[Federal Register Volume 61, Number 160 (Friday, August 16, 1996)]
[Notices]
[Pages 42652-42661]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-20860]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Jacor Communications, Inc. et al.; Proposed 
Final Judgment and Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. Section 16 (b) through (h), that a proposed 
Final Judgment, Stipulation and Competitive Impact Statement have been 
filed with United States District Court for the Southern District of 
Ohio in United States of America v. Jacor Communications, Inc. et al., 
Civil Action C-1-96-757. The Complaint in this case alleged that the 
proposed acquisition of Citicasters, Inc. by Jacor Communications, Inc. 
would tend to lessen competition substantially in the sale of radio 
advertising in Cincinnati, Ohio and the surrounding areas in violation 
of Section 7 of the Clayton Act, 15 U.S.C. Sec. 18. The proposed Final 
Judgment requires Jacor to divest within six months of the filing of 
the Final Judgment one of Cincinnati radio stations, WKRQ-FM, it will 
acquire from Citicasters. The proposed Final Judgment further requires 
defendants to ensure that, until the divestiture mandated by the decree 
has been accomplished, WKRQ will be operated as a viable, ongoing 
business and kept separate and apart from Jacor's other Cincinnati 
radio stations. Finally the proposed Final Judgment requires Jacor to 
give the United States prior notice as to certain future radio station 
acquisitions in Cincinnati or agreements that would grant Jacor the 
right to sell advertising time for Cincinnati stations that are not 
owned by Jacor.
    Public comment 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 Donald J. Russell, Chief, Telecommunications Task Force, Antitrust 
Division, Department of Justice, 555 4th Street, NW., Room 8104, 
Washington, DC 2001.
Constance K. Robinson,
Director of Operations.

In the United States District Court for the Southern District of Ohio

    United States of America, Plaintiff, v. Jacor Communications, 
Inc. and Citicasters, Inc., Defendants.

No. C-1-96-757 (Antitrust)
Stipulation
Judge Weber
Filed: 8/5/96


[[Page 42653]]


    It is stipulated by and between the undersigned parties, by their 
respective attorneys, that:
    A. 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. Sec. 16), 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 defendants and by filing that notice with the 
Court.
    B. If Jacor enters into a local marketing agreement or time 
brokerage agreement (``LMA'') for WKRQ with another person that has 
entered into a written agreement to acquire the WKRQ Assets 
(``broker'') and the person and LMA have been approved by the 
Plaintiff, Jacor need not comply with Sections VIII (A), (C), (D), (F), 
(G), (H), (K), (M), or (N) of the Final Judgment, provided that the LMA 
includes the following provisions:
    (1) Jacor shall not sell advertising time for WKRQ or any other 
station owned by the broker;
    (2) If Jacor has any employee working at WKRQ, each such employee 
shall not sell advertising time, or participate in programming or 
financial decisions of the broker, and Jacor shall ensure that each 
such employee does not influence or attempt to influence, directly or 
indirectly, any decision related to programming or the sale of 
advertising time by the broker, except to the extent necessary for 
Jacor to fulfill its obligations as the licensee under applicable FCC 
rules and policies related to LMAs;
    (3) Each such employee shall not have access to WKRQ confidential 
information, including marketing sales, pacing or rate information 
related to the sale of advertising time on radio stations in the 
Cincinnati area, and shall not communicate or otherwise disclose any 
information related to the sale of advertising on WKRQ or the format or 
programming at WKRQ to anyone at Jacor;
    (4) Each such employee shall not be employed by another Jacor 
Cincinnati Radio Station except that Jacor employees may provide 
technical and administrative services to WKRQ;
    (5) No officer, director or employee of Jacor shall be an officer, 
director or employee of the broker;
    (6) The broker shall hold no interest in Jacor at the time it 
enters into the LMA, unless plaintiff agrees otherwise in writing;
    (7) Jacor shall not hold an interest in the broker, and shall not 
receive compensation related to profits earned by the broker from 
advertising sales of WKRQ;
    (8) Jacor shall exercise no right of control under the LMA to 
oversee the programming, personnel, operations or finances of WKRQ, 
without providing 14 days prior notice to plaintiff, except that if 
Jacor is required to take action to fulfill its obligations as the 
licensee under applicable FCC rules and policies related to LMAs, Jacor 
may take immediate action after notifying plaintiff. Such action shall 
be limited in scope and time to what is necessary to correct the 
problem and shall be consistent with FCC rules and policies;
    (9) Jacor shall take all steps necessary to preserve the WKRQ 
Assets in good working condition within the bounds of its rights and 
obligations under the LMA; and
    (10) Jacor and the broker shall enter into no agreement or 
understanding that limits competition between WKRQ and the Jacor 
Cincinnati radio stations.
    For purposes of this Stipulation, the term ``broker'' means the 
person who enters into the LMA and the written agreement to acquire the 
WKRQ Assets, the person's successors and assigns and its subsidiaries, 
affiliates, parents, directors, officers, managers, agents and 
employees acting for or on behalf of any of them. This provision will 
survive the entry of the Final Judgment and terminate after the 
divestiture ordered by Section IV of the Final Judgment is completed.
    C. The parties recognize that there could be a delay in obtaining 
approval by or a ruling of a government agency related to the 
divestiture required by Section IV of the Final Judgment, 
notwithstanding the diligent and good faith efforts of Jacor and any 
prospective owner of the WKRQ Assets. The Department will, in the 
exercise of its sole discretion, acting in good faith, give special 
consideration to extending the time period specified in Section IV of 
the Final Judgment provided that:
    (1) Jacor has entered into a definitive agreement to divest the 
WKRQ Assets and such agreement and the prospective purchaser have been 
approved by the Department;
    (2) All papers necessary to secure any governmental approvals and/
or rulings to effectuate such divestiture (including but not limited to 
FCC, SEC and IRS approvals or rulings) have been filed with the 
appropriate agency;
    (3) Receipt of such approvals are the only closing conditions that 
have not been satisfied or waived; and
    (4) Jacor has demonstrated that neither it nor the prospective 
owner of the WKRQ Assets is responsible for any such delay.
    D. The parties understand that nothing in the Final Judgment should 
be construed to require the trustee appointed pursuant to Section V of 
the Judgment to directly or indirectly control, supervise, direct or 
attempt to control the operations of WKRQ, without receiving the prior 
approval of the FCC. Such operations, including complete control and 
supervision of all of the programs, employees, finances, operations and 
policies of WKRQ, shall remain solely the responsibility of defendants, 
subject to its obligations set forth in Section VIII of the Final 
Judgment, or the responsibility of the broker, subject to the rights 
and limitations described in Paragraph (C), above. Nothing in this 
paragraph shall change or limit the right of the trustee to sell the 
WKRQ Assets pursuant to Section V of the Final Judgment.
    E. The parties shall abide by and comply with the provisions of the 
proposed Final Judgment pending entry of the Final Judgment, and shall, 
from the date of the filing of this Stipulation, comply with all the 
terms and provisions of the proposed Final Judgment as though the same 
were in full force and effect as an order of the Court; provided, 
however, the Citicasters need not comply with Section V or Sections 
VIII(B) through VIII(N) until the Jacor/Citicasters Transaction has 
been consummated; provided further that, prior to the consummation of 
the Transaction, Jacor shall take no action to impede or influence 
Citicasters' compliance with Section VIII(A); and provided, further, 
that Citicasters need not comply with Sections IV(B) through IV(D) 
until the earlier to occur of the consummation of the Transaction or 
ten business days following issuance of all FCC approvals required as a 
condition to the consummation of the Transaction, except that, prior to 
the time Citicasters' obligation to comply with Sections IV(B) through 
IV(D) arises, Citicasters shall use all reasonable efforts to cooperate 
with Jacor's efforts to divest the WKRQ Assets.
    F. Jacor shall prepare and deliver reports in the form required by 
the provisions of paragraph B of Section VII of the proposed Final 
Judgment commencing no later than September 1,1996, and every thirty 
days thereafter pending entry of the Final Judgment.

