., an Ohio
corporation with its headquarters in Cincinnati, Ohio and includes its
successors and assigns, its subsidiaries, and directors, officers,
managers, agents, and employees acting for or on behalf of Jacor.
B. ``Citicasters'' means defendant Citicasters Inc., a Florida
corporation with its headquarters in Cincinnati, Ohio, and includes its
successors and assigns, its subsidiaries, and directors, officers,
managers, agents, and employees acting for or on behalf of Citicasters.
C. ``WKRQ Assets'' means all of the assets, tangible or intangible,
used in the operation of the WKRQ-FM radio station ``WKRQ'') in
Cincinnati, Ohio, including but not limited to: all real property
(owned and leased) used in the operation of WKRQ; all broadcast
equipment, personal property, inventory, office furniture, fixed assets
and fixtures, materials, supplies and other tangible property used in
the operation of WKRQ; all licenses, permits and authorizations and
applications therefor issued by the Federal Communications Commission
(``FCC'') and other governmental agencies relating to WKRQ; all
contracts, agreements, leases and commitments of Citicasters pertaining
to WKRQ and its operations; all trademarks, service marks, trade names,
copyrights, patents, slogans, programming materials and promotional
materials relating to WKRQ; and all logs and other records maintained
by Citicasters or WKRQ in connection with the station's business. For
all assets used jointly by WKRQ and WWNK-FM or WKRC-TV prior to the
divestiture required by this Final Judgment, Jacor shall propose to
plaintiff, within 7 days of the consummation of the Jacor/Citicasters
Transaction, a plan for dividing such assets among these stations. Upon
approval of the plan by plaintiff, the term``WKRQ Assets'' shall
include only those assets allocated under the plan to WKRQ.
D. ``Jacor Cincinnati Radio Station'' means each broadcast radio
station that is licensed to a community in the Cincinnati Area, and
that Jacor owns, operates, manages, or has an interest in, or for which
Jacor sells more than 20 percent of its advertising time.
E. ``Non-Jacor Radio Station'' means any radio broadcast station
licensed to a community in the Cincinnati Area that is not a Jacor
Cincinnati Radio Station.
F. ``Cincinnati Area'' means the Cincinnati, Ohio DMA as identified
by The Arbitron Radio Market Report for Cincinnati (Winter 1996).
G. ``Jacor/Citicasters Transaction'' means the proposed acquisition
of Citicasters by Jacor contemplated by the Agreement and Plan of
Merger, dated as of February 12, 1996.
III. Applicability
The provisions of this Final Judgment apply to each of the
defendants, its successors and assigns, its subsidiaries, directors,
officers, managers, agents, and employees, and all other persons in
active concert or participation with any of them who shall have
received actual notice of this Final Judgment by personal service or
otherwise.
IV. Divestiture of WKRQ
A. Jacor is hereby ordered and directed, in accordance with the
terms of this Final Judgment, within six (6) months after the filing of
this Final Judgment, to divest the WRRQ Assets to a purchaser
acceptable to plaintiff. Unless plaintiff otherwise consents in
writing, the divestiture pursuant to Section IV of this Final Judgment
or by the trustee appointed pursuant to Section V shall be accomplished
in such a way as to satisfy plaintiff, in its sole discretion, that the
WKRQ Assets can and will be used by the purchaser as a viable, ongoing
business. The divestiture, whether pursuant to Sections IV or V of this
Final Judgment, shall be made (i) to a purchaser that, in the
plaintiff's sole judgment, has the capability and intent of competing
effectively, and has the managerial, operational, and financial
capability to compete effectively as a radio station in the Cincinnati
Area; and (ii) pursuant to an agreement the terms of which shall not
interfere with the ability of the purchaser to compete effectively.
B. Defendants agree to use their best efforts to accomplish the
divestiture as expeditiously and timely as possible. Plaintiff, in its
sole discretion, may extend the time period for the divestiture for two
additional periods of time not to exceed sixty (60) calendar days in
toto.
C. In accomplishing the divestiture ordered by this Final Judgment,
defendants promptly shall make known, by usual and customary means, the
availability of the WKRQ Assets. Defendants shall inform any person
making a bona fide inquiry regarding a possible purchase that the sale
is being
[[Page 42655]]
made pursuant to this Final Judgment and provide such person with a
copy of this Final Judgment. Defendants shall make known to any person
making an inquiry regarding a possible purchase of the WKRQ Assets that
the assets described in Section II (C) are being offered for sale.
Defendants shall also offer to furnish to all bona fide prospective
purchasers, subject to customary confidentiality assurances, all
information regarding the WKRQ Assets customarily provided in a due
diligence process except such information subject to attorney-client
privilege or attorney work-product privilege. Defendants shall make
available such information to plaintiff at the same time that such
information is made available to any other person.
D. Defendants shall permit bona fide prospective purchasers of the
WKRQ Assets to have access to personnel and to make such inspection of
the assets, and any and all financial, operational, or other documents
and information customarily provided as part of a due diligence
process.
V. Appointment of Trustee
A. In the event that Jacor has not divested the WKRQ Assets within
six months of the filing of this Final Judgment with the Court, or
within any extension granted under Section IV, the Court shall appoint,
on application of the plaintiff and consistent with the rules of the
FCC, a trustee selected by the plaintiff to effect the divestiture of
the assets.
