[Federal Register Volume 84, Number 158 (Thursday, August 15, 2019)]
[Notices]
[Pages 41738-41757]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-17522]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States, et al. v. Nexstar Media Group, Inc., et al.: 
Proposed Final Judgment and Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(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, et al. v. Nexstar Media Group, Inc., et al., Civil 
Action No. 1:19-cv-2295. On July 31, 2019, the United States, along 
with the offices of three states Attorneys General, filed a Complaint 
alleging that Nexstar Media Group, Inc.'s (``Nexstar'') proposed 
acquisition of Tribune Media Company (``Tribune'') would violate 
Section 7 of the Clayton Act, 15 U.S.C. 18. The proposed Final 
Judgment, filed at the same time as the Complaint, requires Nexstar to 
divest certain broadcast television stations in Davenport, Iowa-Rock 
Island-Moline, Illinois; Des Moines-Ames, Iowa; Ft. Smith-Fayetteville-
Springdale-Rogers, Arkansas; Grand Rapids-Kalamazoo-Battle Creek, 
Michigan; Harrisburg-Lancaster-Lebanon-York, Pennsylvania; Hartford-New 
Haven, Connecticut; Huntsville-Decatur-Florence, Alabama; Indianapolis, 
Indiana; Memphis, Tennessee; Norfolk-Portsmouth-Newport News, Virginia; 
Richmond-Petersburg, Virginia; Salt Lake City, Utah; and Wilkes-Barre-
Scranton, Pennsylvania.
    Copies of the Complaint, proposed Final Judgment, and Competitive 
Impact Statement are available for inspection on the Antitrust 
Division's website at http://www.justice.gov/atr and at the Office of 
the Clerk of the United States District Court for the District of 
Columbia. Copies of these materials may be obtained from the Antitrust 
Division upon request and payment of the copying fee set by Department 
of Justice regulations.
    Public comment is invited within 60 days of the date of this 
notice. Such comments, including the name of the submitter, and 
responses thereto, will be posted on the Antitrust Division's website, 
filed with the Court, and, under certain circumstances, published in 
the Federal Register. Comments should be directed to Owen Kendler, 
Chief, Media Entertainment and Professional Services Section, Antitrust 
Division, Department of Justice, 450 Fifth Street NW, Suite 4000, 
Washington, DC 20530 (telephone: 202-305-8376).

Amy R. Fitzpatrick,
Counsel to the Director of Civil Enforcement.

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

    UNITED STATES OF AMERICA, 450 Fifth Street NW, Washington, DC 
20530; STATE OF ILLINOIS, 100 West Randolph Street, Chicago, IL 
60601; COMMONWEALTH OF PENNSYLVANIA, 14\th\ Floor, Strawberry 
Square, Harrisburg, PA 17120; and, COMMONWEALTH OF VIRGINIA, 202 
North 9th Street, Richmond, VA 23219, Plaintiffs, v. NEXSTAR MEDIA 
GROUP, INC., 545 E. John Carpenter Freeway, Suite 700, Irving, TX 
75062; and TRIBUNE MEDIA COMPANY, 515 North State Street, Chicago, 
IL 60654, Defendants.

Civil Action No. 1:19-cv-2295 (DLF)

COMPLAINT

    The United States of America, acting under the direction of the 
Attorney General of the United States, and the State of Illinois and 
the Commonwealths of Pennsylvania and Virginia (``Plaintiff States''), 
bring this civil action against Nexstar Media Group, Inc. (``Nexstar'') 
and Tribune Media Company (``Tribune'') to enjoin Nexstar's proposed 
merger with Tribune. The Plaintiffs allege as follows:

I. NATURE OF THE ACTION

    1. Pursuant to an Agreement and Plan of Merger dated November 30, 
2018, Nexstar plans to acquire Tribune for approximately $6.4 billion.
    2. The proposed merger would combine two of the largest independent 
local television station owners in the United States and would combine 
many popular local television stations that compete against each other 
in several markets, likely resulting in significant harm to 
competition.
    3. In twelve Designated Market Areas (``DMAs''), Nexstar and 
Tribune each own at least one broadcast television station that is an 
affiliate of one of the

[[Page 41739]]

