[Federal Register Volume 59, Number 184 (Friday, September 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-23411]
[[Page Unknown]]
[Federal Register: September 23, 1994]
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DEPARTMENT OF JUSTICE
Antitrust Division
U.S. v. Outdoor Systems, Inc.; Proposed Final Judgment and
Competitive Impact Statement
Notice is hereby given pursuant to the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment,
Stipulation and Competitive Impact Statement have been filed with the
United States District Court for the Northern District of Georgia in
United States of America v. Outdoor Systems, Inc., Civil No. P1-94-CV-
2393-CC.
The Complaint alleges that the proposed acquisition by Outdoor
Systems, Inc. of the outdoor advertising business of Capitol Outdoor
Advertising, Inc. may be substantially to lessen competition in outdoor
advertising in the Atlanta area in violation of section 7 of the
Clayton Act.
The Proposed Final Judgment provides that Outdoor Systems, Inc. may
acquire the outdoor advertising business of Capitol Outdoor
Advertising, Inc. but that Outdoor Systems, Inc. must divest the assets
of its existing outdoor advertising business in the Atlanta area within
six months of the entry of the Final Judgment.
Public comment on the proposed Final Judgment 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 John T. Orr, Chief, Atlanta Field
Office, Antitrust Division, Department of Justice, Suite 1176, Richard
B. Russell Federal Building, 75 Spring Street, Atlanta, Georgia 30303
(telephone: (404) 331-7100).
Constance K. Robinson,
Director of Operations, Antitrust Division.
United States District Court, Northern District of Georgia, Atlanta
Division
United States of America, Plaintiff, v. Outdoor Systems, Inc.,
Defendant. Civil No. 94- . Filed: September 8, 1994.
Stipulation
It is stipulated by and between the undersigned parties, by their
respective attorneys, that:
1. This Court has jurisdiction over the subject matter of this
action and over each of the parties hereto, and venue of this action is
proper in the United States District Court for the Northern District of
Georgia, Atlanta Division;
2. 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. 16), and 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 defendant and by filing that notice with the
Court;
3. Defendant agrees to be bound by the provisions of the proposed
Final Judgment pending its approval by the Court. If plaintiff
withdraws its consent or the proposed Final Judgment is not entered
pursuant to this Stipulation, this Stipulation shall be of no effect
whatever and its making shall be without prejudice to any party in this
or any other proceeding; and
4. This Stipulation and the Final Judgment to which it relates are
for settlement purposes only and do not constitute an admission by
defendant in this or any other proceeding that Section 7 of the Clayton
Act, 15 U.S.C. 18, or any other provision of law, has been violated.
Dated:
Anne K. Bingaman,
Assistant Attorney General.
Steven C. Sunshine,
Deputy Assistant Attorney General.
Constance K. Robinson
Director of Operations.
John T. Orr,
Chief, Atlanta Field Office, U.S. Department of Justice, Antitrust
Division.
Mark W. Ryan by David H. Fin
With express authorization Schreeder, Wheeler & Flint, 1600 Candler
Bldg, Atlanta, GA 30303-1845, 404-681-3450, GA. Bar, No. 264600.
Mark W. Ryan,
Counsel For defendant.
Mayer, Brown & Platt, 2000 Pennsylvania Avenue NW., Washington, D.C.
20006, (202) 778-0627.
Justin M. Nicholson,
William G. Traynor
Attorneys, Antitrust Division, U.S. Department of Justice, Richard B.
Russell Building, 75 Spring Street, SW., Suite 1176, Atlanta, Georgia
30303, (404) 331-7100.
United States District Court, Northern District of Georgia, Atlanta
Division
United States of America, Plaintiff, v. Outdoor Systems, Inc.,
Defendant. Civil No. 94- . Filed: September 8, 1994.
Final Judgment
Plaintiff, United States of America, filed its Complaint on
September 8, 1994. Plaintiff and defendant, by their respective
attorneys, have consented to the entry of this Final Judgment without
trial or adjudication of any issue of fact or law. This Final Judgment
shall not constitute any evidence against, or an admission by, any
party with respect to any issue of law or fact. Defendant has agreed to
be bound by the provisions of this Final Judgment pending its approval
by the Court. Prompt and certain diverstiture is the essence of this
agreement, and defendant has represented to plaintiff that the
diverstiture required below can and will be made and that defendant
will later raise no claims of hardship or difficulty as grounds for
asking the Court to modify any of the divestiture provisions contained
below. Therefore, before the taking of any testimony, and without trial
or adjudication of any issue of fact or law, and upon consent of the
parties.
