[Federal Register Volume 64, Number 112 (Friday, June 11, 1999)]
[Notices]
[Pages 31612-31624]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-14896]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Capstar Broadcasting Corporation and Triathlon 
Broadcasting Company; 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 the United States District Court for the District of 
Columbia in United States of America v. Capstar Broadcasting 
Corporation and Triathlon Broadcasting Company, Civil Action No. 99-
CV00993. On April 21, 1999, the United States filed a Complaint 
alleging that the proposed acquisition by Capstar Broadcasting 
Corporation (``Capstar'') of the radio assets of Triathlon Broadcasting 
Company (``Triathlon'') in Wichita, Kansas, would violate Section 7 of 
the Clayton Act, 15 U.S.C. 18. The proposed Final Judgment, filed the 
same time as the Compliant, requires Capstar to divest five radio 
stations in Wichita pursuant to the Final Judgment. Copies of the 
Complaint, proposed Final Judgment and Competitive Impact

[[Page 31613]]

Statement are available for inspection at the Department of Justice in 
Washington, DC in Room 215, 325 Seventh Street, NW, and at the Office 
of the Clerk of the United States District Court for the District of 
the District of Columbia.
    Public comment is invited within 60 days of the date of this 
notice. Such comments, and responses thereto, will be published in the 
Federal Register and filed with the Court. Comments should be directed 
to Craig W. Conrath, Chief Merger Task Force, Antitrust Division, 
Department of Justice, 1401 H St. NW., Suite 4000, Washington, DC 20530 
(telephone: (202) 307-0001).
Constance K. Robinson,
Director of Operations & Merger Enforcement.

    United States of America, United States Department of Justice, 
Antitrust Division, 4000 City Center Building, Washington, DC 20530, 
Plaintiff, v. Capstar Broadcasting Corporation, 600 Congress Ave. 
Suite 1400, Austin, TX 78701 and Triathlon Broadcasting Company, 750 
B Symphony Towers, Suite 1920, San Diego, CA 92101, Defendants.

[Civil Action No. 990993]

Stipulation

    It is stipulated by and between the undersigned parties by their 
respective attorneys, as follows:
    1. This Court has jurisdiction over the subject matter of this 
action and the parties have agreed to waive all objections to personal 
jurisdiction and venue 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. 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 by the 
Court, 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. 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.
    5. In the event plaintiff withdraws its consent, as provided in 
paragraph 2 above, or in the event 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.
    6. Defendants represent that the divestitures 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: April 20, 1999.

    For Plaintiff United States of America.
Karl D. Knutsen,
United States Department of Justice, Antitrust Division, Merger Task 
Force, 1401 H Street, N.W., Washington, D.C. 20530, (202) 514-0976.

    For Defendant Capstar Broadcasting Corporation.
Neil W. Imus,
Vinson & Elkins L.L.P., 1455 Pennsylvania Ave., N.W., Washington, D.C. 
20006, (202) 639-6675.

    For Defendant Triathlon Broadcasting Company.
David J. Laing,
Baker & McKenzie, 815 Connecticut Ave., NW., Washington, DC 20006, 
(202) 452-7023.

    United States of America, Plaintiff, v. Capstar Broadcasting 
Corporation, and Triathlon Broadcasting Company, Defendants.

[Civil Action No. 99 0993]

Final Judgment

    Whereas, plaintiff, the United States of America, filed its 
complaint in this action on April 21, 1999, and plaintiff and 
defendants Capstar and Triathlon by their respective 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, these 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 the 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 the plaintiff that the 
divestitures ordered herein can and will be made and that Defendants 
will not later raise claims of hardship, contractual bar, or difficulty 
as grounds for asking the Court to delay or modify the divestiture 
described 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 Defendants and over 
the subject matter of this action, and Defendants have agreed to waive 
any objection to personal jurisdiction or venue. The Complaint states a 
claim upon which relief may be granted against the Defendants, 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. ``Capstar'' means defendant Capstar Broadcasting Corporation, a 
Delaware corporation with its headquarters in Austin, Texas, and its 
successors, assigns, subsidiaries, divisions, groups, affiliates, 
partnerships and joint ventures, and directors, officers, managers, 
agents, and employees, including but not limited to Hicks, Muse, Tate, 
& Furst Incorporated (``Hicks-Muse''), a Delaware corporation with its 
headquarters in Dallas, Texas.
    B. ``Triathlon'' means defendant Triathlon Broadcasting Company, a 
Delaware corporation with its headquarters in San Diego, California, 
and its successors, assigns, subsidiaries, divisions, groups, 
affiliates, partnerships and joint ventures, and directors, officers, 
managers, agents, and employees.
    C. ``Defendants'' means Capstar and Triathlon.
    D. ``Antitrust Division'' means the Antitrust Division of the 
United States Department of Justice.
    E. ``Radio Assets'' means all of the assets, tangible or 
intangible, used in the operation of the radio stations KEYN-

[[Page 31614]]

FM, KWSJ-FM, KNSS-AM, KFH-AM, and KQAM-AM, that sell advertising time 
in Wichita, Kansas, including all real property (owned or leased) used 
in the operation of these stations, all broadcast equipment, office 
equipment, office furniture, fixtures, materials, supplies, and other 
tangible property used in the operation of these stations; all 
licenses, permits, authorizations, and applications therefor issued by 
the Federal Communications Commission (``FCC'') and other government 
agencies related to these stations; all contracts, agreements, leases 
and commitments of Defendants relating to their operations; all 
trademarks, service marks, trade names, copyrights, patents, slogans, 
programming materials, and promotional materials relating to these 
stations; and all logs and other records maintained by the operator or 
owner in connection with its business, except that in the case of KNSS-
AM, the divestiture may include only those assets necessary to continue 
the transmitting, programming, and selling of that station in its 
present form.
    F. ``Acquirer'' means the entity to whom defendant Capstar divests 
the Radio Assets.
    G. ``Wichita'' means the Wichita, Kansas Metropolitan Survey Area, 
which includes Sedgwick, Harvey and Butler Counties, Kansas.

III. Applicability

    A. The provisions of this Final Judgment apply to the Defendants, 
their successors and assigns, their 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, 
specifically including any trustee or trustees appointed by defendant 
pursuant to an FCC Trust Agreement (as defined in Section V(A)) 
applicable to the Radio Assets.
    B. Defendant Capstar shall require, as a condition of the sale or 
other disposition of any of the Radio Assets, that the Acquirer or 
Acquirers agree to be bound by the provisions of this Final Judgment.

IV. Divestiture of Radio Assets

    A. Capstar is hereby ordered and directed in accordance with the 
terms of this Final Judgment to divest the Radio Assets to (i) an 
Acquirer acceptable to the Antitrust Division at its sole discretion or 
(ii) the Trustee identified pursuant to Sec. V at the same time it 
acquires Triathlon. Unless plaintiff otherwise consents in writing, the 
divestiture pursuant to the section IV of this Final Judgment, or by 
the Trustee appointed pursuant to Section V, shall include all the 
Radio Assets and shall be accomplished in such a way as to satisfy 
plaintiff, in its sole discretion, that the Radio Assets can and will 
be used by an Acquirer as a viable and ongoing radio business. The 
divestiture, whether pursuant to section IV or section V of this Final 
Judgment, shall be made (1) to an Acquirer that, in the sole judgment 
of plaintiff, has the capability and the intent of completing 
effectively, and has the managerial, operational, and financial 
capability to compete effective as a radio operator in the Wichita 
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 Capstar agrees to use its best efforts to divest the 
Radio Assets, and to obtain all regulatory approvals necessary for such 
divestiture, as expeditiously as possible.
    C. In accomplishing the divestiture ordered by the Final Judgment, 
defendant Capstar promptly shall make known, by usual and customary 
means, the availability of the Radio Assets. Defendant Capstar shall 
inform any person making an inquiry regarding a possible purchase that 
the sale is being made pursuant to this Final Judgment and provide each 
person with a copy of this Final Judgment. Defendant Capstar shall make 
known to any person making an inquiry regarding a possible purchase of 
the Radio Assets described in Section II that the Radio Assets are 
being offered for sale. Capstar shall also offer to furnish all 
prospective purchasers, subject to customary confidentiality 
assurances, all information regarding the Radio Assets customarily 
provided in a due diligence process, except such information that is 
subject to attorney-client privilege or attorney-work product 
privilege. Defendant Capstar shall make available such information to 
plaintiff at the same time that such information is made available to 
any other person.
    D. In accomplishing the divestiture ordered by this Section IV, 
defendant Capstar shall permit prospective purchasers of the Radio 
Assets to have access to personnel and to make such inspection of 
assets, and any and all financial, operational, and or other documents 
and information, as is customary in a due diligence process.
    E. Defendant Capstar shall not interfere with any efforts by any 
Acquirer to employ the general manager or any other employee of the 
Radio Assets.