[[Page 42654]]

    G. In the event plaintiff withdraws its consent, as provided in 
paragraph (A) above, or if the proposed final Judgment is not entered 
pursuant to this Stipulation, this Stipulation shall be of no effect 
whatever, and the making of this Stipulation shall be without prejudice 
to any party in this or any other proceeding.
    H. All parties agree that this agreement can be signed in multiple 
counter-parts.

    Dated: August 2, 1996.

    For the Plaintiff:
Nancy M. Goodman,
Assistant Chief, Telecommunications Task Force.
Andrew S. Cowan,
Attorney, Telecommunications Task Force, U.S. Department of Justice, 
Antitrust Division, 555 4th Street N.W., Room 8104, Washington, DC 
20001, (202) 514-5621.
    For the Defendant:
Thomas B. Leary,
Counsel for Jacor Communications, Inc.
Tom D. Smith,
Counsel for Citicasters, Inc.
    Whereas, plaintiff, the United States of America, having filed its 
Complaint herein on August 5, 1996, and plaintiff and defendants, by 
their respective attorneys, having consented to the entry of its Final 
Judgment without trial or adjudication of any issue of fact or law 
herein, and without this Final Judgment constituting any evidence 
against or an admission by any party with respect to any issue of law 
or fact herein;
    And whereas, defendants have agreed to be bound by the provisions 
of this Final Judgment pending its approval by the Court;
    And whereas, the essence of this Final Judgment is prompt and 
certain divestiture of certain assets to assure that competition is not 
substantially lessened;
    And whereas, plaintiff requires Jacor to make certain divestitures 
for the purpose of remedying the loss of competition alleged in the 
Complaint;
    And whereas, defendants have represented to plaintiff that the 
divestitures ordered herein can be made and that Jacor will later raise 
no claims of hardship or difficulty as grounds for asking the Court to 
modify any of the divestiture provisions contained below;
    And, therefore, before the taking of any testimony, and without 
trial or adjudication of any issue of fact or law herein, and upon 
consent of the parties hereto, it is hereby ordered, adjudged, and 
decreed as follows:

I. Jurisdiction

    This Court has jurisdiction over each of the parties hereto and the 
subject matter of this action. The Complaint states a claim upon which 
relief may be granted against the defendants under Section 7 of the 
Clayton Act, as amended (15 U.S.C. Sec. 18).

II. Definitions

    As used in this Final Judgment:
    A. ``Jacor'' means defendant Jacor Communications, Inc., an Ohio 
corporation with its headquarters in Cincinnati, Ohio and includes its 
successors and assigns, its subsidiaries, and directors, officers, 
managers, agents, and employees acting for or on behalf of Jacor.
    B. ``Citicasters'' means defendant Citicasters Inc., a Florida 
corporation with its headquarters in Cincinnati, Ohio, and includes its 
successors and assigns, its subsidiaries, and directors, officers, 
managers, agents, and employees acting for or on behalf of Citicasters.
    C. ``WKRQ Assets'' means all of the assets, tangible or intangible, 
used in the operation of the WKRQ-FM radio station ``WKRQ'') in 
Cincinnati, Ohio, including but not limited to: all real property 
(owned and leased) used in the operation of WKRQ; all broadcast 
equipment, personal property, inventory, office furniture, fixed assets 
and fixtures, materials, supplies and other tangible property used in 
the operation of WKRQ; all licenses, permits and authorizations and 
applications therefor issued by the Federal Communications Commission 
(``FCC'') and other governmental agencies relating to WKRQ; all 
contracts, agreements, leases and commitments of Citicasters pertaining 
to WKRQ and its operations; all trademarks, service marks, trade names, 
copyrights, patents, slogans, programming materials and promotional 
materials relating to WKRQ; and all logs and other records maintained 
by Citicasters or WKRQ in connection with the station's business. For 
all assets used jointly by WKRQ and WWNK-FM or WKRC-TV prior to the 
divestiture required by this Final Judgment, Jacor shall propose to 
plaintiff, within 7 days of the consummation of the Jacor/Citicasters 
Transaction, a plan for dividing such assets among these stations. Upon 
approval of the plan by plaintiff, the term``WKRQ Assets'' shall 
include only those assets allocated under the plan to WKRQ.
    D. ``Jacor Cincinnati Radio Station'' means each broadcast radio 
station that is licensed to a community in the Cincinnati Area, and 
that Jacor owns, operates, manages, or has an interest in, or for which 
Jacor sells more than 20 percent of its advertising time.
    E. ``Non-Jacor Radio Station'' means any radio broadcast station 
licensed to a community in the Cincinnati Area that is not a Jacor 
Cincinnati Radio Station.
    F. ``Cincinnati Area'' means the Cincinnati, Ohio DMA as identified 
by The Arbitron Radio Market Report for Cincinnati (Winter 1996).
    G. ``Jacor/Citicasters Transaction'' means the proposed acquisition 
of Citicasters by Jacor contemplated by the Agreement and Plan of 
Merger, dated as of February 12, 1996.

III. Applicability

    The provisions of this Final Judgment apply to each of the 
defendants, its successors and assigns, its subsidiaries, directors, 
officers, managers, agents, and employees, and 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.

