Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS—D.D.C.: U.S. consent decree allowing TV broadcasting company combination approved, (Nov 19, 2014)

By Jeffrey May, J.D.

The federal district court in Washington, D.C. has approved a consent decree resolving Department of Justice Antitrust Division concerns over Gannett Co. Inc.'s acquisition of Belo Corp. and Sander Media LLC’s related acquisition of six Belo television stations. In a separate order, the court explained its reasons for approving the consent decree (U.S. v. Gannett Co., Inc., November 18, 2014, Walton, R.).

In December 2013, the Antitrust Division filed a complaint to block Gannett’s proposed acquisition of Belo, valued at approximately $2.2 billion, and related agreements concerning Sander’s acquisition of six Belo television stations that Gannett could not hold under Federal Communications Commission (FCC) rules. The Antitrust Division was concerned that the combination would allow Gannett to gain a dominant position in broadcast television spot advertising in the St. Louis area, resulting in higher prices advertisers. At the same time the complaint was filed, the Justice Department filed a proposed consent decree to resolve these competition concerns. The consent decree required the divestiture of KMOV–TV, a CBS affiliate in St. Louis, to an independent purchaser. KMOV-TV was one of the six stations Sander would acquire from Belo and would be subject to agreements between Sander and Gannett. Gannett’s KSDK–TV and Belo’s KMOV–TV compete head-to-head in the sale of broadcast television spot advertising in the St. Louis area. The government was concerned that the various agreements between Gannett and Sander—KMOV–TV’s new owner—would have aligned the incentives of the two stations.

Shortly after the settlement was reached, Gannett announced that it had completed the acquisition of Belo, creating "the largest independent station group of major network affiliates in the top 25 markets." KMOV-TV was sold to Meredith Corporation, and the transaction was approved by the Justice Department and the FCC.

Tunney Act compliance. The court noted that the Justice Department satisfied the threshold notice requirements under the Antitrust Procedures and Penalties Act or Tunney Act and that the consent decree was in the public interest. With respect to the procedural requirements, the proposed final judgment and a competitive impact statement were published in the Federal Register. In addition, summaries of the notices were published in The Washington Post and in the St. Louis Post-Dispatch for seven days, and no public comments were received. While publication in the Washington newspaper alone would have satisfied the technical requirements of the Tunney Act, the court required the publication of the notice in the St. Louis paper as well, since the St. Louis market was the area most affected by the transaction.

Additionally, the court concluded that the proposed final judgment was in the public interest. The settlement was appropriate in scope and its terms unambiguously terminated the anticompetitive behavior that gave rise to the complaint. Moreover, no third-party injuries were likely to result from entering the proposed final judgment.

This is Civil Action No. 1:13-cv-01984-RBW.

Attorneys: Anupama Sawkar for Department Of Justice. Gordon Laurence Lang (Nixon Peabody LLP) and Michael P.A. Cohen (Paul Hastings, LLP) for Gannett Co, Inc.

Companies: Gannett Co., Inc.; Belo Corp.; Sander Media LLC; Meredith Corp.

Cases: AcquisitionsMergers Antitrust AntitrustDivisionNews DistrictofColumbiaNews