[Federal Register Volume 68, Number 98 (Wednesday, May 21, 2003)]
[Notices]
[Pages 27851-27863]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-12746]


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DEPARTMENT OF JUSTICE

Antitrust Division

[Civil Action No. 1: 03CV 000758]


United States v. Univision Communications Inc. & Hispanic 
Broadcasting Corp.

    Proposed Final Judgment and Competitive Impact Statement. Notice is 
hereby given pursuant to the Antitrust Procedures and Penalties Act, 15 
U.S.C. 16(b)-(h), that a proposed Final Judgment, Stipulation and 
Order, and Competitive Impact Statement have been filed with the United 
States District Court for the District of Columbia in United States v. 
Univision Communications Inc., Civil Action No. 03CV000758. On March 
26, 2003, the United States filed a Complaint alleging that Univision 
Communications Inc. (``Univision'') and Hispanic Broadcasting Corp. 
(``HBC'') violated Section 7 of the Clayton Act, 15 U.S.C. 18. The 
Complaint alleges that, due to Univision's partial ownership of 
Entravision Communications Corp. (``Entravision''), a principal 
competitor of HBC, the proposed acquisition, if consummated, will 
substantially lessen competition in the sale of advertising time on 
Spanish-language radio stations in many geographic markets. The 
proposed Final Judgment requires Univision to exchange its Entravision 
shares for a nonvoting equity interest, divest a substantial portion of 
its

[[Page 27852]]

ownership in Entravision, give up its seats on Entravision's Board of 
Directors, eliminate certain rights Univision has to veto important 
Entravision actions, and restrain certain conduct that would interfere 
with the governance of Entravision's radio business. The proposed Final 
Judgment specifically requires Univision, presently owning 
approximately thirty percent of Entravision, to divest down to fifteen-
percent owership within three years, and ten-percent ownership within 
six years. Copies of the Complaint, proposed Final Judgment, and 
Competitive Impact Statement are available for inspection at the 
Department of Justice in Washington, DC., Room 200, 325 Seventh Street, 
NW., on the Internet at http://www.usdoj.gov/atr, and at the Office of 
the Clerk of the United States District Court for the District of 
Columbia, 333 Constitution Avenue, NW., Washington, DC 20001.
    Public comment is invited within sixty 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 James R. Wade, Chief, Litigation III Section, Anitrust Division, 
Department of Justice, 325 Seventh Street, NW., Suite 300, Washington, 
D.C. 20530 (telephone: (202) 616-5935).

Constance K. Robinson,
Director of Operations.

Competitive Impact Statement

    Plaintiff, the United States of America, by and through the 
Antitrust Division of the Department of Justice (``Department''), 
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 Department filed a civil antitrust complaint on March 26, 2003, 
alleging that the proposed acquisition of Hispanic Broadcasting 
Corporation (``HBC'') by Univision Communications Inc. (``Univision'') 
would violate Section 7 of the Clayton Act, as amended, 15 U.S.C. 18. 
HBC is the nation's largest Spanish-language radio broadcaster. 
Univision, the largest Spanish-language media company in the United 
States, owns a significant equity interest, and possesses governance 
rights, in Entravision Communications Corporation (``Entravision''), 
another Spanish-language media company and HBC's principal competitor 
in Spanish-language radio in many markets. The Complaint alleges that, 
due to Univision's substantial partial ownership and governance rights 
in Entravision, the proposed acquisition of HBC would lessen 
competition substantially in the provision of Spanish-language radio 
advertising time to a significant number of advertisers in several 
geographic areas of the United States. The request for relief seeks: 
(a) A judgment that Univision's proposed acquisition would violate 
Section 7 of the Clayton Act; (b) preliminary and permanent injunctive 
relief preventing the consummation of the proposed merger; (c) an award 
to the United States of the costs of this action; and (d) such other 
relief as is just and proper.
    Before this suit was filed, the Department reached an agreement 
with Univision and HBC on the terms of a proposed consent decree, 
which, if entered, would require Univision to reduce its equity 
interest in Entravision to 15 percent of outstanding shares within 
three years from the filing of the proposed decree and to 10 percent 
within six years. The decree would also require Univision to relinquish 
its rights to place directors on Entravision's Board, eliminate certain 
rights Univision has to veto important Entravision actions, and 
restrain certain conduct that would interfere with the governance of 
Entravision's radio business.
    A Stipulation and proposed Final Judgment embodying the settlement 
were filed simultaneously with the Complaint on March 26, 2003. The 
Department and the defendants have stipulated that they will be bound 
by the proposed Final judgment upon its filing. The proposed Final 
Judgment may be entered after compliance with the APPA unless rejected 
by the Court. Entry of the proposed Final Judgment would terminate this 
action, except that the Court would retain jurisdiction to construe, 
modify, or enforce the provisions of the proposed Final Judgment and to 
punish violations thereof.

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

A. The Defendants and the Proposed Transaction

    Univision, a Delaware corporation with its principal place of 
business in Los Angeles, California, is the largest broadcaster of 
Spanish-language television programming in the United States with two 
broadcast networks, Univision and Telefutura, and one cable channel, 
Galavision. It also has several other Spanish-language media 
operations, including Internet sites and services, music recording, 
distribution, and publishing.
    Univision has a significant and long-standing relationship with 
Entravision, a Spanish-language media company with television, radio, 
outdoor advertising, and publishing businesses. Entravision, which is 
not a party to this action, currently owns or operates approximately 55 
radio stations throughout the United States, most of which broadcast 
Spanish-language programming. Entravision also owns or operates 49 
television stations that broadcast Univision programming pursuant to an 
affiliation agreement that does not expire until December 31, 2021. As 
part of this affiliation agreement, Univision serves as Entravision's 
sole representative for the sale of television advertisements sold on a 
national basis.
    At the time the proposed acquisition was announced, Univision owned 
an approximate 30-percent equity and seven-percent voting interest in 
Entravision. In addition, Univision, as the sole holder of 
Entravision's Class C common stock, has significant governance rights 
with respect to Entravision. Although Univision's representatives 
resigned after the proposed acquisition was announced, Univision has 
the right to place two representatives on Entravision's Board of 
Directors. Univision also has the right to veto important Entravision 
business decisions. Entravision's Bylaws provide Univision the right to 
veto Entravision's (a) Issuance of equity, (b) incurrence of debt at 
certain levels, and (c) acquisitions or dispositions of assets valued 
at greater than $25 million. Entravision's Certificate of Incorporation 
provides Univision the right to approve any Entravision (a) Merger, 
consolidation, business combination or reorganization, (b) dissolution, 
liquidation, or termination, and (c) transfer of any FCC license with 
respect to a television station that is an affiliate of Univision.
    HBC, a Delaware corporation with its principal place of business in 
Dallas, Texas, is a media company that owns or operates more than 60 
radio stations in 18 geographic regions in the United States. Nearly 
all of the HBC's stations broadcast in Spanish. HBC's other businesses 
include a marketing group and interactive online services.
    On June 11, 2002, Univision agreed to acquire all of the voting 
securities of HBC. This transaction, if consummated, would result in a 
reduction in competition between HBC and Entravision in the provision 
of Spanish-

[[Page 27853]]

language radio advertising in certain markets where the firms compete.

