[Federal Register Volume 62, Number 64 (Thursday, April 3, 1997)]
[Notices]
[Pages 15929-15938]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-8460]
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DEPARTMENT OF JUSTICE
Proposed Final Judgment and Competitive Impact Statement; United
States of America versus EZ Communications, Inc. and Evergreen Media
Corporation
Notice is hereby given pursuant to the Antitrust Procedures and
Penalties Act, 15 U.S.C. Sec. 16(b)-(h), that a proposed Final
Judgment, Stipulation, and
[[Page 15930]]
Competitive Impact Statement have been filed with the United States
District Court for the District of Columbia in United States v. EZ
Communications, Inc. and Evergreen Media Corporation Civ. Action No. 97
CV 406. The proposed Final Judgment is subject to approval by the Court
after the expiration of the statutory 60-day public comment period and
compliance with the Antitrust Procedures and Penalties Act, 15 U.S.C.
Sec. 16(b)-(h).
Plaintiff filed a civil antitrust Complaint on February 27, 1997,
alleging that a proposed swap and acquisition of radio stations in
Charlotte, North Carolina between EZ Communications, Inc. (``EZ'') and
Evergreen Media Corporation (``Evergreen'') would violate Section 7 of
the Clayton Act, 15 U.S.C. Sec. 18. The Complaint alleges that EZ and
Evergreen both own and operate numerous radio stations throughout the
United States, and that they each own and operate radio stations in the
Charlotte, North Carolina metropolitan area. The combined transactions
would give EZ a significant share of the radio advertising market in
the Charlotte metropolitan area. As a result, the combination of these
stations would lessen competition substantially in the sale of radio
advertising time in the Charlotte metropolitan area.
The prayer for relief seeks: (a) An adjudication that the proposed
transactions described in the Complaint would violate Section 7 of the
Clayton Act; (b) preliminary and permanent injunctive relief preventing
the consummation of such transactions; (c) an award to the United
States of the costs of this action; and (d) such other relief as is
proper.
Shortly before this suit was filed, a proposed settlement was
reached that permits EZ to complete its transactions with Evergreen,
yet preserves competition in the market in which the transactions 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 EZ to divest WRFX-FM, currently
owned by Evergreen. Unless the plaintiff grants a time extension, EZ
must divest this radio station either within six months after the
filing of the Complaint or within five (5) business days after notice
of entry of the Final Judgment, whichever is later. If EZ does not
divest WRFX-FM within the divestiture period, the Court shall, upon
plaintiff's application, appoint a trustee to sell the assets. The
proposed Final Judgment also requires EZ to ensure that, until the
divestiture mandated by the Final Judgment has been accomplished, WRFX-
FM will be operated independently as a viable, ongoing business, and
kept separate and apart from defendant EZ's other Charlotte radio
stations. Further, the proposed Final Judgment requires defendants to
give plaintiff prior notice regarding future radio station acquisitions
or certain agreements pertaining to the sale of radio advertising time
in Charlotte.
A Competitive Impact Statement filed by the United States describes
the Complaint, the proposed Final Judgment, and remedies available to
private litigants.
Public comment is invited within the statutory 60-day comment
period. Such comments, and the responses thereto, will be published in
the Federal Register and filed with the Court. Written comments should
be directed to Craig W. Conrath, Chief, Merger Task Force, Antitrust
Division, 1401 H Street, N.W., Suite 4000, Washington, D.C. 20530
(telephone: (202) 307-0001). Copies of the Complaint, Stipulation,
proposed final Judgment and Competitive Impact Statement are available
for inspection in Room 215 of the U.S. Department of Justice, Antitrust
Division, 325 7th Street, N.W., Washington. D.C. 20530 (telephone:
(202) 514-2481) and the office of the Clerk of the United States
District Court for the District of Columbia, 3rd Street and
Constitution Avenue, N.W., Washington, D.C.
Copies of any of these materials may be obtained upon request and
payment of a copying fee.
Constance K. Robinson,
Director of Operation Antitrust Division.
United States District Court For the District of Columbia
United States of America, Plaintiff, v. EZ Communications, Inc.
and Evergreen Media Corporation, Defendants. Civil Action No.
1:97CV00406, Filed 2/27/97, Judge Oberdorfer.
Stipulation and Order
It is stipulated by and between the undersigned parties, by their
respective attorneys, as follows:
(1) The Court has jurisdiction over the subject matter of this
action and over each of the parties hereto, and venue of this action is
proper in the United States District Court for the District of
Columbia.
(2) The parties stipulate that a Final Judgment in the form hereto
attached may be filed and entered by the Court, upon the motion of any
party or upon 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), and 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 the entry of the proposed Final
Judgment by serving notice thereof on defendants and by filing that
notice with the Court.