B. After the trustee's appointment has become effective, only the
trustee shall have the right to sell the WKRQ Assets. The trustee shall
have the power and authority to accomplish the divestiture at the best
price then obtainable upon a reasonable effort by the trustee, subject
to the provisions of Sections V and VI of this Final Judgment, and
shall have other powers as the Court shall deem appropriate. Subject to
Section V (C) of this Final Judgment, the trustee shall have the power
and authority to hire at the cost and expense of defendants any
investments bankers, attorneys, or other agents reasonably necessary in
the judgment of the trustee to assist in the divestiture, and such
professionals or agents shall be solely accountable to the trustee. The
trustee shall have the power and authority to accomplish the
divestiture at the earliest possible time to a purchaser acceptable to
plaintiff, and shall have such other powers as this Court shall deem
appropriate. Defendants shall not object to the sale of the WKRQ Assets
by the trustee on any grounds other than the trustee's malfeasance. Any
such objection by defendants must be conveyed in writing to plaintiff
and the trustee no later than fifteen (15) calendar days after the
trustee has provided the notice required under Section VI of this Final
Judgment.
C. The trustee shall serve at the cost and expense of defendants,
on such terms and conditions as the Court may prescribe, and shall
account for all monies derived from the sale of the assets sold by the
trustee and all costs and expenses so incurred. After approval by the
Court of the trustee's accounting, including fees for its services and
those of any professionals and agents retained by the trustee, all
remaining monies shall be paid to defendants and the trustee's services
shall then be terminated. The compensation of such trustee and of any
professionals and agents retained by the trustee shall be reasonable in
light of the value of the divestiture and based on a fee arrangement
providing the trustee with an incentive based on the price and terms of
the divestiture and the speed with which it is accomplished.
D. Defendants shall take no action to interfere with or impede the
trustee's accomplishment of the divestiture of the WKRQ Assets and
shall use their best efforts to assist the trustee in accomplishing the
required divestiture, including best efforts to effect all necessary
regulatory approvals. Subject to a customary confidentiality agreement,
the trustee shall have full and complete access to the personnel,
books, records, and facilities related to the WKRQ Assets and
defendants shall develop such financial or other information as may be
necessary to the divestiture of the WKRQ Assets. Defendants shall
permit prospective purchasers of the WKRQ Assets to have access to
personnel and to make such inspection of physical facilities and any
and all financial, operational, or other documents and information as
may be relevant to the divestiture required by this Final Judgment.
E. After its appointment becomes effective, the trustee shall file
monthly reports with the parties and the Court setting forth the
trustee's efforts to accomplish divestiture of the WKRQ Assets as
contemplated under this Final Judgment; provided, however, that to the
extent such reports contain information that the trustee deems
confidential, such reports shall not be filed in the public docket of
the Court. Such reports shall include the name, address, and telephone
number of each person who, during the preceding month, made an offer to
acquire, expressed an interest in acquiring, entered into negotiations
to acquire, or was contacted or made an inquiry about acquiring, any
interest in the WKRQ Assets, and shall describe in detail each contact
with any such person during that period. The trustee shall maintain
full records of all efforts made to divest these operations.
F. Within six (6) months after its appointment has become
effective, if the trustee has not accomplished the divestiture required
by Section IV of this Final Judgment, the trustee shall promptly file
with the Court a report setting forth (1) The trustee's efforts to
accomplish the required divestiture, (2) the reasons, in the trustee's
judgment, why the required divestiture has not been accomplished, and
(3) the trustee's recommendations; provided, however, that to the
extent such reports contain information that the trustee deems
confidential, such reports shall not be filed in the public docket of
the Court. The trustee shall at the same time furnish such reports to
the parties, who shall each have the right to be heard and to make
additional recommendations. The Court shall thereafter enter such
orders as it shall deem appropriate, which shall, if necessary, include
extending the term of the trustee's appointment.
VI. Notification
Within two (2) business days following execution of a definitive
agreement, to effect, in whole or in part, any proposed divestiture
pursuant to Sections IV or V of this Final Judgment, Jacor or the
trustee, whichever is then responsible for effecting the divestiture,
shall notify plaintiff of the proposed divestiture. If the trustee is
responsible, it shall similarly notify defendants. The notice shall set
forth the details of the proposed transaction and list the name,
address, and telephone number of each person not previously identified
who offered to, or expressed an interest in or a desire to, acquire any
ownership interest in the assets that are the subject of the binding
contract, together with full details of same. Within fifteen (15)
calendar days of receipt by plaintiff of such notice, plaintiff may
request from defendants, the proposed purchaser or purchasers, any
other third party, or the trustee if applicable additional information
concerning the proposed divestiture and the proposed purchaser or
purchasers. Defendants and the trustee shall furnish any additional
information requested within fifteen (15) calendar days of the receipt
of the request, unless the parties shall otherwise agree. Within thirty
(30) calendar days after receipt of the notice or within twenty (20)
calendar days after plaintiff has been provided the additional
information requested from
[[Page 42656]]
defendants, the proposed purchaser or purchasers, any third party, and
the trustee, whichever is later, plaintiff shall provide written notice
to defendants and the trustee, if there is one, stating whether or not
it objects to the proposed divestiture. If plaintiff provides written
notice to defendants and the trustee that it does not object, then the
divestiture may be consummated, subject only to defendants' limited
right to object to the sale under Section V (B) of this Final Judgment.
Absent written notice that plaintiff does not object to the proposed
purchaser or upon objection by plaintiff, a divestiture proposed under
Section IV shall not be consummated. Upon objection by plaintiff, or by
defendants under the proviso in Section V (B), a divestiture proposed
under Section V shall not be consummated unless approved by the Court.
VII. Affidavits
A. Within twenty (20) calendar days of the filing of this Final
Judgment and every thirty (30) calendar days thereafter until the
divestiture has been completed whether pursuant to Section IV or
Section V of this Final Judgment, Jacor shall deliver to plaintiff an
affidavit as to the fact and manner of defendants' compliance with
Sections IV or V of this Final Judgment. Each such affidavit shall
include, inter alia, the name, address, and telephone number of each
person who, at any time after the period covered by the last such
report, made an offer to acquire, expressed an interest in acquiring,
entered into negotiations to acquire, or was contacted or made an
inquiry about acquiring, any interest in the WKRQ Assets, and shall
describe in detail each contact with any such person during that
period.