B. Markets

    The Complaint alleges that the provision of advertising time on 
Spanish-language radio stations to advertisers that consider Spanish-
language radio to be a particularly effective medium is a relevant 
product market, and that the Dallas, Texas; El Paso, Texas; Las Vegas, 
Nevada; McAllen-Brownsville-Harlingen, Texas; Phoenix, Arizona; and San 
Jose, California metro areas (``Overlap Markets'') are each a relevant 
geographic market.
1. Relevant Product Market
    Radio broadcasters, like HBC and Entravision, sell advertising time 
to local and national advertisers in areas where their stations are 
located. HBC and Entravision each negotiate these transactions 
individually with each local and national advertiser, and the resulting 
price for advertising time reflects the circumstances of these 
individual negotiations and the preferences of each advertiser.
    There are a significant number of local and national advertisers in 
the geographic markets identified below that consider Spanish-language 
radio to be particularly effective in reaching desired customers who 
speak Spanish and who listen predominately or exclusively to Spanish-
language radio. Such advertisers view Spanish-language radio, either 
alone or in conjunction with other media, to be the most effective way 
to reach their target audience and do not consider other media, 
including non-Spanish-language radio, to be a reasonable substitute. 
These advertisers would not turn to other media, including radio that 
is not broadcast in Spanish, if faced with a small but significant 
increase in the price of advertising time on Spanish-language radio or 
a reduction in the value of the services provided.
    Given the nature of individualized negotiations between radio 
stations and advertisers discussed above, Spanish-language radio 
stations are likely able to identify advertisers that place a high 
value on utilizing Spanish-language radio to reach their targeted 
audience. Such advertisers would not find it economical to switch, or 
credibly threaten to switch, to other media to avoid a post-merger 
price increase. In the geographic markets identified below, there are a 
significant number of advertisers that consider Spanish-language radio 
advertising to be a particularly effective medium, and the provision of 
advertising time on Spanish-language radio stations to these 
advertisers is a relevant product market within the meaning of Section 
7 of the Clayton Act.
2. Relevant Geographic Markets
    Advertising placed by local and national advertisers on radio 
stations in the Overlap Markets is aimed at reaching listening 
audiences within each of those Overlap Markets, and radio stations 
outside an Overlap Market do not provide effective access to that 
audience. If there were a small but significant increase in the price 
of advertising time on Spanish-language radio stations within an 
Overlap Market, advertisers would not switch enough purchases of 
advertising time to stations outside the Overlap Market and/or 
otherwise reduce their purchases to defeat the price increase. Thus, 
the Overlap Markets of Dallas, El Paso, Las Vegas, McAllen-Brownsville-
Harlengen, Phoenix, and San Jose are each relevant geographic markets 
for the purpose of Section 7 of the Clayton Act.

C. Harm to Competition in Radio Advertising Markets

1. Current Competition Between HBC and Entravision
    The Compliant alleges that Entravision and HBC are vigorous 
competitors in the provision of Spanish-language radio. They heavily 
promote their stations against each other in order to gain ratings; 
they program and format their stations with an eye toward attracting 
listeners from each other; they aggressively seek to acquire stations; 
and they closely monitor each other's competitive positions in the 
Overlap Markets. Most importantly, the Compliant alleges that HBC and 
Entravision compete aggressively to sell advertising time to 
advertisers that seek to reach Spanish-language audiences. During 
individualized rate negotiations, advertisers targeting Spanish-
language listeners benefit from its competition, including the ability 
to play off HBC stations against Entravision stations to reach better 
terms.
2. Reduction in Competition From the Acquisition
    The Complaint alleges that, given Univision's significant ownership 
stake and governance rights in HBC's principal competitor, Entravision, 
the acquisition of HBC by Univision will lessen competition 
substantially in the sale of advertising time on Spanish-language radio 
in the Overlap Markets. The market for the provision of Spanish-
language radio in the Overlap Markets is highly concentrated, with HBC 
and Entravision's combined share of advertising revenue ranging from 70 
to 95 percent. HBC and Entravision face few other significant 
competitors and, for many local and national advertisers buying 
advertising time on Spanish-language radio, they are the next best 
substitutes for each other.
    The Complaint alleges that Univision's ownership of a substantial 
equity stake in Entravision, and its ability to influence or control 
competitively significant Entravision decisions, will lessen the 
incentives of both companies to compete aggressively against each other 
and will result in higher prices and lower service quality in the sale 
of Spanish-language radio advertising time. Univision's right to place 
directors on Entravision's board and right to veto certain strategic 
business decisions (namely any Entravision issuance of equity or debt, 
or acquisitions over $25 million) give it a significant degree of 
control or influence over Entravision and will likely impair 
Entravision's ability and incentive to compete with Univision/HBC. For 
example, Univision's right to veto any Entravision acquisition of 
assets over $25 million would allow Univision/HBC to prevent 
Entravision from purchasing any significant radio station assets in a 
market where HBC competes. A Univision veto on the issuance of new 
stock or debt could leave Entravision without access to capital it may 
need to make acquisition or otherwise compete effectively with HBC. 
Entravision has frequently taken actions in the past that have been 
subject to these Univision veto rights and, because its plans call for 
more growth through acquisition, Entravision is likely to need 
Univision's approval on many occasions in the future. Indeed, the 
existence of these veto rights lessons competitions even if they are 
not exercised because Entravision will have the incentive to constrain 
its normal competitive behavior against Univision/HBC to ensure that 
Univision/HBC provides the necessary approval.
    Univision's approximately 30-percent equity interest in Entravision 
also will substantially reduce competition between Univision/HBC and 
Entravision. Univision/HBC will have reduced incentives to compete 
against Entravision for advertisers seeking a Spanish-language radio 
audience because Univision/HBC, as a substantial owner of Entravision 
stock, will benefit even if a customer chooses Entravision rather than 
HBC. Consequently, HBC will compete less aggressively to gain customers 
at the expense of Entravision, resulting in an increase in prices for a 
significant number of advertisers in the

[[Page 27854]]

Overlap Markets. Advertisers that consider Spanish-language radio to be 
a particularly effective medium will find it difficult or impossible to 
``buy around'' Univision/HBC and Entravision, i.e., to effectively 
reach their targeted audience without using Univision/HBC and 
Entravision radio stations.
    Entry of new Spanish-language radio stations into the relevant 
geographic markets would not be timely, likely, or sufficient to 
mitigate the competitive harm likely to result from this acquisition. 
In theory, entry could occur by obtaining a license for new radio 
spectrum or by reformatting an existing station. New radio spectrum 
acquisition is highly unlikely, however, because spectrum is a scarce 
and expensive commodity and reformatting by existing stations is 
unlikely to defeat a price increase by Univision/HBC or Entravision. 
Radio stations are unlikely to undertake a format change solely in 
response to small but significant increases in price being charged to 
advertisers by a firm such as Univision/HBC, and even given such a 
format change, radio stations that did change formats would be unlikely 
to attract enough listeners to provide sufficient alternatives to the 
merged entity. Reformatting is an expensive endeavor that involves the 
loss of the station's existing audience, a significant expense to 
attract new listeners, and no assurance of attracting a significant 
listening base to justify the costs involved. It generally occurs when 
a station believes that a particular format is not being sufficiently 
served or when a station finds an niche between existing formats. An 
increase in the price of advertising rates charged by existing stations 
serving a specific format does not in itself provide assurance that a 
newly formatted station would attract a sufficient audience base, 
particularly if there are strong incumbents already in that format.

III. Explanation of the Proposed Final Judgment

    The proposed Final Judgment is designed to preserve competition in 
the sale of advertising time on Spanish-language radio stations in the 
Overlap Markets by restricting Univision's ability to control or 
influence Entravision's radio business and by significantly reducing 
Univision's equity stake in Entravision. The proposed Final Judgment 
has three principal provisions: (1) Exchange of Univision's Entravision 
stock for a nonvoting equity interest with limited shareholder rights; 
(2) divestitures of a substantial portion of the defendants' equity 
stake in Entravision; and (3) restrictions on the defendant's ability 
to interfere with the governance of Entravision's radio business. The 
proposed Final Judgment also has several sections designed to ensure 
its effectiveness and adequate compliance. Each of these sections is 
discussed below.