``Big 4'' television networks: NBC, CBS, ABC, or FOX. These twelve 
DMAs, collectively referred to in this Complaint as the ``Big 4 Overlap 
DMAs,'' are: (i) Davenport, Iowa-Rock Island-Moline, Illinois; (ii) Des 
Moines-Ames, Iowa; (iii) Ft. Smith-Fayetteville-Springdale-Rogers, 
Arkansas; (iv) Grand Rapids-Kalamazoo-Battle Creek, Michigan; (v) 
Harrisburg-Lancaster-Lebanon-York, Pennsylvania; (vi) Hartford-New 
Haven, Connecticut; (vii) Huntsville-Decatur-Florence, Alabama; (viii) 
Memphis, Tennessee; (ix) Norfolk-Portsmouth-Newport News, Virginia; (x) 
Richmond-Petersburg, Virginia; (xi) Salt Lake City, Utah; and (xii) 
Wilkes-Barre-Scranton, Pennsylvania.
    4. Additionally, in the Indianapolis, Indiana DMA (``Indianapolis 
DMA''), Tribune owns two Big 4 stations and Nexstar owns the CW and 
MyNetworkTV affiliates. Nexstar's CW station has a higher than usual 
market share for a CW affiliate because of its strong local news 
programming; until 2014, the station had been the CBS affiliate in the 
Indianapolis DMA. The Big 4 Overlap DMAs and the Indianapolis DMA 
together are referred to in this Complaint as ``Overlap DMAs.''
    5. In each Big 4 Overlap DMA, the proposed merger would eliminate 
competition between Nexstar and Tribune in the licensing of Big 4 
network content (``retransmission consent'') to cable, satellite, fiber 
optic television, and over-the-top providers (referred to collectively 
as multichannel video programming distributors or ``MVPDs''), for 
distribution to their subscribers. Additionally, in each Overlap DMA, 
the proposed merger would substantially lessen competition in the sale 
of broadcast television spot advertising to advertisers interested in 
reaching viewers in the DMA.
    6. By eliminating a major competitor, the merger would likely give 
Nexstar the power to charge MVPDs higher fees for its programming--fees 
that those companies would likely pass on, in large measure, to their 
subscribers. Additionally, the merger would likely allow Nexstar to 
charge local businesses and other advertisers higher prices to reach 
audiences in the Overlap DMAs.
    7. As a result, the proposed merger of Nexstar and Tribune likely 
would substantially lessen competition in the markets for licensing Big 
4 television retransmission consent in each of the Big 4 Overlap DMAs, 
and in the markets for selling broadcast television spot advertising in 
each of the Overlap DMAs, in violation of Section 7 of the Clayton Act, 
15 U.S.C. Sec.  18.

II. THE DEFENDANTS

    8. Nexstar is a Delaware corporation with its headquarters in 
Irving, Texas. Nexstar owns 171 television stations in 100 DMAs, of 
which 136 stations are Big 4 affiliates. In 2018, Nexstar reported 
revenues of $2.8 billion.
    9. Tribune is a Delaware corporation with its headquarters in 
Chicago, Illinois. Tribune owns 44 television stations in 33 DMAs, of 
which 27 stations are Big 4 affiliates. In 2018, Tribune earned 
revenues of more than $2.0 billion.

III. JURISDICTION AND VENUE

    10. The United States brings this action under Section 15 of the 
Clayton Act, 15 U.S.C. Sec.  25, as amended, to prevent and restrain 
Defendants from violating Section 7 of the Clayton Act, 15 U.S.C. Sec.  
18.
    11. The Plaintiff States bring this action under Section 16 of the 
Clayton Act, 15 U.S.C. Sec.  26, to prevent and restrain Defendants 
from violating Section 7 of the Clayton Act, 15 U.S.C. Sec.  18. The 
Plaintiff States, by and through their respective Attorneys General, 
bring this action as parens patriae on behalf of and to protect the 
health and welfare of their citizens and the general economy in each of 
their states.
    12. The Court has subject matter jurisdiction over this action 
pursuant to Section 15 of the Clayton Act, 15 U.S.C. Sec.  25, and 28 
U.S.C. Sec. Sec.  1331, 1337(a), and 1345.
    13. Defendants license Big 4 television retransmission consent to 
MVPDs, and sell broadcast television spot advertising to businesses 
(either directly or through advertising agencies), in the flow of 
interstate commerce, and such activities substantially affect 
interstate commerce.
    14. Nexstar and Tribune have consented to venue and personal 
jurisdiction in this judicial district. Both companies transact 
business in this district. Venue is therefore proper in this district 
under Section 12 of the Clayton Act, 15 U.S.C. Sec.  22, and under 28 
U.S.C. Sec.  1391(b)(1) and (c).

IV. BIG 4 TELEVISION RETRANSMISSION CONSENT MARKETS

A. Background

    15. MVPDs, such as Comcast, DirecTV, and Charter, typically pay the 
owner of each local Big 4 broadcast station in a given DMA a per-
subscriber fee for the right to retransmit the station's content to the 
MVPD's subscribers. The per-subscriber fee and other terms under which 
an MVPD is permitted to distribute a station's content to its 
subscribers are set forth in a retransmission agreement. A 
retransmission agreement is negotiated directly between a broadcast 
station group, such as Nexstar or Tribune, and a given MVPD, and this 
agreement typically covers all of the station group's stations located 
in the MVPD's service area, or ``footprint.''
    16. Each broadcast station group typically renegotiates 
retransmission agreements with the MVPDs every few years. If an MVPD 
and a broadcast station group cannot agree on a retransmission consent 
fee at the expiration of a retransmission agreement, the result may be 
a ``blackout'' of the broadcast group's stations from the particular 
MVPD--i.e., an open-ended period during which the MVPD may not 
distribute those stations to its subscribers until a new contract is 
successfully negotiated.