It is hereby ordered, adjudged and decreed as follows:
I
Jurisdiction
This Court has jurisdiction over the subject matter of this action
and over each of the parties consenting to this Final Judgment. The
Compliant states a claim upon which relief may be granted against
defendant under Section 7 of the Clayton Act, as amended (15 U.S.C.
18).
II
Definitions
As used in this Final Judgment:
A. ``Capitol'' shall mean Capitol Outdoor Advertising, Inc.,
Capitol Outdoor Leasing Co., Inc., each of their subsidiaries and
affiliates and each officer, director, employee, attorney, agent or
other person acting for or on behalf of any of them. Such term shall
also mean the entity owned by defendant that acquires the assets of
Capitol Outdoor Advertising, Inc. and Capitol Outdoor Leasing Co.,
Inc.;
B. ``OSI-Atlanta'' shall mean the entity conducting the outdoor
advertising business of Outdoor Systems, Inc. as of the date of the
entry of this Final Judgment, or any successor entity, in the greater
Atlanta, Georgia metropolitan area, each of their subsidiaries and
affiliates and each officer, director, employee, attorney, agent or
other person acting for or on behalf of any of them;
C. ``Holding Company'' or ``defendant'' shall mean defendant
Outdoor Systems, Inc., each of its subsidiaries and affiliates and each
officer, director, employee, attorney, agent or other person acting for
or on behalf of any of them;
D. ``Separated Assets'' shall mean (1) all of the outdoor
advertising billboards (including bulletins and poster panels),
structures and leases of OSI-Atlanta, (2) all contracts, including but
not limited to advertising contracts, agreements, invoices, ledgers and
other books and records relating to the business of OSI-Atlanta and (3)
such equipment currently owned or operated by Capitol as the purchaser
may select that would provide the purchaser with the functional
equivalent of the equipment owned or operated by OSI-Atlanta;
E. ``Separated Business'' shall mean Capitol or OSI-Atlanta, as the
case may be;
F. ``Purchaser'' shall mean an independent third party, not
connected or affiliated in any way with Capitol, OSI-Atlanta or Holding
Company, that acquires the Separated Assets; and
G. ``Person'' shall mean any natural person, corporation,
association, firm, partnership or other business or legal entity.
III
Applicability
A. The provisions of this Final Judgment shall apply to defendant,
to its successors and assigns, to its subsidiaries, affiliates,
directors, officers, managers, agents and employees and to 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.
B. Nothing herein shall suggest that any portion of this Final
Judgment is or has been created for the benefit of any third party, and
nothing herein shall be construed to provide any rights to any third
party.
IV
Divestiture of OSI-Atlanta
A. Defendant is hereby ordered and directed to divest all of its
direct and indirect ownership and control of the Separated Assets to a
purchaser within six (6) months of the entry of this Final Judgment. In
addition, defendant shall offer to any purchaser of the Separated
Assets the opportunity, which may be exercised in the purchaser's sole
and absolute discretion, (1) To make offers of employment to all or any
of the employees currently employed by Capitol and (2) to assume the
lease of the facility now operated by Capitol in the conduct of its
outdoor advertising business. The obligation to divest shall be
satisfied if, within six (6) months of the entry of this Final
Judgment, defendant has entered into a binding contract with a
qualified purchaser for the sale of the Separated Assets according to
terms approved by plaintiff that are contingent upon compliance with
the terms of this Final Judgment and that specify a prompt and
reasonable date for the closing and if the sale is completed pursuant
to the contract.
B. Defendant agrees to take all reasonable steps to accomplish the
divestiture as quickly as possible. In carrying out the divestiture of
the Separated Assets, defendant may divest the Separated Assets alone,
or may divest along with the Separated Assets any other assets of
defendant.
C. In accomplishing the divestiture ordered by this Final Judgment,
defendant promptly shall make known, by usual and customary means, the
availability of the Separated Assets for sale and the opportunities
described in Paragraph IV.A. above. Defendant shall notify any person
making an inquiry regarding the possible purchase of the Separated
Assets that the sale is being made pursuant to this Final Judgment and
provide such person with a copy of the Final Judgment, if requested.
Defendant shall also offer to furnish to all bona fide prospective
purchasers of the Separated Assets, subject to customary
confidentiality assurances, all pertinent information regarding OSI-
Atlanta, except information subject to attorney-client privilege or
attorney work product privilege. Defendant shall make available to
plaintiff, upon plaintiff's request, such information as is made
available to such potential purchasers. Defendant shall permit
prospective purchasers of the Separated Assets to have access to
personnel at the business and to make such inspection of physical
facilities and any and all financial, operational, or other documents
and information as may be relevant and customary to the sale of an
outdoor advertising business.