B. Within twenty (20) calendar days of the filing of this Final
Judgment, defendants shall deliver to plaintiff an affidavit which
describes in reasonable detail all actions defendants have taken and
all steps defendants have implemented on an on-going basis to preserve
the WKRQ Assets pursuant to Section VIII of this Final Judgment. The
affidavit also shall describe, but not be limited to, defendants'
efforts to maintain and operate WKRQ as an active competitor, maintain
the management, sales, marketing and pricing of WKRQ apart from that of
the other Jacor Cincinnati Radio Stations, maintain and increase sales
of advertising time at WKRQ, and maintain the WKRQ Assets in operable
condition, continuing normal maintenance. Defendants shall deliver to
plaintiff an affidavit describing any changes to the efforts and
actions outlined in defendants' earlier affidavit(s) filed pursuant to
this Section within fifteen (15) calendar days after the change is
implemented.
C. Defendants shall preserve all records of all efforts made to
preserve and divest the WKRQ Assets.
VIII. Preservation of Assets/Hold Separate
Until the divestiture required by the Final Judgment has been
accomplished:
A. Defendants shall preserve, hold, and continue to operate the
business of WKRQ as an independent, ongoing, economically viable
business, with its assets, management, and operations separate,
distinct, and apart from the other Jacor Cincinnati Radio Stations.
Defendants shall maintain the business of WKRQ as a viable and active
competitor to the other Cincinnati radio stations, including the Jacor
Cincinnati Radio Stations.
B. Defendants shall not coordinate the marketing, promotion,
merchandising or terms of sale of advertising time on WKRQ with other
current or hereafter acquired Jacor Cincinnati Radio Stations. There
shall be no communications between personnel at WKRQ and those at other
Jacor Cincinnati Radio Stations relating to any confidential business
information, including any marketing, sales, pacing or rate information
relating to the sale of advertising time on radio stations in the
Cincinnati Area.
C. Defendants shall use all reasonable efforts to maintain and
increase sales of advertising time on WKRQ. In particular, defendants
shall, consistent with market conditions, provide promotional,
marketing and merchandising support for the sale of advertising time on
WKRQ, including maintaining or increasing expenditures designed to
promote WKRQ.
D. Defendants shall ensure that WKRQ has separate management,
programming, sales personnel and other employees from the other Jacor
Cincinnati Radio Stations, and ensure that the management, programming,
sales personnel and employees of other Jacor Cincinnati Radio Stations,
or anyone acting at their direction, do not influence or attempt to
influence, directly or indirectly, any operational, programming,
marketing or financial decisions of WKRQ, and vice versa.
E. Except in the ordinary course of business or as part of the
disposition of the WRKQ Assets under this Final Judgment, defendants
shall not, without the prior consent of plaintiff, sell, lease, assign,
transfer, or otherwise dispose of, or pledge for collateral for loans
(except such loans and credit facilities as are currently outstanding
or replacements or substitutes therefor), the WKRQ Assets, including
but not limited to the real estate, facilities, and equipment, all
tangible and intangible assets used in connection with WKRQ's format,
and all administrative, marketing, sales and support facilities,
related to the sale of advertising time on WRKQ.
F. Defendants shall provide and maintain sufficient working
capital, consistent with past practice, to maintain the WKRQ Assets as
a viable, ongoing business.
G. Defendants shall provide and maintain sufficient lines and
sources of credit, consistent with past practice, to maintain the
general business operations of WKRQ as a viable, ongoing business.
H. Consistent with the stations' existing practices, defendants
shall maintain, in accordance with sound accounting practices,
separate, true and complete financial ledgers, books and records
reporting the profits and losses of WKRQ on a monthly and quarterly
basis.
I. Defendants shall refrain from taking any action designed to
reduce the scope or level of competition between the general business
operations of WKRQ and other Cincinnati radio stations, including
current or hereafter acquired Jacor Cincinnati Radio Stations, or in
the sale of advertising time on radio stations in the Cincinnati Area,
without the prior consent of plaintiff.
J. Defendants shall refrain from taking any action designed to
jeopardize its ability to divest the WKRQ Assets as a viable, ongoing
business.
K. Defendants shall give five business days' prior notice to
plaintiff of its decision to terminate any WKRQ management staff, on-
air personality or sales employee.
L. Jacor shall not hire or contract to purchase services from any
WKRQ employee including management, sales or production staff or on-
air-personality.
M. Defendants shall give five business days' notice to plaintiff
prior to either (1) changing WKRQ's format from Contemporary Hits
Radio, or (2) Jacor changing the format of any current or hereafter
acquired Jacor Cincinnati Radio Stations to an Adult Hits, Top 40, Soft
Hits, Adult Contemporary, or to a similar format.
N. Defendants shall appoint a person or persons to oversee the WKRQ
Assets, and who will be responsible for defendants' compliance with
Section VIII of this Final Judgment.
IX. Notice
A. Unless such transaction is otherwise subject to the reporting
and waiting period requirements of the Hart-
[[Page 42657]]
Scott-Rodino Antitrust Improvements Act of 1976, as amended, 15 U.S.C.