IV. Divestiture of WKRQ

    A. Jacor is hereby ordered and directed, in accordance with the 
terms of this Final Judgment, within six (6) months after the filing of 
this Final Judgment, to divest the WRRQ Assets to a purchaser 
acceptable to plaintiff. Unless plaintiff otherwise consents in 
writing, the divestiture pursuant to Section IV of this Final Judgment 
or by the trustee appointed pursuant to Section V shall be accomplished 
in such a way as to satisfy plaintiff, in its sole discretion, that the 
WKRQ Assets can and will be used by the purchaser as a viable, ongoing 
business. The divestiture, whether pursuant to Sections IV or V of this 
Final Judgment, shall be made (i) to a purchaser that, in the 
plaintiff's sole judgment, has the capability and intent of competing 
effectively, and has the managerial, operational, and financial 
capability to compete effectively as a radio station in the Cincinnati 
Area; and (ii) pursuant to an agreement the terms of which shall not 
interfere with the ability of the purchaser to compete effectively.
    B. Defendants agree to use their best efforts to accomplish the 
divestiture as expeditiously and timely as possible. Plaintiff, in its 
sole discretion, may extend the time period for the divestiture for two 
additional periods of time not to exceed sixty (60) calendar days in 
toto.
    C. In accomplishing the divestiture ordered by this Final Judgment, 
defendants promptly shall make known, by usual and customary means, the 
availability of the WKRQ Assets. Defendants shall inform any person 
making a bona fide inquiry regarding a possible purchase that the sale 
is being

[[Page 42655]]

made pursuant to this Final Judgment and provide such person with a 
copy of this Final Judgment. Defendants shall make known to any person 
making an inquiry regarding a possible purchase of the WKRQ Assets that 
the assets described in Section II (C) are being offered for sale. 
Defendants shall also offer to furnish to all bona fide prospective 
purchasers, subject to customary confidentiality assurances, all 
information regarding the WKRQ Assets customarily provided in a due 
diligence process except such information subject to attorney-client 
privilege or attorney work-product privilege. Defendants shall make 
available such information to plaintiff at the same time that such 
information is made available to any other person.
    D. Defendants shall permit bona fide prospective purchasers of the 
WKRQ Assets to have access to personnel and to make such inspection of 
the assets, and any and all financial, operational, or other documents 
and information customarily provided as part of a due diligence 
process.

V. Appointment of Trustee

    A. In the event that Jacor has not divested the WKRQ Assets within 
six months of the filing of this Final Judgment with the Court, or 
within any extension granted under Section IV, the Court shall appoint, 
on application of the plaintiff and consistent with the rules of the 
FCC, a trustee selected by the plaintiff to effect the divestiture of 
the assets.
    B. After the trustee's appointment has become effective, only the 
trustee shall have the right to sell the WKRQ Assets. The trustee shall 
have the power and authority to accomplish the divestiture at the best 
price then obtainable upon a reasonable effort by the trustee, subject 
to the provisions of Sections V and VI of this Final Judgment, and 
shall have other powers as the Court shall deem appropriate. Subject to 
Section V (C) of this Final Judgment, the trustee shall have the power 
and authority to hire at the cost and expense of defendants any 
investments bankers, attorneys, or other agents reasonably necessary in 
the judgment of the trustee to assist in the divestiture, and such 
professionals or agents shall be solely accountable to the trustee. The 
trustee shall have the power and authority to accomplish the 
divestiture at the earliest possible time to a purchaser acceptable to 
plaintiff, and shall have such other powers as this Court shall deem 
appropriate. Defendants shall not object to the sale of the WKRQ Assets 
by the trustee on any grounds other than the trustee's malfeasance. Any 
such objection by defendants must be conveyed in writing to plaintiff 
and the trustee no later than fifteen (15) calendar days after the 
trustee has provided the notice required under Section VI of this Final 
Judgment.
    C. The trustee shall serve at the cost and expense of defendants, 
on such terms and conditions as the Court may prescribe, and shall 
account for all monies derived from the sale of the assets sold by the 
trustee and all costs and expenses so incurred. After approval by the 
Court of the trustee's accounting, including fees for its services and 
those of any professionals and agents retained by the trustee, all 
remaining monies shall be paid to defendants and the trustee's services 
shall then be terminated. The compensation of such trustee and of any 
professionals and agents retained by the trustee shall be reasonable in 
light of the value of the divestiture and based on a fee arrangement 
providing the trustee with an incentive based on the price and terms of 
the divestiture and the speed with which it is accomplished.
    D. Defendants shall take no action to interfere with or impede the 
trustee's accomplishment of the divestiture of the WKRQ Assets and 
shall use their best efforts to assist the trustee in accomplishing the 
required divestiture, including best efforts to effect all necessary 
regulatory approvals. Subject to a customary confidentiality agreement, 
the trustee shall have full and complete access to the personnel, 
books, records, and facilities related to the WKRQ Assets and 
defendants shall develop such financial or other information as may be 
necessary to the divestiture of the WKRQ Assets. Defendants shall 
permit prospective purchasers of the WKRQ Assets to have access to 
personnel and to make such inspection of physical facilities and any 
and all financial, operational, or other documents and information as 
may be relevant to the divestiture required by this Final Judgment.
    E. After its 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 WKRQ 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 month, 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 
interest in the WKRQ 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.
    F. Within six (6) months after its appointment has become 
effective, if the trustee has not accomplished the divestiture required 
by Section IV of 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 reports to 
the parties, who shall each have the right to be heard and to make 
additional recommendations. The Court shall thereafter enter such 
orders as it shall deem appropriate, which shall, if necessary, include 
extending the term of the trustee's appointment.

VI. Notification

    Within two (2) business days following execution of a definitive 
agreement, to effect, in whole or in part, any proposed divestiture 
pursuant to Sections IV or V of this Final Judgment, Jacor 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 defendants. 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 or a desire to, acquire any 
ownership interest in the assets that are the subject of the binding 
contract, together with full details of same. Within fifteen (15) 
calendar days of receipt by plaintiff of such notice, plaintiff may 
request from defendants, the proposed purchaser or purchasers, any 
other third party, or the trustee if applicable additional information 
concerning the proposed divestiture and the proposed purchaser or 
purchasers. Defendants and the trustee shall furnish any additional 
information requested within fifteen (15) calendar days of the receipt 
of the request, unless the parties shall otherwise agree. Within thirty 
(30) calendar days after receipt of the notice or within twenty (20) 
calendar days after plaintiff has been provided the additional 
information requested from

[[Page 42656]]

defendants, the proposed purchaser or purchasers, any third party, and 
the trustee, whichever is later, plaintiff shall provide written notice 
to defendants and the trustee, if there is one, stating whether or not 
it objects to the proposed divestiture. If plaintiff provides written 
notice to defendants and the trustee that it does not object, then the 
divestiture may be consummated, subject only to defendants' limited 
right to object to the sale under Section V (B) of this Final Judgment. 
Absent written notice that plaintiff does not object to the proposed 
purchaser or upon objection by plaintiff, a divestiture proposed under 
Section IV shall not be consummated. Upon objection by plaintiff, or by 
defendants under the proviso in Section V (B), a divestiture proposed 
under Section V shall not be consummated unless approved by the Court.