A. Exchange of Shares for Nonviting Equity

    Section IV of the proposed Final Judgment requires Univision to 
exchange all of its Entravision Class A and Class C common stock for a 
nonvoting equity interest with limited rights and to certify that the 
voting and director rights that Univision has held in connection with 
its Entravision stock has been eliminated. The limited rights to be 
associated with the new class of stock to be issued to defendants are 
set forth in a Certificate of Designations, Preferences and Rights of 
Series U Preferred Stock, which is attached to the proposed Final 
Judgment. The exchange of stock must occur prior to the closing of the 
Univision/HBC merger.
    These provisions will significantly curtail Univision's ability to 
influence or control Entravision's business conduct. As part of the 
acquisition of a new class of stock, Univision will relinquish certain 
rights it previously had in connection with Entravision governance. 
First, Univision will relinquish all shareholder voting rights so that 
it will not be able to vote on any corporate matters. Second, Univision 
will relinquish its two seats on Entravision's Board of Directors so 
that it will no longer have access to confidential Entravision 
information or the ability to vote on matters before the Board. Third, 
Univision will relinquish certain ``veto'' rights over important 
Entravision decisions, namely Univision's rights under the Entravision 
Bylaws to veto Entravision's issuance of equity, incurrence of debt at 
certain levels, and acquisitions or dispositions of assets valued at 
greater than $25 million. Retention of these rights would have allowed 
Univision to affect Entravision's strategic decision-making by 
preventing, or threatening to prevent, Entravision from making 
acquisitions or raising capital. Moreover, the continued existence of 
these veto rights would lessen competition even if they were not 
exercised because Entravision would have the incentive to constrain its 
normal competitive behavior against Univision/HBC to ensure that 
Univision/HBC would grant necessary approvals for future transactions 
subject to the veto rights.
    The proposed Final Judgment does not require elimination of all 
shareholder rights that Univision currently possesses. As set forth in 
the Certificate of Designations, Univision will retain the modified 
right to veto any decision by Entravision to merge, consolidate, or 
otherwise reorganize Entravision with or into one or more entities that 
results in a transfer of all or substantially all of the assets of 
Entravision or a transfer of a majority of the voting power of 
Entravision.\1\ Univision also retains the right to veto any 
Entravision dissolution, liquidation, or termination. Finally, 
Univision will also have the right to veto any disposition of any 
interest in any FCC license with respect to television stations that 
are affiliates of Univision. The proposed Final Judgment makes clear 
that these rights may be terminated if Entravision and the defendants 
choose not to do so. See Section VILC. Defendants, however, are 
restrained from seeking to expand or modify these limited rights in any 
manner.
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    \1\ Section D(i) of the Certificate provides that without 
Univision's approval, Entravision will not ``merge, consolidate or 
enter into a business combination, or otherwise reorganize this 
Corporation with or into one or more entities (other than a merger 
of a wholly-owned subsidiary of this Corporation into another 
wholly-owned subsidiary of this Corporation).'' This approval right 
is identical to one that Univision possessed previously. Section 
VI.C of the proposed Final Judgment, however, limits Univision's 
rights in that it provides that Univision may not exercise its 
rights under D(i) unless the transaction at issue ``results in a 
transfer of all or substantially all of the assets of Entravision or 
a transfer of a majority of the voting power of Entravision.''
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B. Divestiture of Defendants' Entravision Holdings

    Section V of the proposed Final Judgment requires Univision to 
reduce its equity stake in Entravision so that it owns no more than 15 
percent of all outstanding Entravision stock by March 26, 2006, and no 
more than 10 percent by March 26, 2009. The divestitures of this stock 
may be made by any combination of open-market sale, public offering, 
private sale, or repurchase by Entravision. The stock may not be sold 
by private sale or placement to any Spanish-language radio broadcaster 
other than Entravision unless the Department agrees to such a 
transaction in writing.
    As explained above, if Univision/HBC owned a substantial, partial-
ownership interest in Entravision, Univision/HBC would have an 
incentive to compete less aggressively. This is because Univision/HBC 
would receive some significant benefit even on sales it loses to 
Entravision. Reducing Univision/HBC's stake in Entravision to a much 
lower

[[Page 27855]]

percentage reduces substantially the likelihood that Univision/HBC's 
competitive incentives will be affected by its partial ownership of 
Entravision, thus preserving Univision/HBC's incentive to compete with 
Entravision.
    The terms of the proposed Final Judgment reflect a balancing of the 
potential harm to competition that might arise from a divestiture that 
proceeds either too slowly or too rapidly. In merger cases in which the 
Department seeks a divestiture of assets as a remedy, the Department 
requires completion of the divestiture within the shortest time period 
reasonable under the circumstances. In this case, the time periods for 
divestiture of stock are appropriate, however, because of concerns that 
a more rapid divestiture might harm competition by adversely affecting 
Entravision's ability to raise capital to fund expansion of its radio 
business.

C. Restrictions on Defendants Ability to Participate in the Governance 
of Entravision

    Section VI of the proposed Final Judgment restrains defendants from 
directly or indirectly: (1) Suggesting or nominating any candidate for 
election to Entravision's board or serving as an officer, director, 
manager, or employee of Entravision; (2) accessing any nonpublic 
information relating to the governance of Entravision; (3) voting or 
permitting to be voted any shares of Entravision stock that defendants 
own; (4) using or attempting to use any ownership interest in 
Entravision to exert any influence over Entravision in the conduct of 
Entravision's radio business; (5) using or attempting to use any rights 
or duties under the television affiliation agreement or relationship to 
influence Entravision in the conduct of Entravision's radio business; 
and (6) communicating to or receiving from Entravision any nonpublic 
information relating to Entravision's radio business.
    Collectively, these provisions are intended to prevent defendants 
from participating in Entravision's governance or in the conduct of 
Entravision's radio business, notwithstanding the defendants' remaining 
equity interest in Entravision and the television affiliation 
relationship. While recognizing that Univision and Entravision have a 
mutual interest in matters affecting their television affiliation 
relationship, these provisions seek to ensure the competitive 
independence of the two companies in matters involving the radio 
business.

D. Permitted Conduct

    Section VII of the proposed Final Judgment identifies certain 
conduct that is permitted. Individual managers, agents, and employees 
of the defendants are allowed to hold, acquire, or sell Entravision 
stock solely for personal investment. Officers and directors also may 
hold or sell Entravision stock but may not acquire any additional 
Entravision stock. Any Entravision stock held by these individuals is 
not subject to the stock-exchange or divestiture requirements of 
Sections IV and V of the proposed Final Judgment.
    Section VII also provides that Univision may acquire a majority of 
Entravision's voting securities so long as the transaction is subject 
to the reporting and waiting requirements of the Hart-Scott-Rodino 
Antitrust Improvements Act of 1976, as amended, 15 U.S.C. 18a, 
provided, however, that Univision cannot acquire or retain any interest 
in Entravision's radio assets in any of the Overlap Markets as part of 
such a transaction without the approval of the Department, in its sole 
discretion. This provision makes clear that the proposed Final Judgment 
does not prohibit a transaction in which Univision would acquire a 
majority stake in Entravision so long as the Department is afforded the 
ability to review the transaction pursuant to the established Hart-
Scott-Rodino framework. The Department, of course, would review any 
such transaction to determine whether it was likely to lessen 
competition in any relevant market. Because the Department has 
determined that a combination of Univision and Entravision would lessen 
competition in the sale of advertising on Spanish-language radio in the 
Overlap Markets, a transaction in which Univision acquired Entravision 
may not include any Entravision radio assets from the markets that are 
the subject of the Complaint unless the Department gives its approval.

E. Compliance, Inspection, and Other Provisions Designed To Ensure 
Effectiveness of the Proposed Final Judgment

    Section VIII of the proposed Final Judgment provides for 
appointment of a trustee should defendants not comply with the terms of 
the proposed Final Judgment that require stock divestitures within the 
established time periods. The trustee would have the power to 
accomplish the divestitures. Section IX requires the defendants to 
distribute the proposed Final Judgment to certain officers, directors, 
and appropriate employees, and obtain statements from these individuals 
that they understand their obligations under the Final Judgment. The 
terms of this provision are designed to ensure that those individuals 
responsible for complying with the Final Judgment are aware of its 
existence and understand its requirements. Section IX also requires 
annual reports and certifications during the life of the decree. 
Section X provides a means for the Department to obtain information 
from the defendants to determine or secure compliance with the proposed 
Final Judgment. Under Section XI, the Court would retain jurisdiction 
over this matter to modify or terminate any of its provisions, to 
enforce compliance, and to punish any violations of its provisions. 
Section XII provides that the proposed Final Judgment will expire 10 
years after it is entered by the Court. Section XIII states that the 
entry of the proposed Final Judgment is in the public interest.

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 
attorneys' fees. Entry of the proposed Final Judgment will neither 
impair nor assist the bringing of any private antitrust damage action. 
Under the provisions of Section 5(a) of the Clayton Act, 15 U.S.C. 
16(a), the proposed Final Judgment has no prima facie in any subsequent 
private lawsuit that may be brought against defendants.