(3) Defendants shall abide by and comply with the provisions of the
proposed Final Judgment pending entry of the Final Judgment, or until
expiration of time for all appeals of any Court ruling declining entry
of the proposed Final Judgment, and shall, from the date of the signing
of this Stipulation by the parties, 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.
(4) Defendants shall not consummate the transaction sought to be
enjoined by the complaint herein before the Court has signed this
Stipulation and Order.
(5) This Stipulation shall apply with equal force and effect to any
amended proposed Final Judgment agreed upon in writing by the parties
and submitted to the Court. In the event that, as contemplated by
defendants, the WRFX-FM Assets are transferred by defendant Evergreen
Media Corporation (``Evergreen'') to defendant EZ Communications, Inc.
(``EZ'') or to a trust approved by plaintiff and the FCC prior to the
entry of the attached Final Judgment, then an amended Complaint and
proposed Final Judgment which do not name Evergreen as a defendant
shall promptly be filed herein and submitted to the Court.
(6) The parties recognize that there could be a delay in obtaining
approval by or a ruling of a government agency related to either the
transfer of the WRFX-FM Assets to EZ or to an approved trust, described
in paragraph (5) above, or the divestiture required by Section IV of
the Final Judgment, notwithstanding the good faith efforts of
defendants and any prospective Acquirer, as defined in the Final
Judgment. In this circumstance, plaintiff will, in the exercise of its
sole discretion, acting in good faith, give special consideration to
forbearing from applying for the appointment of a trustee pursuant to
Section V of the Final Judgment, or from pursuing legal remedies
available to it as a result of such delay, provided that: (a)
defendants have entered into a definitive agreement to divest the WRFX-
FM Assets, and such agreement and the Acquirer have been approved by
plaintiff; (b) all papers necessary to
[[Page 15931]]
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; (c) receipt of
such approvals are the only closing conditions that have not been
satisfied or waived; and (d) defendants have demonstrated that neither
they nor the prospective Acquirer are responsible for any such delay.
(7) In the event (a) plaintiff withdraws its consent, as provided
in paragraph 2 above, or (b) the proposed Final Judgment is not entered
pursuant to this Stipulation, the time has expired for all appeals of
any Court ruling declining entry of the proposed Final Judgment, and
the Court has not otherwise ordered continued compliance with the terms
and provisions of the proposed Final Judgment, then the parties are
released from all further obligations under this Stipulation, and the
making of this Stipulation shall be without prejudice to any party in
this or any other proceeding.
(8) Defendants represent that the divestiture ordered in the
proposed Final Judgment can and will be made, and that defendants will
later raise no claim of hardship or difficulty as grounds for asking
the Court to modify any of the divestiture provisions contained
therein.
Dated: February 26, 1997.
For Plaintiff United States of America
Dando B. Cellini,
U.S. Department of Justice, Antitrust Division, Merger Task Force, 1401
H Street, NW., Suite 4000, Washington, DC 20005, (202) 307-0829.
So Ordered.
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United States District Judge
For Defendant EZ Communications, Inc.
Ray V. Hartwell, III,
Andrew J. Strenio, Jr.,
Hunton & Williams,
1900 K Street, NW, Washington, DC 20006-1109, (202) 955-1639.
For Defendant Evergreen Media Corporation.
Bruce J. Prager,
Latham & Watkins,
885 Third Avenue, New York, NY 10022-4802, (212) 906-1272.
Final Judgment
Whereas, plaintiff, the United States of America, having filed its
Complaint herein on February 27, 1997, and defendants EZ
Communications, Inc. (``EZ'') and Evergreen Media Corporation
(``Evergreen''), by their attorneys, having consented to the entry of
this 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 purpose of this Final Judgment is prompt and
certain divestiture of certain assets to assure that competition is not
substantially lessened;
And whereas, plaintiff requires defendants 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
divestiture ordered herein can and will be made and that defendants
will later raise no claims of hardship or difficulty as grounds for
asking the Court to modify any of the divestiture provisions contained
below;
Now, 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
over the subject matter of this action. The Complaint states a claim
upon which relief may be granted against defendants EZ and Evergreen,
as hereinafter defined, under Section 7 of the Clayton Act, as amended
(15 U.S.C. 18).
II. Definitions
As used in this Final Judgment:
A. EZ means defendant EZ Communications, Inc., a Virginia
corporation with its headquarters in Fairfax, Virginia, and includes
its successors and assigns (specifically including without limitation
American Radio Systems Corporation (``ARS''), a Delaware corporation
headquartered in Boston, Massachusetts, which has agreed to acquire EZ
through merger), its subsidiaries, and directors, officers, managers,
agents and employees acting for or on behalf of EZ.