B. Relevant Markets

1. Product Market

    17. Big 4 broadcast content has special appeal to television 
viewers in comparison to the content that is available through other 
broadcast stations and cable channels. Big 4 stations usually are the 
highest ranked in terms of audience share and ratings in each DMA, 
largely because of unique offerings such as local news, sports, and 
highly ranked primetime programs. Viewers typically consider the Big 4 
stations to be close substitutes for one another.
    18. Because of Big 4 stations' popular national content and valued 
local coverage, MVPDs regard Big 4 programming as highly desirable for 
inclusion in the packages they offer subscribers.
    19. Non-Big 4 broadcast stations are typically not close 
substitutes for viewers of Big 4 stations. Stations that are affiliates 
of networks other than the Big 4, such as the CW Network, MyNetworkTV, 
or Telemundo, typically feature niche programming without local news or 
sports--or, in the case of Telemundo, aimed at a Spanish-speaking 
audience. Stations that are unaffiliated with any network are similarly 
unlikely to carry programming with broad popular appeal.
    20. If an MVPD suffers a blackout of a Big 4 station in a given 
DMA, many of the MVPD's subscribers in that DMA are likely to turn to 
other Big 4 stations in the DMA to watch similar content, such as 
sports, primetime shows, and local news and weather. This willingness 
of viewers to switch between competing Big 4 broadcast

[[Page 41740]]

stations limits an MVPD's expected losses in the case of a blackout, 
and thus limits a broadcaster's ability to extract higher fees from 
that MVPD--since an MVPD's willingness to pay higher retransmission 
consent fees for content rises or falls with the harm it would suffer 
if that content were lost.
    21. Due to the limited programming typically offered by non-Big 4 
stations, viewers are much less likely to switch to a non-Big 4 station 
than to switch to other Big 4 stations in the event of a blackout of a 
Big 4 station. Accordingly, competition from non-Big 4 stations does 
not typically impose a significant competitive constraint on the 
retransmission consent fees charged by the owners of Big 4 stations.
    22. For the same reasons, subscribers--and therefore MVPDs--
generally do not view cable network programming as a close substitute 
for Big 4 network content. This is primarily because cable channels 
offer different content. For example, cable channels generally do not 
offer local news, which provides a valuable connection to the local 
community that is important to viewers of Big 4 stations.
    23. Because viewers do not regard non-Big 4 broadcast stations or 
cable networks as close substitutes for the programming they receive 
from Big 4 stations, these other sources of programming are not 
sufficient to discipline an increase in the fees charged for Big 4 
television retransmission consent. Accordingly, a hypothetical 
monopolist of Big 4 television stations would likely increase the 
retransmission consent fees it charges to MVPDs for those stations by 
at least a small but significant amount.
    24. The licensing of Big 4 television retransmission consent 
therefore constitutes a relevant product market and line of commerce 
under Section 7 of the Clayton Act, 15 U.S.C. Sec.  18.

2. Geographic Markets

    25. A DMA is a geographic unit for which A.C. Nielsen Company--a 
firm that surveys television viewers--furnishes broadcast television 
stations, MVPDs, cable and satellite television networks, advertisers, 
and advertising agencies in a particular area with data to aid in 
evaluating audience size and composition. DMAs are widely accepted by 
industry participants as the standard geographic areas to use in 
evaluating television audience size and demographic composition. The 
Federal Communications Commission (``FCC'') also uses DMAs as 
geographic units with respect to its MVPD regulations.
    26. In the event of a blackout of a Big 4 network station, FCC 
rules generally prohibit an MVPD from importing the same network's 
content from another DMA. Thus, Big 4 viewers in one DMA cannot switch 
to Big 4 programming in another DMA in the face of a blackout. 
Therefore, substitution to stations outside the DMA cannot discipline 
an increase in the fees charged for retransmission consent for 
broadcast stations in the DMA. Each DMA thus constitutes a relevant 
geographic market for the licensing of Big 4 television retransmission 
consent within the meaning of Section 7 of the Clayton Act, 15 U.S.C. 
Sec.  18.

C. Likely Anticompetitive Effects

    27. The more concentrated a market would be as a result of a 
proposed merger, the more likely it is that the proposed merger would 
substantially lessen competition. Concentration can be measured by the 
widely used Herfindahl-Hirschman Index (``HHI'').\1\ Under the 
Horizontal Merger Guidelines issued by the Department of Justice and 
the Federal Trade Commission, mergers that result in highly 
concentrated markets (i.e., with an HHI over 2,500) and that increase 
the HHI by more than 200 points are presumed likely to enhance market 
power.
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    \1\ The HHI is calculated by squaring the market share of each 
firm competing in the market and then summing the resulting numbers. 
For example, for a market consisting of four firms with shares of 
30, 30, 20, and 20 percent, the HHI is 2,600 (30\2\ + 30\2\ + 20\2\ 
+ 20\2\ = 2,600). The HHI takes into account the relative size 
distribution of the firms in a market. It approaches zero when a 
market is occupied by a large number of firms of relatively equal 
size, and reaches its maximum of 10,000 points when a market is 
controlled by a single firm. The HHI increases both as the number of 
firms in the market decreases and as the disparity in size between 
those firms increases.
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    28. The chart below summarizes Defendants' approximate Big 4 
television retransmission consent market shares, based on revenue, and 
the effect of the transaction on the HHI in each Big 4 Overlap DMA.\2\
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    \2\ In this chart and the one below, sums that do not agree 
precisely reflect rounding.