V. Procedures Available for Modification of the Proposed Final Judgment

    The Department and the defendants have stipulated that the proposed 
Final Judgment may be entered by the Court after compliance with the 
provisions of the APPA, provided that the Department 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 60 days preceding the 
effective date of the proposed Final Judgment within which any person 
may submit to the Department written comments regarding the proposed 
Final Judgment. Any person who wishes to comment should do so within 60 
days of the date of publication of this Competitive Impact Statement in 
the Federal Register. The Department will evaluate and respond to the 
comments. All comments will be given due

[[Page 27856]]

consideration by the Department, which remains free to withdraw its 
consent to the proposed Final Judgment at any time prior to entry. The 
comments and the response of the Department will be filed with the 
Court and published in the Federal Register.
    Written comments should be submitted to: James R. Wade, Chief, 
Litigation III Section, Antitrust Division, United States Department of 
Justice, 325 7th Street, NW., Suite 300, Washington, DC 20530.
    The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and that the parties may apply to the 
Court for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

    The Department considered, as an alternative to the proposed Final 
Judgment, a full trial on the merits of its Complaint for Injunctive 
Relief against Univision and HBC as well as a proposal by the 
defendants that they would, in lieu of divestitures, place their 
Entravision stock in a long-term trust. The Department is satisfied, 
however, that the divestiture of a substantial portion of equity 
interest in Entravision by Univision, the surrender of several key 
control rights, and the other relief contained in the proposed Final 
Judgment will preserve competition in the sale of radio advertising 
time on Spanish-language stations serving the Overlap Markets. Thus, 
the proposed Final Judgment would achieve substantially all the relief 
the Department 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 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 to 
alternative remedies actually considered, and any other 
considerations bearing upon the adequacy of such judgment;
    (2) The impact of entry of such judgment upon the public 
generally and individuals alleging specific injury from the 
violations set forth in the complaint including consideration of the 
public benefit, if any, to be derived from a determination of the 
issues at trial.

15 U.S.C. 16(e). As the United States Court of Appeals for the D.C. 
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 government's complaint, whether the decree 
is sufficiently clear, whether enforcement mechanisms are sufficient, 
and whether the decree may positively harm third parties. See United 
States v. Microsoft, 56 F.3d 1448, 1461-62 (D.C. Cir. 1995).
    In conducting this inquiry, ``[t]he court is nowhere compelled to 
go to trial or to engage in extended proceedings which might have the 
effect of vitiating the benefits of prompt and less costly settlement 
through the consent decree process.'' 119 Cong. Rec. 24,598 (1973) 
(statement of Senator Tunney).\2\ Rather,
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    \2\ See also United States v. Gillette Co., 406 F. Supp. 713, 
716 (D. Mass. 1975) (recognizing it was not the court's duty to 
settle; rather, the court must only answer ``whether the settlement 
achieved [was] within the reaches of the public interest''). A 
``public interest'' determination can be made properly on the basis 
of the Competitive Impact Statement and Response to Comments filed 
pursuant to the APPA. Although the APPA authorizes the use of 
additional procedures, 15 U.S.C. Sec.  16(f), those procedures are 
discretionary. A court need not invoke any of them unless it 
believes that the comments have raised significant issues and that 
further proceedings would aid the court in resolving those issues. 
See H.R. Rep. No. 93-1463, 93rd Cong., 2d Sess. 8-9 (1974), 
reprinted in 1974 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-Am. Dairymen, Inc., 1977-1 Trade Cas. (CCH) ] 
61,508, at 71,980 (W.D. Mo. May 17, 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 State 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

    [t]he 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.

Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted).\3\
---------------------------------------------------------------------------

    \3\ Cf. BNS, 858 F.2d at 463 (holding that the court's 
``ultimate authority under the [APPA] is limited to approving or 
disapproving the consent decree''); Gillette, 406 F. Supp. at 716 
(noting that, in this way, the court is constrained to ``look at the 
overall picture not hypercritically, nor with a microscope, but with 
an artist's reducing glass''). See generally Microsoft, 56 F.3d at 
1461 (discussing 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' '').
---------------------------------------------------------------------------

    The proposed Final Judgment, therefore, should not be reviewed 
under a standard of whether it is certain to eliminate every 
anticompetitive effect of a particular practice or whether it mandates 
certainty of free competition in the future. Court approval of a final 
judgment requires a standard more flexible and less strict than the 
standard required for a finding of liability. ``[A] proposed decree 
must be approved even if it falls short of the remedy the court would 
impose on its own, as long as it falls within the range of 
acceptability or is `within the reaches of public interest' '' United 
States v. Am. Tel. & Tel. Co., 552 F. Supp. 131, 151 (D.D.C. 1982) 
(citations omitted) (quoting Gillette, 406 F. Supp. at 716), aff'd sub 
nom. Maryland v. United States, 460 U.S. 1001 (1983); see also United 
States v. Alcan Aluminum Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 1985) 
(approving the consent decree even though the court would have imposed 
a greater remedy).
    Moreover, the Court's role under the APPA is limited to reviewing 
the remedy in relationship to the violations that the United States has 
alleged in its Complaint, and does not authorize the Court to 
``construct [its] own hypothetical case and then evaluate the decree 
against that case.'' Microsoft, 56 F.3d at 1459. Because the ``court's 
authority to review the decree depends entirely on the government's 
exercising its prosecutorial discretion by bringing a case in the first 
place,'' it follows that ``the court is only authorized to review the 
decree itself,'' and not to ``effectively redraft the complaint'' to 
inquire into other matters that the United States might have but did 
not pursue. Id. at 1459-60.

VIII. Determinative Documents

    There are no determinative materials or documents within the 
meaning of the APPA that were considered by the

[[Page 27857]]

Department in formulating the proposed Final Judgment.

    Dated this 7th day of May 2003.

     Respectfully submitted,

 /s/-------------------------------------------------------------------
William H. Stallings,
Litigation III Section, Antitrust Division, United States Department 
of Justice, 325 7th Street, NW., Suite 300, Washington, DC 20530.

Certificate of Service

    The undersigned certifies that a copy of the foregoing Competitive 
Impact Statement was served on the following counsel, by electronic 
mail in PDF format and by hand delivery, this 7th day of May, 2003:

John M. Taladay,
Howrey, Simon, Arnold & White L.L.P., 1299 Pennsylvania Avenue, NW., 
Washington, DC 20004-2402.

Neil W. Imus,
Vinson & Elkins L.L.P., The Willard Office Building, 1455 
Pennsylvania Avenue, NW., Washington, DC 20004-1008.

 /s/-------------------------------------------------------------------
William H. Stallings,

Stipulation and Order

    It is hereby stipulated by and between the undersigned parties, 
through their respective counsel as follows:
    1. The Court has jurisdiction over the subject matter of 
plaintiff's Complaint alleging defendants Univision Communications Inc. 
(``Univision'') and Hispanic Broadcasting Corporation (``HBC'') 
violated Section 7 of the Clayton Act (15 U.S.C. 18), and the parties 
do not object either to the Court's exercise of personal jurisdiction 
over them in this case, or to the propriety of venue of this action in 
the United States District Court for the District of Columbia. The 
defendants authorize John M. Taladay, Esq. of Howrey, Simon, Arnold & 
White L.L.P. to accept service of all process in this matter on their 
behalf.
    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 Procedure 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 they 
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 that (1) plaintiff withdraws its consent, as 
provided in paragraph two above, (2) defendants provide notice to 
plaintiff and the Court that the Agreement and Plan of Reorganization 
dated June 11, 2002 has been terminated or that the Merger of Univision 
and HBC (as defined in the Agreement and Plan of Reorganization) has 
been abandoned; or (3) that 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 required actions set forth in 
Sections IV, V, and VI of the proposed Final Judgment can and will be 
implemented and followed and that the defendants will later raise no 
claim of hardship or difficulty as grounds for asking the Court to 
modify any of the provisions contained therein.

 Respectfully submitted,

For Plaintiff United States of America:

-----------------------------------------------------------------------
William H. Stallings,
U.S. Department of Justice, Antitrust Division, Litigation III 
Section, 325 7th Street, NW., Suite 300, Washington, D.C. 20530, 
Tel: (202) 514-9323, Fax: (202) 307-9952.
Dated: March 26, 2003.

For Defendant Univision Communications Inc.:

-----------------------------------------------------------------------
John M. Taladay
Howrey, Simon, Arnold & White, L.L.P. 1299 Pennsylvania Avenue, NW., 
Washington, D.C. 20004-2402, Tel: (202) 383-6564, Fax: (202) 383-
6610.

For Defendant Hispanic Broadcasting Corporation:

-----------------------------------------------------------------------
Neil W. Imus,
Vinson & Elkins L.L.P. The Willard Office Building, 1455 
Pennsylvania Avenue, NW., Washington, D.C. 20004-1008, Tel: (202) 
639-6675, Fax: (202) 879-8875 D.C. Bar 394544.