B. Evergreen means defendant Evergreen Media Corporation, a
Delaware corporation with its headquarters in Irving, Texas, and
includes Evergreen's successors and assigns, its subsidiaries, and
directors, officers, managers, agents and employees acting for or on
behalf of Evergreen.
C. WRFX-FM Assets means all of the assets, tangible or intangible,
used in the operation of the WRFX 99.7 FM radio station in the
Charlotte Area, including but not limited to all real property (owned
and leased) used in the operation of that station; all broadcast
equipment, personal property, inventory, office furniture, fixed assets
and fixtures, materials, supplies and other tangible property used in
the operation of that station; all licenses, permits, authorizations
and applications therefor issued by the Federal Communications
Commission (``FCC'') and other governmental agencies related to that
station, all contracts, agreements, leases and commitments of
defendants pertaining to that station and its operations; all
trademarks, service marks, trade names, copyrights, patents, slogans,
programming materials and promotional materials relating to that
station, and all logos and other records maintained by defendants or
that station in connection with its business.
D. Charlotte Area means the Charlotte, North Carolina Metro Survey
Area as identified by The Arbitron Radio Market Report for Charlotte
(Fall 1996), which is made up of the following counties: Union, York,
Cabarrus, Rowan, Mecklenburg, Lincoln and Gaston.
E. Acquirer means the entity to whom defendants divest the WRFX-FM
Assets under this Final Judgment.
F. EZ Radio Station means any radio station owned by EZ and
licensed to a community in the Charlotte Area, other than WRFX-FM.
G. Non-EZ Radio Station means any radio station licensed to a
community in the Charlotte area that is not an EZ Radio Station.
III. Applicability
A. The provisions of this Final Judgment apply to the defendants,
their successors and assigns (specifically including without limitation
ARS), their subsidiaries, affiliates, directors, officers, managers,
agents and employees, and all other persons in active concert or
participation with them who shall have received actual notice of this
Final Judgment by personal service or otherwise, specifically including
any trustee or trustees appointed by defendants pursuant to an FCC
License Trust Agreement or an FCC Assets Trust Agreement applicable to
the WRFX-FM Assets.
B. The defendants shall require, as a condition of the sale or
other disposition of all or substantially all of the assets used in
their business of owning and operating their portfolio of radio
stations in the Charlotte Area, that the acquiring party or parties
agree to be bound by the provisions of this Final
[[Page 15932]]
Judgment; provided, however, defendants need not obtain such an
agreement from an Acquirer in connection with the divestiture of the
WRFX-FM Assets.
IV. Divestiture of WRFX-FM Assets
A. Defendant EZ is hereby ordered and directed, in accordance with
the terms of this Final Judgment, within six (6) months after the
filing of the compliant in this action, or within five (5) business
days after notice of entry of this Final Judgment, whichever is later,
to divest the WRFX-FM Assets to an Acquirer acceptable to plaintiff, in
its sole discretion. 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 include all the
WRFX-FM Assets and shall be accomplished in such a way as to satisfy
plaintiff, in its sole discretion, that the WRFX-FM Assets can and will
be used by an Acquirer as a viable, ongoing commercial radio business.
The divestiture, whether pursuant to Section IV or V of this Final
Judgment, shall be made (1) to an Acquirer that, in the sole judgment
of plaintiff, has the capability and intent of competing effectively,
and has the managerial, operational and financial capability to compete
effectively as a radio station operator in the Charlotte Area; and (2)
pursuant to agreements the terms of which shall not, in the sole
judgment of plaintiff, interfere with the ability of the Acquirer to
compete effectively.
B. Defendant EZ agrees to use its best efforts to divest the WRFX-
FM Assets, and to obtain all regulatory approvals necessary for such
divestiture, as expeditiously as possible. Plaintiff, in its sole
discretion, may extend the time period for the divestiture for two (2)
additional thirty (30)-day periods of time, not to exceed sixty (60)
calendar days in total.
C. In accomplishing the divestiture ordered by this Final Judgment,
defendant EZ promptly shall make known, by usual and customary means,
the availability of the WRFX-FM Assets. Defendant EZ shall inform any
person making a bona fide inquiry regarding a possible purchase that
the sale is being made pursuant to this Final Judgment and provide such
person with a copy of the Final Judgment. Defendant EZ shall make known
to any person making an inquiry regarding a possible purchase of the
WRFX-FM Assets that the assets described in Section II (C) are being
offered for sale. Defendants also shall offer to furnish to all bona
fide prospective purchasers, subject to customary confidentiality
assurances, all information regarding the WRFX-FM Assets customarily
provided in a due diligence process, except such information that is
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
WRFX-FM 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, as is customary in a due diligence process.
E. Defendants shall not interfere with any efforts by any Acquirer
to employ the general manager or any other employee of WRFX-FM.