 
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                                                           Nexstar share   Tribune share   Merged share                     Post-merger
                    Big 4 overlap DMA                           (%)             (%)             (%)       Pre-merger HHI        HHI        HHI increase
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Wilkes Barre, PA........................................            54.0            24.7            78.7            3981            6645            2664
Ft. Smith, AR...........................................            63.4            15.0            78.4            4708            6613            1906
Norfolk, VA.............................................            56.0            21.1            77.1            4104            6465            2361
Grand Rapids, MI........................................            43.4            16.3            59.7            2974            4391            1417
Hartford, CT............................................            33.5            25.4            58.9            2636            4338            1702
Memphis, TN.............................................            38.4            17.6            56.1            2762            4118            1356
Davenport, IA...........................................            36.8            14.9            51.6            2744            3838            1094
Des Moines, IA..........................................            34.5            13.9            48.4            2798            3756             958
Huntsville, AL..........................................            32.5            16.6            49.1            2630            3710            1080
Salt Lake City, UT......................................            32.1            15.5            47.5            2691            3683             992
Harrisburg, PA..........................................            25.3            22.1            47.4            2553            3670            1117
Richmond, VA............................................            28.0            16.9            44.9            2672            3617             945
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    29. As indicated by the preceding chart, the post-merger HHI in 
each Big 4 Overlap DMA is well above 2,500, and the HHI increase in 
each Big 4 Overlap DMA far exceeds the 200-point threshold. Thus, the 
proposed merger presumptively violates Section 7 of the Clayton Act in 
each Big 4 Overlap DMA.
    30. The proposed merger would enable Nexstar to black out more Big 
4 stations simultaneously in each of the Big 4 Overlap DMAs than either 
Nexstar or Tribune could black out independently today, likely leading 
to increased retransmission consent fees charged to such MVPDs.
    31. Retransmission consent fees generally are passed through to an 
MVPD's subscribers in the form of higher subscription fees or as a line 
item on their bills.
    32. For these reasons, the proposed merger of Nexstar and Tribune 
likely would substantially lessen competition

[[Page 41741]]

in the licensing of Big 4 television retransmission consent in each of 
the Big 4 Overlap DMAs, in violation of Section 7 of the Clayton Act, 
15 U.S.C. Sec.  18.

V. BROADCAST TELEVISION SPOT ADVERTISING MARKETS

A. Background

    33. Broadcast television stations, including both Big 4 broadcast 
stations and non-Big 4 stations in the Overlap DMAs, sell advertising 
``spots'' during breaks in their programming. Advertisers purchase 
spots from a broadcast station to communicate with viewers within the 
DMA in which the broadcast television station is located. Broadcast 
television spot advertising is distinguished from ``network'' 
advertising, which consists of advertising time slots sold on 
nationwide broadcast networks by those networks, and not by local 
broadcast stations or their representatives.
    34. Nexstar and Tribune compete with one another to sell broadcast 
television spot advertising in each of the Overlap DMAs.

B. Relevant Markets

1. Product Market

    35. Broadcast television spot advertising, including spot 
advertising on both Big 4 and non-Big 4 broadcast stations, constitutes 
a relevant product market and line of commerce under Section 7 of the 
Clayton Act, 15 U.S.C. Sec.  18. Advertisers' inability or 
unwillingness to substitute to other types of advertising in response 
to a price increase in broadcast television spot advertising supports 
this relevant market definition.

i. Overview of Local Broadcast Television Spot Advertising

    36. Typically, an advertiser purchases broadcast television 
advertising spots as one component of an advertising strategy that may 
also include cable spots, newspaper advertisements, billboards, radio 
spots, digital advertisements, email advertisements, and direct mail.
    37. Different components of an advertising strategy generally 
target different audiences and serve distinct purposes. Advertisers 
that advertise on broadcast stations do so because the stations offer 
popular programming such as local news, sports, and primetime and 
syndicated shows that are especially attractive to a broad demographic 
base and a large audience of viewers. Other categories of advertising 
may offer different characteristics, making them potential complements 
to broadcast television advertising, but not close substitutes. For 
example, ads associated with online search results target individual 
consumers or respond to specific keyword searches, whereas broadcast 
television advertising reaches a broad audience throughout a DMA.
    38. Technological developments may bring various advertising 
categories into closer competition with each other. For example, 
broadcasters and cable networks are developing technology to make their 
spot advertising addressable, meaning that broadcasters could deliver 
targeted advertising in live broadcast and on-demand formats to smart 
televisions or streaming devices. For certain advertisers, these 
technological changes may make other categories of advertising closer 
substitutes for advertising on broadcast television in the future. 
However, at this time, for many broadcast television spot advertising 
advertisers, these projected developments are insufficient to mitigate 
the effects of the merger in the Overlap DMAs.