Order

    It is so ordered, this--day of March, 2003.

-----------------------------------------------------------------------
United States District Court Judge

Final Judgment

    Whereas, plaintiff, United States of America, filed its Complaint 
on March 26, 2003, alleging that defendants, Univision Communications 
Inc. (``Univision'') and Hispanic Broadcasting Corporation (``HBC''), 
violated Section 7 of the Clayton Act, 15 U.S.C. 18, and plaintiff and 
defendants, by their attorneys, have consented to the entry of this 
Final Judgment without trial or adjudication of any issue of fact or 
law, and without this Final Judgment constituting any evidence against, 
or an admission by, any party with respect to any issue of fact or law;
    And Whereas, defendant 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 rights or assets by and the imposition 
of related injunctive relief against the defendants to ensure that 
competition is not substantially lessened:
    And Whereas, defendants have represented to plaintiff that the 
divestitures required below can and will be made and that defendants 
will later raise no claim of hardship of difficulty as grounds for 
asking the Court to modify any of the divestiture provisions contained 
below:
    Now Therefore, before the taking of any testimony, and without 
trial or adjudication of any issue of fact or law, and upon the consent 
of the parties, it is Ordered, adjudged and decreed as follows:

I. Jurisdiction

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

II. Definitions

    As used in this Final Judgment:
    A. ``Univision'' means defendant Univision Communications Inc., a 
Delaware corporation with its principal place of business in Los 
Angeles, California, its successors and assigns,

[[Page 27858]]

and its subsidiaries, divisions, groups, affiliates, partnerships, and 
joint ventures, and their directors, officers, managers, agents, and 
employees.
    B. ``HBC'' means defendant Hispanic Broadcasting Corporation, a 
Delaware corporation with its principal place of business in Dallas, 
Texas, its successors and assigns, and its subsidiaries, divisions, 
groups, affiliates, partnerships, and joint ventures, and their 
directors, officers, managers, agents, and employees.
    C. Entravision means Entravision Communications Corporation, a 
Delaware corporation with its principal place of business in Santa 
Monica, California, its successors and assigns, and its subsidiaries, 
divisions, groups, affiliates, partnerships, and joint ventures, and 
their directors, officers, managers, agents, and employees.
    D. Divestiture Assets means that portion of the Entravision 
Holdings required to be divested under this Final Judgment.
    E. Entravision Holdings means any equity interest, whether voting 
or nonvoting, of Entravision that defendants own or control, directly 
or indirectly, including, but not limited to, the 21,983,392 shares of 
Entravision's Class C common shares and the 14,943,231 shares of 
Entravision's Class A common shares owned by Univision as of the date 
of the filing this Final Judgment.
    F. The Univision/HBC Merger means the Agreement and Plan of 
Reorganization dated June 11, 2002, by and among Univision and HBC 
under which Univision will acquire 100 percent of the voting securities 
of HBC.
    G. Own means to have or retain any right, title, or interest in any 
asset, including any ability to control or direct actions with respect 
to such asset, either directly or indirectly, individually or through 
any other party.
    H. Overlap Markets are the following Metro Survey Areas: Dallas, 
Texas; El Paso, Texas; Las Vegas, Nevada; McAllen-Brownsville-
Harlingen, Texas: Phoenix, Arizona; and San Jose, California. A Metro 
Survey Area is a geographical unit for which Arbitron, a company that 
surveys radio listeners, furnishes radio stations, advertisers, and 
advertising agencies in a particular area with data to aid in 
evaluating radio size composition.

III. Applicability

    This final Judgment applies to Univision and HBC, both individually 
and jointly, and all other persons in active concert or participation 
with any of them who receive actual notice of this Final Judgment by 
personal service or otherwise.

IV. Exchange or Entravision Shares

    A. Univision is hereby ordered and directed, prior to closing of 
the Univision/HBC Merger, to exchange all of its Entravision Class A 
and Class C common stock for a nonvoting equity interest with rights 
and restrictions as specified in the Certificate of Designations. 
Preferences and Rights of Series U Preferred Stock (attached hereto as 
Schedule A and made a part of this Final Judgment).
    B. Univision is hereby ordered and directed, prior to closing of 
the Univision/BBC Merger, to provide written certification and 
supporting documentation to plaintiff that all voting and director 
rights associated with Entravision's Class C common shares contained in 
Univision's First Restated Certificate of Incorporation, dated July 24, 
2000, and Entravision's Second Amended and Restated Bylaws, dated July 
11, 2002, have been eliminated.

V. Divestiture of Entravision Holdings

    A. Defendants are hereby ordered and directed, in accordance with 
the terms of this Final Judgment, on or before three (3) years from the 
date of filing of this Final Judgment, to divest that portion of the 
Entravision Holdings sufficient to cause defendants to own no more than 
fifteen (15) percent of all outstanding shares of Entravision on a 
fully converted basis. On or before six (6) years from the date of this 
Final Judgment, defendants shall divest that portion of the Entravision 
Holdings sufficient to cause defendants to own no more than ten (10) 
percent of all outstanding shares of Entravision on a fully converted 
basis.
    B. Defendants are enjoined and restrained from the date of the 
filing of this Final Judgment until the completion of the divestitures 
required by Section V.A from acquiring, directly or indirectly, any 
additional share of Entravision stock, except pursuant to a transaction 
that does not increase defendants' proportion of the outstanding equity 
of Entravision, such as a stock split, stock dividend, rights offering, 
recapitalization, reclassification, merger, consolidation, or corporate 
reorganization. Any additional Entravision equity acquired by 
defendants as specifically permitted in this Section V.B. shall be part 
of the Entravision Holdings and be subject (1) the divestiture 
obligations of Section V.A of this Final Judgment: and (2) to the 
rights and restrictions set forth in Section IV.A and embodied in the 
attached Certificate of Designations, Preferences and Rights of Series 
U Preferred Stock.
    C. Upon completion of the divestitures required by Section V.A. 
defendants may acquire additional shares of Entravision, but defendants 
are enjoined and restrained from owning any more than ten (10) percent 
of all outstanding shares of Entravision on a fully converted basis. 
Any additional Entravision shares acquired by defendants shall be 
subject to the rights and restrictions set forth in Section IV.A and 
embodied in the attached Certificate of Designations. Preferences and 
Rights of Series U Preferred Stock.
    D. The divestitures required by Section V.A may be made by open 
market sale, public sale, repurchase by Entravision, or a combination 
thereof. Such divestitures shall not be made by private sale or 
placement to any person who provides Spanish-language radio 
broadcasting services other than Entravision unless plaintiff, in its 
sole discretion, shall otherwise agree in writing.
    E. Univision shall notify plaintiff no less than sixty (60) 
calendar days prior to the expiration of each of the time periods for 
the divestitures required by Section V.A of this Final Judgment of the 
arrangements it has made to complete each required divestiture in a 
timely fashion.

VI. Entravision Governance

    A. From the date of the filing of this Final Judgment and until its 
expiration, defendants are enjoined and restrained, directly or 
indirectly, from:
    1. Suggesting or nominating, individually or as part of a group, 
any candidate for election to Entravision's Board of Directors, or 
having any officer, director, manager, employee, or agent serve as an 
officer, director, manager, employee, or in a comparable position with 
or for Entravision:
    2. Participating in, being present at, or receiving any notes, 
minutes, or agendas of, information from, or any documents distributed 
in connection with, any nonpublic meeting of Entravision's Board of 
Directors or any committee thereof, or any other governing body of 
Entravision. For purposes of this provision, the term ``meeting'' 
includes any action taken by consent of the relevant directors in lieu 
of a meeting:
    3. Voting or permitting to be voted any Entravision shares that 
defendants own, provided, however, that Univision shall have the right 
to vote on matters arising under the attached Certificate of 
Designations. Preferences and Rights of Series U Preferred Stock:

[[Page 27859]]