V. Appointment of Trustee
A. In the event that EZ has not divested the WRFX-FM Assets within
the time period specified in Section IV above, the Court shall appoint,
on application of plaintiff, a trustee selected by 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 WRFX-FM Assets. The trustee
shall have the power and authority to accomplish the divestiture at the
best price than obtainable upon a reasonable effort by the trustee,
subject to the provisions of Section V and VII of this Final Judgment
and consistent with FCC regulations, and shall have such 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 defendant EZ any investment 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 purchaser acceptable to plaintiff in its sole
judgment, and shall have such other powers as this Court shall deem
appropriate. EZ shall not object to the sale of the WRFX-FM Assets by
the trustee on any grounds other than the trustee's malfeasance. Any
such objection by EZ 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 VII of this Final Judgment.
C. The trustee shall serve at the cost and expense of EZ, 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 EZ, 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 WRFX-FM 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 WRFX-FM Assets, and
defendants shall develop such financial or other information as may be
necessary for the divestiture of the WRFX-FM Assets. Defendants shall
permit prospective purchasers of the WRFX-FM 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 defendant EZ, plaintiff and the Court, setting
forth the trustee's efforts to accomplish divestiture of the WRFX-FM
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 WRFX-FM 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
assets.
[[Page 15933]]
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
plaintiff and defendant EZ, which 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 to accomplish the
purpose of this Final Judgment, which shall, if necessary, include
extending the term of the trustee's appointment.
VI. Preservation of Assets/Hold Separate
Until the divestiture of the WRFX-FM Assets required by Section IV
of the Final Judgment has been accomplished:
A. Defendants shall take all steps necessary to operate WRFX-FM as
a separate, independent, ongoing, economically viable and active
competitor to defendant EZ's other stations in the Charlotte Area, and
shall take all steps necessary to ensure that, except as necessary to
comply with Section IV and paragraphs B and C of this Section of the
Final Judgment, the management of said station, including the
performance of decision-making functions regarding marketing and
pricing, will be kept separate and apart from, and not influenced by,
defendant EZ.
B. Defendants shall use all reasonable efforts to maintain and
increase sales of advertising time by WRFX-FM, and shall maintain at
1996 or previously approved levels for 1997, whichever are higher,
promotional advertising, sales, marketing and merchandising support for
such radio station.
C. Defendants shall take all steps necessary to ensure that the
assets used in the operation of WRFX-FM are fully maintained. WRFX-FM's
sales and marketing employees shall not be transferred or reassigned to
any other station, except for transfer bids initiated by employees
pursuant to defendants' regular, established job posting policies,
provided that defendants give plaintiff and Acquirer ten (10) day's
notice of such transfer.
D. Defendants shall not, except as part of a divestiture approved
by plaintiff, sell any WRFX-FM Assets.
E. Defendants shall take no action that would jeopardize the sale
of the WRFX-FM Assets.
F. Defendants shall appoint a person or persons to oversee the
assets to be held separate and who will be responsible for defendants'
compliance with Section VI of this Final Judgment.
VII. Notification
Within two (2) business days following execution of a binding
agreement to divest, including all contemplated ancillary agreements
(e.g., financing), to effect any proposed divestiture pursuant to
Section IV or V of this Final Judgment, defendant EZ 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 defendant EZ. 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 WRFX-FM Assets, 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, the
proposed purchaser, and any other potential purchaser. Defendants and
the trustee shall furnish any additional information requested within
fifteen (15) calendar days of the receipt of the request. Within thirty
(30) calendar days after receipt of the notice or within twenty (20)
calendar days after plaintiff has been provided the additional
information, 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 fails to object
within the period specified, or if plaintiff provides written notice to
defendants and the trustee, if there is one, 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. A divestiture proposed under Section IV shall not be
consummated if plaintiff objects to it. Upon objection by plaintiff, or
by defendant EZ under the proviso in Section V(B), a divestiture
proposed under Section V shall not be consummated unless approved by
the Court.
VIII. Financing
Defendants are ordered and directed not to finance all or any part
of any purchase by an Acquirer made pursuant to Sections IV or V of
this Final Judgment without the prior written consent of plaintiff.
IX. 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, defendants shall deliver to plaintiff
an affidavit as to the fact and manner of defendants' compliance with
Section 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, was contacted by defendants, or their representatives, made an
offer to acquire, expressed an interest in acquiring, entered into
negotiations to acquire, or made an inquiry about acquiring, any
interest in the WRFX-FM Assets, and shall describe in detail each
contact with any such person during that period. Each such affidavit
shall also include a description of the efforts that defendants have
taken to solicit a buyer for the WRFX-FM Assets.
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
WRFX-FM pursuant to Section VII of this Final Judgment. Defendants
shall deliver to plaintiff an affidavit describing any changes to the
efforts and actions outlined in their earlier affidavit(s) filed
pursuant to this Section within fifteen (15) calendar days after such
change is implemented.