ii. Cable Television Spot Advertising

    39. MVPDs sell spot advertising to be shown during breaks in cable 
network programming. For viewers, these advertisements are similar to 
broadcast ads. That, however, does not mean that cable television spot 
advertising should be included in the product market. For the following 
reasons, cable television spot advertising is at this time a relatively 
ineffective substitute for broadcast television spot advertising for 
most advertisers.
    40. First, broadcast television spot advertising is a more 
efficient option than cable television spot advertising for many 
advertisers. Because broadcast television offers highly rated 
programming with broad appeal, each broadcast television advertising 
spot typically offers the opportunity to reach more viewers (more 
``ratings points'') than a single spot on a cable channel. By contrast, 
MVPDs offer dozens of cable channels with specialized programs that 
appeal to niche audiences. This fragmentation allows advertisers to 
target narrower demographic subsets by buying cable spots on particular 
channels, but it does not meet the needs of advertisers who want to 
reach a large percentage of a DMA's population.
    41. Second, households that have access to cable networks are 
divided among multiple MVPDs within a DMA. In some DMAs, MVPDs sell 
some spot advertising through consortia called ``interconnects.'' 
Sometimes these interconnects include all of the largest MVPDs in a 
DMA, approaching but not matching broadcast stations' reach. But in 
other, especially smaller DMAs, the interconnect only contains a subset 
of MVPDs, which reduces the reach of the interconnect's advertisements. 
In contrast, broadcast television spot advertising reaches all 
households that subscribe to an MVPD and, through an over-the-air 
signal, most households with a television that do not.
    42. Finally, MVPDs' inventory of cable television spot advertising 
is limited--typically to two minutes per hour--contrasting sharply with 
broadcast stations' much larger number of minutes per hour. The 
inventory of DMA-wide cable television spot advertising is 
substantially further reduced by the large portion of those spots 
allocated to local zone advertising, in which an MVPD sells spots by 
geographic zones within a DMA, allowing advertisers to target smaller 
geographic areas. Due to the limited inventories and lower ratings 
associated with cable television spot programming, cable television 
spot advertisements cannot offer a sufficient volume of ratings points, 
or broad enough household penetration, to provide a viable alternative 
to broadcast television spot advertising at this time. Because of these 
limitations, MVPDs and interconnects would be unable to expand output 
or increase sales sufficiently to defeat a small but significant 
increase in the prices charged for broadcast television spot 
advertising in a given DMA.

iii. Digital Advertising

    43. Digital advertising is not a sufficiently close substitute for 
broadcast television spot advertising. Some digital advertising, such 
as static and floating banner advertisements, static images, text 
advertisements, wallpaper advertisements, pop-up advertisements, flash 
advertisements, and paid search results, lacks the combination of 
sight, sound, and motion that makes television spot advertising 
particularly impactful and memorable and therefore effective for 
advertisers. Digital video advertisements, on the other hand, do allow 
for a combination of sight, sound, and motion, and on this basis are 
more comparable to broadcast television spot advertising than other 
types of digital advertising, but are still not close substitutes for 
broadcast television spot advertising for the reasons stated below.
    44. First, digital advertisements typically reach a different 
audience than broadcast television spot advertising. Whereas 
advertisers use broadcast television spots to reach a large

[[Page 41742]]

percentage of households in a DMA, advertisers use digital advertising 
to reach a variety of different audiences. While a small portion of 
advertisers purchase DMA-wide advertisements on digital platforms, 
digital advertisements usually are targeted either very broadly, such 
as nationwide or regional, or to a smaller geographic target, such as a 
city or a zip code, or to narrow demographic subsets of a population.
    45. Second, inventory of ad-supported, high-quality, long-form 
video on the internet is limited. Advertisers see value to advertising 
on video that is watched by the audience they seek to target. High-
quality, long-form video is the most similar content to broadcast 
television programming available on the internet. The most popular 
high-quality, long-form video available on the internet is provided 
through ad-free subscription services (like Netflix or Amazon Prime), 
over-the-top MVPDs that sell cable television spot advertisements (like 
Sling and YouTube TV), or sold directly by the networks on their own 
network sites. The remaining inventory of digital advertisements 
attached to high-quality, long-form video on the internet, which is 
primarily sold by digital advertising platforms, is small today. 
Because of these limitations, digital video advertising would be unable 
to expand output or increase sales sufficiently to defeat a small but 
significant increase in the prices charged for broadcast television 
spot advertising in a given DMA.

iv. Other Forms of Advertising

    46. Other forms of advertising, such as radio, newspaper, 
billboard, and direct-mail advertising, also do not constitute 
effective substitutes for broadcast television spot advertising. These 
forms of media do not reach as many local viewers or drive brand 
awareness to the same extent as broadcast television does. Broadcast 
television spot advertising possesses a unique combination of 
attributes that advertisers value in a way that sets it apart from 
advertising on other media. Broadcast television spot advertising 
combines sight, sound, and motion in a way that makes television 
advertisements particularly memorable and impactful.
    47. For all of these reasons, advertisers likely would not respond 
to a small but significant non-transitory increase in the price of 
broadcast television spot advertising by switching to other forms of 
advertising--such as cable, digital, print, radio, or billboard 
advertising--in sufficiently large numbers to make the price increase 
unprofitable.