Sec. 18a (the ``HSR Act''), Jacor, without providing advance
notification to the United States Department of Justice, shall not
directly or indirectly:
(1) acquire any assets of, or any equity or management interest in,
any Non-Jacor Radio Station; provided, however, that Jacor need not
provide notice under this provision for any direct or indirect
acquisition of equity of a Non-Jacor Radio Station that would result in
Jacor's holding no more than five percent of the total equity of the
station; and provided further that assets for purpose of this Section
IX(A) means: (i) substantially all the assets of a Non-Jacor Radio
Station, or (ii) any trademarks, trade names, service marks, service
names, copyrights, or call letters, or programming the purchase of
which is accompanied by a non-compete covenant, whether or not the
acquired assets constitute substantially all the assets of a Non-Jacor
Radio Station; or
(2) enter into any agreement or understanding that would allow
Jacor to market or sell advertising time for any Non-Jacor Radio
Station; provided, however, that Jacor need not provide notice under
this provision for any such agreement or understanding: (i) that is
consideration for the sale by Jacor of proprietary news, weather or
traffic programming to any such Non-Jacor Radio Station and would
permit Jacor to sell no more than 5 percent of that station's
advertising time for any day and no more than 20 percent of that
station's advertising time for any hour segment, or (ii) that is
consideration for Jacor's granting to such station rebroadcast rights
for a sports event to which Jacor has exclusive broadcast rights, and
would permit Jacor to sell no more than 15 percent of such station's
advertising time for any day.
Notification shall be provided to the United States Department of
Justice in the same format as, and per the instructions relating to the
Notification and Report Form set forth in the Appendix to Part 803 of
Title 16 of the Code of Federal Regulations as amended, except that the
information requested in Items 5-9 of the instructions must be provided
only with respect to Jacor Cincinnati Radio Stations. Notification
shall be provided at least thirty (30) days prior to acquiring any such
interest covered in (1) or (2) above, and shall include, beyond what
may be required by the applicable instructions, the names of the
principal representatives of the parties to the agreement who
negotiated the agreement, and any management or strategic plans
discussing the proposed transaction. If within the 30-day period after
notification, representatives of the Department make a written request
for additional information, Jacor shall not consummate the proposed
transaction or agreement until twenty (20) days after submitting all
such additional information. Early termination of the waiting periods
in this paragraph may be requested and, where appropriate, granted in
the same manner as is applicable under the requirements and provisions
of the HSR Act and rules promulgated thereunder.
B. Jacor shall submit to the Department within ten (10) business
days following the end of each of Jacor's fiscal quarters a list of
each acquisition made by Jacor in that just-ended quarter of any assets
of a Non-Jacor Radio Station that was not subject to the reporting and
waiting period requirements of the HSR Act or to the notice and waiting
period requirements of Section IX(A); provided, however, that the
acquisition of physical assets valued at less than $25,000 need not be
included in the list. The list shall include the identity of the
parties to the transaction, the date of the transaction and a
description of the assets acquired.
X. Compliance Inspection
Only for the purposes of determining or securing compliance with
the Final Judgment and subject to any legally recognized privilege,
from time to time:
A. Duly authorized representatives of the United States Department
of Justice, upon written request of the Attorney General or of the
Assistant Attorney General in charge of the Antitrust Division, and on
reasonable notice to defendants made to their principal offices, shall
be permitted:
(1) Access during office hours of defendants to inspect and copy
all books, ledgers, accounts, correspondence, memoranda, and other
records and documents in the possession or under the control of
defendants, who may have counsel present, relating to enforcement of
this Final Judgment; and
(2) Subject to the reasonable convenience of defendants and without
restraint or interference from it, to interview officers, employees,
and agents of defendants, who may have counsel present, regarding any
such matters.
B. Upon the written request of the Attorney General or of the
Assistant Attorney General in charge of the Antitrust Division, made to
defendants' principal offices, defendants shall submit such written
reports, under oath if requested, with respect to enforcement of this
Final Judgment.
C. No information or documents obtained by the means provided in
this Section X shall be divulged by plaintiff to any person other than
a duly authorized representative of the Executive Branch of the United
States, except in the course of legal proceedings to which the United
States is a party (including grand jury proceedings), or for the
purpose of securing compliance with this Final Judgment, or as
otherwise required by law.
D. If at the time information or documents are furnished by
defendants to plaintiff, defendants represent and identify in writing
the material in any such information or documents to which a claim of
protection may be asserted under Rule 26(c)(7) of the Federal Rules of
Civil Procedure, and defendants mark each pertinent page of such
material, ``Subject to claim of protection under Rule 26(c)(7) of the
Federal Rules of Civil Procedure,'' then ten (10) calendar days notice
shall be given by plaintiff to defendants prior to divulging such
material in any legal proceeding (other than a grand jury proceeding).
XI. Retention of Jurisdiction
Jurisdiction is retained by this Court for the purpose of enabling
any of the parties to this Final Judgment to apply to this Court at any
time for such further orders and directions as may be necessary or
appropriate for the construction or carrying out of this Final
Judgment, for the modification of any of the provisions hereof, for the
enforcement of compliance herewith, and for the punishment of any
violations hereof.
XII. Termination
Unless this Court grants an extension, this Final Judgment will
expire upon the tenth anniversary of the date of its entry, except that
plaintiff, after five years from the date of this Final Judgment's
entry, in its sole discretion, may notify Jacor and the Court that
Jacor shall no longer be subject to Section IX.
XIII. Public Interest
Entry of this Final Judgment is in the public interest.
Dated: ________
----------------------------------------------------------------------
United States District Judge
The United States pursuant to Section 2(b) of the Antitrust
Procedures and Penalties Act (``APPA''), 15 U.S.C. Sec. 16 (b)-(h),
files this Competitive Impact Statement relating to the proposed Final
Judgment submitted for entry in this civil antitrust proceeding.