C. Defendants shall preserve all records of all efforts made to
preserve WRFX-FM and to divest the WRFX-FM Assets.
X. Notice
A. Unless such transaction is otherwise subject to the reporting
and waiting period requirements of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, 15 U.S.C. 18a (the ``HSR Act''),
EZ, without providing advance notification to the plaintiff, shall not
directly or indirectly acquire any assets of or any interest, including
any financial, security, loan, equity, or
[[Page 15934]]
management interest, in any Non-EZ Radio Station.
B. EZ, without providing advance notification to the plaintiff,
shall not directly or indirectly enter into any agreement or
understanding that would allow EZ to market or sell advertising time or
to establish advertising prices for any Non-EZ Radio Station.
C. Notification described in (A) and (B) above 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 EZ Radio
Stations in the Charlotte Area. Notification shall be provided at least
thirty (30) days prior to acquiring any such interest or entering any
such agreement covered in (A) or (B) 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 plaintiff make a written request
for additional information, defendants 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.
D. This Section shall be broadly construed and any ambiguity or
uncertainty regarding the filing of notice under this Section shall be
resolved in favor of filing notice.
XI. Compliance Inspection
For the purpose 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 plaintiff, including
consultants and other persons retained by the plaintiff, shall, upon
written request of the United States 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, 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 any matters
contained in this Final Judgment; and
(2) Subject to the reasonable convenience of defendants and without
restraint or interference from defendants, to interview directors,
officers, employees and agents of defendants, who may have cousel
present, regarding any such matters.
B. Upon the written request of the Untied States 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
any of the matters contained in this Final Judgment as may be
requested.
C. No information or documents obtained by the means provided in
Section IX or this Section XI shall be divulged by any representative
of the Untied States 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 plaintiff 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 a
defendant to plaintiff, and such defendant represents and identifies 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 such defendant marks 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 such defendant prior to divulging
such material in any legal proceeding (other than a grand jury
proceeding) to which such defendant is not a party.
XII. Retention of Jurisdiction
Jurisdiction is retained by this Court at any time for such further
orders and directions as may be necessary or appropriate for the
construction, implementation or modification of any provisions of this
Final Judgment, for the enforcement of compliance herewith, and for the
punishment of any violation hereof.
XIII. Termination
Unless this Court grants an extension, this Final Judgment will
expire upon the tenth anniversary of the date of its entry.
XIV. Public Interest
Entry of this Final Judgment is in the public interest.
Certificate of Service
I, Dando B. Cellini, hereby certify that, on February 27, 1997, I
caused the foregoing documents to be served on defendants EZ
Communications, Inc. and Evergreen Media Corporation by having a copy
mailed, first-class postage prepaid, to:
Ray V. Hartwell, III,
Andrew J. Strenio, Jr.,
Hunton & Williams,
1900 K Street, NW, Washington, DC 20006-1109, (202) 955-1639, Counsel
for EZ Communications, Inc.
Bruce J. Prager,
Latham & Watkins,
885 Third Avenue, New York, NY 10022-4802, (212) 906-1272, Counsel for
Evergreen Media Corporation.
Dando B. Cellini.
Competitive Impact Statement
Plaintiff, the United States of America, 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.
I. Nature and Purpose of the Proceeding
Plaintiff filed a civil antitrust Complaint on February 27, 1997,
alleging that a proposed swap and acquisition of radio stations in
Charlotte, North Carolina between EZ Communications, Inc. (``EZ'') and
Evergreen Media Corporation (``Evergreen'') would violate Section 7 of
the Clayton Act, 15 U.S.C. Sec. 18. The Complaint alleges that EZ and
Evergreen both own and operate numerous radio stations throughout the
United States, and that they each own and operate radio stations in the
Charlotte, North Carolina metropolitan area. The combined transactions
would give EZ a significant share of the radio advertising market in
the Charlotte metropolitan area. As a result, the combination of these
stations would lessen competition substantially in the sale of the
radio advertising time in the Charlotte metropolitan area.\1\
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\1\ Prior to, and independent of, the transactions giving rise
to this action, EZ and other radio station owners had announced
plans to swap radio stations. The swaps would have eliminated
existing competition and resulted in EZ dominating the country
format--and its listeners--and SFX Broadcasting Inc. dominating the
rock format--and its listeners. These transactions were abandoned
following the Department of Justice's investigation into whether the
swaps were a device to allocate Charlotte's advertisers in such a
way as to lessen competition between the two station groups.
Therefore, it was not necessary to seek relief regarding these swaps
in this Complaint.
