WPRI-12’s Parent Company Settles with Department of Justice Over Price-Fixing Scheme

Friday, December 14, 2018

 

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The Department of Justice announced Friday that it has reached a settlement with Nexstar Media Group Inc.  — the parent company of WPRI-12  — and one of the largest owners of television stations in the country, as part of its ongoing investigation into exchanges of competitively sensitive information in the broadcast television industry. 

Justice filed an amended complaint today in the case United States v. Sinclair Broadcast Group, Inc., et al., adding Nexstar Media Group Inc. as a defendant.  Sinclair is the parent company of WJAR-10.

At the same time, the Department filed a proposed settlement with Nexstar that, if approved by the court, would resolve the competitive harm alleged in the complaint.  The Department filed its original complaint in the case on Nov. 13, 2018, along with proposed settlements with six other television broadcasting companies said the DOJ.

“The Antitrust Division continues its efforts to stop the unlawful exchange of competitively sensitive information in the television broadcast industry,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division.  “Robust competition among broadcast stations allows American businesses to obtain competitive advertising rates.  The unlawful sharing of information reduced that competition and harmed businesses and the consumers they serve.”

According to the amended complaint, Nexstar agreed with other entities in many metropolitan areas across the United States to exchange revenue pacing information, and also engaged in the exchange of other forms of non-public sales information in certain metropolitan areas.  Pacing compares a broadcast station’s revenues booked for a certain time period to the revenues booked in the same point in the previous year.  Pacing indicates how each station is performing versus the rest of the market and provides insight into each station’s remaining spot advertising for the period.

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By exchanging pacing information, Nexstar and other broadcasters were better able to anticipate whether their competitors were likely to raise, maintain, or lower spot advertising prices, which in turn helped inform their stations’ own pricing strategies and negotiations with advertisers.  As a result, the information exchanges harmed the competitive price-setting process.

The proposed settlement prohibits the direct or indirect sharing of such competitively sensitive information.

The DOJ has determined that prohibiting this conduct would resolve the antitrust concerns raised as a result of Nexstar’s conduct.  The proposed settlement further requires Nexstar to cooperate in the Department’s ongoing investigation and to adopt rigorous antitrust compliance and reporting measures to prevent similar anticompetitive conduct in the future. 

The settlement has a seven-year term, and it will continue to apply to stations currently owned by Nexstar, even if those stations are acquired by another company.

As GoLocal reported earlier this week, Nexstar which is poised to become the biggest local television group in the United States, and like its rival Sinclair Broadcasting, it is pumping hundreds of thousands of dollars into the political coffers of Congress — especially Republicans.

Recipients of Nextar’s donations include PACs like Trump Victory Committee, Team Ryan and McConnell for Majority Leader Committee.

In the 2016 cycle, Nexstar gave over 80 percent of its PAC donations to Republican-affiliated PACs and in 2018 GOP political PACs received 100% of Nexstar's PACs donations, according to to the watchdog group Center for Responsive Government.

According to Federal Election Commission reports, Nexstar’s CEO has donated six times as much to top-level Republican members of Congress than to Democrats over the past decade — regardless of which party controlled Congress.

Nexstar Media Group Inc. is a Delaware corporation with headquarters in Irving, Texas. It owns or operates 105 television stations across 93 markets and had revenues in excess of $1.2 billion in 2017.

 
 

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