VII. Affidavits

    A. Within twenty (20) calendar days of the filing of this Final 
Judgment and every thirty (30) calendar days thereafter until the 
divestiture has been completed whether pursuant to Section IV or 
Section V of this Final Judgment, Jacor shall deliver to plaintiff an 
affidavit as to the fact and manner of defendants' compliance with 
Sections IV or V of this Final Judgment. Each such affidavit shall 
include, inter alia, 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 interest in the WKRQ Assets, and shall 
describe in detail each contact with any such person during that 
period.
    B. Within twenty (20) calendar days of the filing of this Final 
Judgment, defendants shall deliver to plaintiff an affidavit which 
describes in reasonable detail all actions defendants have taken and 
all steps defendants have implemented on an on-going basis to preserve 
the WKRQ Assets pursuant to Section VIII of this Final Judgment. The 
affidavit also shall describe, but not be limited to, defendants' 
efforts to maintain and operate WKRQ as an active competitor, maintain 
the management, sales, marketing and pricing of WKRQ apart from that of 
the other Jacor Cincinnati Radio Stations, maintain and increase sales 
of advertising time at WKRQ, and maintain the WKRQ Assets in operable 
condition, continuing normal maintenance. Defendants shall deliver to 
plaintiff an affidavit describing any changes to the efforts and 
actions outlined in defendants' earlier affidavit(s) filed pursuant to 
this Section within fifteen (15) calendar days after the change is 
implemented.
    C. Defendants shall preserve all records of all efforts made to 
preserve and divest the WKRQ Assets.

VIII. Preservation of Assets/Hold Separate

    Until the divestiture required by the Final Judgment has been 
accomplished:
    A. Defendants shall preserve, hold, and continue to operate the 
business of WKRQ as an independent, ongoing, economically viable 
business, with its assets, management, and operations separate, 
distinct, and apart from the other Jacor Cincinnati Radio Stations. 
Defendants shall maintain the business of WKRQ as a viable and active 
competitor to the other Cincinnati radio stations, including the Jacor 
Cincinnati Radio Stations.
    B. Defendants shall not coordinate the marketing, promotion, 
merchandising or terms of sale of advertising time on WKRQ with other 
current or hereafter acquired Jacor Cincinnati Radio Stations. There 
shall be no communications between personnel at WKRQ and those at other 
Jacor Cincinnati Radio Stations relating to any confidential business 
information, including any marketing, sales, pacing or rate information 
relating to the sale of advertising time on radio stations in the 
Cincinnati Area.
    C. Defendants shall use all reasonable efforts to maintain and 
increase sales of advertising time on WKRQ. In particular, defendants 
shall, consistent with market conditions, provide promotional, 
marketing and merchandising support for the sale of advertising time on 
WKRQ, including maintaining or increasing expenditures designed to 
promote WKRQ.
    D. Defendants shall ensure that WKRQ has separate management, 
programming, sales personnel and other employees from the other Jacor 
Cincinnati Radio Stations, and ensure that the management, programming, 
sales personnel and employees of other Jacor Cincinnati Radio Stations, 
or anyone acting at their direction, do not influence or attempt to 
influence, directly or indirectly, any operational, programming, 
marketing or financial decisions of WKRQ, and vice versa.
    E. Except in the ordinary course of business or as part of the 
disposition of the WRKQ Assets under this Final Judgment, defendants 
shall not, without the prior consent of plaintiff, sell, lease, assign, 
transfer, or otherwise dispose of, or pledge for collateral for loans 
(except such loans and credit facilities as are currently outstanding 
or replacements or substitutes therefor), the WKRQ Assets, including 
but not limited to the real estate, facilities, and equipment, all 
tangible and intangible assets used in connection with WKRQ's format, 
and all administrative, marketing, sales and support facilities, 
related to the sale of advertising time on WRKQ.
    F. Defendants shall provide and maintain sufficient working 
capital, consistent with past practice, to maintain the WKRQ Assets as 
a viable, ongoing business.
    G. Defendants shall provide and maintain sufficient lines and 
sources of credit, consistent with past practice, to maintain the 
general business operations of WKRQ as a viable, ongoing business.
    H. Consistent with the stations' existing practices, defendants 
shall maintain, in accordance with sound accounting practices, 
separate, true and complete financial ledgers, books and records 
reporting the profits and losses of WKRQ on a monthly and quarterly 
basis.
    I. Defendants shall refrain from taking any action designed to 
reduce the scope or level of competition between the general business 
operations of WKRQ and other Cincinnati radio stations, including 
current or hereafter acquired Jacor Cincinnati Radio Stations, or in 
the sale of advertising time on radio stations in the Cincinnati Area, 
without the prior consent of plaintiff.
    J. Defendants shall refrain from taking any action designed to 
jeopardize its ability to divest the WKRQ Assets as a viable, ongoing 
business.
    K. Defendants shall give five business days' prior notice to 
plaintiff of its decision to terminate any WKRQ management staff, on-
air personality or sales employee.
    L. Jacor shall not hire or contract to purchase services from any 
WKRQ employee including management, sales or production staff or on-
air-personality.
    M. Defendants shall give five business days' notice to plaintiff 
prior to either (1) changing WKRQ's format from Contemporary Hits 
Radio, or (2) Jacor changing the format of any current or hereafter 
acquired Jacor Cincinnati Radio Stations to an Adult Hits, Top 40, Soft 
Hits, Adult Contemporary, or to a similar format.
    N. Defendants shall appoint a person or persons to oversee the WKRQ 
Assets, and who will be responsible for defendants' compliance with 
Section VIII of this Final Judgment.

IX. Notice

    A. Unless such transaction is otherwise subject to the reporting 
and waiting period requirements of the Hart-

[[Page 42657]]