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[[Page 15935]]
The prayer for relief seeks: (a) an adjudication that the proposed
transactions described in the Complaint would violate Section 7 of the
Clayton Act; (b) preliminary and permanent injunctive relief preventing
the consummation of such transactions; (c) an award to the United
States of the costs of this action; and (d) such other relief as is
proper.
Shortly before this suit was filed, a proposed settlement was
reached that permits EZ to complete its transactions with Evergreen,
yet preserves competition in the market in which the transactions would
raise significant competitive concerns. A stipulation and proposed
Final Judgment embodying the settlement were filed at the same time the
Complaint was filed.\2\
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\2\ In a related transaction, American Radio Systems Corporation
(``ARS'') has agreed to acquire EZ through merger. Should the
proposed merger be consummated, ARS will succeed to EZ's obligations
under the proposed Final Judgment.
---------------------------------------------------------------------------
The proposed Final Judgment orders EZ to divest WRFX-FM, currently
owned by Evergreen. Unless the plaintiff grants a time extension, EZ
must divest this radio station either within six months after the
filing of the Complaint or within five (5) business days after notice
of entry of the Final Judgment, whichever is later. If EZ does not
divest WRFX-FM within the divestiture period, the Court shall, upon
plaintiff's application, appoint a trustee to sell the assets. The
proposed Final Judgment also requires EZ to ensure that, until the
divestiture mandated by the Final Judgment has been accomplished, WRFX-
FM will be operated independently as a viable, ongoing business, and
kept separate and apart from defendant EZ's other Charlotte radio
stations. Further, the proposed Final Judgment requires defendants to
give plaintiff prior notice regarding future radio station acquisitions
or certain agreements pertaining to the sale of radio advertising time
in Charlotte.
The plaintiff and the defendants 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. The Alleged Violations
A. The Defendants
Defendant EZ is a Virginia corporation with its headquarters in
Fairfax, Virginia. It currently operates 23 radio stations throughout
the United States, including two radio stations in Charlotte. In 1996
EZ reported revenues of approximately $14 million from its Charlotte
stations.
Evergreen is a Delaware corporation headquartered in Irving, Texas.
It owns and operates 41 radio stations nationwide, including five
stations in the Charlotte area. In 1996 Evergreen derived approximately
$22 million in revenues from its Charlotte stations.
B. Description of the Events Giving Rise to the Alleged Violations
On August 27, 1996, EZ entered into an agreement to swap two of its
radio stations in Philadelphia for five of Evergreen's stations in
Charlotte, North Carolina. In addition, EZ agreed to purchase another
Charlotte radio station Evergreen for $10 million. The result of these
two transactions, as is more fully discussed below, would be to give EZ
a significant share of the radio advertising market in Charlotte, as
well as a significant percentage of advertising directed to certain
target audiences in Charlotte.
EZ and Evergreen previously have competed for the business of local
and national companies seeking to advertise in the Charlotte area.
Because the proposed transactions between EZ and Evergreen would have
eliminated this competition, they precipitated the government's suit.
C. Anticompetitive Consequences of the Proposed Transaction
1. Sale of Radio Advertising Time in Charlotte. The Complaint
alleges that the provision of advertising time on radio stations
serving the Charlotte, North Carolina Metro Service Area (``MSA'')
constitutes a line of commerce and section of the country, or relevant
market, for antitrust purposes. The Charlotte MSA is the geographical
unit for which Arbitron furnishes radio stations, advertisers and
advertising agencies in Charlotte with data to aid in evaluating radio
audience size and composition. Advertisers use this data in making
decisions about which radio station or combination of radio stations
can deliver their target audiences in the most efficient and cost-
effective way. The Charlotte MSA includes seven countries: Union, York,
Cabarrus, Rowan, Mecklenburg, Lincoln and Gaston.
Local and national advertising that is placed on radio stations
within the Charlotte MSA is aimed at reaching listening audiences
within the Charlotte MSA, and radio stations outside of the Charlotte
MSA do not provide effective access to this audience. Thus, if there
were a small but significant nontransitory increase in radio
advertising prices within the Charlotte MSA, advertisers would not buy
enough advertising time from radio stations located outside of the
Charlotte MSA to defeat the increase.
Radio stations earn their revenues from the sale of advertising
time to local and national advertisers. Many local and national
advertisers purchase radio advertising time in Charlotte because they
find such advertising preferable to advertising in other media for
their specific needs. For such advertisers, radio time (a) may be less
expensive and more cost-efficient than other media at reaching the
advertiser's target audience (individuals most likely to purchase the
advertiser's products or services); (b) may reach certain target
audiences that cannot be reached as effectively through other media; or
(c) may offer promotional opportunities to advertisers that they cannot
exploit as effectively using other media. For these and other reasons,
many local and national advertisers in Charlotte who purchase radio
advertising time view radio either as a necessary advertising medium
for them or as a necessary advertising complement to other media.