V. Appointment of Trustee

    A. In the event that Capstar has not divested the Radio Assets in 
the time period specified in Sec.  IV above, Henry M. Rivera shall, 
subject to the prior approval of the FCC, become Trustee (the 
``Trustee'') to effect the operation and sale of the Radio Assets 
pursuant to an FCC Trust Agreement submitted by Capstar to the FCC, as 
amended, and attached to this proposed Final Judgment as Exhibit A (the 
``FCC Trust Agreement''). In the event of Mr. Rivera's resignation, 
incapacity to act, death, or insolvency, the Court shall appoint, on 
application of plaintiff and subject to such prior approvals as may be 
required, 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 Radio Assets. The Trustee 
shall have the power and authority to accomplish the sale pursuant to 
the conditions of the FCC Trust Agreement.
    C. The Trustee shall serve at the cost and expense of defendant 
Capstar, on such terms and conditions contained in the FCC Trust 
Agreement or 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 pursuant to the attached FCC Trust 
Agreement.
    D. Defendants shall take no action to interfere with or impede the 
Trustee's accomplishment of the divestiture of the Radio Assets, and 
shall use their best efforts to assist the Trustee in accomplishing the 
required divestiture, including its best efforts to effectuate 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 Radio Assets, 
and, at the Trustee's request, Defendants shall develop such financial 
or other information as may be necessary for the divestiture of the 
Radio Assets. The Trustee shall permit prospective purchasers of the 
Radio 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 his appointment becomes effective, the Trustee shall file 
reports pursuant to this Final Judgment and the FCC Trust Agreement 
with defendant Capstar, the plaintiff, and the Court, setting forth the 
Trustee's efforts to accomplish divestiture of the Radio

[[Page 31615]]

Assets as contemplated under this Final Judgment; provided, however, 
that to the extent that 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 Radio 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 the Radio Assets.
    F. Within four (4) months after the date of entry of this proposed 
Final Judgment, if the Trustee has not accomplished the divestiture 
required by Section V 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 at the same time shall furnish such 
reports to the plaintiff and to defendant Capstar, which shall have the 
right to be heard and to make additional recommendations. The Court 
shall thereafter enter such orders as it deems appropriate to 
accomplish the purpose of this Final Judgment, which shall, if 
necessary, include extending the term of the Trustee's appointment 
after all applicable government approvals are obtained.
    G. Upon divestiture of the radio assets, the FCC Trust will be 
deemed terminated and the Trustee discharged.

VI. Notice

    Capstar shall provide advance notification of the Antitrust 
Division when it directly or indirectly acquires any assets of or any 
interest (including any financial, security, loan, equity or management 
interest) in any broadcast radio station that sells advertising time in 
Wichita, Kansas, or enters into any joint sales agreement or any 
cooperative selling arrangement with any other operator of radio 
stations serving listeners in Wichita, Kansas. This obligation to 
provide notice is met under this section when a transaction is 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'').
    Notification under this section shall be provided to the Antitrust 
Division 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 about the sales of radio advertising time in Wichita. 
Notification shall be provided at least thirty (30) days prior to the 
acquisition of any such interest, 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 Antitrust Division make a written request for 
additional information, Defendant Capstar 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. 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.

VII. Preservation of Assets/Hold Separate

    Until the divestiture of the Radio Assets required by Sections IV 
or V of the Final Judgment has been accomplished:
    A. Defendants shall take all steps necessary to operate the Radio 
Assets as separate, independent, ongoing, economically viable and 
active competitors to the other stations in Wichita, Kansas, 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 stations, including the performance of 
decision-making functions regarding marketing and pricing, will be kept 
separate and apart from, and not influenced by, defendant Capstar in 
the case of Triathlon stations and defendant Triathlon in the case of 
Capstar stations.
    B. Defendants shall use all reasonable efforts to maintain and 
increase sales of advertising time by the Radio Assets, and shall 
maintain at 1997, 1998, or previously approved levels for 1999, 
whichever are higher, promotional advertising, sales, marketing and 
merchandising support for such radio stations.
    C. Defendants shall take all steps necessary to ensure that the 
assets used in the operation of the Radio Assets are fully maintained. 
The sales and marketing employees of the Radio Assets shall not be 
transferred or reassigned to any other station, except for transfer 
bids initiated by employees pursuant to each defendant's regular, 
established job posting policies, provided that Defendants give 
plaintiff and Acquirer ten (10) days' notice of such transfer.
    D. Defendant Capstar shall not, except as part of a divestiture 
approved by plaintiff, sell any Radio Assets.
    E. Defendants shall take no action that would jeopardize the sale 
of the Radio Assets.
    F. Defendant Capstar shall appoint a person or persons to oversee 
the assets to be held separate who will be responsible for Defendant's 
compliance with Section VI of this Final Judgment.

VIII. Financing

    Defendant Capstar is ordered and directed not to finance all or any 
part of any purchase by an Acquirer made pursuant to Sections IV or V 
or this Final Judgment.

IX. Compliance Inspection

    For purposes of determining or securing compliance with the Final 
Judgment or determining whether the Final Judgment should be modified 
or terminated and subject to any legally recognized privilege, from 
time to time:
    A. duly authorized representatives of the plaintiff, upon the 
written request of the Assistant Attorney General in charge of the 
Antitrust Division, and on reasonable notice to the Defendants made to 
their principal offices, shall be permitted:

    (1) Access during office hours of the Defendants to inspect and 
copy all books, ledgers, accounts, correspondence, memoranda, and 
other records and documents in the possession or under the control 
of the Defendants, who may have counsel present, relating to the 
matters contained in this Final Judgment; and
    (2) Subject to the reasonable convenience of the Defendants and 
without restraint or interference from any of them, to interview, 
either informally or on the record, their officers, employees, and 
agents, who may have counsel present, regarding any such matters.


[[Page 31616]]


    B. Upon the written request of the Assistant Attorney General in 
charge of the Antitrust Division, made to the Defendants' principal 
offices, the Defendants shall submit written reports, under oath if 
requested, with respect to any matter contained in the Final Judgment.
    C. No information or documents obtained by the means provided in 
Section IX or X of this Final Judgment shall be divulged by a 
representative of the 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 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 the 
Defendants to the plaintiff, the 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 the 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 the plaintiff to the Defendants prior to 
divulging such material in any legal proceeding (other than a grand 
jury proceeding) to which the Defendants are not a party.

X. 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, defendant Capstar shall deliver to 
plaintiff an affidavit as to the fact and manner of defendant's 
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 defendant, or its 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 Radio 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 defendant Capstar has taken 
to solicit a buyer for the Radio Assets.
    B. Within twenty (20) calendar days of the filing of this Final 
Judgment, defendant Capstar shall deliver to plaintiff an affidavit 
which describes in reasonable detail all actions defendant Capstar has 
taken and all steps defendant Triathlon has implemented on an on-going 
basis to preserve the Radio Assets describing any changes to the 
efforts and actions outlined in its earlier affidavit(s) filed pursuant 
to this section within fifteen (15) calendar days after such change is 
implemented.
    C. Defendant Capstar shall preserve all records of all efforts to 
preserve the Radio Assets and to divest the Radio Assets.

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.

XIII. Public Interest

    Entry of this Final Judgment is in the public interest.

  Dated:---------------------------------------------------------------

----------------------------------------------------------------------
United States District Judge

ATTACHMENT A

Wichita Stations Trust Agreement

    THIS TRUST AGREEMENT (the ``Trust Agreement'') is entered into 
as of April 30, 1999, and shall be effective April 30, 1999, by and 
between Capstar Broadcasting Corporation, a Delaware corporation 
(``Beneficiary''), and Henry M. Rivera (the ``Trustee'').