[[Page 42658]]
I. Nature and Purpose of the Proceeding
The plaintiff filed a civil antitrust complaint on August 5, 1996,
alleging that the proposed acquisition of Citicasters, Inc.
(``Citicasters'') by Jacor Communications, Inc. (``Jacor'') would
violate Section 7 of the Clayton Act, 15 U.S.C. Sec. 18. Jacor and
Citicasters own and operate radio broadcast stations in various cities
across the United States, and they are the first and third largest
owners of radio stations in the Cincinnati, Ohio area.
The complaint alleges that the combination of these companies would
substantially lessen competition in the sale of radio advertising time
in Cincinnati, Ohio and the surrounding areas. The prayer for relief
seeks: (1) a judgment that the proposed acquisition would violate
Section 7 of the Clayton Act, 15 U.S.C. Sec. 18, and (2) a preliminary
and permanent injunction preventing Jacor and Citicasters from carrying
out the proposed merger.
Shortly before that suit was filed, a proposed settlement was
reached that permits Jacor to complete its acquisition of Citicasters,
yet preserves competition in the market for which the transaction would
raise significant competitive concerns. A Stipulation and proposed
Final Judgment embodying the settlement were filed at the same time the
complaint was filed.
The proposed Final Judgment orders Jacor to divest WKRQ-FM in
Cincinnati, which it will acquire from Citicasters in the proposed
transaction, including all the assets necessary to make WKRQ an
economically viable competitor in the Cincinnati radio market. Unless
the United States grants a time extension, Jacor must complete this
divestiture within six months after the entry of the Final Judgment. If
Jacor does not divest the WKRQ Assets during the divestiture period,
the Court may appoint a trustee to sell the assets. The proposed Final
Judgment further requires defendants to ensure that, until the
divestiture mandated by the Final Judgment has been accomplished, WKRQ
will be operated independently as a viable, ongoing business, and kept
separate and apart from Jacor's other Cincinnati radio stations.
Finally, the proposed Final Judgment requires Jacor to give the United
States prior notice as to certain future radio station acquisitions in
Cincinnati or agreements that would grant Jacor the right to sell
advertising time for non-Jacor radio stations in Cincinnati.
The United States and Jacor have stipulated that the proposed Final
Judgment may be entered after compliance with the APPA. Entry of the
proposed Final Judgment would terminate this action, except that the
Court would retain jurisdiction to construe, modify, or enforce the
provisions of the proposed Final Judgment and to punish violations
thereof.
II. Description of the Events Giving Rise to the Alleged Violation
A. The Defendants and the Proposed Transaction
Defendant Jacor is an Ohio corporation with its headquarters in
Cincinnati, Ohio. It currently owns and operates 22 stations in 7
cities.\1\ In 1995, Jacor reported total revenues of approximately $134
million, $40 million from operations in the Cincinnati area. Jacor owns
four Cincinnati radio stations, and sells advertising for three more
radio stations under joint sales agreements (``JSAs'').
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\1\ In a separate acquisition, Jacor plans to acquire Noble
Broadcast Group, Inc., which owns 10 radio stations.
---------------------------------------------------------------------------
Citicasters is a Florida corporation headquartered in Cincinnati,
Ohio. Citicasters owns 19 radio stations in 8 cities, and also owns two
television stations. In 1995, Citicasters' total revenues were
approximately $60 million, $10 million from its Cincinnati radio
operations. Citicasters owns two radio stations in Cincinnati.
On February 12, 1996, Jacor agreed to purchase Citicasters for
approximately $770 million. This transaction, which would combine Jacor
and Citicasters, precipitated the Government's suit. As a result of the
proposed transaction, Jacor would own six major radio stations in
Cincinnati and control the sale of advertising time for three more.
B. Sale of Radio Advertising Time
The complaint alleges that the provision of advertising time on
radio stations serving the Cincinnati metropolitan area constitutes a
line of commerce and section of the country, or relevant market, for
antitrust purposes. Advertisers that seek to reach residents of the
Cincinnati area would not find radio stations that broadcast to other
areas to be acceptable substitutes for Cincinnati stations.
Radio stations earn money by selling broadcast time to advertisers.
Advertisers choose among radio stations by comparing differences among
the stations' rates, audience size, audience composition, and
availability of time for sale. An advertiser typically has a ``target
audience'' (young women, for example) that it seeks to reach when
marketing its product or service, and wants its target audience to have
substantial exposure to its message. To ensure this reach and
frequency, advertisers generally buy time on multiple radio stations in
the same market. Because a radio station bases its rates on the size of
its overall audience, advertisers prefer to advertise on stations that
are listened to primarily by their target audience.
For Cincinnati advertisers, radio is a qualitatively different
medium from television or newspapers. Perhaps most significantly, radio
gives Cincinnati advertisers the ability to reach target audiences far
more efficiently than other media. Cincinnati radio stations attract
different types of audiences by adopting different formats, such as
country or rock and roll. By choosing appropriate radio stations, a
Cincinnati advertiser can reach a large percentage of its target
audience without also reaching (and thus paying for) listeners outside
of its target. Although television and newspapers are good vehicles for
reaching a broad, undifferentiated audience, they generally lack
radio's ability to provide efficient targeting.
Radio advertisements are also comparatively inexpensive to produce,
and can be changed or modified easily and with little advance notice to
the radio station. This makes radio advertising especially attractive
to Cincinnati advertisers that need to change messages frequently (for
example, to advertise different items as being on sale each week), as
well as to companies with limited advertising budgets. Radio is also
the most effective medium for delivering a message to consumers when
they are traveling in their cars or outside their homes.