Although some local and national advertisers may switch some of
their advertising to other media rather than absorb a price increase in
radio advertising time in Charlotte, the existence of such advertisers
would not prevent radio stations from raising their prices a small but
significant amount. At a minimum, stations could raise prices
profitably to those advertisers who view radio either as a necessary
advertising medium for them, or as a necessary advertising complement
to other media. Radio stations, which negotiate prices individually
with advertisers, can identify those advertisers with strong radio
preferences. Consequently, radio stations can charge different
advertisers different rates. Because of this ability to price
discriminate between different customers, radio stations may charge
higher rates to advertisers that view radio as particularly effective
for their needs, while maintaining lower rates for other advertisers.
2. Harm to Competition. The Complaint alleges that EZ's proposed
station swaps and acquisition with Evergreen would lessen competition
substantially in the provision of radio
[[Page 15936]]
advertising time in the Charlotte MSA. First, the proposed transactions
would create further market concentration in an already highly
concentrated market, and EZ would control a substantial share of the
advertising revenues in this market. EZ's market share of radio
advertising revenues would increase to 55 percent after the proposed
transactions. According to the Herfindahl-Hirschman Index (``HHI''), a
widely-used measure of market concentration defined and explained in
Appendix A, EZ possesses a pretransaction HHI of 2198, which would rise
by 1440 points to 3638 after the transactions. This substantial
increase in concentration is likely to give EZ the unilateral power to
raise advertising prices and reduce the level of service provided to
advertisers in the Charlotte radio market.
Furthermore, the proposed transactions would eliminate head-to-head
competition between EZ and Evergreen for advertisers seeking to reach
specific audiences. Advertisers select radio stations to reach a large
percentage of their target audience based upon a number of factors,
including, inter alia, the size of the station's audience, the
characteristics of its audience, and the geographic reach of a
station's signal. Many advertisers seek to reach a large percentage of
their target audience by selecting those stations whose audience best
correlates to their target audience. Today, EZ's two stations and
several of Evergreen's stations compete head-to-head to reach the same
audiences and, for many local and national advertisers buying time in
Charlotte, the stations are close substitutes for each other based on
their specific audience characteristics. The proposed transactions
would eliminate such competition, notably including competition for
advertisers seeking to reach male listeners in Charlotte.
Advertisers seeking to reach male listeners in Charlotte currently
help ensure competitive rates by ``playing off'' Evergreen stations
against EZ stations. Because the direct competition between the
Evergreen and EZ stations would be eliminated by the proposed
transactions, and because advertisers seeking to reach male listeners
would have inferior alternatives as a result of the transactions, the
transactions would give EZ the ability to raise its rates and reduce
the quality of its services to some of its advertisers on its Charlotte
stations. This is particularly true because of EZ's ability to charge
different prices to different advertisers.
Format changes are unlikely to deter the anticompetitive
consequences of these transactions. If EZ raised prices or lowered
services to those advertisers who buy EZ and Evergreen stations because
of their strength in delivering access to certain specific audiences,
non-EZ radio stations in Charlotte would not be induced to change their
formats to attract a greater share of the same listeners and to serve
better those advertisers seeking to reach such listeners. Successful
radio stations are unlikely to undertake a format change solely in
response to small but significant increases in price being charged to
advertisers by a multi-station firm such as EZ, because they would
likely lose a substantial portion of their existing audiences. Even if
less successful stations did change format, they still would be
unlikely to attract enough listeners to provide a suitable alternative
to EZ.
Finally, new entry into the Charlotte radio advertising market is
highly unlikely in response to a price increase by EZ. No unallocated
radio broadcast frequencies exist in Charlotte. Also, stations located
in adjacent communities cannot boost their power so as to enter the
Charlotte market without interfering with other stations on the same or
similar frequencies, a violation of Federal Communications Commission
(``FCC'') regulations.
For all of these reasons, plaintiff concludes that the proposed
transactions would lessen competition substantially in the sale of
radio advertising time in the Charlotte MSA, eliminate actual
competition between EZ and Evergreen, and result in increased prices
and reduced quality of service for radio advertising time in the
Charlotte MSA, 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 Charlotte MSA. It requires the
divestiture of WRFX-FM, Charlotte's most popular station among male
listeners. This relief will reduce the market share in advertising
revenues EZ would have achieved through the proposed transactions from
over 55 percent to about 40 percent of the Charlotte radio market. The
divestiture will preserve choices for advertisers and help ensure that
radio advertising rates in Charlotte do not increase and that services
do not decline as a result of the combined transactions.
Unless plaintiff grants an extension of time, EZ must divest WRFX-
FM either within six months after the Complaint has been filed or
within five (5) business days after notice of entry of the Final
Judgment, whichever is later. Until the divestiture takes place, WRFX-
FM will be maintained as a viable and independent competitor to EZ's
other stations in the Charlottee MSA.