D. The divestiture required by this Final Judgment shall be
accomplished in such a way as to satisfy plaintiff, in its sole
discretion, that the Separated Assets can and will be operated by the
purchaser as a viable, ongoing business. Divestiture shall be made to a
purchaser for whom it is demonstrated to plaintiff's satisfaction that
(1) The purchase is for the purpose of competing effectively in the
outdoor advertising business in the greater Atlanta, Georgia
metropolitan area, and (2) the purchaser has the managerial,
operational, and financial capability to compete effectively in the
outdoor advertising business.
V
Financing
With prior consent of plaintiff, defendant may finance all or any
part of any purchase made pursuant to this Final Judgment.
VI
Appointment of Trustee for OSI-Atlanta
A. If defendant has not accomplished the divestiture required by
Section IV. of this Final Judgment within five (5) months of the entry
of this Final Judgment, then defendant shall notify plaintiff of that
fact. Within ten (10) days after notification, plaintiff shall provide
defendant with written notice of the names and qualifications of not
more than two (2) nominees for the position of trustee for the required
divestiture. Defendant shall notify plaintiff within ten (10) days
thereafter whether either or both of such nominees are acceptable. If
either or both of such nominees are acceptable to defendant, plaintiff
shall notify the Court of the person upon whom the parties have agreed
and the Court shall appoint that person as the trustee. If neither of
such nominees is acceptable to defendant, it shall furnish to
plaintiff, within ten (10) days after plaintiff provides the names of
its nominees, written notice of the names and qualifications of not
more than two (2) nominees for the position of trustee for the required
divestiture. If either or both of such nominees are acceptable to
plaintiff, plaintiff shall notify the Court of the person upon whom the
parties have agreed and the Court shall appoint that person as the
trustee. If neither of such nominees is acceptable to plaintiff, it
shall furnish the Court the names and qualifications of its proposed
nominess and the names and qualifications of the nominees proposed by
defendant. The Court may hear the parties as to the qualifications of
the nominees and shall appoint one of the nominees as the trustee.
B. If defendant has not accomplished the required divestiture at
the expiration of the period specified in paragraph IV.A. of this Final
Judgment, the appointment by the Court of the trustee shall become
effective. The trustee shall then take steps to effect divestiture of
the Separated Assets.
C. After the trustee's appointment has become effective, only the
trustee shall have the right to sell the Separated Assets and to offer
any prospective purchasers the same opportunities as defendant is
obligated to extend as provided in paragraph IV.A. The trustee shall
have the power and authority to accomplish the divestiture to a
purchaser acceptable to plaintiff at such price and on such terms as
are then obtainable upon a reasonable effort by the trustee, subject to
the provisions of paragraph IX.A. of this Final Judgment, and shall
have such other powers as this Court shall deem appropriate. Defendant
shall not object to a sale of the Separated Assets by the trustee on
any grounds other than the trustee's malfeasance. Any such objection by
defendant must be conveyed in writing to plaintiff and the trustee
within fifteen (15) days after the trustee has notified defendant of
the proposed sale.
D. The trustee shall serve at the cost and expense of defendant,
shall receive compensation based on a fee arrangement providing an
incentive based on the price and terms of the divestiture and the speed
with which it is accomplished and shall serve on such other terms and
conditions as the Court may prescribe; provided, however, that the
trustee shall receive no compensation, nor incur any costs or expenses,
prior to the effective date of his or her appointment. The trustee
shall account for all monies derived from a sale of the Separated
Assets and all costs and expenses incurred in connection therewith.
After approval by the Court of the trustee's accounting, including fees
for the trustee's services, all remaining monies shall be paid to
defendant and the trust shall then be terminated.
E. Defendant shall take no action to interfere with or impede the
trustee's accomplishment of the divestiture of the Separated Assets and
shall use its best efforts to assist the trustee in accomplishing the
required divestiture. The trustee shall have full and complete access
to the personnel, books, records and facilities of OSI-Atlanta.
F. After his or her 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 Separated 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 thirty (30) days, 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 ownership interest in the Separated 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.
G. Within six (6) months after his or her appointment has become
effective, if the trustee has not accomplished the divestiture required
by 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 report to the parties, who
shall each have the right to be heard and to make additional
recommendations consistent with the purpose of the trust. The Court
shall thereafter enter such orders as it shall deem appropriate in
order to carry out the purpose of the trust, which shall, if necessary,
include extending the trust and the term of the trustee's appointment.