v. Broadcasters' Negotiations with Advertisers and Internal Analyses

    48. While cable spot or digital advertising may constrain broadcast 
television spot advertising prices in the future, it does not do so 
today. On a cost-per-point basis (cost to reach one percent of a 
relevant target population), over the last few years broadcast 
television spot advertising prices have generally remained steady or 
increased. If cable spot or digital advertising was a close and robust 
competitor to broadcast television spot advertising, then, all else 
being equal, competition from cable spot or digital advertising would 
place downward pressure on broadcast television spot advertising 
pricing. But they have not had this effect.
    49. The differentiation between broadcast television spot 
advertising and cable spot and digital advertising bears out in 
negotiations between broadcasters and advertisers. Advertisers usually 
will put an advertising buy out to bid to many or all broadcast 
stations in a DMA, and will not include MVPDs or digital advertisers in 
that same bid. In negotiations with broadcast stations, advertisers 
regularly discuss offered prices and opportunities from other broadcast 
stations in the same DMA to try to bargain down price, but they rarely 
discuss price offers or opportunities from MVPDs or digital advertisers 
in those negotiations. When a broadcaster salesperson internally 
analyzes the station's performance on any particular buy, the 
salesperson typically looks at the percentage of the buy that was 
allocated to each broadcast station, adding up to 100% of the buy. The 
salesperson typically does not consider any allocation of an 
advertiser's spending on cable or digital advertising. Likewise, if an 
advertiser reports to a broadcaster salesperson the percentage of a buy 
that the broadcaster received, the advertiser typically reports the 
broadcaster's percentage of the amount awarded to all broadcast 
stations in the DMA, but does not include any amount spent on cable or 
digital advertising.
    50. Internally, broadcasters make most of their competitor 
comparisons against other broadcasters in the same DMA, not against 
MVPDs in that DMA or digital advertisers. When reporting to their 
station managers and corporate headquarters, broadcast station sales 
executives regularly report on their performance vis-[agrave]-vis other 
broadcast stations in the DMA; they rarely report on their performance 
against cable or digital platforms. When looking for new business, 
broadcast stations use third-party services to identify advertisers 
advertising on other broadcast stations, but do not subscribe to 
similar services for cable or digital advertising. Similarly, the 
national sales representation firms regularly report to broadcast 
stations about competition from representatives for other broadcasters 
in the same DMA, but rarely report on competition from representatives 
for cable or digital platforms. Many broadcasters use a third-party 
data analysis service to help set their spot advertising rate cards; 
that service uses market share estimates from other broadcasters as 
input data to generate the rate cards, but does not use market share 
estimates from cable or digital advertising platforms.

2. Geographic Markets

    51. For an advertiser seeking to reach potential customers in a 
given DMA, broadcast television stations located outside of the DMA do 
not provide effective access to the advertiser's target audience. The 
signals of broadcast television stations located outside of the DMA 
generally do not reach any significant portion of the target DMA 
through either over-the-air signal or MVPD distribution. Because 
advertisers cannot reach viewers inside a DMA by advertising on 
stations outside the DMA, a hypothetical monopolist of broadcast 
television spot advertising on stations in a given DMA would likely 
implement at least a small but significant non-transitory price 
increase.
    52. Each of the Overlap DMAs accordingly constitutes a relevant 
geographic market for the sale of broadcast television spot advertising 
within the meaning of Section 7 of the Clayton Act, 15 U.S.C. Sec.  18.

C. Likely Anticompetitive Effects

    53. The chart below summarizes Defendants' approximate market 
shares and the result of the transaction on the HHIs in the sale of 
broadcast television spot advertising in each of the Overlap DMAs.

[[Page 41743]]



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                                                           Nexstar share   Tribune share   Merged share                     Post-merger
                       Overlap DMA                              (%)             (%)             (%)       Pre-merger HHI        HHI        HHI increase
--------------------------------------------------------------------------------------------------------------------------------------------------------
Wilkes Barre, PA........................................            35.8            47.6            83.4            3749            7161            3412
Norfolk, VA.............................................            44.0            31.4            75.4            3277            6038            2761
Ft. Smith, AR...........................................            29.1            41.3            70.3            3361            5761            2400
Davenport, IA...........................................            27.0            27.1            54.2            3568            5035            1467
Grand Rapids, MI........................................            36.0            19.0            55.0            2700            4065            1365
Des Moines, IA..........................................            11.2            34.6            45.8            3235            4009             774
Richmond, VA............................................            20.9            29.9            50.8            2733            3981            1248
Huntsville, AL..........................................            13.9            33.0            46.9            2786            3704             918
Memphis, TN.............................................            14.5            33.3            47.9            2558            3527             969
Harrisburg, PA..........................................            21.8            20.8            42.5            2524            3427             903
Indianapolis, IN........................................            13.1            31.0            44.2            2577            3393             815
Hartford, CT............................................            22.7            20.6            43.3            2306            3240             934
Salt Lake City, UT......................................            16.0            24.1            40.0            2329            3098             769
--------------------------------------------------------------------------------------------------------------------------------------------------------

    54. Defendants' large market shares reflect the fact that, in each 
Overlap DMA, Nexstar and Tribune each own one or more significant 
broadcast stations. As indicated by the preceding chart, the post-
merger HHI in each Overlap DMA is well above 2,500, and the HHI 
increase in each Overlap DMA far exceeds the 200-point threshold above 
which a transaction is presumed to enhance market power and harm 
competition. Defendants' proposed transaction is thus presumptively 
unlawful in each Overlap DMA.
    55. In addition to substantially increasing the concentration 
levels in each Overlap DMA, the proposed merger would combine Nexstar's 
and Tribune's broadcast television stations, which are close 
substitutes and generally vigorous competitors in the sale of broadcast 
television spot advertising. In each Overlap DMA, Defendants' broadcast 
stations compete head-to-head in the sale of broadcast television spot 
advertising. Advertisers obtain lower prices as a result of this 
competition. In particular, advertisers in the Overlap DMAs can respond 
to an increase in one station's spot advertising prices by purchasing, 
or threatening to purchase, advertising spots on one or more stations 
owned by different broadcast station groups--``buying around'' the 
station that raises its prices. This practice allows the advertisers 
either to avoid the first station's price increase, or to pressure the 
first station to lower its prices.
    56. If Nexstar acquires Tribune's stations, advertisers seeking to 
reach audiences in the Overlap DMAs would have fewer competing 
broadcast television alternatives available to meet their advertising 
needs, and would find it more difficult and costly to buy around higher 
prices imposed by the combined stations. This would likely result in 
increased advertising prices, lower quality local programming to which 
the spot advertising is attached (for example, less investment in local 
news), and less innovation in providing advertising solutions to 
advertisers.
    57. For these reasons, the proposed merger likely would 
substantially lessen competition in the sale of broadcast television 
spot advertising in each of the Overlap DMAs, in violation of Section 7 
of the Clayton Act, 15 U.S.C. Sec.  18.