If EZ fails to divest WRFX-FM within the time periods specified in
the Final Judgment, the Court, upon plaintiff's application, shall
appoint a trustee nominated by plaintiff to effect the divestiture. If
a trustee is appointed, the proposed Final Judgment provides that EZ
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 WRFX-FM, 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 plaintiff, defendant EZ 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 plaintiff and
defendant EZ, who will each have the right to be heard and to make
additional recommendations.
The proposed Final Judgment requires that defendants maintain WRFX-
FM separate and apart from defendant EZ's other Charlotte stations,
pending divestiture. The Judgment also contains provisions to ensure
the WRFX-FM will be preserved, so that this station remains a viable,
aggressive competitor after divestiture.
The proposed Final Judgment also prohibits EZ from entering into
certain agreements with other Charlotte radio stations without
providing at least thirty (30) days' notice to the Department of
Justice. Specifically, EZ must notify the Department before acquiring
any interest in another Charlotte radio station. Such acquisitions
could raise competitive concerns but might be too small to be reported
otherwise under the Hart-Scott-Rodino (``HSR'') premerger notification
statute. Moreover, EZ may not agree to sell radio advertising time for
any other Charlotte radio station without providing plaintiff with
notice. In particular, the provision requires EZ to notify the
Department before it enters
[[Page 15937]]
into any Joint Sales Agreements (``JSAs''), where one station takes
over another station's advertising time, or any Local Marketing
Agreements (``LMAs''), where one station takes over another station's
broadcasting and advertising time, or other comparable arrangements in
the Charlotte area. Agreements whereby EZ sells advertising for or
manages other Charlotte area radio stations would effectively increase
its market share in this MSA. Despite their clear competitive
significance, JASs probably would not be reportable to the Department
under the HSR Act. Thus, this provision in the proposed Final Judgment
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 Charlotte market.
The relief in the proposed Final Judgment is intended to remedy the
likely anticompetitive effects of EZ's proposed transactions with
Evergreen in Charlotte. Nothing in this Final Judgment is intended to
limit the plaintiff's ability to investigate or to bring actions, where
appropriate, challenging other past or future activities of defendants
in the Charlotte MSA.
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 APA, provided that the plaintiff 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 plaintiff 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 plaintiff 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 plaintiff will be filed
with the Court and published in the Federal Register.
Written comments should be submitted to: Craig W. Conrath, Chief,
Merger Task Force, Antitrust Division, United States Department of
Justice, 1401 H Street, NW; Suite 4000, Washington, DC 20530.
The proposed Final Judgment provides that the Court retains
jurisdiction over this action, and that 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
Plaintiff considered, as an alternative to the proposed Final
Judgment, a full trial on the merits of its Complaint against
defendants. Plaintiff is satisfied, however, that the divestiture of
WRFX-FM and other relief contained in the proposed Final Judgment will
preserve viable competition in the sale of radio advertising time in
the Charlotte MSA. 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.A. Sec. 16(e).
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.'' \3\ Rather,
---------------------------------------------------------------------------
\3\ 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. 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 findings, 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. 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
[[Page 15938]]
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.\4\
\4\ 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.' '' \5\
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\5\ 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).
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This is strong and effective relief that should fully address the
competitive harm posed by the proposed transactions.
VIII. Determinative Documents
There are no determinative materials or documents within the
meaning of the APPA that were considered by the plaintiff in
formulating the proposed Final Judgment.
Respectfully submitted,
Dando B. Cellini,
Merger Task Force, U.S. Department of Justice, Antitrust Division, 1401
H Street, N.W.; Suite 4000, Washington, D.C. 20530, (202) 307-0829.
Dated: March 20, 1997.
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 (302 + 302 + 202 + 202 = 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 increases and as the disparity in size between
those firms increases.
Markets in which the HHI is between 1000 and 1800 points 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.
Certificate of Service
I, Dando B. Cellini, hereby certify that, on March 20, 1997, I
caused the foregoing document to be served on defendants EZ
Communications, Inc. and Evergreen Media Corporation by having a copy
mailed, first-class, postage prepaid, to:
Ray V. Hartwell, III,
Andrew J. Strenio, Jr.,
Hunton & Williams,
1900 K Street, NW, Washington, DC 20006-1109, (202) 955-1639, Counsel
for EZ Communications, Inc.
Bruce J. Prager,
Latham & Watkins,
885 Third Avenue, New York, NY 10022-4802, (212) 906-1272, Counsel for
Evergreen Media Corporation.
Dando B. Celini.
[FR Doc. 97-8460 Filed 4-2-97; 8:45 am]
BILLING CODE 4410-11-M