Radio thus has particular advantages for those seeking to place
low-cost, targeted or time-sensitive advertising. Many Cincinnati
advertisers therefore perceive radio as a distinct advertising medium
from television or newspapers. Accordingly, many are not likely to
switch any or some of their advertising budget from radio to other
media were radio prices to rise 5-10%.
Radio stations negotiate rates individually with each advertiser.
As an integral part of these negotiations, an advertiser will provide
the station with a description of its target audience, as well as the
reach and frequency it desires. Based on this information and the
station's knowledge of its competitors, the station can identify the
reasonable alternatives available to advertisers, and has the ability
to charge advertisers different rates, based on whether such
alternatives exist.
[[Page 42659]]
C. Anticompetitive Consequences of the Proposed Merger
The complaint alleges that Jacor's proposed acquisition of
Citicasters would lessen competition substantially in the provision of
advertising time on radio in the Cincinnati area. The proposed
acquisition would create further market concentration in an already
highly concentrated market, and Jacor would control a substantial share
of the advertising revenues in this market. Jacor presently controls
42% of all radio advertising revenues in Cincinnati, and its market
share would rise to 53% after the proposed merger. According to the
Herfindahl-Hirschman Index (``HHI''), a widely-used measure of market
concentration defined and explained in Appendix A, Jacor possesses a
pre-merger HHI of 2180, which would rise to 3077 after the merger.
Advertisers, at present, can choose among radio stations owned by
Jacor, Citicasters and others. When there are multiple stations that
could satisfy its needs, an advertiser can get competing bids from the
stations, and so obtain better rates or other special services from
them. After the merger, advertisers will have fewer radio companies to
choose from, and many will have to purchase advertising time from
Jacor/Citicasters so as to obtain the desired reach and frequency.
Advertisers will thus lose the benefits that the existing competition
between Jacor and Citicasters stations provides.
Currently, many advertisers feel that advertising on either one of
the Jacor-controlled stations, or on WKRQ, is very important. Many of
these advertisers' target audiences include young adults (listeners
aged 18 to 34). Thus, the Jacor stations and WKRQ compete against each
other for the business of advertisers trying to reach that audience,
and in rate negotiations, advertisers use this competition to get
better rates or increased services from the Citicasters and Jacor
stations. This competition will be eliminated by the merger.
Currently, advertisers trying to reach young adults could
efficiently reach this audience on the radio without having to use a
Jacor station. Post-merger, however, many of these advertisers will be
much more dependant on purchasing time from Jacor stations. Jacor could
accordingly raise its rates, and reduce the quality of its service, to
advertisers targeting young adults (or who need either the Jacor
stations or WKRQ for other reasons) who would have scant alternatives
to paying the increase, while maintaining lower rates for other
advertisers. This would make a price increase profitable even though
some advertisers could switch to other radio stations.
Non-Jacor radio stations in Cincinnati are not likely to respond to
Jacor's increased prices after the acquisition by changing formats so
as to attract a greater number of young adults. Most radio stations
change format only when their existing formats are losing money. A
station is also unlikely to change its format solely in response to
higher prices being charged by a large established company that
controls a number of stations in the market, such as Jacor.
Entry by new radio stations in this market is unlikely. The FCC is
unlikely to grant a license to a new radio station, as there is
insufficient spectrum to accommodate a new signal without interfering
with existing signals. In addition, radio stations sited in nearby
communities cannot easily boost their signal power so as to provide
better coverage and thereby enter the Cincinnati market. Boosting a
signal would interfere with neighboring stations on the same or similar
frequencies, a violation of FCC regulations.
For these reasons, the Department concludes that the merger as
proposed would substantially lessen competition in the sale of radio
advertising time in the Cincinnati area, eliminate actual competition
between Jacor and Citicasters, and result in increased rates for radio
advertising time in the Cincinnati metropolitan area, all in violation
of Section 7 of the Clayton Act.
III. Explanation of the Proposed Final Judgment
The proposed Final Judgment would preserve competition in the sale
of radio advertising time in the Cincinnati metropolitan market. It
requires the divestiture of WKRQ-FM, the station owned by Citicasters
that competes most directly with Jacor stations for advertising dollars
targeted to young adults. As a result of this divestiture, WKRQ-FM will
remain as a strong competitor to the Jacor stations. The divestiture
will preserve choices for advertisers and help ensure that radio
advertising rates in Cincinnati do not increase as a result of the
acquisition.
Unless the United States grants a time extension, this divestiture
of WKRQ must be accomplished by Jacor within six months after entry of
the Final Judgment. The defendants must divest the assets and rights
associated with WKRQ in such a way as to satisfy the plaintiff that the
station can and will be operated as a viable, ongoing business, and
that until the divestiture, the station will be maintained as an
independent competitor to the other stations in the Cincinnati area,
including the Jacor stations.
If the defendants fail to divest WKRQ within the six months after
entry of Final Judgment, or extension thereof, the Court, upon
application of the United States, shall appoint a trustee nominated by
the United States to effect the divestiture. If a trustee is appointed,
the proposed Final Judgment provides that Jacor will pay all costs and
expenses of the trustee and any professionals and agents retained by
the trustee. The compensation paid to the trustee and any persons
retained by the trustee shall be both reasonable in light of the value
of WKRQ and based on a fee arrangement providing the trustee with an
incentive based on the price and terms of the divestiture and the speed
with which it is accomplished. After appointment, the trustee will file
monthly reports with the parties and the Court setting forth the
trustee's efforts to accomplish the divestiture ordered under the
proposed Final Judgment. If the trustee has not accomplished the
divestiture within six (6) months after its appointment, the trustee
shall promptly file with the Court a report setting forth (1) the
trustee's efforts to accomplish the required divestiture, (2) the
reasons, in the trustee's judgment, why the required divestiture has
not been accomplished, and (3) the trustee's recommendations. At the
same time, the trustee will furnish such report to the parties, who
will each have the right to be heard and to make additional
recommendations consistent with the purpose of the trust.
