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Major broadcasters have reached a deal with the Department of Justice to resolve claims that they have violated the Sherman Act by exchanging information to boost ad revenue.
The DOJ on Tuesday announced it has reached a settlement with six broadcast television companies — Sinclair Broadcast Group, Raycom Media, Tribune Media Company, Meredith Corporation, Griffin Communications and Dreamcatcher Broadcasting — in a dispute centered on whether the companies illegally shared information. The broadcasters own or operate a combined 250 stations and bring in more than $5.8 billion in annual revenue.
A complaint filed contemporaneously by the DOJ’s antitrust division claimed the companies have been sharing “competitively sensitive information” about advertising costs.
“Broadcast television ‘spot’ advertising, which typically comprises the majority of a station’s revenues, is sold directly by the station itself or through its sales representatives to advertisers who want to target viewers in specific geographic areas called Designated Market Areas,” DOJ trial attorney Lee F. Berger explains in a Tuesday filing. “Prices are individually negotiated with advertisers, and advertisers are able to ‘play off’ the stations against each other to obtain competitive rates.”
According to the complaint, the stations have been exchanging revenue data in order to “resist more effectively advertisers’ attempts to obtain lower prices by playing stations off of one another.”
The proposed settlement resolves the issue by prohibiting the broadcasters from sharing such information and requiring them to adopt “rigorous antitrust compliance and reporting measures.” The deal has a seven-year term and will continue to apply to stations owned by these broadcasters for that period even if they are acquired by another company.
The DOJ’s antitrust division will take comments on the proposed final judgments for 60 days, after which the court will determine if the deal is in the public interest.
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