VII
Notification
Immediately following entry of a binding contract, contingent upon
compliance with the terms of this Final Judgment, to effect the
proposed divestiture pursuant to Section IV. or VI. of this Final
Judgment, defendant 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
defendant. 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 the business that is the subject of the binding contract,
together with full details of same. Within fifteen (15) days of receipt
by plaintiff of such notice, plaintiff may request additional
information concerning the proposed divestiture and the proposed
purchaser. Defendant and/or the trustee shall furnish any additional
information requested within twenty (20) days of the receipt of the
request, unless the parties shall otherwise agree. Within thirty (30)
days after receipt of the notice or within twenty (20) days after
plaintiff has been provided the additional information requested
(excluding any additional information requested of persons other than
defendant or the trustee), whichever is later, plaintiff shall provide
written notice to defendant and the trustee, if there is one, stating
whether or not it objects to the proposed divestiture. If plaintiff
provides written notice to defendant or the trustee that it does not
object, then the divestiture may be consummated, subject only to
defendant's limited right to object to the sale under the provisions in
Section VI.C. Absent written notice that the plaintiff does not object
to the proposed purchaser, a divestiture under Section IV. shall not be
consummated. Upon objection by plaintiff, or by defendant under the
proviso in Section IV.C., a divestiture proposed under Section VI.
shall not be consummated.
VIII
Affidavits
Upon filing of this Final Judgment and every thirty (30) days
thereafter until the divestiture has been completed or authority to
effect divestiture passes to the trustee pursuant to Section VI. of
this Final Judgment, defendant shall deliver to plaintiff an affidavit
as to the fact and manner of compliance with Section IV. of this Final
Judgment. Each such affidavit shall include 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 ownership interest in
the Separated Assets and shall describe in detail each contact with any
such person during that period. Defendant shall maintain full records
of all efforts made to divest the Separated Assets.
IX
Preservation of Assets
A. The Holding Company shall be created and take all steps
necessary to assure that Capitol and OSI-Atlanta will be maintained as
separate, independent and economically viable, ongoing businesses with
their assets, management and operations separate, distinct and apart
from one another. Without limitation of the foregoing, the Holding
Company and the Separated Businesses shall comply with the following
provisions during the pendency of this Final Judgment:
1. The Holding Company and the Separated Businesses shall refrain
from causing or permitting any commingling of the assets of one
Separated Business with those of the other Separated Business;
provided, however, that financial statements may be consolidated at the
Holding Company, subject to the accounting provisions set forth herein.
2. The Holding Company and the Separated Businesses shall assure
that neither Separated Business, nor any of its directors, officers,
employees or agents, influences or attempts to influence, directly or
indirectly, any operational, marketing or financial decisions of the
other Separated Business.
3. a. Within five (5) days of the entry of this Final Judgment, the
Holding Company shall establish a Sales Committee (``Holding Company
Sales Committee''), consisting of not less than two (2) members of the
current Board of Directors of the Holding Company, or their designees,
who are not involved in the management of the Holding Company or of
either of the Separated Businesses.
b. The Holding Company shall designate an ``Operating President''
for each of OSI-Atlanta and Capitol and said Operating Presidents shall
serve in those capacities for the respective Separated Businesses until
the divestiture required by this Final Judgment shall have been
accomplished.
c. Without limiting his or her other responsibilities, each
Operating President shall be responsible to supervise and assist in the
respective Separated Business's outdoor advertising businesses and
shall exercise such authority and responsibilities without consulting
with any officer, director or employee of the other Separated Business
regarding the terms and conditions of the operation of the other
Separated Business.
d. Insofar as any contract or proposal of either Separated Business
shall entail actions that would otherwise require approval by either
the Chief Executive Officer or Board of Directors of the Holding
Company, the Operating President of the Separated Business shall report
the proposal to the Holding Company Sales Committee for its
consideration and any requisite action. With respect to matters that
are brought to it pursuant to the terms of this subsection, the Holding
Company Sales Committee shall be authorized to bind the Holding
Company.
e. Insofar as either Separated Business anticipates a need to
exceed the amounts provided in its annual budget for capital
expenditures, authority for such additional expenditures shall be
sought and first obtained by the Operating President of the Separated
Business from the Holding Company Sales Committee.
4. Except as expressly allowed by the terms of this Final Judgment,
neither Separated Business, nor any of its directors, officers,
employees or agents, shall provide to the other Separated Business, or
any director, officer, employee or agent of the other Separated
Business, any competitively sensitive information, including but not
limited to actual or proposed prices, costs, bids, contract terms,
financial data or profit data (other than aggregated monthly or
quarterly results provided to the Board of Directors of the Holding
Company). The Holding Company and the independent accounting firm
referred to in this Final Judgment shall not provide any competitively
sensitive information relating to one Separated Business to any
director, officer or employee of the other Separated Business.