Recitals

    A. Beneficiary, through subsidiaries, holds various licenses, 
permits and authorizations issued by the Federal Communications 
Commission (the ``FCC'') with respect to the radio station in the 
Wichita, Kansas radio market (the ``Wichita Market'') listed on 
Annex A hereto (the ``Capstar Wichita Station'').
    B. Pursuant to the Agreement and Plan of Merger dated as of July 
23, 1998 (the ``Purchase Agreement''), among Capstar Radio 
Broadcasting Partners, Inc., TBC Radio Acquisition Corp., a wholly-
owned subsidiary of Capstar Radio Broadcasting Partners, Inc. 
(``Merger Sub''), and Triathlon Broadcasting Company, a Delaware 
corporation (``Triathlon''), Merger Sub will be merged (the 
``Merger'') with and into Triathlon, with Triathlon being the 
surviving corporation and an indirect wholly-owned subsidiary of 
Beneficiary. Triathlon, through its subsidiaries, holds various 
licenses, permits, and authorizations issued by the FCC with respect 
to certain radio stations in the Wichita Market listed on Annex B 
hereto (the ``Triathlon Wichita Stations''). The Merger will result 
in the attribution to Beneficiary of the Triathlon Wichita Stations. 
Accordingly, each reference in this Trust Agreement to Beneficiary 
shall be deemed, following the consummation of the merger, to 
include Triathlon, and the Capstar Wichita Station and the Triathlon 
Wichita Stations shall be referred to collectively as the 
``Stations.''
    C. The Communications Act of 1934, as amended, and the rules, 
regulations, and policies of the FCC (collectively, the 
``Communications Act'') do not permit Beneficiary to own and operate 
all of the Stations. Beneficiary desires to enter into this Trust 
Agreement to facilitate consummation of the Merger by assuring that 
such consummation will not result in the attribution to Beneficiary 
of radio stations with overlapping signal contours in the Wichita 
Market in contravention of the Communications Act.
    D. Interim acquisition by the Trustee of the Station Assets (as 
hereinafter defined) for the purpose of holding and operating the 
same for productive business use and selling the Station Assets to a 
government-approved buyer or buyers pursuant to the Final Judgment 
in United States v. Capstar Broadcasting Corporation and Triathlon 
Broadcasting Company, C.A. No. __________ (D.D.C. Apr. ____, 1999) 
as proposed, entered or modified (the ``Final Judgment'') (proposed 
Final Judgment attached hereto), provided that the Trustee continues 
to operate the Stations until such a sale can be consummated, would 
provide an appropriate mechanism to facilitate consummation of the 
Merger while complying with the laws and regulations relating to 
transactions of this type, and accordingly the Trustee and 
Beneficiary desire to associate together for the joint conduct of 
the business of holding and operating such Station Assets.
    Now, Therefore, in consideration of the recitals and of the 
respective agreements and covenants contained herein, and other good 
and valuable consideration, the receipt and sufficiency of which are 
hereby acknowledged, the parties, intending to be legally bound 
hereby, agree as follows:

Agreements

    1. Creation and Purpose of The Wichita Stations Trust. Subject 
to the terms and conditions hereof, a trust in respect of the 
Stations is hereby created and established, to be known as the 
``Wichita Stations Trust,'' and the Trustee hereby accepts the trust 
created hereby and agrees to serve as trustee hereunder. The trust 
created hereby shall be irrevocable until such time as the Trustee 
sells the Station Assets to a government-approved buyer or buyers.
    2. Assets to be Conveyed; Assumption of Obligations.

[[Page 31617]]

    (a) From time to time on or before consummation of the Merger, 
Beneficiary shall convey, transfer, assign, and deliver to Trustee, 
and Trustee shall acquire and assume from Beneficiary, all of 
Beneficiary's right, title, interest, and obligations in and to all 
of the assets, properties, contracts, leases, and agreements that 
are used, held for use, useful or necessary in the conduct of the 
business and operation of each Station as of the date of this Trust 
Agreement, including the following assets:
    (i) All of Beneficiary's right, title and interest in and to the 
licenses, permits and other authorizations issued by any 
governmental authority and used, held for use, useful or necessary 
in the conduct of the business and operation of any Station, 
including the call letters of each Station and any applications for 
such licenses, permits and authorizations;
    (ii) All of Beneficiary's right, title and interest in and all 
to all real property, including leasehold interests and easements, 
used, held for use, useful or necessary in the conduct of the 
business and operation of any Station;
    (iii) All equipment, office furniture and fixtures, office 
materials and supplies, inventory, spare parts, motor vehicles and 
other tangible personal property of every kind and description, 
owned, leased or held by Beneficiary and used, held for use, useful 
or necessary in the conduct of the business and operation of the 
Stations;
    (iv) All cash in each Station's operating bank accounts;
    (v) All accounts receivable arising out of the operation of each 
Station;
    (vi) All of Beneficiary's rights under and interest in all 
contracts relating to the conduct of the business of any Station 
(the ``Assumed Contracts''), and any contract for the sale of the 
Stations as contemplated by Section 3;
    (vii) All programs and programming materials of whatever form or 
nature owned by Beneficiary and used or held for use on or by any 
Station;
    (viii) All of Beneficiary's rights, title and interest in and to 
the trademarks, trade names, service marks, franchises, copyrights, 
including registrations and applications for registration of any of 
them and good will related thereto, jingles, logos, slogans, 
licenses, permits and privileges owned or held by Beneficiary and 
used, held for use, useful or necessary in the conduct of the 
business and operation of any Station;
    (ix) All files, records, books of account, computer programs and 
software and logs relating to the operation of any Station, 
including payable records, receivable records, invoices, statements, 
traffic material, programming information and studies, technical 
information and engineering data, news and advertising studies and 
consultants' reports, ratings reports, marketing and demographic 
data, sales correspondence, lists of advertisers, promotional 
materials, credit and sales reports, budgets, financial reports and 
projections, sales, operating and business plans, filings with the 
FCC and original executed copies of all written contracts to be 
assigned hereunder.
    (x) All of Beneficiary's rights under manufacturers' and 
vendors' warranties relating to items included in the Station Assets 
and all similar rights against third parties relating to items 
included in the Station Assets to the extent contractually 
assignable; and
    (xi) All intangible assets of Beneficiary relating to any 
Station or the business and operation of any Station not 
specifically described above, including goodwill, and all other 
assets used or held for use in connection with any Station.
    The assets to be transferred to the Trustee hereunder are 
hereinafter collectively referred to as the ``Station Assets.'' 
Notwithstanding this Section 2(a), beneficiary and Trustee 
acknowledge that the Station Assets shall include only those assets 
that Beneficiary would have sold to a third party in an arms-length 
transaction involving the Stations consistent with the Final 
Judgment. The Trustee shall retain and hold the Station Assets only 
in accordance with the terms and conditions set forth in this Trust 
Agreement.
    (b) The Trustee shall assume and be solely responsible for the 
payment, performance and discharge of all of Beneficiary's 
liabilities, obligations, and duties under or in respect of the 
Assumed Contracts that relate to and accrue in the period after 
transfer of the Station Assets. Except as specifically provided in 
this Trust Agreement, the Trustee shall not be liable for and shall 
not assume any liabilities, obligations, or duties of Beneficiary 
(whether known or unknown, matured or unmatured, or fixed or 
contingent).
    (c) Prior to the date hereof, Beneficiary shall have obtained 
policies of insurance, or procured the amendment of or riders to 
existing policies of insurance, to provide insurance coverage 
related to the Station Assets under the umbrella policies currently 
held by Beneficiary. All such policies shall name the Trustee as the 
insured or an additional insured and shall not be canceled or 
amended without thirty (30) days prior written notice to the 
Trustee. The Trustee is hereby authorized to make payment of all 
premiums, and all deductibles and excesses, related to such policies 
of insurance in the same manner as any other expense in the ordinary 
course of business of the Stations.
    3. Management and Other Actions by Trustee.
    (A) The Wichita Stations Trust is authorized to carry on 
business. During the term of this Trust Agreement, the right to 
manage and direct the management of the business of the Stations 
shall be solely vested in the Trustee, subject to the following:
    (i) The Trustee shall have the obligation to consummate the sale 
of the Station Assets within four (4) months from the date of the 
entry of the Final Judgment, pursuant to the conditions contained 
herein and at a price that renders to Beneficiary the maximum cash 
present value for the Station Assets. The Trustee has read that 
certain Stipulation and Order and the proposed Final Judgment 
attached thereto which Beneficiary executed on April ____, 1999, in 
the Civil Action styled ``United States v. ____________,'' which 
Final Judgment shall apply to the Trustee under Section III(A) 
thereof effective this date, consistent with the obligations assumed 
by Beneficiary under the Stipulation and Order (attached hereto). 
Without limiting the generality of the foregoing, the Trustee shall 
have the power and authority to hire at the cost and expense of 
Beneficiary any investment bankers, attorneys or other agents 
reasonably necessary, in the judgment of the Trustee, to assist in 
the sale of the Station Assets, and such professionals or agents 
shall be solely accountable to the Trustee. The Trustee shall have 
the power and authority to accomplish the sale of the Station Assets 
at the earliest possible time to any purchaser approved by the 
Department of Justice (``DOJ'') who the DOJ determines has the 
intent and managerial, operational and financial capability to 
compete effectively as a radio station operator in the Wichita 
Market. Beneficiary shall not take any action to jeopardize the 
Trustee's sale of the Station Assets, but shall use its best efforts 
to assist the Trustee in accomplishing the required sale, including 
its best efforts to effect all regulatory approvals. The Trustee and 
Beneficiary shall permit prospective purchasers of the Stations to 
have access to personnel and to make such inspection of physical 
facilities and any and all financial, operational and other 
documents and information as may be relevant to the sale of the 
Station Assets. To facilitate the sale of the Station Assets, the 
Trustee may request in writing from Beneficiary such representations 
and warranties, consents, information, covenants and indemnities 
(which may be directly provided by Beneficiary to a buyer, as 
negotiated and determined by the Trustee, so long as notice and 
copies of any such communications are given by Beneficiary to the 
Trustee) regarding such sale, and such request shall not be 
unreasonably denied.
    (ii) In fulfilling its obligations to effectuate the sale of the 
Station Assets, the Trustee shall take all actions necessary or 
appropriate to effectuate the transfer of title to the Station 
Assets held by the Trustee pursuant to this Trust Agreement to (and 
assumption of the liabilities, obligations and commitments of the 
Station Assets by) an unaffiliated third party. In this regard, the 
Trustee shall enter into appropriate agreements and submit and fully 
prosecute appropriate applications to the FCC requesting approval to 
assign the Station Assets. The Trustee also shall seek and obtain 
the prior approval of the DOJ for the sale of the Station Assets. 
Beneficiary shall have the right to request the Trustee to sell the 
Station Assets to an unaffiliated third party it a binding contract 
(an ``Existing Sale Agreement'') has been entered into, but not 
consummated, prior to the effective date of this Trust Agreement. If 
the DOJ concurs with such sale, the Trustee shall take all necessary 
and appropriate actions to effectuate the sale as provided herein 
and therein, including without limitation by accepting the 
assignment of the Existing Sale Agreement.
    (iii) The Trustee shall file monthly reports with Beneficiary 
and the DOJ setting forth the Trustee's efforts to sell the Station 
Assets as contemplated by this Trust Agreement. Such