    4. Using or attempting to use any ownership interest in Entravision 
to exert any influence over Entravision in the conduct of Entravision's 
radio business:
    5. Using or attempting to use any rights or duties under any 
television affiliation agreement or relationship between Univision and 
Entravision (including any duties Univision may have as national 
television sales representative for Entravision), to influence 
Entravision in the conduct of Entravision's radio business: and
    6. Communicating to or receiving from any officer, director, 
manager, employee, or agent or Entravision any nonpublic information 
regarding any aspect of defendants' or Entravision radio business, 
including any plans or proposals with respect thereto. Nothing in this 
prohibition, however, is intended to prevent: (1) Entravision from 
advertising its radio business on defendants' stations or to prevent 
defendants from advertising on Entravision stations: (2) joint 
promotions between Entravision and defendants and communications 
regarding the same; (3) Univision from hiring Entravision personnel or 
Entravision from hiring Univision personnel: and (4) nonpublic 
communications regarding industry-wide issues or possible potential 
business transactions between the two companies provided that such 
communications do not violate the antitrust laws or any other 
applicable law or regulation.
    B. Defendants are enjoined and restrained from preventing, or 
attempting to prevent, Entravision from making any changes in any 
corporate governance documents (including its First Restated 
Certificate of Incorporation and Second Amended and Restated Bylaws) to 
implement the prohibitions contained in Section VI.A.
    C. Defendants are enjoined and restrained from exercising the 
rights contained in Section D(i) of the attached Certificate of 
Designations, Preferences and Rights of Series U Preferred Stock except 
in connection with a decision by Entravision to merge, consolidate or 
otherwise reorganize Entravision with or into one or more entities 
which results in a transfer of all or substantially all of the assets 
of Entravision or a transfer of a majority of the voting power of 
Entravision.

VII. Permitted Conduct

    A. Nothing in this Final Judgment shall prohibit individual 
managers, agents, and employees of defendants, other than individual 
directors and officers of defendants, from holding, acquiring, or 
selling shares of Entravision stock solely for personal investment, and 
any shares so held will not be subject to the requirements of Sections 
IV and V of this Final Judgment.
    B. Nothing in this Final Judgment shall prohibit individual 
directors or officers of defendants from continuing to hold, sell, or 
otherwise dispose of shares of Entravision stock acquired prior to the 
filing of this Final Judgment and held solely for personal investment, 
and any shares so held will not be subject to the requirements of 
Sections IV and V of this Final Judgment. Individual directors and 
officers of defendants shall not acquire any additional shares of 
Entravision stock after the filing of this Final Judgment.
    C. Nothing in this Final Judgment shall prohibit defendants from 
agreeing with Entravision to terminate the rights under Section D of 
the attached Certificate of Designations. Preferences and Rights of 
Series U Preferred Stock.
    D. Nothing in this Final Judgment shall prohibit defendants from 
entering into a transaction in which Univision would acquire a majority 
of the voting securities of Entravision so long as the 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; provided however, that Univision shall not acquire or retain any 
direct or indirect interest in Entravision's radio assets in any of the 
Overlap Markets as part of that transaction without the approval of 
plaintiff, in its sole discretion.

VIII. General Powers and Duties of the Trustee

    In the event that plaintiff, in its sole discretion, determines (a) 
that, upon receipt of the notice called for in Section V.E. defendants 
have not made arrangements that will result in completion of any 
divestiture within the time limits specified in Section V.A, or (b) 
that defendants have not completed any of the divestitures required in 
Section V.A. within the specified time limits, the Court shall, upon 
application of plaintiff, appoint a trustee selected by plaintiff to 
effect such divestiture. Plaintiff may request, and the Court may 
appoint, a trustee before any of the time periods for divestiture 
specified in Section V.A. expire. The following provisions apply to the 
trustee:
    A. After the appointment of a trustee becomes effective, only that 
trustee shall have the right to sell the Divestiture Assets. The 
trustee shall have the power and authority to accomplish the 
divestitures to an acquirer(s) acceptable to plaintiff at such price 
and on such terms as are then obtainable upon the best reasonable 
effort by the trustee, and shall have such other powers as the Court 
shall deem appropriate. The trustee may hire at the cost and expense of 
defendants any investment bankers, attorneys, or other agents, who 
shall be solely accountable to the trustee, reasonably necessary in the 
trustee's judgment to assist in the divestitures.
    B. Defendants shall not object to a sale by the trustee on any 
grounds other than the trustee's malfeasance. Any such objections by 
defendants must be conveyed in writing to plaintiff and the trustee 
within ten (10) calendar days after the trustee has provided the notice 
required under sectioons VIII.E and F.
    C. The trustee shall serve at the cost and expense of defendants on 
such terms and conditions as plaintiff approves, and shall account for 
all monies derived from the sale of the assets sold by the trustee and 
all costs and expenses so incurred. After approval by the Court of the 
trustee's accounting, including fees for its services and those of any 
professionals and agents retained by the trustee, all remaining money 
shall be paid to defendants and the trust shall then be terminated. The 
compensation of the trustee and any professionals and agents retained 
by the trustee shall be reasonable in light of the Divestiture Assets 
and based on a fee arrangement providing the trustee with incentives 
based on the price and terms of the divestitures and the speed with 
which they are accomplished.
    D. Defendants shall use their best efforts to assist the trustee in 
accomplishing the required divestitures. The trustee and any 
consultants, accountant, attorney's, and other persons retained by the 
trustee shall have full and complete access to all information held by 
defendants relating to the Divestiture Assets. Defendants shall take no 
action to interfere with or impede the trustee's accomplishment of the 
divestitures.
    E. After his or her appointment becomes effective, the trustee 
shall file monthly reports with the Court and plaintiff, setting forth 
the trustee's efforts to accomplish the divestitures ordered under this 
Final Judgment. To the extent that such reports contain information 
that the trustee deems confidential, such reports shall not be 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

[[Page 27860]]

inquiry about acquiring, any interest in the Divestiture Assets by 
means of private sale or placement, and shall describe in detail each 
contact with any such person. The trustee shall maintain full records 
of all efforts made to divest the Divestiture Assets.
    F. If the trustee has not accomplished such divestitures within 
sixty (60) calendar days after his or her appointment, 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 trustees judgment, why the required divestitures have 
not been accomplished, and (3) the trustee's recommendations. To the 
extent such reports contain in formation 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 
plaintiff, who shall have the right to make additional recommendations 
consistent with the purpose of the trust. The Court thereafter shall 
enter such order as it deems appropriate to carry out the purpose of 
this Final Judgment, which may, if necessary, include extending the 
trust and the term of the trustee's appointment by a period requested 
by the United States.