The proposed Final Judgment requires that Jacor maintain WKRQ
separate and apart pending divestiture. The Judgment also contains
provisions to ensure that the assets of WKRQ will be preserved so that
the station after divestiture will remain a viable, aggressive
competitor.
The proposed Final Judgment also prohibits Jacor from entering into
certain agreements with other Cincinnati radio stations without
providing at least thirty (30) days notice to the Department of
Justice. Specifically, Jacor must notify the Department before
acquiring any significant interest in another Cincinnati radio station,
which would raise competitive concerns but might well be too small to
be reported under the Hart-Scott-Rodino (``HSR'') premerger
notification process. In addition, Jacor may not agree to sell radio
advertising time for any other Cincinnati radio station, without
providing such notice.
[[Page 42660]]
This provision ensures that the Department will receive advance notice
of any acquisition, or agreements, through which Jacor will increase
the amount of advertising time on radio stations that it can sell. In
particular, this provision will require Jacor to notify the Department
before it enters into any more joint sales agreements (``JSAs'') or
limited management agreements (``LMAs'') with other stations in the
Cincinnati area. Such agreements, whereby Jacor sells advertising for
or manages other area radio stations, would effectively increase
Jacor's market share in Cincinnati. In analyzing the Cincinnati radio
market, the Department treated Jacor's three present JSA stations as if
Jacor owned them outright. Despite their clear competitive
significance, a JSA or an LMA probably would not be reportable to the
Department under HSR. Thus, this provision in the decree ensures that
the Department will receive notice of and be able to act, if
appropriate, to stop any agreements that might have anticompetitive
effects in the Cincinnati market.
The relief in the proposed Final Judgment is intended to remedy the
competitive effects of the proposed acquisition of Citicasters by
Jacor. Nothing in this Final Judgment is intended to limit the
plaintiff's ability to investigate or bring actions, where appropriate,
challenging other past or future activities of Jacor in the Cincinnati
area, including its entry into JSAs, LMAs or other agreements related
to the sale of advertising time on non-Jacor stations.
IV. Remedies Available to Potential Private Litigants
Section 4 of the Clayton Act, 15 U.S.C. Sec. 15, provides that any
person who has been injured as a result of conduct prohibited by the
antitrust laws may bring suit in federal court to recover three times
the damages the person has suffered, as well as costs and reasonable
attorneys' fees. Entry of the proposed Final Judgment will neither
impair nor assist the bringing of any private antitrust damage action.
Under the provisions of Section 5(a) of the Clayton Act, 15 U.S.C.
Sec. 16(a), the proposed Final Judgment has no prima facie effect in
any subsequent private lawsuit that may be brought against defendants.
V. Procedures Available for Modification of the Proposed Final Judgment
The plaintiff and the defendants have stipulated that the proposed
Final Judgment may be entered by the Court after compliance with the
provisions of the APPA, provided that the United States has not
withdrawn its consent. The APPA conditions entry upon the Court's
determination that the proposed Final Judgment is in the public
interest.
The APPA provides a period of at least sixty (60) days preceding
the effective date of the proposed Final Judgment within which any
person may submit to the United States written comments regarding the
proposed Final Judgment. Any person who wishes to comment should do so
within sixty (60) days of the date of publication of this Competitive
Impact Statement in the Federal Register. The United States will
evaluate and respond to the comments. All comments will be given due
consideration by the Department of Justice, which remains free to
withdraw its consent to the proposed Final Judgment at any time prior
to entry. The comments and the response of the United States will be
filed with the Court and published in the Federal Register.
Written comments should be submitted to: Donald J. Russell, Chief,
Telecommunications Task Force, Antitrust Division, United States
Department of Justice, 555 4th Street, N.W., Room 8104, Washington,
D.C. 20001.
The proposed Final Judgment provides that the Court retains
jurisdiction over this action, and the parties may apply to the Court
for any order necessary or appropriate for the modification,
interpretation, or enforcement of the Final Judgment.
VI. Alternatives to the Proposed Final Judgment
The plaintiff considered, as an alternative to the proposed Final
Judgment, a full trial on the merits of its complaint against
defendants. The plaintiff is satisfied, however, that the divestiture
of WKRQ and other relief contained in the proposed Final Judgment will
preserve viable competition in the sale of radio advertising time in
the Cincinnati metro area. Thus, the proposed Final Judgment would
achieve the relief the government would have obtained through
litigation, but avoids the time, expense and uncertainty of a full
trial on the merits of the complaint.
VII. Standard of Review Under the APPA for Proposed Final Judgment
The APPA requires that proposed consent judgments in antitrust
cases brought by the United States be subject to a sixty (60) day
comment period, after which the court shall determine whether entry of
the proposed Final Judgment ``is in the public interest.'' In making
that determination, the court may consider--
(1) the competitive impact of such judgment, including
termination of alleged violations, provisions for enforcement and
modification, duration or relief sought, anticipated effects of
alternative remedies actually considered, and any other
considerations bearing upon the adequacy of such judgment;
(2) the impact of entry of such judgment upon the public
generally and individuals alleging specific injury from the
violations set forth in the complaint including consideration of the
public benefit, if any, to be derived from a determination of the
issues at trial.
15 U.S.C. Sec. 16(e) (emphasis added). As the United States Court of
Appeals for the D.C. Circuit recently held, this statute permits a
court to consider, among other things, the relationship between the
remedy secured and the specific allegations set forth in the
government's complaint, whether the decree is sufficiently clear,
whether enforcement mechanisms are sufficient, and whether the decree
may positively harm third parties. See United States v. Microsoft, 56
F.3d 1448, 1461-62 (D.C. Cir. 1995).