[[Page 31618]]

reports shall be designated confidential and 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 Station Assets, 
and shall describe in detail each contact with any such person 
during that period. The Trustee shall maintain full records of all 
efforts undertaken to sell the Station Assets. If the Trustee has 
failed to consummate the sale of the Station Assets within four (4) 
months from the date of the entry of the Final Judgment, the Trustee 
shall promptly produce a report stamped confidential to Beneficiary, 
the DOJ and the Court setting forth (1) the Trustee's efforts to 
sell the Station Assets; (2) the reasons, in the Trustee's judgment, 
why the required sale has not been consummated; and (3) the 
Trustee's recommendations.
    (iv) Within five (5) business days following execution of a 
binding agreement for the sale of the Station Assets, including all 
contemplated ancillary agreements (e.g., financing agreements), to 
effect, in whole or in part, the sale of the Station Assets, the 
Trustee shall notify Beneficiary and the DOJ of the proposed sale. 
The notice (as provided for herein) 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 desire to, acquire any ownership 
interest in the Station Assets, together with the full details of 
same. Within fifteen (15) calendar days of receipt by the DOJ, the 
DOJ may request from Beneficiary, the proposed purchaser, any other 
third party, or the Trustee, additional information concerning the 
proposed sale, the proposed purchaser and any other potential 
purchaser. Beneficiary and the Trustee shall furnish the requested 
information within fifteen (15) calendar days of receipt of the 
request. Within thirty (30) calendar days after receipt of the 
notice or within twenty (20) calendar days after the DOJ has been 
provided the additional information, whichever is later, the DOJ 
shall provide written notice to Beneficiary and the Trustee, stating 
whether or not it objects to the proposed sale. If the DOJ fails to 
object within the period specified, or if the DOJ provides written 
notice that it does not object, then the DOJ will be deemed to have 
approved the sale pursuant to the trust agreement. Beneficiary may 
only object to the sale where the Trustee has acted with 
malfeasance.
    (v) The Trustee shall have absolute and complete control over 
the operations of the Station Assets pending their sale. The Trustee 
shall operate the Stations as separate, independent, ongoing, 
economically viable and active competitors to Beneficiary, and the 
Trustee shall ensure that the management of the Stations is kept 
separate and apart from, and not influenced by, Beneficiary. The 
Trustee shall use all reasonable efforts to maintain and increase 
sales of advertising time, and to maintain promotional advertising, 
sales, marketing and merchandising support for the Stations at 1998 
levels or greater.
    (vi) The Trustee shall conduct the operations of the Stations in 
accordance with its duties as a licensee of the FCC. In addition, 
the Trustee shall, within fifteen (15) days of the end of each 
calendar month, provide to Beneficiary's Chief Financial Officer 
such monthly financial reports consisting of unaudited balance 
sheets of the Stations and related statements of operations and cash 
flows for the month and three-month period then ended as shall be 
necessary for Beneficiary to meet its financial reporting 
requirements to its accountants, lenders, the Securities and 
Exchange Commission and any other governmental authorities of 
competent jurisdiction. In no case shall such information be 
provided to Beneficiary's employees who are involved in the 
management or operation of Beneficiary's radio stations in the 
Wichita Market.
    (vii) Any employee hired by the Trustee who is not employed at 
the Stations as of the effective date of this Trust Agreement shall 
not be a 1% or greater shareholder, director, officer, or employee 
of Beneficiary or its affiliates, and may not have any business and 
familial relationship (as defined in the FCC Policy Statement in MM 
Docket No. 85-218, FCC 86-67 (March 17, 1986)) with Beneficiary or 
with any 1% or greater shareholder, director, officer, or employee 
of Beneficiary or its affiliates.
    (b) The trustee shall cause any employee hired by him pursuant 
to Section 3(a)(vii) and any person previously employed by 
Beneficiary whom the Trustee elects to retain, to execute and 
deliver to the Trustee an agreement, in form and substance 
acceptable to the Trustee, pursuant to which such employee agrees to 
comply with the rules, regulations and policies of the FCC, 
including without limitation all rules, regulations and policies 
governing communications among such employee and Beneficiary or its 
officers, directors, employees, and affiliates, regarding the 
Stations and their management and operations.
    (c) Effective as of the effective date of this Trust Agreement, 
the Trustee will hire on behalf of the Wichita Stations Trust those 
current employees of the Stations on the same terms and conditions 
as such employees were employed by Beneficiary, provided that the 
Trustee is not required to provide such employees with any medical, 
pension, insurance or other employee benefit plans, programs or 
arrangements. To the extent that Beneficiary provides such employees 
of the Wichita Stations Trust with group medical, group insurance 
and/or pension plan benefits on or after the date of this Trust 
Agreement through plans maintained by Beneficiary for its employees, 
the Trustee shall within such reasonable time as deemed necessary or 
appropriate by Beneficiary provide to Beneficiary or its designee 
such reports, data or other information as Beneficiary or its 
designee shall Beneficiary for purposes of administering such plans 
or satisfying any reporting or other requirements as may be required 
by law or any governmental agency. In no event shall the Trustee or 
the Wichita Stations Trust be responsible for any liabilities or 
obligations relating to or arising under any of Beneficiary's 
employee benefit plans, programs or arrangements, whether such 
liabilities or obligations arise, or relate to a period, prior or 
subsequent to the effective date of this Trust Agreement, except for 
liabilities or obligations caused by Trustee's own gross negligence 
or willful misconduct. All liabilities or obligations that relate to 
or arise under any of Beneficiary's employee benefit plans, programs 
or arrangements, except for liabilities or obligations caused by 
Trustee's own gross negligence or willful misconduct, shall remain 
the sole and complete responsibility of Beneficiary and shall be 
subject to the indemnification provided in Section 4(c) of this 
Trust Agreement.
    (d) To the extent that the Trustee determines in his discretion 
that management and operation of the Stations consistent with past 
practice or that payment of the charges and other expenses set forth 
in Section 4(c) requires funds in excess of the ordinary cash flow 
of the Stations (as diminished by any prior remittances of cash 
accumulations from operations in excess of the actual and projected 
expenses as determined by the Trustee in his sole discretion 
(``Excess Cash Flow''), Beneficiary agrees to provide a line of 
credit to Trustee in the amount of $250,000. Beneficiary shall not 
communicate directly or indirectly with the Trustee about, or 
participate with the Trustee in making, any decision to draw on the 
line of credit or as to when or how the funds will be used. The 
Trustee may draw on the line of credit by making a written draft on 
Beneficiary for a specific amount of funds. Beneficiary shall, 
within ten days of receipt of such draft, provide such funds to 
Trustee in the amount requested, up to the limit of the line of 
credit. The outstanding principal balance under the line of credit 
shall bear interest at a rate equal to the rate in effect under 
Beneficiary's credit facility at the time the Trustee draws on such 
line of credit. The principal amount of any drawings on the line of 
credit, together with accrued and unpaid interest thereon, shall be 
paid from (i) Excess Cash Flow and (ii) if any balance is 
outstanding upon completion of any sale of the Station Assets 
pursuant to Section 3, then prior to any distribution contemplated 
by Section 5(b), from the proceeds of any such sale. All amounts 
paid under this Section 3(d) shall be applied first to all interest 
then accrued and unpaid hereunder, and the balance, if any, to 
principal.
    (e) To the extent that the Stations' operations generate Excess 
Cash Flow, such Excess Cash Flow shall first be applied to repay 
amounts due to Beneficiary under the line of credit provided for in 
Section 3(d), and thereafter shall be remitted to Beneficiary from 
time to time as the trustee shall determine.
    (f) No person other than the Trustee or managers designated by 
the Trustee shall have any authority with respect to the management 
of the Stations or Station Assets for so long as this Trust 
Agreement is in effect. The Trustee shall have no beneficial 
interest in the Station Assets.
    (g) Except as expressly provided in this Trust Agreement, the 
Trustee shall not: (1) incur any debt or guaranty obligation in 
favor