IX. Compliance

    A. Defendants shall maintain an antitrust compliance program which 
shall include designating, within thirty (30) days of filing of this 
Final Judgment, an Antitrust Compliance Officer with responsibility for 
achieving compliance with this Final Judgment. The Antitrust Compliance 
Officer shall, on a continuing basis, supervise the review of current 
and proposed activities to ensure compliance with this Final Judgment. 
In the event that individual is unable to perform his or her duties, 
defendants shall appoint, subject to plaintiff's approval, a 
replacement Antitrust Compliance Officer within five (5) working days. 
Should defendants fail to appoint a replacement acceptable to plaintiff 
within this time period, plaintiff shall appoint a replacement.
    B. The Antitrust Compliance Officer shall be responsible for 
accomplishing the following activities:
    (1) Distributing within forty-five (45) days of the filing of this 
Final Judgment, a copy of this Final Judgment to each current director 
and each current officer, and obtaining within ninety (90) days from 
the filing of this Final Judgment and retaining for the duration of 
this Final Judgment, a written certification from each such director or 
officer that he or she: (a) Has received, read, understands, and agrees 
to abide by the terms of this Final Judgment; (b) understands that 
failure to comply with this Final Judgment may result in conviction for 
contempt of court: and (c) is not aware of any violation of this Final 
Judgment that has not been reported to plaintiff.
    (2) Distributing within forty-five (45) days of the filing of this 
Final Judgment, a copy of this Final Judgment to each employee and any 
manager of any such employee who has any responsibility for or 
authority over the sale of advertising time on radio stations, and 
obtaining within ninety (90) days from the filing of this Final 
Judgment and retaining for the duration of this Final Judgment, a 
written certification from each such employee or manager that he or 
she: (a) Has received this Final Judgment and has read, understands, 
and agrees to abide by the terms of Section VI of this Final Judgment; 
(b) understands that failure to comply with Section VI of this Final 
Judgment may result in conviction for contempt of court; (c) is not 
aware of any violation of Section VI of this Final Judgment that has 
not been reported to plaintiff.
    (3) Obtaining, within thirty (30) days from the time of such 
succession, a written certification from each director or officer 
identified in Section IX.B.1 who succeeds to such a position that he or 
she: (a) Has received, read, understands, and agrees to abide by the 
terms of this Final Judgment: (b) understands that failure to comply 
with this Final Judgment may result in conviction for contempt of 
court; and (c) is not aware of any violation of this Final Judgment 
that has not been reported to plaintiff.
    (4) Obtaining within thirty (30) days from the time of such 
succession, a written certification from each employee or manager 
identified in Section IX.B.2. who succeeds to such a position that he 
or she: (a) Has received this Final Judgment and has read, understands, 
and agrees to abide by the terms of Section VI of this Final Judgment; 
(b) understands that failure to comply with Section VI of this Final 
Judgment may result in conviction for contempt of court; and (c) is not 
aware of any violation of Section VI of this Final Judgment that has 
not been reported to plaintiff.
    (5) Obtaining annually thereafter, and retaining for the duration 
of this Final Judgment, a written certification from (a) each director; 
(b) each officer with responsibility for or authority over the sale of 
advertising time on radioi stations; (c) the individual or individuals 
with primary operational responsibility for the Univision Television 
Group (currently the co-Presidents of UTG); and (d) the individual or 
individuals with primary supervisory responsibility for National Sales 
within the Univision Television Group (currently the Senior Vice 
President of National Sales for UTG), that he or she: (i) Has received, 
read, understands, and agrees to abide by the terms of this Final 
Judgment; (ii) understands that failure to comply with this Final 
Judgment may result in conviction for contempt of court; and (iii) is 
not aware of any violation of this Final Judgment that has not been 
reported to plaintiff.
    C. Within sixty (60) days of filing of this Final Judgment, 
defendants shall certify to plaintiff that it has: (1) Designated an 
Antitrust Compliance Officer, specifying his or her name, business 
address, and telephone number: and (2) distributed the Final Judgment 
in accordance with Section IX.B.1 and 2.
    D. For the term of this Final Judgment, on or before each annual 
anniversary of the date of its filing, defendants shall file with 
plaintiff a statement as to the fact and manner of its compliance with 
the provisions of Section V, VI, and IX.B, including a statement of the 
percentage of all outstanding shares of Entravision owned by 
defendants.
    E. If the Antitrust Compliance Officer or any of defendants' 
director, officers, or employees learn of any violation of this Final 
Judgment, defendant shall: (1) Within three (3) business days take 
appropriate action to terminate or modify the activity so as to assure 
compliance with this Final Judgment, and (2) within ten (10) business 
days notify plaintiff of any such violation and the actions taken with 
respect to it.

X. Plaintiff's Access and Inspection

    A. For the purpose of determining or securing compliance with this 
Final Judgment, and subject to any legally recognized privilege, duly 
authorized representatives of the United States Department of Justice, 
including consultants and other persons retained by the United States, 
shall, upon written request of a duly authorized representative of the 
Assistant Attorney General in charge of the Antitrust Division, and on 
reasonable notice to defendants, be permitted:
    (1) Access during defendants' office hours to inspect and copy, or 
at plaintiff's option, to require defendants to provide copies of, all 
records and documents in its possession or control relating to any 
matters contained in this Final Judgment; and

[[Page 27861]]

    (2) To interview, either informally or on the record, defendants' 
director, officers, employees, agents or other persons, who may have 
their individual counsel present, relating to any matters contained in 
this Final Judgment. The interviews shall be subject to the reasonable 
convenience of the interviewee and without restraint or interference by 
defendants.
    B. Upon written request of a duly authorized representative of the 
Assistant Attorney General in charge of the Antitrust Division, 
defendants shall submit written reports, under oath if requested, 
relating to any of the matters contained in this Final Judgment as may 
be requested.
    C. No information or documents obtained by the means provided in 
this Section shall be divulged by plaintiff to any person other than an 
authorized representative of the executive branch of the United States, 
except in the course of legal proceedings to which the United States is 
a party (including grand jury proceedings), or for the purpose of 
securing compliance with this Final Judgment, or as otherwise required 
by law.
    D. If, at the time information or documents are furnished by 
defendants to plaintiff, defendants represent and identify in writing 
the material in any such information or documents to which a claim of 
protection may be asserted under Rule 26(c)(7) of the Federal Rules of 
Civil Procedure, and defendants mark each pertinent page of such 
material. ``Subject to claim of protection under Rule 26(c)(7) of the 
Federal Rules of Civil Procedure,'' then plaintiff shall give 
defendants ten (10) calendar days' notice prior to divulging such 
material in any legal proceeding (other than a grand jury proceeding) 
to which defendants are not a party.

XI. Retention of Jurisdiction

    This Court retains jurisdiction to enable any party to this Final 
Judgment to apply to this Court at any time for such further orders and 
directions as may be necessary or appropriate to carry out or construe 
this Final Judgment, to modify or terminate any of its provisions, to 
enforce compliance, and to punish any violations of its provisions.

XII. Expiration of Final Judgment

    Unless extended by this Court, this Final Judgment shall expire ten 
(10) years from the date of its entry.

XIII. Public Interest Determination

    Entry of this Final Judgment is in the public interest.

DATED:------

Court approval subject to the Antitrust Procedures and Penalties 
Act, 15 U.S.C. 16.

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

 Certificate of Designations, Preferences and Rights of Series U 
Preferred Stock of Entravision Communications Corporation

    Pursuant to Section 151 of the General Corporation Law of the State 
of Delaware:
    Whereas, Entravision Communications Corporation, a corporation 
organized and existing under the laws of the State of Delaware (this 
``Corporation''), does hereby certify that, pursuant to the authority 
conferred on the Board of Directors of this Corporation by the First 
Restated Certificate of Incorporation, as amended, of this Corporation 
in accordance with Section 151 of the General Corporation Law of the 
State of Delaware, the Board of Directors of this Corporation adopted 
the following resolution establishing a new series of preferred stock 
of this Corporation.
    Resolved, that pursuant to the authority conferred on the Board of 
Directors of this Corporation by Article 4 of the First Restated 
Certificate of Incorporation, as amended, the Board of Directors of 
this Corporation hereby establishes a series of the authorized 
preferred stock of this Corporation, $0.0001 per value per share, which 
series will be designated as ``Series U Preferred Stock,'' and which 
will consist of 369,266 shares and will have the following rights, 
preferences, privileges and restrictions (capitalized terms not defined 
herein shall have the meaning given to such terms in the First Restated 
Certificate of Incorporation, as amended, of this Corporation):
    A. Dividends and Distributions. The holders of shares of Series U 
Preferred Stock will be entitled to participate with the holders of 
Class A Common Stock with respect to any dividend declared on the Class 
A Common Stock in proportion to the number of shares of Class A Common 
Stock issuable upon conversion of the shares of Series U Preferred 
Stock held by them.
    B. Liquidation Preference. (i) In the event of any liquidation, 
dissolution or winding up of this Corporation, either voluntary or 
involuntary, subject to the rights of the Series A Preferred Stock and 
any other series of Preferred Stock to be established by the Board of 
Directors of this Corporation (collectively, the ``Senior Preferred 
Stock''), the holders of the Series U Preferred Stock shall be entitled 
to receive, after any distribution with respect to the Senior Preferred 
Stock and prior to and in preference to any distribution of any of the 
assets of this Corporation to the holders of Common Stock by reason of 
their ownership thereof, $0.0001 for each share (as adjusted for any 
stock split, stock division or consolidation) of Series U Preferred 
Stock then-outstanding.
    (ii) Upon the completion of the distribution required by 
subparagraph (i) of this Section B, the remaining assets of this 
Corporation available for distribution to stockholders shall be 
distributed among the holders of Series U Preferred Stock and Common 
Stock pro rata based on the number of shares of Common Stock held by 
each (assuming conversion of all such Series U Preferred Stock.)
    C. Voting. Except as provided in this Certificate of Designations, 
the holders of shares of Series U Preferred Stock will have no right to 
vote on any matters, questions or proceedings of this Corporation 
including, without limitation, the election of directors.
    D. Protective Provisions. So long as Univision Communications Inc. 
(``Univision''), or any Permitted Transferee of Univision, owns at 
least 65,950 shares of Series U Preferred Stock, without the consent of 
the holders of at least a majority of the shares of Series U Preferred 
Stock then outstanding, in their sole discretion, voting as a separate 
series, given in writing or by vote at a meeting of such called for 
such purpose, this Corporation will not:
    (i) Merge, consolidate or enter into a business combination, or 
otherwise reorganize this Corporation with or into one or more entities 
(other than a merger of a wholly-owned subsidiary of this Corporation 
into another wholly-owned subsidiary of this Corporation);
    (ii) Dissolve, liquidate or terminate this Corporation;
    (iii) Directly or indirectly dispose of any interest in any FCC 
license with respect to television stations which are affiliates of 
Univision Communications Inc.;
    (iv) Amend, alter or repeal any provision of the Certificate of 
Incorporation or bylaws of this Corporation or this Certificate of 
Designations, each as amended, so as to adversely affect any of the 
rights, preferences, privileges, limitation's or restrictions provided 
for the benefit of the holders of the Series U Preferred Stock; or
    (v) Issue or sell, or obligate itself to issue or sell, any 
additional shares of Series U Preferred Stock, or any securities that 
are convertible into or