VI. ABSENCE OF COUNTERVAILING FACTORS

    58. Entry of a new broadcast station into an Overlap DMA would not 
be timely, likely, or sufficient to prevent or remedy the proposed 
merger's likely anticompetitive effects in the relevant markets. The 
FCC regulates entry through the issuance of broadcast television 
licenses, which are difficult to obtain because the availability of 
spectrum is limited and the regulatory process associated with 
obtaining a license is lengthy. Even if a new signal were to become 
available, commercial success would come over a period of many years, 
if at all.
    59. Defendants cannot demonstrate merger-specific, verifiable 
efficiencies sufficient to offset the proposed merger's likely 
anticompetitive effects.

VII. VIOLATIONS ALLEGED

    60. The proposed merger of Nexstar and Tribune likely would 
substantially lessen competition in interstate trade and commerce, in 
violation of Section 7 of the Clayton Act, 15 U.S.C. Sec.  18. The 
merger likely would have the following effects, among others:
    a. competition in the licensing of Big 4 television retransmission 
consent in each of the Big 4 Overlap DMAs likely would be substantially 
lessened;
    b. competition between Nexstar and Tribune in the licensing of Big 
4 television retransmission consent in each of the Big 4 Overlap DMAs 
would be eliminated;
    c. the fees charged to MVPDs for the licensing of retransmission 
consent in each of the Big 4 Overlap DMAs likely would increase;
    d. competition in the sale of broadcast television spot advertising 
in each of the Overlap DMAs likely would be substantially lessened;
    e. competition between Nexstar and Tribune in the sale of broadcast 
television spot advertising in each of the Overlap DMAs would be 
eliminated; and
    f. prices for spot advertising on broadcast television stations in 
each of the Overlap DMAs likely would increase, the quality of local 
programming likely would decrease, and Defendants likely would be less 
innovative in providing advertising solutions to advertisers.

VIII. RELIEF REQUESTED

    61. The Plaintiffs request that:
    a. the Court adjudge the proposed merger to violate Section 7 of 
the Clayton Act, 15 U.S.C. Sec.  18;
    b. the Court enjoin and restrain Defendants from carrying out the 
merger, or entering into any other agreement, understanding, or plan by 
which Nexstar would merge with, acquire, or be acquired by Tribune, or 
Nexstar and Tribune would combine any of their respective Big 4 
stations in the Big 4 Overlap DMAs or their stations in the 
Indianapolis DMA;
    c. the Court award Plaintiffs the costs of this action; and
    d. the Court award such other relief to Plaintiffs as the Court may 
deem just and proper.

Dated: July 31, 2019
Respectfully submitted,
FOR PLAINTIFF UNITED STATES OF AMERICA

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MAKAN DELRAHIM (D.C. Bar  457795)
Assistant Attorney General for Antitrust

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ANDREW C. FINCH
Principal Deputy Assistant Attorney General

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PATRICIA A. BRINK
Director of Civil Enforcement
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OWEN M. KENDLER

[[Page 41744]]

Chief, Media, Entertainment & Professional Services Section

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YVETTE TARLOV (D.C. Bar  442452)
Assistant Chief, Media, Entertainment & Professional Services 
Section

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LEE F. BERGER (D.C. Bar  482435)
LAUREN G.S. RIKER
GARRETT LISKEY
United States Department of Justice, Antitrust Division, Media, 
Entertainment & Professional Services Section, 450 Fifth Street, 
N.W., Suite 4000, Washington, DC 20530, Telephone: (202) 598-2698, 
Facsimile: (202) 514-7308

FOR PLAINTIFF STATE OF ILLINOIS

KWAME RAOUL
Attorney General

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Elizabeth L. Maxeiner
Assistant Attorney General, Antitrust Bureau, Office of the Illinois 
Attorney General, 100 West Randolph street, Chicago, Illinois 60601, 
Phone: 312-814-5470, Facsimile: 312-814-4209, E-mail: 
[email protected]

FOR THE COMMONWEALTH OF PENNSYLVANIA

JOSH SHAPIRO
Attorney General

JAMES A. DONAHUE, III
Executive Deputy Attorney General
Public Protection Division

TRACY W. WERTZ
Chief Deputy Attorney General
Antitrust Section

JOSEPH S. BETSKO
PA ID 82620
Senior Deputy Attorney General

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JENNIFER A. THOMSON
PA ID 89360
Senior Deputy Attorney General
Antitrust Section, Office of the Attorney General, 14th Floor, 
Strawberry Square, Harrisburg, PA 17120, Telephone: (717) 787-4530, 
Fax: (717) 787-1190, E-mail: [email protected]