[[Page 31619]]

of any other person; (2) engage in any business other than as 
necessary in Trustee's reasonable opinion to meet his fiduciary 
duties with respect to the operation of the Stations as a broadcast 
license serving the Wichita Market; (3) sell or otherwise transfer, 
assign or encumber the Station Assets, or (4) enter into any 
agreement to do so, or enter into any merger, consolidation, or 
similar transaction or engage in any reclassification or similar 
transaction.
    (h) The Trustee shall have full authority and power over the 
operation and management of the Stations, shall conduct the 
operations of the Stations in the ordinary course of business 
consistent with past operations of the Stations, and, to the extent 
possible, shall maintain the status quo of such operations as 
currently conducted with a view to maximizing the value to be 
received by Beneficiary consistent with the Trustee's duties as a 
licensee of the FCC and as a fiduciary of Beneficiary. Without 
limiting the generality of the foregoing, during the term of this 
Trust Agreement, except as contemplated by this Trust Agreement, the 
Trustee shall not:
    (i) Fail to use all commercially reasonable efforts to preserve 
intact Beneficiary's present business organization of the Stations 
and preserve each Station's relationships with customers, suppliers 
and other having business dealings with it;
    (ii) Fail to use commercially reasonable efforts to maintain the 
Station Assets in their current condition, except for ordinary wear 
and tear;
    (iii) Fail to use all commercially reasonable efforts to 
maintain the present format of the Stations;
    (iv) Except for amendments of employment agreements in the 
ordinary course of business and consistent with past operations of 
the Stations, materially amend any material contract or default in 
any material respect (or take or omit to take any action that, with 
or without the giving of notice or passage of time, would constitute 
a material default) under any material contract or, except in the 
ordinary course of business and consistent with past operations of 
the Stations, enter into any new material contract;
    (v) Sell (Whether by merger, consolidation, or the sale of an 
equity interest or assets), lease, or dispose of any Station Assets 
except pursuant to an agreement to sell the Station Assets, which is 
permitted under this Trust Agreement, or in the ordinary course of 
business and consistent with past practice or, even if in the 
ordinary course of business and consistent with past practices 
(other than sales of surplus or obsolete equipment), whether in one 
or more transactions, in no event involving a Station Asset or 
Station Assets having an aggregate fair market value in excess of 
$75,000'
    (vi) (A) Mortgage, (B) pledge, or (C) subject to any material 
lien, pledge, claim, security interest, restriction, mortgage, 
tenancy and other possessory interest, conditional sale or other 
title retention agreement, assessment, easement, right of way, 
covenant, restriction, right of first refusal, defect in title, 
encroachment or other burden, option or encumbrance of any kind, any 
Station Assets;
    (vii) Enter into, or enter into negotiations or discussions with 
any person other than a purchaser under an agreement to sell the 
Station Assets, which is permitted under this Trust Agreement, with 
respect to, any local marketing agreement, time brokerage agreement, 
join sales agreement, or any other similar agreement;
    (viii) Fail to use commercially reasonable efforts to maintain 
the ability of each Station to operate at a maximum power and full 
coverage at all times; or
    (ix) Agree to or make any commitment, orally or in writing any 
actions prohibited the this Trust Agreement or the Final judgment.
    Notwithstand this Section 3(h), Beneficiary acknowledges that 
the business organization and operator of the Station Assets of 
station KNSS(AM)--as they exist on the date of this Trust Agreement 
will change as the station is incorporated in the operation and 
business organization of the Triathlon Wichita Stations.
    (i) The Trustee shall have any and all such further powers and 
shall take such further actions (including, but not limited to, 
taking legal action) as may be necessary to fulfill the Trustee's 
obligations under this Trust Agreement.
    (j) If as of the date hereof any of the Stations are not subject 
to a binding Existing Sale Agreement for a Sale (or Sales) (as 
defined below) of the Station Assets, or if any Existing Sale 
Agreement terminates or expires during the term of this Agreement, 
the Trustee shall promptly take such actions and execute such 
documents in order to effect a disposition of the Station Assets 
which renders to Beneficiary the maximum cash present value for the 
Station Assets. The Trustee may negotiate the terms and conditions 
of a binding agreement for the sale of the Station Assets (a ``Sale 
Agreement'') in his sole and absolute discretion. Trustee shall 
submit and fully prosecute appropriate applications to such 
governmental authorities as such Sale Agreement requires, requesting 
approval to assign such Station Assets, and, upon satisfaction of 
all closing conditions under such agreements (unless waived, in 
whole or in part, by the Trustee), transfer title to the Station 
Assets to the third party (or parties).
    4. Concerning the Trustee.
    (a) The Trustee shall be entitled to receive as a trustee fee 
(the ``Wichita Trustee Fee'') for his services hereunder a fee of 
$2,500 per month for each Station that is in the Wichita Stations 
Trust (which amount shall be prorated for each Station for partial 
months based on a 30-day month), provided, however, that the Wichita 
Trustee Fee plus any Capstar II Trustee Fee to which the Trustee may 
be entitled under the Capstar Trust II Agreement entered into as of 
April 30, 1999, by and between the Beneficiary and the Trustee (the 
``Capstar Trust II Agreement'') shall not exceed a total of $15,000 
per month. The fee (the ``Engagement Fee'') received by the Trustee 
pursuant to the Engagement and Assignment Agreement entered into as 
of February 3, 1999, by and between the Beneficiary and the Trustee 
(the ``Engagement and Assignment Agreement'') shall be credited 
toward any amounts otherwise due as a Wichita Trustee Fee and a 
Capstar II Trustee Fee. In the event that the Wichita Trustee Fees 
and the Capstar II Trustee Fees paid to the Trustee, in the 
aggregate, do not exceed the Engagement Fee, nothing in this 
Agreement shall restrict the Trustee's entitlement to the entire 
Engagement Fee. The Trustee agrees that in return for the Wichita 
Trustee Fees, he will devote such time to the Wichita Stations Trust 
as is necessary, appropriate, or advisable in the proper exercise of 
his fiduciary duties hereunder. Payment of Trustee's monthly 
compensation shall be made by Beneficiary within 20 days after the 
end of each calendar month during the term of this Trust Agreement.
    (b) The Trustee is expressly authorized to incur and pay from 
the Station Assets held in trust all reasonable expenses, 
disbursements, and advances incurred or made by the Trustee in the 
performance of his duties hereunder (including reasonable fees, 
expenses and disbursements of his counsel), which the Trustee in 
good faith deems necessary, proper, or advisable in the performance 
of his duties under this Trust Agreement; provided, however, that 
the Trustee may pay legal fees attributable to legal services that 
he personally performs for the Wichita Stations Trust in his 
capacity as an attorney if, and only if, at any time during the 
calendar month in which such services are performed the combined 
number of stations in the Wichita Stations Trust and the Capstar 
Trust II is five or fewer.
    (c) The Trustee shall not be liable, except for his own gross 
negligence or willful misconduct and, except with respect to claims 
based upon such gross negligence or willful misconduct that are 
successfully asserted against the Trustee, Beneficiary shall 
indemnify and hold harmless the Trustee (and any successor trustee) 
from and against any and all losses, liabilities, claims, actions, 
damages and expenses, including reasonable attorneys' fees and 
disbursements, arising out of and in connection with (i) the 
Trustee's performance of his duties under this Trust Agreement and/
or any Sale Agreement, (ii) Beneficiary's failure to perform its 
obligations under the Trust Agreement, (iii) any liability arising 
out of or related to the Station Assets that accrued or arose prior 
to the date of transfer to the Trustee, including without limitation 
with respect to the Assumed Contracts, (iv) losses arising out of or 
related to the Station Assets, and the operation thereof on a going 
concern basis, that are not recovered from the proceeds of a Sale, 
or otherwise under the Trust Agreement, (v) fines and penalties 
levied by the FCC or any other governmental authority, and costs 
related thereto, which may be caused or incurred by the transactions 
contemplated by the Trust Agreement, any Sale or any other action, 
error or omission of any person other than the Trustee, (vi) taxes 
that may be levied upon or payable by the Trustee, in his personal 
capacity, arising out of or related to the Trust and (vii) the 
Trustee's obligation, if any, under the employment laws, including 
without limitation the Employee Retirement Security Act of 1974, as 
amended. Payments to the Trustee pursuant to this Section 4(c) shall 
be made within 20 days of Trustee's submission to Beneficiary of an 
invoice or bill therefor,