[[Page 27862]]

exchangeable for shares of Series U Preferred Stock.
    E. Conversion.
    (i) Voluntary Conversion. Each share of Series U Preferred Stock 
shall convert automatically without any further action by the holder 
thereof into a number of shares of Class A Common Stock determined in 
accordance with Section E(ii) upon its sale, conveyance, assignment, 
hypothecation, disposition or other transfer (each a ``Transfer'') to 
any third party other than an ``affiliate'' (as such term is defined in 
Rule 405 promulgated under the Securities Act of 1933, as amended) of 
the transferor and may be so converted at the option of the holder 
thereof in connection with any such Transfer.
    (ii) Conversion Rate. Each share of Series U Preferred Stock shall 
be convertible in accordance with Section E(i) into the number of 
shares of Class A Common Stock that results from multiplying (x) l by 
(y) the conversion rate for the Series U Preferred Stock that is an 
effect at the time of conversion (the ``Conversion Rate''). The 
Conversion Rate for the Series U Preferred Stock initially shall be 
100. The Conversion Rate shall be subject to adjustment from time to 
time as provided in this Certificate of Designations. All references to 
the Conversion Rate herein mean the Conversion Rate as so adjusted.
    (iii) Mandatory Conversion. When and if this Corporation is 
authorized to issue a class of Common Stock that has generally the same 
rights, preferences, privileges and restrictions as the Series U 
Preferred Stock (other than the liquidation preference provided for in 
Section B), the final terms of such class of Common Stock to be 
mutually agreed upon by this Corporation and the holders of the Series 
U Preferred Stock, then this Corporation shall have the right, without 
any further action by the holder of the Series U Preferred Stock, to 
cause each share of Series U Preferred Stock to convert into the number 
of shares of Class U Common Stock that results from multiplying (x) l 
by (y) the Conversion Rate. The Conversion of the Series U Preferred 
Stock pursuant to this subsection D(iii) shall be deemed to occur on 
the date this Corporation deposits written notice of such conversion in 
the United States mail, postage prepaid, and addressed to the holder of 
the Series U Preferred Stock at its address appearing on the books of 
this Corporation.
    (iv) Subdivisions: Combinations. In the event this Corporation 
should at any time prior to the conversion of the Series U Preferred 
Stock fix a record date for the effectuation of a split or subdivision 
of the outstanding shares of Class A Common Stock or the determination 
of holders of Class A Common Stock entitled to receive a dividend or 
other distribution payable in additional shares of Common Stock, then, 
as of such record date (or the date of such dividend, distribution, 
split or subdivision if no record date is fixed), the Conversion Rate 
shall be appropriately decreased so that the number of shares of Class 
A Common Stock issuable on conversion of each share of such series 
shall be increased in proportion to such increase in the aggregate 
number of shares of Class A Common Stock outstanding. If the number of 
shares of Class A Common Stock outstanding at any time prior to the 
conversion of the Series U Preferred Stock is decreased by a reverse 
split or combination of the outstanding shares of Class A Common Stock, 
then, following the record date for such reverse split or combination, 
the Conversion Rate shall be appropriately increased so that the number 
of shares of Class A Common Stock issuable on conversion of each share 
of such series shall be decreased in proportion to such decrease in 
outstanding shares.
    (v) Recapitalizations. If at any time or from time to after the 
effective date of this Certificate of Designations there is a 
recapitalization, reclassification, reorganization or similar event, 
then in any such event each holder of a share of Series U Preferred 
Stock shall have the right thereafter to convert such share into the 
kind and amount of stock and other securities and property receivable 
upon such recapitalization, reclassification, reorganization or other 
change by a holder of the number of shares of Class A Common Stock into 
which such share of Series U Preferred Stock could have been converted 
immediately prior to such recapitalization, reclassification, 
reorganization, or other change, all subject to further adjustment as 
provided herein or with respect to such other securities or property by 
the terms thereof.
    (vi) No Impairment. This Corporation will not, by amendment of its 
Certificate of Incorporation or this Certificate of Designations 
(except in accordance with applicable law) or through any 
reorganization, recapitalization, transfer of assets, consolidation, 
merger, dissolution, issue or sale of securities or any other voluntary 
action, avoid or seek to avoid the observance or performance of any of 
the terms to be observed or performed under this Section E by this 
Corporation, but will in good faith assist in the carrying out of all 
the provisions of this Section E and in the taking of all such action 
as may be necessary or appropriate in order to protect the conversion 
rights of the holders of Series U Preferred Stock against impairment.
    (vii) Unconverted Shares. If less than all of the outstanding 
shares of Series U Preferred Stock are converted pursuant to Sections 
E(i) and E(iii) above, and such shares are evidenced by a certificate 
representing shares in excess of the shares being converted and 
surrendered to this Corporation in accordance with the procedures as 
the Board of Directors of this Corporation may determine, this 
Corporation shall execute and deliver to or upon the written order of 
the holder of such certificate, without charge to the holder, a new 
certificate evidencing the number of shares of Series U Preferred Stock 
not converted. No fractional shares shall be issued upon the conversion 
of any share or shares of Series U Preferred Stock, and the number of 
shares to be issued shall be rounded to the nearest whole share.
    (viii) Reservation. This Corporation shall at all times reserve and 
keep available out of its authorized but unissued shares of Class A 
Common Stock, to effect conversions, such number of duly authorized 
shares of Class A Common Stock as shall from time to time be sufficient 
to effect the conversion of all outstanding shares of Series U 
Preferred Stock; and if at any time the number of authorized but 
unissued shares of Class A Common Stock shall not be sufficient to 
effect the conversion of all then outstanding shares of the Series U 
Preferred Stock; in addition to such other remedies as shall be 
available to the holder of the Series U Preferred Stock, this 
corporation will take such corporate action as may, in the opinion of 
counsel, be necessary to increase its authorized but unissued shares of 
Class A Common Stock to such number of shares as shall be sufficient 
for such purposes, including, without limitation, engaging in best 
efforts to obtain the requisite stockholder approval of any necessary 
amendment to this Corporation's Certificate of Incorporation.
    F. Redemption by this Corporation. The Series U Preferred Shares 
shall not be redeemable by this Corporation.
    G. Reacquired Shares. Any shares of Series U Preferred Stock which 
will have been converted will be retired and cancelled promptly after 
the acquisition thereof. All such shares will upon their cancellation 
become authorized but unissued shares of Preferred Stock and may be 
reissued as part of a new series of Preferred Stock subject to the 
conditions and restrictions on issuance

[[Page 27863]]

set forth herein, in the Certificate of Incorporation, or in any other 
certificate or designations creating a series or any similar stock or 
as otherwise required by law.
    Resolved, further, that the officers of this Corporation be, and 
each of them hereby is, authorized and empowered on behalf of this 
Corporation to execute, verify and file a certificate of designations 
of preferences in accordance with Delaware law.
    In Witness whereof, Entravision Communications Corporation has 
caused this certificate to be duly executed by its duly authorized 
officers this day of March, 2003.

Entravision Communications Corporation
 By:-------------------------------------------------------------------
Walter F. Ulloa,
Chairman and Chief Executive Officer.
 By:-------------------------------------------------------------------
John F. DeLorenzo,
Chief Financial Officer.

[FR Doc. 03-12746 Filed 5-20-03; 8:45 am]
BILLING CODE 4410-11-M