Scott-Rodino Antitrust Improvements Act of 1976, as amended, 15 U.S.C. 
Sec. 18a (the ``HSR Act''), Jacor, without providing advance 
notification to the United States Department of Justice, shall not 
directly or indirectly:
    (1) acquire any assets of, or any equity or management interest in, 
any Non-Jacor Radio Station; provided, however, that Jacor need not 
provide notice under this provision for any direct or indirect 
acquisition of equity of a Non-Jacor Radio Station that would result in 
Jacor's holding no more than five percent of the total equity of the 
station; and provided further that assets for purpose of this Section 
IX(A) means: (i) substantially all the assets of a Non-Jacor Radio 
Station, or (ii) any trademarks, trade names, service marks, service 
names, copyrights, or call letters, or programming the purchase of 
which is accompanied by a non-compete covenant, whether or not the 
acquired assets constitute substantially all the assets of a Non-Jacor 
Radio Station; or
    (2) enter into any agreement or understanding that would allow 
Jacor to market or sell advertising time for any Non-Jacor Radio 
Station; provided, however, that Jacor need not provide notice under 
this provision for any such agreement or understanding: (i) that is 
consideration for the sale by Jacor of proprietary news, weather or 
traffic programming to any such Non-Jacor Radio Station and would 
permit Jacor to sell no more than 5 percent of that station's 
advertising time for any day and no more than 20 percent of that 
station's advertising time for any hour segment, or (ii) that is 
consideration for Jacor's granting to such station rebroadcast rights 
for a sports event to which Jacor has exclusive broadcast rights, and 
would permit Jacor to sell no more than 15 percent of such station's 
advertising time for any day.
    Notification shall be provided to the United States Department of 
Justice in the same format as, and per the instructions relating to the 
Notification and Report Form set forth in the Appendix to Part 803 of 
Title 16 of the Code of Federal Regulations as amended, except that the 
information requested in Items 5-9 of the instructions must be provided 
only with respect to Jacor Cincinnati Radio Stations. Notification 
shall be provided at least thirty (30) days prior to acquiring any such 
interest covered in (1) or (2) above, and shall include, beyond what 
may be required by the applicable instructions, the names of the 
principal representatives of the parties to the agreement who 
negotiated the agreement, and any management or strategic plans 
discussing the proposed transaction. If within the 30-day period after 
notification, representatives of the Department make a written request 
for additional information, Jacor shall not consummate the proposed 
transaction or agreement until twenty (20) days after submitting all 
such additional information. Early termination of the waiting periods 
in this paragraph may be requested and, where appropriate, granted in 
the same manner as is applicable under the requirements and provisions 
of the HSR Act and rules promulgated thereunder.
    B. Jacor shall submit to the Department within ten (10) business 
days following the end of each of Jacor's fiscal quarters a list of 
each acquisition made by Jacor in that just-ended quarter of any assets 
of a Non-Jacor Radio Station that was not subject to the reporting and 
waiting period requirements of the HSR Act or to the notice and waiting 
period requirements of Section IX(A); provided, however, that the 
acquisition of physical assets valued at less than $25,000 need not be 
included in the list. The list shall include the identity of the 
parties to the transaction, the date of the transaction and a 
description of the assets acquired.

X. Compliance Inspection

    Only for the purposes of determining or securing compliance with 
the Final Judgment and subject to any legally recognized privilege, 
from time to time:
    A. Duly authorized representatives of the United States Department 
of Justice, upon written request of the Attorney General or of the 
Assistant Attorney General in charge of the Antitrust Division, and on 
reasonable notice to defendants made to their principal offices, shall 
be permitted:
    (1) Access during office hours of defendants to inspect and copy 
all books, ledgers, accounts, correspondence, memoranda, and other 
records and documents in the possession or under the control of 
defendants, who may have counsel present, relating to enforcement of 
this Final Judgment; and
    (2) Subject to the reasonable convenience of defendants and without 
restraint or interference from it, to interview officers, employees, 
and agents of defendants, who may have counsel present, regarding any 
such matters.
    B. Upon the written request of the Attorney General or of the 
Assistant Attorney General in charge of the Antitrust Division, made to 
defendants' principal offices, defendants shall submit such written 
reports, under oath if requested, with respect to enforcement of this 
Final Judgment.
    C. No information or documents obtained by the means provided in 
this Section X shall be divulged by plaintiff 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 
defendants to plaintiff, defendants represent and identify 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 Procedure, and defendants mark each pertinent page of such 
material, ``Subject to claim of protection under Rule 26(c)(7) of the 
Federal Rules of Civil Procedure,'' then ten (10) calendar days notice 
shall be given by plaintiff to defendants prior to divulging such 
material in any legal proceeding (other than a grand jury proceeding).

XI. 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.

XII. Termination

    Unless this Court grants an extension, this Final Judgment will 
expire upon the tenth anniversary of the date of its entry, except that 
plaintiff, after five years from the date of this Final Judgment's 
entry, in its sole discretion, may notify Jacor and the Court that 
Jacor shall no longer be subject to Section IX.

XIII. Public Interest

    Entry of this Final Judgment is in the public interest.


    Dated: ________
----------------------------------------------------------------------
United States District Judge
    The United States pursuant to Section 2(b) of the Antitrust 
Procedures and Penalties Act (``APPA''), 15 U.S.C. Sec. 16 (b)-(h), 
files this Competitive Impact Statement relating to the proposed Final 
Judgment submitted for entry in this civil antitrust proceeding.

[[Page 42658]]

I. Nature and Purpose of the Proceeding

    The plaintiff filed a civil antitrust complaint on August 5, 1996, 
alleging that the proposed acquisition of Citicasters, Inc. 
(``Citicasters'') by Jacor Communications, Inc. (``Jacor'') would 
violate Section 7 of the Clayton Act, 15 U.S.C. Sec. 18. Jacor and 
Citicasters own and operate radio broadcast stations in various cities 
across the United States, and they are the first and third largest 
owners of radio stations in the Cincinnati, Ohio area.
    The complaint alleges that the combination of these companies would 
substantially lessen competition in the sale of radio advertising time 
in Cincinnati, Ohio and the surrounding areas. The prayer for relief 
seeks: (1) a judgment that the proposed acquisition would violate 
Section 7 of the Clayton Act, 15 U.S.C. Sec. 18, and (2) a preliminary 
and permanent injunction preventing Jacor and Citicasters from carrying 
out the proposed merger.
    Shortly before that suit was filed, a proposed settlement was 
reached that permits Jacor to complete its acquisition of Citicasters, 
yet preserves competition in the market for which the transaction would 
raise significant competitive concerns. A Stipulation and proposed 
Final Judgment embodying the settlement were filed at the same time the 
complaint was filed.
    The proposed Final Judgment orders Jacor to divest WKRQ-FM in 
Cincinnati, which it will acquire from Citicasters in the proposed 
transaction, including all the assets necessary to make WKRQ an 
economically viable competitor in the Cincinnati radio market. Unless 
the United States grants a time extension, Jacor must complete this 
divestiture within six months after the entry of the Final Judgment. If 
Jacor does not divest the WKRQ Assets during the divestiture period, 
the Court may appoint a trustee to sell the assets. The proposed Final 
Judgment further requires defendants to ensure that, until the 
divestiture mandated by the Final Judgment has been accomplished, WKRQ 
will be operated independently as a viable, ongoing business, and kept 
separate and apart from Jacor's other Cincinnati radio stations. 
Finally, the proposed Final Judgment requires Jacor to give the United 
States prior notice as to certain future radio station acquisitions in 
Cincinnati or agreements that would grant Jacor the right to sell 
advertising time for non-Jacor radio stations in Cincinnati.
    The United States and Jacor have stipulated that the proposed Final 
Judgment may be entered after compliance with the APPA. Entry of the 
proposed Final Judgment would terminate this action, except that the 
Court would retain jurisdiction to construe, modify, or enforce the 
provisions of the proposed Final Judgment and to punish violations 
thereof.

