Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: Justice Department requires Nexstar to divest CBS, Fox affiliate, (Dec 1, 2014)
Law Firms Mentioned:Kirkland & Ellis LLP | Wiley Rein LLP
Organizations Mentioned:Bayou City Broadcasting Evansville Inc. | Communications Corp. of America | Kirkland & Ellis, LLP | Nexstar Broadcasting Group, Inc. | U.S. Department of Justice | Wiley Rein, LLP
By Greg Hammond, J.D.
Nexstar Broadcasting Group Inc. and Communications Corp. of America (CCA) must divest their interests in WEVV-TV, a CBS and Fox affiliate in Evansville, Indiana, in order for Nexstar to continue with its acquisition of CCA, the Justice Department Antitrust Division has declared. The divestment will prevent Nexstar from owning or controlling three of four major broadcast network affiliations in the Evansville area (U.S. v. Nexstar Broadcasting Group, Inc., Case No. 1:14-cv-02007).
In its complaint and competitive impact statement, the Antitrust Division asserts that Nexstar’s $270 million acquisition of CCA would allow Nexstar to control advertising sales for three out of four major broadcast network affiliates—Including ABC, CBS, Fox, and CW—In Evansville. Unless blocked, the Department of Justice states that the transaction will “lead to higher prices for broadcast television spot advertising,” in violation of Section 7 of the Clayton Act.
Both the proposed final judgment and hold separate stipulation and order require Nexstar and CCA to divest WEVV-TV to Bayou City Broadcasting Evansville Inc., or an alternative, independent buyer. Bayou City is a newly formed entity, headquartered in Boston, which will be run by individuals with significant experience owning, managing, and operating broadcast television stations.
“This divestiture maintains the status quo in Evansville, Indiana, and avoids a loss of competition for local broadcast television spot advertising,” stated Antitrust Division Assistant Attorney General William J. Baer. “By ensuring that Nexstar does not come to control three of four major network affiliations, consumers will benefit as these stations continue to compete to attract viewers and advertisers.”
Attorneys: Marimichael O. Skubel (Kirkland & Ellis LLP) for Nexstar Broadcasting Group, Inc. John B. Wyss (Wiley Rein LLP) for Communications Corp. of America. Matthew C. Hammond, U.S. Department of Justice Antitrust Division.
Companies: Nexstar Broadcasting Group, Inc.; Communications Corp. of America; Bayou City Broadcasting Evansville Inc.
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