[[Page 31620]]

plus appropriate supporting documentation. The obligations of 
Beneficiary to the Trustee under this Section 4(c) shall survive the 
resignation, incapacity to act, death or insolvency of the Trustee 
and the termination of this Trust Agreement.
    (d) The Trustee shall be entitled to rely in good faith upon any 
order, judgment, certification, demand, notice, instrument or other 
writing delivered to him hereunder without being required to 
determine the authenticity or the correctness of any fact stated 
therein or the propriety or validity or the service thereof. The 
Trustee may act in reliance upon any instrument or signature 
believed by him in good faith to be genuine and may assume that any 
person purporting to give receipt or advice or make any statement or 
execute any document in connection with the provisions hereof has 
been duly authorized to do so. The Trustee may act pursuant to the 
advice of counsel with respect to any matter relating to this Trust 
Agreement and shall not be liable for any action taken or omitted in 
good faith in accordance with such advice. The Trustee's counsel and 
advisors shall be independent of, and have no relationship with, 
Beneficiary.
    (e) Subject to Section 4(c), the rights and duties of the 
Trustee hereunder shall terminate upon the Trustee's incapacity to 
act, death or insolvency, and no interest in the Sale Agreement or 
the Station Assets directly or indirectly held by the Trustee nor 
any of the rights and duties of a deceased or insolvent Trustee may 
be transferred by will, devise, succession or in any manner except 
as provided in this Trust Agreement. The heirs, administrators, 
executors or other representatives of an incapacitated, deceased or 
insolvent Trustee shall, however, have the right and duty to convey 
the Sale Agreement and the Station Assets held by the Trustee to one 
or more successor trustees designated by Beneficiary pursuant to 
Section 4(g).
    (f) The Trustee (and any successor trustee) may resign by giving 
not less than 60 days prior written notice of resignation to 
Beneficiary, provided that a successor trustee has been appointed, 
such appointment has received all necessary approval from the FCC, 
and any order granting such approval has become a final order with 
respect to which no action, request for stay, petition for hearing 
or reconsideration, or appeal has expired. Beneficiary shall 
cooperate fully in the prompt appointment of a successor trustee and 
shall not unreasonably interfere with or delay the effectiveness of 
such resignation.
    (g) In the event of such resignation, incapacity to act, death 
or insolvency of the Trustee, the Court shall appoint, on 
application of the DOJ, a Trustee selected by the DOJ, subject to 
such prior approval of the FCC as may be required, to effect the 
divestiture of the Station Assets. Any successor trustee shall 
succeed to all of the rights and obligations of the Trustee replaced 
hereunder and shall be deemed the Trustee for purposes of this Trust 
Agreement, upon execution of such successor trustee of a counterpart 
of this Trust Agreement.
    (h) The Trustee and any successor trustee designated pursuant to 
Sections 4(f) and (g) shall not be 1% or greater stockholder, 
officer, employee, director, or affiliate of Beneficiary, and may 
not have any business or familial relationship (as defined in the 
FCC Policy Statement in MM Docket No. 85-218, FCC 86-67 (March 17, 
1986)) with any officer, employee, director, or 1% of greater 
stockholder or affiliate of Beneficiary. Neither the Trustee nor any 
successor trustee will serve as an officer, employee, or director of 
Beneficiary, its affiliates, or its successor companies.
    (i) The Trustee agrees to resign as Trustee if requested to do 
so by the DOJ in order for Defendants (as defined in the Final 
Judgment) to meet their obligations under the Final Judgment. Such 
resignations will not be effective until a successor trustee has 
been appointed pursuant to the provisions of the Trust Agreement.
    5. Termination: Distribution of Station Assets or Proceeds from 
Sale of Station Assets.
    (a) Subject to such FCC and DOJ approval as may be required, and 
following the receipt of such approval, this Trust Agreement and the 
Wichita Stations Trust created hereby shall terminate if such 
termination would not cause Beneficiary to be in violation of the 
Communications Act or the Final Judgment.
    (b) Upon the termination of this Trust Agreement under Section 
5(a) or pursuant to a Sale (or Sales) of all or substantially all of 
the Station Assets to an unaffiliated third party (or parties) 
pursuant to Section 3, the Trustee shall receive the money, 
securities, rights or property which are distributed or are 
distributable in respect of the Station Assets, and, after paying 
(or reserving for payment thereof) any reasonable expenses or 
liabilities incurred pursuant to this Trust Agreement, shall 
promptly distribute or cause the distribution of such money, 
securities, rights or property to Beneficiary or its designee.
    6. Communications.
    (a) The Trustee may communicate with and provide reports to 
Beneficiary concerning the implementation of the Wichita Station 
Trust, but not concerning the management and operations of the 
Stations except as provided in Section 3(a)(vi).
    (b) The Trustee may engage in the communications contemplated by 
Section 3 hereof to facilitate a Sale (or Sales) of the Station 
Assets to an unaffiliated third party (or parties).
    (c) During the term of this Trust Agreement, neither Beneficiary 
nor any of its officers, directors, employees, stockholders, or 
affiliates shall communicate with the Trustee regarding the 
operation or management of the Stations; provided, however, that 
Beneficiary may communicate with the Trustee as provided in Section 
3, and concerning the mechanics of implementing any Sale of the 
Station Assets to an unaffiliated third party.
    (d) Any communications permitted by Section 6(a), (b), or (c) 
shall be evidenced in writing, and shall be retained the Trustee for 
inspection upon request by the FCC.
    (e) All notices, requests, consents, waivers, and other 
communications required or permitted to be given hereunder shall be 
in writing and shall be deemed to have been duly given (a) if 
transmitted by facsimile, upon acknowledgement of receipt thereof in 
writing by facsimile or otherwise, (b) if personally delivered, upon 
delivery or refusal of delivery, or (c) if mailed by registered or 
certified United States mail, return receipt requested, postage 
prepaid, upon delivery or refusal of delivery. All notices, 
consents, waivers, or other communications required or permitted to 
be given hereunder shall be addressed to the respective party to 
whom such notice, consent, waiver, or other communication relates at 
the following addresses:
    If to Beneficiary: Capstar Broadcasting Corporation, 600 
Congress Avenue, Suite 1400, Austin, Texas 78701, Attention: William 
S. Banowsky, Jr., Facsimile: (512) 340-7890.
    With copies to:

Vinson & Elkins L.L.P., 3700 Trammell Crow Center, 2001 Ross Avenue, 
Dallas, Texas 75201, Attention: Michael D. Wortley, Rodney L. Moore, 
Facsimile: (214) 999-7732.
Wiley, Rein & Fielding, 1776 K Street, N.W., Washington, D.C. 20006, 
Attention: Nathaniel F. Emmons, Facsimile: (202) 719-7049

    If to the Trustee: Henry M. Rivera, Shook Hardy & Bacon L.L.P., 
Hamilton Square, Suite 800, 600 14th Street, NW, Washington, D.C. 
20005-2004, Facsimile: (202) 783-4211.
    Any party by written notice to the other parties pursuant to 
this Section 6(e) may change the address or the persons to whom 
notices or copies thereof shall be directed.
    7. Miscellaneous.
    (a) This Trust Agreement (which term shall be deemed to include 
the annexes, exhibits, and schedules hereto and the other 
certificates, documents, and instruments delivered hereunder), 
constitutes the entire agreement between the parties hereto and 
supersedes all prior agreements, commitments, or understandings with 
respect to the subject matter hereof. This Trust Agreement shall not 
be amended, altered or modified except by an instrument in writing 
duly executed by each of the parties hereto. Substantial changes in 
this Trust Agreement may be made only as approved by the FCC and the 
DOJ, pursuant to and consistent with the Final Judgment. A copy of 
any substantial change shall be filed by the Trustee with the FCC 
and the DOJ within ten days following the execution thereof, with 
copies to the appropriate divisions and bureaus of the FCC and the 
DOJ.
    (b) This Trust Agreement shall be binding upon and shall inure 
to the benefit of the parties hereto and their respective permitted 
successors and permitted assigns, and nothing in this Trust 
Agreement, express or implied, is intended to confer upon any other 
person any rights or remedies of any nature whatsoever under or by 
reason of this Trust Agreement. Subject to Section 4(g), this Trust 
Agreement shall not be assignable by any of the parties hereto.
    (c) If any term or other provision of this Trust Agreement is 
invalid, illegal, or incapable of being enforced by any rule of 
applicable law, or public policy, all other conditions and 
provisions of this Trust

[[Page 31621]]