5. Except as authorized by the terms of this Final Judgment,
Capitol and OSI-Atlanta shall not permit the use of the other's
trademarks or otherwise identify the relationship of these Separated
Businesses in their advertising, sales or promotional materials. In
dealing with third parties, the Separated Business shall indicate and
make clear that the Separated Businesses are being operated as discrete
and separate business entities during the pendency of this Final
Judgment.
6. Each Separated Business shall compete with the other Separated
Business in the same fashion as it competes with other outdoor
advertising businesses in the greater Atlanta, Georgia metropolitan
area.
7. Each Separated Business shall keep and maintain in accordance
with generally accepted accounting principles, separate financial
statements and records, including separate unaudited monthly and
quarterly financial statements. Additionally, the Holding Company shall
assure that an independent certified public accountant shall prepare
certified annual financial statements for each Separated Business.
8. Paragraph IX.E. of this Final Judgment shall not preclude Arte
Moreno from performing the following functions in his capacity as the
Chief Operating Officer of the Holding Company:
a. Participating in decisions regarding the management of the cash
and short-term assets of the Holding Company and the Separated
Businesses, subject to all of the explicit limitations contained in
this Final Judgment;
b. Participating in decisions regarding the deployment of existing
equipment of either Separated Business in servicing contracts that have
been awarded to that Separated Business;
c. Participating in decisions regarding the employment and
redeployment of staff and administrative personnel within each
Separated Business, as well as all personnel at the Holding Company
level; and
d. Participating in decisions regarding employee compensation and
employee benefits within the Holding Company.
B. The Holding Company and the Separated Businesses shall refrain
from taking any action that would jeopardize the sale or operation of
either Separated Business or would otherwise adversely affect the
capability of either Separated Business to compete effectively in the
sale of outdoor advertising, including but not limited to the
following:
1. The Holding Company and the Separated Businesses shall refrain
from taking any action, directly or indirectly, that would cause any
material adverse change or alteration to be made in the operations of
each Separated Business that would impair the ability of the Holding
Company to sell or dispose of such Separated Business;
2. Except as incident to obtaining financing or refinancing of the
transaction pursuant to which the Holding Company acquired Capitol, the
Holding Company and each Separated Business shall refrain from
disposing of, mortgaging, pledging or otherwise encumbering any of the
assets of the Separated Businesses, other than in the ordinary course
of business of the Holding Company or the respective Separated
Businesses; and
3. Upon the entry of this Final Judgment, the Holding Company may
move current employees of OSI-Atlanta a Capitol, but each employee
moved from OSI-Atlanta to Capitol must be replaced at OSI-Atlanta by an
employee of similar job description and experience. Replacement
employees may come from Capitol.
C. Each Separated Business shall maintain, in accordance with usual
industry standards, all outdoor advertising structures owned or
operated by it.
D. The Separated Businesses shall have such outside financing for
capital improvements and working capital available as is consistent
with their budgets and past practices. Holding Company shall provide,
consistent with the budgets established for the respective Separated
Businesses prior to the date of this Final Judgment, funds for
necessary capital improvements.
E. No director, officer or employee of one Separated Business shall
also serve as a director, officer or employee of the other Separated
Business. To the extent any director, officer or employee of the
Holding Company is also a director, officer or employee of a Separated
Business, that person may not receive any competitively sensitive
information provided to the Board of Directors of the Holding Company
by the other Separated Business.
X
Modifications
To the extent that either party later determines that modifications
of this Final Judgment are necessary or appropriate, the parties shall
first discuss any such proposed modifications among themselves, and
shall present to the Court any such proposed modifications on which
they agree in a form that they recommend the Court approve. In the
event the parties cannot agree on any such modifications, either party
may file a motion to the Court seeking a modification of this Final
Judgment only after having provided the other party fifteen days'
advance written notice of intention to seek such modification.
XI
Compliance Inspection
A. For purposes of determining or securing compliance with this
Final Judgment and subject to any legally recognized privilege, from
time to time, duly authorized representatives of the Department of
Justice shall, upon written request of the Assistant Attorney General
in charge of the Antitrust Division, and on reasonable notice to
defendant made to its principal office, be permitted:
1. access during office hours of defendant to inspect and copy all
books, ledgers, accounts, correspondence, memoranda and other records
and documents in the possession or under the control of defendant, who
may have counsel present, relating to any matters contained in this
Final Judgment; and
2. subject to the reasonable convenience of defendant and without
restraint or interference from it to interview officers, employees and
agents of defendant, who may have counsel present, regarding any such
matters.