II. Description of the Events Giving Rise to the Alleged Violation

A. The Defendants and the Proposed Transaction

    Defendant Jacor is an Ohio corporation with its headquarters in 
Cincinnati, Ohio. It currently owns and operates 22 stations in 7 
cities.\1\ In 1995, Jacor reported total revenues of approximately $134 
million, $40 million from operations in the Cincinnati area. Jacor owns 
four Cincinnati radio stations, and sells advertising for three more 
radio stations under joint sales agreements (``JSAs'').
---------------------------------------------------------------------------

    \1\ In a separate acquisition, Jacor plans to acquire Noble 
Broadcast Group, Inc., which owns 10 radio stations.
---------------------------------------------------------------------------

    Citicasters is a Florida corporation headquartered in Cincinnati, 
Ohio. Citicasters owns 19 radio stations in 8 cities, and also owns two 
television stations. In 1995, Citicasters' total revenues were 
approximately $60 million, $10 million from its Cincinnati radio 
operations. Citicasters owns two radio stations in Cincinnati.
    On February 12, 1996, Jacor agreed to purchase Citicasters for 
approximately $770 million. This transaction, which would combine Jacor 
and Citicasters, precipitated the Government's suit. As a result of the 
proposed transaction, Jacor would own six major radio stations in 
Cincinnati and control the sale of advertising time for three more.

B. Sale of Radio Advertising Time

    The complaint alleges that the provision of advertising time on 
radio stations serving the Cincinnati metropolitan area constitutes a 
line of commerce and section of the country, or relevant market, for 
antitrust purposes. Advertisers that seek to reach residents of the 
Cincinnati area would not find radio stations that broadcast to other 
areas to be acceptable substitutes for Cincinnati stations.
    Radio stations earn money by selling broadcast time to advertisers. 
Advertisers choose among radio stations by comparing differences among 
the stations' rates, audience size, audience composition, and 
availability of time for sale. An advertiser typically has a ``target 
audience'' (young women, for example) that it seeks to reach when 
marketing its product or service, and wants its target audience to have 
substantial exposure to its message. To ensure this reach and 
frequency, advertisers generally buy time on multiple radio stations in 
the same market. Because a radio station bases its rates on the size of 
its overall audience, advertisers prefer to advertise on stations that 
are listened to primarily by their target audience.
    For Cincinnati advertisers, radio is a qualitatively different 
medium from television or newspapers. Perhaps most significantly, radio 
gives Cincinnati advertisers the ability to reach target audiences far 
more efficiently than other media. Cincinnati radio stations attract 
different types of audiences by adopting different formats, such as 
country or rock and roll. By choosing appropriate radio stations, a 
Cincinnati advertiser can reach a large percentage of its target 
audience without also reaching (and thus paying for) listeners outside 
of its target. Although television and newspapers are good vehicles for 
reaching a broad, undifferentiated audience, they generally lack 
radio's ability to provide efficient targeting.
    Radio advertisements are also comparatively inexpensive to produce, 
and can be changed or modified easily and with little advance notice to 
the radio station. This makes radio advertising especially attractive 
to Cincinnati advertisers that need to change messages frequently (for 
example, to advertise different items as being on sale each week), as 
well as to companies with limited advertising budgets. Radio is also 
the most effective medium for delivering a message to consumers when 
they are traveling in their cars or outside their homes.
    Radio thus has particular advantages for those seeking to place 
low-cost, targeted or time-sensitive advertising. Many Cincinnati 
advertisers therefore perceive radio as a distinct advertising medium 
from television or newspapers. Accordingly, many are not likely to 
switch any or some of their advertising budget from radio to other 
media were radio prices to rise 5-10%.
    Radio stations negotiate rates individually with each advertiser. 
As an integral part of these negotiations, an advertiser will provide 
the station with a description of its target audience, as well as the 
reach and frequency it desires. Based on this information and the 
station's knowledge of its competitors, the station can identify the 
reasonable alternatives available to advertisers, and has the ability 
to charge advertisers different rates, based on whether such 
alternatives exist.

[[Page 42659]]

C. Anticompetitive Consequences of the Proposed Merger

    The complaint alleges that Jacor's proposed acquisition of 
Citicasters would lessen competition substantially in the provision of 
advertising time on radio in the Cincinnati area. The proposed 
acquisition would create further market concentration in an already 
highly concentrated market, and Jacor would control a substantial share 
of the advertising revenues in this market. Jacor presently controls 
42% of all radio advertising revenues in Cincinnati, and its market 
share would rise to 53% after the proposed merger. According to the 
Herfindahl-Hirschman Index (``HHI''), a widely-used measure of market 
concentration defined and explained in Appendix A, Jacor possesses a 
pre-merger HHI of 2180, which would rise to 3077 after the merger.
    Advertisers, at present, can choose among radio stations owned by 
Jacor, Citicasters and others. When there are multiple stations that 
could satisfy its needs, an advertiser can get competing bids from the 
stations, and so obtain better rates or other special services from 
them. After the merger, advertisers will have fewer radio companies to 
choose from, and many will have to purchase advertising time from 
Jacor/Citicasters so as to obtain the desired reach and frequency. 
Advertisers will thus lose the benefits that the existing competition 
between Jacor and Citicasters stations provides.
    Currently, many advertisers feel that advertising on either one of 
the Jacor-controlled stations, or on WKRQ, is very important. Many of 
these advertisers' target audiences include young adults (listeners 
aged 18 to 34). Thus, the Jacor stations and WKRQ compete against each 
other for the business of advertisers trying to reach that audience, 
and in rate negotiations, advertisers use this competition to get 
better rates or increased services from the Citicasters and Jacor 
stations. This competition will be eliminated by the merger.
    Currently, advertisers trying to reach young adults could 
efficiently reach this audience on the radio without having to use a 
Jacor station. Post-merger, however, many of these advertisers will be 
much more dependant on purchasing time from Jacor stations. Jacor could 
accordingly raise its rates, and reduce the quality of its service, to 
advertisers targeting young adults (or who need either the Jacor 
stations or WKRQ for other reasons) who would have scant alternatives 
to paying the increase, while maintaining lower rates for other 
advertisers. This would make a price increase profitable even though 
some advertisers could switch to other radio stations.
    Non-Jacor radio stations in Cincinnati are not likely to respond to 
Jacor's increased prices after the acquisition by changing formats so 
as to attract a greater number of young adults. Most radio stations 
change format only when their existing formats are losing money. A 
station is also unlikely to change its format solely in response to 
higher prices being charged by a large established company that 
controls a number of stations in the market, such as Jacor.
    Entry by new radio stations in this market is unlikely. The FCC is 
unlikely to grant a license to a new radio station, as there is 
insufficient spectrum to accommodate a new signal without interfering 
with existing signals. In addition, radio stations sited in nearby 
communities cannot easily boost their signal power so as to provide 
better coverage and thereby enter the Cincinnati market. Boosting a 
signal would interfere with neighboring stations on the same or similar 
frequencies, a violation of FCC regulations.
    For these reasons, the Department concludes that the merger as 
proposed would substantially lessen competition in the sale of radio 
advertising time in the Cincinnati area, eliminate actual competition 
between Jacor and Citicasters, and result in increased rates for radio 
advertising time in the Cincinnati metropolitan area, all in violation 
of Section 7 of the Clayton Act.