In conducting this inquiry. ``[t]he Court is nowhere compelled to
go to trial or to engage in extended proceedings which might have the
effect of vitiating the benefits of prompt and less costly settlement
through the consent decree process.'' \2\ Rather,
\2\ 119 Cong. Rec. 24598 (1973). See United States v. Gillette
Co., 406 F. Supp. 713, 715 (D. Mass. 1975). A ``public interest''
determination can be made properly on the basis of the Competitive
Impact Statement and Response to Comments filed pursuant to the
APPA. Although the APPA authorizes the use of additional procedures,
15 U.S.C. Sec. 16(f), those procedures are discretionary. A court
need not invoke any of them unless it believes that the comments
have raised significant issues and that further proceedings would
aid the court in resolving those issues. See H.R. Rep. 93-1463, 93rd
Cong. 2d Sess. 8-9 (1974), reprinted in U.S.C.C.A.N. 6535, 6538.
---------------------------------------------------------------------------
[a]bsent a showing of corrupt failure of the government to discharge
its duty, the Court, in making its public interest finding, should *
* * carefully consider the explanations of the government in the
competitive impact statement and its responses to comments in order
to determine whether those explanations are reasonable under the
circumstances.
United States v. Mid-America Dairymen, Inc., 1977-1 Trade Cas. para.
61,508, at 71,980 (W.D. Mo. 1977).
Accordingly, with respect to the adequacy of the relief secured by
the decree, a court may not ``engage in an unrestricted evaluation of
what relief would best serve the public.'' United States v. BNS, Inc.,
858 F.2d 456, 462 (9th Cir. 1988), citing United States v.
[[Page 42661]]
Bechtel Corp., 648 F.2d 660, 666 (9th Cir.), cert. denied, 454 U.S.
1083 (1981); see also Microsoft, 56 F.3d at 1460-62. Precedent requires
that
the balancing of competing social and political interests affected
by a proposed antitrust consent decree must be left, in the first
instance, to the discretion of the Attorney General. The court's
role in protecting the public interest is one of insuring that the
government has not breached its duty to the public in consenting to
the decree. The court is required to determine not whether a
particular decree is the one that will best serve society, but
whether the settlement is `'within the reaches of the public
interest.'' More elaborate requirements might undermine the
effectiveness of antitrust enforcement by consent decree.\3\
\3\ Bechtel, 648 F.2d at 666 (citations omitted) (emphasis
added); see BNS, 858 F.2d at 463; United States v. National
Broadcasting Co., 449 F. Supp. 1127, 1143 (C.D. Cal. 1978);
Gillette, 406 F. Supp. at 716. See also Microsoft, 56 F.3d at 1461
(whether ``the remedies [obtained in the decree are] so inconsonant
with the allegations charged as to fall outside of the `reaches of
the public interest' '') (citations omitted).
---------------------------------------------------------------------------
The proposed Final Judgment, therefore, should not be reviewed
under a standard of whether it is certain to eliminate every
anticompetitive effect of a particular practice or whether it mandates
certainty of free competition in the future. Court approval of a final
judgment requires a standard more flexible and less strict than the
standard required for a finding of liability. ``[A] proposed decree
must be approved even if it falls short of the remedy the court would
impose on its own, as long as it falls within the range of
acceptability or is `within the reaches of public interest.' '' \4\
---------------------------------------------------------------------------
\4\ United States v. American Tel. and Tel Co., 552 F. Supp.
131, 151 (D.D.C. 1982), aff'd sub nom. Maryland v. United States,
460 U.S. 1001 (1983), quoting Gillette Co., 406 F. Supp. at 716
(citations omitted); United States v. Alcan Aluminum, Ltd., 605 F.
Supp. 619, 622 (W.D. Ky. 1985).
---------------------------------------------------------------------------
VIII. Determinative Documents
There are no determinative materials or documents within the
meaning of the APPA that were considered by the United States in
formulating the proposed Final Judgment.
Dated: August 2, 1996.
Respectfully submitted,
Nancy M. Goodman,
Assistant Chief, Telecommunications Task Force, U.S. Department of
Justice, Antitrust Division, 555 4th Street, N.W., Room 8104,
Washington, D.C. 20001, (202) 514-5621.
Exhibit A--Definition of HHI and Calculations for Market
``HHI'' means the Herfindahl-Hirschman Index, a commonly accepted
measure of market concentration. It is calculated by squaring the
market share of each firm competing in the market and then summing the
resulting numbers. For example, for a market consisting of four firms
with shares of thirty, thirty, twenty, and twenty percent, the HHI is
2600 (30\2\ + 30\2\ + 20\2\ + 20\2\ = 2600). The HHI takes into account
the relative size and distribution of the firms in a market and
approaches zero when a market consists of a large number of firms of
relatively equal size. The HHI increases both as the number of firms in
the market decreases and as the disparity in size between those firms
increases.
Markets in which the HHI is between 1000 and 1800 are considered to
be moderately concentrated, and those in which the HHI is in excess of
1800 points are considered to be concentrated. Transactions that
increase the HHI by more than 100 points in concentrated markets
presumptively raise antitrust concerns under the Merger Guidelines. See
Merger Guidelines Sec. 1.51.
Based on available radio advertising revenues, the pre-merger HHI
for the Cincinnati area radio market is 2180. After the proposed merger
the HHI would be 3077, an increase of 897 points.
[FR Doc. 96-20860 Filed 8-15-96; 8:45 a.m.]
BILLING CODE 4410-01-M