B. Upon the written request of the Assistant Attorney General in
charge of the Antitrust Division made to defendant's principal office,
defendant shall submit such written reports, under oath if requested,
with respect to any of the matters contained in this Final Judgment as
may be requested.
C. No information or documents obtained by the means provided in
this Section XI shall be divulged by a representative of the Department
of Justice 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
defendant to plaintiff, defendant represents and identifies 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 Procedures, and defendant marks each pertinent page of such
material, ``Subject to claim of protection under Rule 26(c)(7) of the
Federal Rules of Civil Procedure,'' governing protection of trade
secrets and confidential commercial information, then ten days notice
shall be given by plaintiff to defendant prior to divulging such
material in any legal proceeding (other than a grand jury proceeding ).
XII
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.
XIII
Termination
This Final Judgment will expire upon consummation of the
divestiture of the Separated Assets in accordance with the terms
herein.
XIV
Public Interest
Entry of this Final Judgment is in the public interest.
So ordered.
----------------------------------------------------------------------
United States District Judge, Northern District of Georgia.
Dated:
United States District Court, Northern District of Georgia, Atlanta
Division
United States of America, Plaintiff, v. Outdoor Systems, Inc.,
Defendant. Civil No. 1-94-CV-2393-CC, Filed: September 8, 1994.
Competitive Impact Statement
Pursuant to Section 2(b) of the Antitrust Procedures and Penalties
Act (``APPA''), 15 U.S.C. 16(b)-(h), the United States submits this
Competitive Impact Statement relating to the proposed Final Judgment
submitted for entry with the consent of Outdoor Services, Inc., in this
civil antitrust proceeding.
I
Nature and Purpose of the Proceeding
On September 8, 1994, the United States filed a civil antitrust
complaint, under Section 15 of the Clayton Act, 15 U.S.C. 25, against
Outdoor Services, Inc., alleging that the proposed acquisition by
Outdoor Services, Inc. (``OSI'') of the outdoor advertising business of
Capitol Outdoor Advertising, Inc. (``Capitol'') would violate Section 7
of the Clayton Act, 15 U.S.C. 18. The Complaint alleges that the effect
of the merger may be substantially to lessen competition in outdoor
advertising in the Atlanta area. The Complaint seeks, among other
relief, a permanent injunction preventing defendant from combining its
outdoor advertising business with that of Capitol.
Also on September 8, 1994, the United States and OSI filed a
Stipulation by which they consented to the entry of a proposed Final
Judgment designed to preserve competition in the outdoor advertising
business in the Atlanta area. The proposed Final Judgment, as explained
more fully below, would allow OSI to acquire the outdoor advertising
business of Capitol but orders OSI to divest its own outdoor
advertising business in the Atlanta area within six months. The Final
Judgment also provides that pending the sale of OSI's outdoor
advertising business, a holding company will be established to hold
separate the businesses of OSI and Capitol.
The United States and OSI have stipulated that the proposed Final
Judgment may be entered after compliance with the APPA. Entry of the
proposed Final Judgment will terminate this action, except that the
Court will retain jurisdiction to construe, modify and enforce the
Final Judgment and to punish violations of the Final Judgment.
II
Background to the Alleged Violation
On or about July 27, 1994, OSI and Capitol entered into a purchase
agreement under which the two companies would merge and OSI would
become the sole surviving entity. This acquisition would, if
unchallenged, effectively merge all of the business of OSI and Capitol.
The purchase price was approximately $40 million.
OSI is a corporation organized and existing under the laws of the
State of Delaware. It maintains its principal offices at 2502 North
Black Canyon Highway, Phoenix, Arizona. OSI is in the business of
providing outdoor advertising services in the Atlanta area. OSI's
Atlanta area office is located at 3745 Atlanta Industrial Drive, N.W.,
Atlanta, Georgia. OSI had outdoor advertising revenues in the Atlanta
area of about $7.4 million in 1993.
Capitol is a corporation organized and existing under the laws of
the State of Delaware. It maintains its principal offices at 732 Ashby
Street, N.W., Atlanta, Georgia. Capitol is in the business of providing
outdoor advertising services in the Atlanta area. Capitol had outdoor
advertising revenues in the Atlanta area of about $17.1 million in
1992.
The Complaint alleges that OSI and Capital are significant
competitors in the outdoor advertising market in the Atlanta area.