Agreement shall nevertheless remain in full force and effect so long 
as the economic or legal substance of the transactions contemplated 
herein are not affected in any manner materially adverse to any 
party. Upon such determination that any term or other provision is 
invalid, illegal, or incapable of being enforced, the parties hereto 
shall negotiate in good faith to modify this Trust Agreement so as 
to effect the original intent of the parties as closely as possible 
in a mutually acceptable manner in order that the transactions 
contemplated herein are consummated as originally contemplated to 
the fullest extent possible.
    (d) The headings of the sections of this Trust Agreement are 
solely for convenience of reference and shall not be given any 
effect in the construction or interpretation of this Trust 
Agreement. Unless otherwise stated, references in this Trust 
Agreement to Sections, subsections, Annexes, Exhibits, Schedules, 
and other subdivisions refer to the corresponding Sections, 
subsections, Annexes, Exhibits, Schedules, and other subdivisions of 
this Trust Agreement. The words ``this Trust Agreement,'' 
``herein,'' ``hereby,'' ``hereunder,'' ``hereof,'' and words of 
similar import, refer to this Trust Agreement as a whole and not to 
any particular subdivision unless expressly so limited. The word 
``or'' is not exclusive, and the word ``including'' (in its various 
forms) means ``including without limitation.'' Pronouns in the 
masculine, feminine, or neuter genders shall be construed to state 
and include any other gender.
    (e) This Trust Agreement shall be governed by and construed in 
accordance with the laws of the State of Texas without regard to 
conflicts of law principles.
    (f) This Trust Agreement may be executed and delivered 
(including by facsimile transmission) in one or more counterparts, 
each of which shall be deemed an original and all of which together 
shall constitute a single instrument, and shall become effective 
when one or more counterparts have been signed and delivered by each 
of the parties hereto, it being understood that all parties need not 
sign the same counterpart.
    8. Relationship to Final Judgment.
    The Trustee hereby agrees to be bound by the applicable 
provisions of the Final Judgment, and to the extent that any 
provision contained in this Trust Agreement is inconsistent with the 
Final Judgment, the provisions of the Final Judgment shall govern.

[Remainder of page intentionally left blank]

    In witness whereof, the parties hereto have executed this Trust 
Agreement or caused this Trust Agreement to be duly executed on their 
behalf as of the date first written above.

Beneficiary: Capstar Broadcasting Corporation

By:--------------------------------------------------------------------
    William S. Banowsky, Jr.,
    Executive Vice President

Trustee: Wichita Stations Trust

By:--------------------------------------------------------------------
    Henry M. Rivera
    Trustee

Annex A

KNSS(AM), Wichita, Kansas

Annex B

KFH(AM), Wichita, Kansas
KQAM(AM), Wichita, Kansas
KEYN(FM), Wichita, Kansas
KWSJ(FM), Haysville, Kansas

    United States of America, Plaintiff, v. Capstar Broadcasting 
Corporation, and Triathlon Broadcasting, Company, Defendants.

[Civil Action No. 99-CV-00993]

(Judge Oberdorfer)

Competitive Impact Statement

    The United States, pursuant to Section 2(b) of the Antitrust 
Procedures and Penalties Act (``APPA''), 15 U.S.C. 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

    The plaintiff filed a civil antitrust Complaint on April 21, 1999, 
alleging that Capstar Broadcasting Corporation's (``Capstar'') proposed 
acquisition of Triathlon Broadcasting Company (``Triathlon'') would 
violate Section 7 of the Clayton Act, as amended, 15 U.S.C. 18. The 
Complaint alleges that Capstar and Triathlon both own and operate radio 
stations throughout the United States, and that they each own and 
operate radio stations in the Wichita, Kansas, metropolitan area. 
Specifically, the complaint alleges that Capstar owns KKRD-FM, KRZZ-FM, 
and KNSS-AM in Wichita and that Capstar controls approximately 20 
percent of the Wichita radio advertising market. The complaint also 
alleges that Triathlon owns KZSN-FM, KRBB-FM, KEYN-FM, KWSY-FM, KFH-AM, 
and KQAM-FM in Wichita and controls approximately 33 percent of the 
radio advertising revenues in the Wichita radio advertising market. The 
proposed acquisition would give Capstar a significant share of the 
radio advertising market in Wichita and control over stations that are 
close substitutes for each other based upon their specific audience 
characteristics. According to industry estminates, the proposed 
acquisition would give Capstar control of over 45 percent of the radio 
advertising revenue--even after Capstar divests the two lowest ranked 
FM radio stations pursuant to Federal Communications Commission 
(``FCC'') regulations. As a result, the combination would substantially 
lessen competition in the sale of radio advertising time in the Wichita 
metropolitan area.
    The prayer for relief seeks: (a) adjudication that Capstar's 
proposed acquisition of Triathlon described in the Complaint would 
violate Section 7 of the Clayton Act, as amended, 15 U.S.C. 18; (b) 
preliminary and permanent injunctive relief preventing the consummation 
of the proposed acquisition; (c) an award to the United States of the 
costs of this action, and (d) such other relief as is proper.
    Before this suit was filed, the United States reached a proposed 
settlement with Capstar and Triathlon which is memorialized in the 
Stipulation and proposed Final Judgment which have been filed with the 
Court. Under the terms of the proposed Final Judgment, Capstar must 
divest five stations--KEYN-FM, KWSJ-FM, KFH-AM, KNSS-AM and KQAM-AM--to 
another radio operator approved by plaintiff at the time it acquires 
Triathlon. If Capstar does not divest these stations to an approved 
buyer at the time it acquires Triathlon, Capstar must place the 
stations in an FCC Trust. The FCC Trust Agreement was filed with the 
Court as an attachment to the proposed Final Judgment. Unless the 
Antitrust Division of the United States Department of Justice (the 
``Antitrust Division'') grants an extension, the Trustee must divest 
the stations to a buyer approved by the Antitrust Division at its sole 
discretion within four (4) months of the date of entry of the Final 
Judgment.
    The proposed Final Judgment also requires both Capstar and 
Triathlon to ensure, to the extent they are able under the proposed 
Final Judgment, that these stations will be operated independently as 
viable ongoing businesses while Capstar and Triathlon continue to 
operate them. If the stations are transferred to the Trustee, the 
Trustee has agreed that he will operate the stations independently as 
viable ongoing businesses. Further, the proposed Final Judgment 
requires Capstar to give plaintiff prior notice regarding future radio 
station acquisitions or certain agreements pertaining to the sale of 
broadcast radio advertising time in Wichita.
    The plaintiff and defendants have stipulated that the proposed 
Final Judgment may be entered after compliance with 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 Violation

A. The Defendants

    Capstar is a Delaware corporation with its headquarters in Austin, 
Texas.

[[Page 31622]]

Capstar owns approximately 309 radio stations in 76 U.S. markets. In 
1997, Capstar had total revenue of approximately $350 million, 
approximately $4.9 million of which was derived from its Wichita 
stations.
    Triathlon is a Delaware corporation headquartered in San Diego, 
California. Triathlon currently owns 31 radio stations in six U.S. 
markets. In 1997, Triathlon had total revenue of approximately $33.6 
million, approximately $8 million of which was derived from its Wichita 
stations.

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

    On July 23, 1998, Capstar and Triathlon entered into an Agreement 
and Plan of Merger (``Agreement''). Under the terms of the Agreement, 
Triathlon agreed to transfer its licensee companies, including 
Triathlon Broadcasting of Wichita Licensee, Inc., to Capstar. Also 
under the terms of the Agreement, Triathlon agreed to sell Triathlon 
Broadcasting Company to Capstar.
    Capstar and Triathlon compete for the business of local and 
national companies seeking to advertise in the Wichita radio market. 
The proposed acquisition of Triathlon by Capstar, and the threatened 
loss of competition that would be caused thereby, precipitated the 
government suit.