III. Explanation of the Proposed Final Judgment

    The proposed Final Judgment would preserve competition in the sale 
of radio advertising time in the Cincinnati metropolitan market. It 
requires the divestiture of WKRQ-FM, the station owned by Citicasters 
that competes most directly with Jacor stations for advertising dollars 
targeted to young adults. As a result of this divestiture, WKRQ-FM will 
remain as a strong competitor to the Jacor stations. The divestiture 
will preserve choices for advertisers and help ensure that radio 
advertising rates in Cincinnati do not increase as a result of the 
acquisition.
    Unless the United States grants a time extension, this divestiture 
of WKRQ must be accomplished by Jacor within six months after entry of 
the Final Judgment. The defendants must divest the assets and rights 
associated with WKRQ in such a way as to satisfy the plaintiff that the 
station can and will be operated as a viable, ongoing business, and 
that until the divestiture, the station will be maintained as an 
independent competitor to the other stations in the Cincinnati area, 
including the Jacor stations.
    If the defendants fail to divest WKRQ within the six months after 
entry of Final Judgment, or extension thereof, the Court, upon 
application of the United States, shall appoint a trustee nominated by 
the United States to effect the divestiture. If a trustee is appointed, 
the proposed Final Judgment provides that Jacor will pay all costs and 
expenses of the trustee and any professionals and agents retained by 
the trustee. The compensation paid to the trustee and any persons 
retained by the trustee shall be both reasonable in light of the value 
of WKRQ and based on a fee arrangement providing the trustee with an 
incentive based on the price and terms of the divestiture and the speed 
with which it is accomplished. After appointment, the trustee will file 
monthly reports with the parties and the Court setting forth the 
trustee's efforts to accomplish the divestiture ordered under the 
proposed Final Judgment. If the trustee has not accomplished the 
divestiture within six (6) months after its appointment, 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. At the 
same time, the trustee will furnish such report to the parties, who 
will each have the right to be heard and to make additional 
recommendations consistent with the purpose of the trust.
    The proposed Final Judgment requires that Jacor maintain WKRQ 
separate and apart pending divestiture. The Judgment also contains 
provisions to ensure that the assets of WKRQ will be preserved so that 
the station after divestiture will remain a viable, aggressive 
competitor.
    The proposed Final Judgment also prohibits Jacor from entering into 
certain agreements with other Cincinnati radio stations without 
providing at least thirty (30) days notice to the Department of 
Justice. Specifically, Jacor must notify the Department before 
acquiring any significant interest in another Cincinnati radio station, 
which would raise competitive concerns but might well be too small to 
be reported under the Hart-Scott-Rodino (``HSR'') premerger 
notification process. In addition, Jacor may not agree to sell radio 
advertising time for any other Cincinnati radio station, without 
providing such notice.

[[Page 42660]]

This provision ensures that the Department will receive advance notice 
of any acquisition, or agreements, through which Jacor will increase 
the amount of advertising time on radio stations that it can sell. In 
particular, this provision will require Jacor to notify the Department 
before it enters into any more joint sales agreements (``JSAs'') or 
limited management agreements (``LMAs'') with other stations in the 
Cincinnati area. Such agreements, whereby Jacor sells advertising for 
or manages other area radio stations, would effectively increase 
Jacor's market share in Cincinnati. In analyzing the Cincinnati radio 
market, the Department treated Jacor's three present JSA stations as if 
Jacor owned them outright. Despite their clear competitive 
significance, a JSA or an LMA probably would not be reportable to the 
Department under HSR. Thus, this provision in the decree ensures that 
the Department will receive notice of and be able to act, if 
appropriate, to stop any agreements that might have anticompetitive 
effects in the Cincinnati market.
    The relief in the proposed Final Judgment is intended to remedy the 
competitive effects of the proposed acquisition of Citicasters by 
Jacor. Nothing in this Final Judgment is intended to limit the 
plaintiff's ability to investigate or bring actions, where appropriate, 
challenging other past or future activities of Jacor in the Cincinnati 
area, including its entry into JSAs, LMAs or other agreements related 
to the sale of advertising time on non-Jacor stations.

IV. Remedies Available to Potential Private 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 nor assist the bringing of any private antitrust damage action. 
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 subsequent private lawsuit that may be brought against defendants.

V. Procedures Available for Modification of the Proposed Final Judgment

    The plaintiff and the defendants have stipulated that the proposed 
Final Judgment may be entered by the Court after compliance with the 
provisions of the APPA, provided that the United States has not 
withdrawn its consent. The APPA conditions entry upon the Court's 
determination that the proposed Final Judgment is in the public 
interest.
    The APPA provides a period of at least sixty (60) days preceding 
the effective date of the proposed Final Judgment within which any 
person may submit to the United States written comments regarding the 
proposed Final Judgment. Any person who wishes to comment should do so 
within sixty (60) days of the date of publication of this Competitive 
Impact Statement in the Federal Register. The United States will 
evaluate and respond to the comments. All comments will be given due 
consideration by the Department of Justice, which remains free to 
withdraw its consent to the proposed Final Judgment at any time prior 
to entry. The comments and the response of the United States will be 
filed with the Court and published in the Federal Register.
    Written comments should be submitted to: Donald J. Russell, Chief, 
Telecommunications Task Force, Antitrust Division, United States 
Department of Justice, 555 4th Street, N.W., Room 8104, Washington, 
D.C. 20001.
    The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and the parties may apply to the Court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

    The plaintiff considered, as an alternative to the proposed Final 
Judgment, a full trial on the merits of its complaint against 
defendants. The plaintiff is satisfied, however, that the divestiture 
of WKRQ and other relief contained in the proposed Final Judgment will 
preserve viable competition in the sale of radio advertising time in 
the Cincinnati metro area. Thus, the proposed Final Judgment would 
achieve the relief the government would have obtained through 
litigation, but avoids the time, expense and uncertainty of a full 
trial on the merits of the complaint.