Outdoor advertising is another name given to standardized billboard
advertising in the United States. There are several types of
billboards. The largest type of billboard is the ``bulletin,'' which
comes in two standard sizes, 14' tall by 48' long, or 20' high by 60'
long. If painting is the method of reproduction, the bulletin is called
a ``paint'' or a ``painted bulletin.'' If posting is the method of
reproduction, the bulletin is called a ``posted bulletin.'' Bulletin
billboards are frequently sold singly to advertisers at negotiated
rental prices that depend primarily on each billboard's location.
Bulletins sold in this fashion are called ``permanent bulletins'' and
command, on average, the highest rent of any type of billboard.
Bulletins are also rented as part of ``rotary'' plans by billboard
companies. A rotary plan consists of rotating an advertiser's bulletin
message to a number of well distributed bulletin locations within a
metropolitan area. Usually located adjacent to interstate highways and
high traffic arterials, bulletins are typically sold to advertisers for
longer contract periods than other types of billboards because of the
high initial expense in painting or posting the advertiser's message or
illustration.
A second type of standardized billboard is the ``poster panel,''
which comes in one size, 12' high by 25' long and which is customarily
sold in packages called ``showings.'' A ``100 showing'' of poster
panels means that the billboard company will provide enough
geographically distributed poster panels to deliver in one day a number
of exposure opportunities, as measured by the traffic count past all
the poster panels included in the showing, equal to 100% of the
population of that particular market. In the Atlanta area, for example,
a 100 showing requires approximately 120 poster panels. The advertising
message on a poster panel billboard is carried on a printed paper
poster. Poster panels are nearly always sold in groups by billboard
companies and usually for a shorter contract period than painted
bulletin billboards. Poster panels are generally located adjacent to
primary arterial roads and busy secondary streets. The rental price for
each poster panel is a showing averages about one-fifth of the rental
price for each painted bulletin in a rotary.
A third type of standardized billboard is the ``8-sheet,''
sometimes referred to as a ``junior billboard.'' An 8-sheet is
approximately 6' high by 12' long. An advertiser's message on an 8-
sheet is usually carried on a printed paper poster. In the Atlanta
area, nearly all 8-sheet locations are in inner city areas, and 8-
sheets are usually sold in packages directed to residents of the areas
in which they are located. An 8-sheet rents, on average, for less than
one-third the rental price of a poster panel.
Many customers who use outdoor advertising also advertise in other
media, especially radio, television, newspapers and magazines, but use
outdoor advertising when they want a large number of exposures to
consumers at a low cost per exposure. Since exposure is necessarily
brief, outdoor advertising is most suitable for highly visual, limited
informational advertising. Outdoor advertising's particular
characteristics make it a type of advertising for which there are no
close substitutes. The Complaint alleges that the customers who want or
need to use outdoor advertising would not switch to another advertising
medium in response to a small but significant increase in outdoor
advertising rental prices.
The Atlanta area includes the City of Atlanta and the five populous
counties that include and surround that city. The vast majority of the
population of the greater Atlanta region lives or works in the Atlanta
area and most of that region's commercial activity occurs in the
Atlanta area. Advertisers who desire to employ outdoor advertising to
reach the Atlanta consumer market have no reasonable substitute for
billboards located within the Atlanta area; in particular, a small but
significant increase in the price of outdoor advertising in the Atlanta
area would not cause advertisers to turn to billboards located in more
rural counties outside of the Atlanta area. About 93% of Capitol's and
OSI's billboard sites are located in the Atlanta area. The Atlanta area
constitutes a section of the country and relevant geographic market for
antitrust purposes.
OSI and Capitol are the only companies that offer a full line of
billboards in the Atlanta area. Together, OSI and Capitol control over
63% of all billboards in the Atlanta area. They are the only sellers of
poster panel billboards and are two of only four sellers of bulletin
rotary billboard service in the Atlanta area. A combined OSI-Capitol
entity would control about 4,000 bulletin and poster panel billboards
in the Atlanta area, over six times the total of the next largest
outdoor advertising company in the Atlanta area and approximately
eleven times the total of the third largest. The proposed acquisition
of Capitol by OSI would raise OSI's market share of the outdoor
advertising business in the Atlanta area, based upon the number of
billboards, from approximately 24% to approximately 63%.
The Complaint further alleges that successful new entry into the
outdoor advertising market in the Atlanta area is not easy, due in part
to the increasing amount of government regulation limiting billboard
construction, the scarcity of suitable billboard sites within in the
Atlanta area, paticularly within the I-285 Perimeter around Atlanta,
and the necessity of obtaining a sufficient number and geographic
dispersion of billboard sites in order to be an effective competitor.