C. Anticompetitive Consequences of the Proposed Acquisition

1. The Sale of Radio Advertising Time in Wichita
    The Complaint alleges that the provision of advertising time on 
radio stations serving the Wichita, Kansas Metropolitan Survey Area 
(``MSA'') constitutes a line of commerce and a section of the country, 
or a relevant market, for antitrust purposes. The Wichita MSA is the 
geographical unit for which Arbitron furnishes radio stations, 
advertising agencies, and advertisers 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 Wichita MSA includes Butler, Harvey, and 
Sedgwick Counties. 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 Wichita 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 render certain services or 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 
Wichita 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 Wichita, 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 among 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 Capstar's proposed acquisition of 
Triathlon would lessen competition substantially in the provision of 
radio advertising time in the Wichita MSA. The proposed transaction 
would create further market concentration in an already concentrated 
market. Using a measure of market concentration called the Herfindahl-
Hirschman Index (``HHI''), explained in Appendix A of the Complaint, a 
combination of Capstar and Triathlon would substantially increase the 
concentration in the Wichita radio advertising markets. The HHI 
currently is 3040. If Capstar divests only the two least significant FM 
stations, Capstar's share of the Wichita radio market, based on 
advertising revenue, would increase from approximately 20 percent to 
approximately 45 percent. The approximate post-merger HHI would be 
3680, representing an increase of about 640 points. This substantial 
increase in concentration is likely to give Capstar unilateral power to 
raise advertising rates and reduce the level of service provided to 
advertisers in Wichita.
    Today, several Capstar and Triathlon stations in Wichita compete 
head-to-head to reach the same audiences and, for many local and 
national advertisers buying time in Wichita, they are close substitutes 
for each other based on their specific audience characteristics. The 
proposed merger would eliminate this competition.
    During individual price negotiations between advertisers and radio 
stations, advertisers provide the stations with information about their 
advertising needs, including their target audience and the desired 
frequency and timing of ads. Radio stations thus have the ability to 
charge advertisers differing rates based in part on the number and 
attractiveness of competitive radio stations that can meet a particular 
advertiser's specific target needs.
    During individualized rate negotiations, advertisers that desire to 
reach certain listeners can help ensure competitive rates by ``playing 
off'' Capstar stations against Triathlon stations. Capstar's 
acquisition of Triathlon will end this competition. After the 
acquisition, such advertisers will be unable to reach their desired 
audiences with equivalent efficiency without using Capstar stations. 
Because advertisers seeking to reach these audiences would have 
inferior alternatives to the merged entity as a result of the 
acquisition, the acquisition would give Capstar the ability to raise 
prices and reduce the quality of its service to some advertisers on its 
stations in Wichita.
    b. Advertisers could not turn to other Wichita radio stations to 
prevent Capstar from imposing an anticompetitive price increase.
    If Capstar raised prices or lowered services to those advertisers 
who buy advertising time on Capstar and Triathlon stations in Wichita 
because of their strength in delivering access to certain audiences, 
non-Capstar radio stations in Wichita would not be induced to change 
their formats to attract those audiences in sufficiently large numbers 
to defeat a price increase. Successful radio stations are unlikely to 
undertake a format change solely in response to small but significantly 
increases in price being charged to advertisers by a multi-station firm 
such as Capstar because they would likely lose a substantial portion of 
their existing audiences. Even if less successful stations did change 
format, they would still be unlikely to attract

[[Page 31623]]

enough listeners to provide suitable alternatives to the merged entity. 
In addition, new entry into the Wichita radio advertising market would 
not be timely, likely or sufficient to deter the exercise of market 
power. For all these reasons, plaintiff concludes that the proposed 
transaction would lessen competition substantially in the sale of radio 
advertising time on radio stations serving the Wichita MSA 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 Wichita. It requires Capstar to divest 
five stations: KEYN-FM, KWSJ-FM, KFH-AM, KNSS-AM and KQAM-AM. The 
relief will reduce the share in advertising revenues Capstar would have 
achieved in the transaction from 45 percent to less than 40 percent. 
The divestitures will preserve choices for advertisers and will ensure 
that radio advertising prices do not increase and services do not 
decline as a result of the transaction.
    Capstar must divest the KEYN-FM, KWSJ-FM, KFH-AM, KNSS-AM and KQAM-
AM assets to either another buyer or a Trustee at the time it acquires 
Triathlon. The divestitures must be to a purchaser or purchasers 
acceptable to the plaintiff in its sole discretion. Except in the case 
of KNSS-AM, the divestitures shall include all the assets of the 
stations being divested. The divestitures shall be accomplished in such 
a way as to satisfy plaintiff, in its sole discretion, that such assets 
can and will be used as viable, ongoing commercial radio businesses. If 
defendants fail to divest these stations within the time periods 
specified in the Final Judgment, a Trustee agreed upon by plaintiff and 
Defendants and identified in the Final Judgment will be entrusted to 
effect the divestitures. If the Trustee is appointed, the proposed 
Final Judgment provides that Capstar will pay all costs and expenses of 
the Trustee and any professionals and agents retained by the Trustee. 
After appointment, the Trustee will file monthly reports with the 
plaintiff, Capstar and the Court, setting forth the Trustee's efforts 
to accomplish the divestitures ordered under the proposed Final 
Judgment. If the Trustee has not accomplished the divestitures within 
four (4) months after the date of the Order's entry, the Trustee shall 
promptly file with the Court a report setting forth (1) the Trustee's 
efforts to accomplish the required divestitures, (2) the reasons, in 
the Trustee's judgment, why the required divestitures have not been 
accomplished and (3) the Trustee's recommendations. At the same time 
the Trustee will furnish such report to the plaintiff and defendants, 
who will each have the right to be heard and to make additional 
recommendations.
    The proposed Final Judgment requires that prior to the consummation 
of the transaction, defendants will maintain the independence of their 
respective radio stations in Wichita until the closing of the merger 
and the transfer of KEYN-FM, KWSJ-FM, KFH-AM, KNSS-AM and KQAM-AM to 
either a buyer approved by the plaintiff or to the Trustee.
    The proposed Final Judgment also prohibits Capstar from entering 
into certain agreements with other Wichita radio stations without 
providing at least thirty (30) days' notice to the plaintiff. 
Specifically, Capstar must notify the plaintiff before acquiring any 
interest in another Wichita radio station. Such acquisitions could 
raise competitive concerns but might be too small to be reported 
otherwise under the Hart-Scott-Rodino Antitrust Improvements Act of 
1976, as amended, 15 U.S.C. 18a (the ``HSR Act''). Moreover, Capstar 
may not agree to sell radio advertising time for any other Wichita 
radio station, or to have another radio station that also sells radio 
advertising time in Wichita sell its radio advertising time, without 
providing plaintiff with notice. In particular, the provision requires 
Capstar to notify the plaintiff before it enters into any Joint Sales 
Agreements (``JSAs'') in Wichita. Under a JSA, one station sells 
another station's advertising time. Despite their clear competitive 
significance, JSAs may not all be reportable to the Department under 
the HSR Act. Thus, this provision in the proposed Final Judgment 
ensures that the plaintiff will receive notice of and be able to act, 
if appropriate, to stop any agreements that might have anticompetitive 
effects in the Wichita radio advertising market.
    The relief in the proposed Final Judgment is intended to remedy the 
likely anitcompetitive effects of Capstar's proposed transaction with 
Triathlon in Wichita. Nothing in this Final Judgment is intended to 
limit the plaintiffs ability to investigate or to bring actions, where 
appropriate, challenging other past or future activities of defendants 
in Wichita, or any other markets.

IV. Remedies Available to Potential Private Litigants

    Section 4 of the Clayton Act, 15 U.S.C. 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 
attorney's 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. 
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 
provision 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 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 its entry. The comments and the response of the United States will 
be filed with the Court and published in the Federal Register.
    Any such 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 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 trail on the merits of its Complaint against 
defendants. The plaintiff is satisfied, however, that the divestiture 
of KEYN-FM, KWSJ-FM, KFH-AM, KNSS-AM, and KQAM-AM,

[[Page 31624]]

and other relief contained in the proposed Final Judgment will preserve 
viable competition in the sale of radio advertising time in the Wichita 
radio advertising markets. Thus, the proposed Final Judgment would 
achieve the relief the plaintiff 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 trail.

15 U.S.C. 16(e).

    As the United States Court of Appeals for the District of Columbia 
Circuit 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 plaintiff'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 Corp., 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.'' \1\ Rather,

    \1\ 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 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. Bechtel 
Corp. 648 F.2d 660, 666 (9th Cir. 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.\2\
---------------------------------------------------------------------------

    \2\ Bechtel, 648 F.2d at 666 (citations omitted) (emphasis 
added); see BNS, 858 F.2d at 463; United States v. National Broad. 
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 very 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. '' \3\
---------------------------------------------------------------------------

    \3\ 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).
---------------------------------------------------------------------------

    This is strong and effective relief that should fully address the 
competitive harm posed by the proposed transaction.

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.

    Dated: May 12, 1999.

Respectfully submitted,
Karl D. Knutsen,
Attorney, Merger Task Force.
U.S. Department of Justice
Antitrust Division, 1401 H Street, N.W., Washington, D.C. 20530, (202) 
514-0976.

Certificate of Service

    I, Karl D. Knutsen, of the Antitrust Division of the United States 
Department of Justice, do hereby certify that true copies of the 
foregoing Competitive Impact Statement were served this 12th day of 
May, 1999, by United States mail, to the following:

David J. Laing, Baker & McKenzie, 815 Connecticut Ave. N.W., 
Washington, D.C. 20006, Counsel for Triathlon Broadcasting Company.
Neil W. Imus, Vinson & Elkins, 1455 Pennsylvania Avenue, N.W., 
Washington, D.C. 20006, Counsel for Capstar Broadcasting Corporation

Karl D. Knutsen.

[FR Doc. 99-14896 Filed 6-10-99; 8:45 am]
BILLING CODE 4410-11-M