VII. Standard of Review Under the APPA for Proposed Final Judgment

    The APPA requires that proposed consent judgments in antitrust 
cases brought by the United States be subject to a sixty (60) day 
comment period, after which the court shall determine whether entry of 
the proposed Final Judgment ``is in the public interest.'' In making 
that determination, the court may consider--

    (1) the competitive impact of such judgment, including 
termination of alleged violations, provisions for enforcement and 
modification, duration or relief sought, anticipated effects of 
alternative remedies actually considered, and any other 
considerations bearing upon the adequacy of such judgment;
    (2) the impact of entry of such judgment upon the public 
generally and individuals alleging specific injury from the 
violations set forth in the complaint including consideration of the 
public benefit, if any, to be derived from a determination of the 
issues at trial.

15 U.S.C. Sec. 16(e) (emphasis added). As the United States Court of 
Appeals for the D.C. Circuit recently held, this statute permits a 
court to consider, among other things, the relationship between the 
remedy secured and the specific allegations set forth in the 
government's complaint, whether the decree is sufficiently clear, 
whether enforcement mechanisms are sufficient, and whether the decree 
may positively harm third parties. See United States v. Microsoft, 56 
F.3d 1448, 1461-62 (D.C. Cir. 1995).
    In conducting this inquiry. ``[t]he Court is nowhere compelled to 
go to trial or to engage in extended proceedings which might have the 
effect of vitiating the benefits of prompt and less costly settlement 
through the consent decree process.'' \2\ Rather,

    \2\ 119 Cong. Rec. 24598 (1973). See United States v. Gillette 
Co., 406 F. Supp. 713, 715 (D. Mass. 1975). A ``public interest'' 
determination can be made properly on the basis of the Competitive 
Impact Statement and Response to Comments filed pursuant to the 
APPA. Although the APPA authorizes the use of additional procedures, 
15 U.S.C. Sec. 16(f), those procedures are discretionary. A court 
need not invoke any of them unless it believes that the comments 
have raised significant issues and that further proceedings would 
aid the court in resolving those issues. See H.R. Rep. 93-1463, 93rd 
Cong. 2d Sess. 8-9 (1974), reprinted in U.S.C.C.A.N. 6535, 6538.
---------------------------------------------------------------------------

[a]bsent a showing of corrupt failure of the government to discharge 
its duty, the Court, in making its public interest finding, should * 
* * carefully consider the explanations of the government in the 
competitive impact statement and its responses to comments in order 
to determine whether those explanations are reasonable under the 
circumstances.

United States v. Mid-America Dairymen, Inc., 1977-1 Trade Cas. para. 
61,508, at 71,980 (W.D. Mo. 1977).
    Accordingly, with respect to the adequacy of the relief secured by 
the decree, a court may not ``engage in an unrestricted evaluation of 
what relief would best serve the public.'' United States v. BNS, Inc., 
858 F.2d 456, 462 (9th Cir. 1988), citing United States v.

[[Page 42661]]

Bechtel Corp., 648 F.2d 660, 666 (9th Cir.), cert. denied, 454 U.S. 
1083 (1981); see also Microsoft, 56 F.3d at 1460-62. Precedent requires 
that

the balancing of competing social and political interests affected 
by a proposed antitrust consent decree must be left, in the first 
instance, to the discretion of the Attorney General. The court's 
role in protecting the public interest is one of insuring that the 
government has not breached its duty to the public in consenting to 
the decree. The court is required to determine not whether a 
particular decree is the one that will best serve society, but 
whether the settlement is `'within the reaches of the public 
interest.'' More elaborate requirements might undermine the 
effectiveness of antitrust enforcement by consent decree.\3\

    \3\ Bechtel, 648 F.2d at 666 (citations omitted) (emphasis 
added); see BNS, 858 F.2d at 463; United States v. National 
Broadcasting Co., 449 F. Supp. 1127, 1143 (C.D. Cal. 1978); 
Gillette, 406 F. Supp. at 716. See also Microsoft, 56 F.3d at 1461 
(whether ``the remedies [obtained in the decree are] so inconsonant 
with the allegations charged as to fall outside of the `reaches of 
the public interest' '') (citations omitted).
---------------------------------------------------------------------------

    The proposed Final Judgment, therefore, should not be reviewed 
under a standard of whether it is certain to eliminate every 
anticompetitive effect of a particular practice or whether it mandates 
certainty of free competition in the future. Court approval of a final 
judgment requires a standard more flexible and less strict than the 
standard required for a finding of liability. ``[A] proposed decree 
must be approved even if it falls short of the remedy the court would 
impose on its own, as long as it falls within the range of 
acceptability or is `within the reaches of public interest.' '' \4\
---------------------------------------------------------------------------

    \4\ United States v. American Tel. and Tel Co., 552 F. Supp. 
131, 151 (D.D.C. 1982), aff'd sub nom. Maryland v. United States, 
460 U.S. 1001 (1983), quoting Gillette Co., 406 F. Supp. at 716 
(citations omitted); United States v. Alcan Aluminum, Ltd., 605 F. 
Supp. 619, 622 (W.D. Ky. 1985).
---------------------------------------------------------------------------

VIII. Determinative Documents

    There are no determinative materials or documents within the 
meaning of the APPA that were considered by the United States in 
formulating the proposed Final Judgment.

    Dated: August 2, 1996.

    Respectfully submitted,
Nancy M. Goodman,
Assistant Chief, Telecommunications Task Force, U.S. Department of 
Justice, Antitrust Division, 555 4th Street, N.W., Room 8104, 
Washington, D.C. 20001, (202) 514-5621.

Exhibit A--Definition of HHI and Calculations for Market

    ``HHI'' means the Herfindahl-Hirschman Index, a commonly accepted 
measure of market concentration. It is calculated by squaring the 
market share of each firm competing in the market and then summing the 
resulting numbers. For example, for a market consisting of four firms 
with shares of thirty, thirty, twenty, and twenty percent, the HHI is 
2600 (30\2\ + 30\2\ + 20\2\ + 20\2\ = 2600). The HHI takes into account 
the relative size and distribution of the firms in a market and 
approaches zero when a market consists of a large number of firms of 
relatively equal size. The HHI increases both as the number of firms in 
the market decreases and as the disparity in size between those firms 
increases.
    Markets in which the HHI is between 1000 and 1800 are considered to 
be moderately concentrated, and those in which the HHI is in excess of 
1800 points are considered to be concentrated. Transactions that 
increase the HHI by more than 100 points in concentrated markets 
presumptively raise antitrust concerns under the Merger Guidelines. See 
Merger Guidelines Sec. 1.51.
    Based on available radio advertising revenues, the pre-merger HHI 
for the Cincinnati area radio market is 2180. After the proposed merger 
the HHI would be 3077, an increase of 897 points.

[FR Doc. 96-20860 Filed 8-15-96; 8:45 a.m.]
BILLING CODE 4410-01-M