OSI regularly contracts with customers outside the State of Georgia
for the sale of outdoor advertising in the Atlanta area and regularly
receives outdoor advertising materials from outside of Georgia. OSI is
engaged in interstate commerce, and its activities are in the flow of,
and substantially affect, interstate commerce.
III
Effect on Competition
The effect of OSI's acquisition of Capitol's outdoor advertising
business in the Atlanta area may be substantially to lessen competition
in outdoor advertising in the Atlanta area because actual and potential
competition between OSI and Capitol in outdoor advertising in the
Atlanta area will be eliminated, and competition generally in outdoor
advertising in the Atlanta area may be substantially lessened.
IV
Explanation of the Proposed Final Judgment
The United States brought this action because the effect of the
proposed merger of OSI and Capitol may be substantially to lessen
competition, in violation of Section 7, in the Atlanta area outdoor
advertising market. The risk posed to competition by this transaction,
however, would be substantially eliminated were defendant OSI to divest
its outdoor advertising business to a purchaser that would operate it
as an active, independent and financially viable competitor in the
Atlanta area. To this end, the provisions of the proposed Final
Judgment are designed to accomplish the sale of OSI's outdoor
advertising business and to prevent the anticompetitive effects of the
proposed acquisition.
The Final Judgment allows OSI to acquire the outdoor advertising
business of Capitol, but requires OSI to sell its Atlanta outdoor
advertising business to an independent third party within six months.
The United States has the right to approve the purchaser. If OSI does
not accomplish the sale within six months, a trustee will be appointed
by the Court with full powers to make the sale. Pending the sale of
OSI's Atlanta outdoor advertising business, a holding company will be
established to preserve and hold separate the assets and business
operations of OSI and Capitol. The proposed Final Judgment should
ensure that an appropriate purchaser will obtain OSI's divested outdoor
advertising business and operate it as a competitive member of the
Atlanta area outdoor advertising market.
V
Remedies Available to Potential 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 not assist the bringing of any private antitrust actions. 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 private lawsuit that may be brought against the defendant.
Procedures Available for Modification of the Proposed Final Judgment
The United States and OSI have stipulated that the Court may enter
the proposed Final Judgment after compliance with the APPA. The
stipulation provides that entry of the Final Judgment does not
constitute any evidence or admission by any party with respect to any
issue of fact or law. Under the provisions of the APPA, the proposed
Final Judgment may not be entered unless the Court finds that entry is
in the public interest. The Department believes that the proposed Final
Judgment provides an adequate remedy for the alleged violation and is
in the public interest. The term of the proposed Final Judgment is
until the divestiture of OSI's Atlanta business is accomplished.
As provided by the APPA, any person believing that the proposed
Final Judgment should be modified may submit written comments within
the sixty-day period from the date of publication in the Federal
Register to John T. Orr, Chief, Atlanta Field Office, Antitrust
Division, U.S. Department of Justice, Suite 1176, 75 Spring Street,
SW., Atlanta, GA 30303. These comments, and the Department's responses,
will be filed with the Court and published in the Federal Register. All
comments will be given due consideration by the Department of Justice,
which remains free to withdraw its consent at any time prior to entry.
The proposed Final Judgment provides that the Court retains
jurisdiction over these actions, and any party may apply to the Court
for any other necessary or appropriate for their modification,
interpretation or enforcement.
VII
Alternatives to the Proposed Final Judgment
The United States considered, as an alternative to the proposed
Final Judgment, litigation to enjoin the major. The United States
rejected that alternative because the relief in the proposed Final
Judgment should prevent the possible occurrence of conduct the effect
of which may be substantially to lessen competition in the outdoor
advertising industry in the Atlanta area. The United States believes
that in the hands of the appropriate purchaser, the outdoor advertising
business that is divested will likely maintain the present level of
competition in the Atlanta area.
VIII
Determinative Documents
No documents were determinative in the formulation of the proposed
Final Judgment. Consequently, the United States has not attached any
such documents to the proposed Final Judgment.
Dated: September 8, 1994.
John T. Orr,
Georgia Bar No.: 554625.
Justin M. Nicholson,
William G. Traynor,
Attorney, Antitrust Division, U.S. Department of Justice, Richard B.
Russell Building, 75 Spring Street SW., Suite 1176, Atlanta, Georgia
30303, (404) 331-7100.
[FR Doc. 94-23411 Filed 9-22-94; 8:45 am]
BILLING CODE 4410-01-M