FOR PLAINTIFF COMMONWEALTH OF VIRGINIA

MARK R. HERRING
Attorney General

CYNTHIA E. HUDSON
Chief Deputy Attorney General

SAMUEL T. TOWELL
Deputy Attorney General
Civil Division

RICHARD S. SCHWEIKER, JR.
Senior Assistant Attorney General and Chief
Consumer Protection Section

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SARAH OXENHAM ALLEN
VA Bar 33217
Senior Assistant Attorney General and Unit Manager
TYLER T. HENRY
VA Bar 87621
Assistant Attorney General
Antitrust Unit, Office of the Attorney General, 202 North 9th 
Street, Richmond, VA 23219, Telephone: (804) 786-6657, Fax: (804) 
786-0122, E-mail: [email protected]

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

    UNITED STATES OF AMERICA, STATE OF ILLINOIS, COMMONWEALTH OF 
PENNSYLVANIA, and COMMONWEALTH OF VIRGINIA, Plaintiffs, v. NEXSTAR 
MEDIA GROUP, INC. and TRIBUNE MEDIA COMPANY, Defendants.

Civil Action No. 1:19-cv-2295 (DLF)

PROPOSED FINAL JUDGMENT

    WHEREAS, Plaintiffs, United States of America and the State of 
Illinois and the Commonwealths of Pennsylvania and Virginia 
(collectively, the ``Plaintiff States''), filed their Complaint on July 
31, 2019, and Defendant Nexstar Media Group, Inc., and Defendant 
Tribune Media Company, by their respective 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 admission by any party regarding any issue of fact 
or law;
    AND WHEREAS, Defendants agree 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 Defendants to assure 
that competition is not substantially lessened;
    AND WHEREAS, Defendants agree to make certain divestitures for the 
purpose of remedying the loss of competition alleged in the Complaint;
    AND WHEREAS, Defendants have represented to Plaintiffs that the 
divestitures required below can and will be made and that Defendants 
will not later raise any claim of hardship or difficulty as grounds for 
asking the Court to modify any of the divestiture provisions contained 
below;
    NOW THEREFORE, before any testimony is taken, without trial or 
adjudication of any issue of fact or law, and upon consent of the 
parties, it is ORDERED, ADJUDGED, AND DECREED:

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. Sec.  18.

II. DEFINITIONS

    As used in this Final Judgment:
    A. ``Acquirer'' means Scripps, TEGNA, Circle City Broadcasting, or 
any other entity or entities to which Defendants divest any of the 
Divestiture Assets.
    B. ``Circle City Broadcasting'' means Circle City Broadcasting I, 
Inc., a Delaware corporation headquartered in Indianapolis, Indiana, 
its successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships, and joint ventures, and their directors, 
members, officers, managers, agents, and employees.
    C. ``Cooperative Agreement'' means (1) joint sales agreements, 
joint operating agreements, local marketing agreements, news share 
agreements, or shared services agreements, or (2) any agreement through 
which a person exercises control over any broadcast television station 
not owned by the person.
    D. ``Defendants'' means Nexstar and Tribune.
    E. ``Divestiture Assets'' means the Divestiture Stations and all 
assets, tangible or intangible, necessary for the operation of the 
Divestiture Stations as viable, ongoing commercial broadcast television 
stations, including, but not limited to, all real property (owned or 
leased), all broadcast equipment, office equipment, office furniture, 
fixtures, materials, supplies, and other tangible property relating to 
the Divestiture Stations; all licenses, permits, and authorizations 
issued by, and applications submitted to, the FCC and other government 
agencies relating to the Divestiture Stations; all contracts (including 
programming contracts and rights), agreements, network affiliation 
agreements, leases, and commitments and understandings of Defendants 
relating to the Divestiture Stations; all trademarks, service marks, 
trade names, copyrights, patents, slogans, programming materials, and 
promotional materials relating to the Divestiture Stations; all 
customer lists, contracts, accounts, and credit records related to the 
Divestiture Stations; all logs and other records maintained by 
Defendants in connection with the Divestiture Stations; and the content 
and affiliation of each digital subchannel of the Divestiture Stations.
    F. ``Divestiture Stations'' means KCWI-TV, KFSM-TV, KSTU, WATN-TV, 
WCCT-TV, WGNT, WISH-TV, WLMT, WNDY-TV, WNEP-TV, WOI-DT, WPMT, WQAD-TV, 
WTIC-TV, WTKR, WTVR-TV, WXMI, and WZDX.
    G. ``DMA'' means Designated Market Area as defined by The Nielsen 
Company (US), LLC, based upon viewing patterns and used by BIA Advisory 
Services' Investing in Television Market Report 2018 (4th edition).

[[Page 41745]]

    H. ``FCC'' means the Federal Communications Commission.
    I. ``KCWI-TV'' means the CW-affiliated broadcast television station 
bearing that call sign located in the Des Moines-Ames, Iowa, DMA, owned 
by Defendant Nexstar.
    J. ``KFSM-TV'' means the CBS-affiliated broadcast television 
station bearing that call sign located in the Ft. Smith-Fayetteville-
Springdale-Rogers, Arkansas, DMA, owned by Defendant Tribune.
    K. ``KSTU'' means the FOX-affiliated broadcast television station 
bearing that call sign located in the Salt Lake City, Utah, DMA, owned 
by Defendant Tribune.
    L. ``Nexstar'' means defendant Nexstar Media Group, Inc., a 
Delaware corporation headquartered in Irving, Texas, its successors and 
assigns, and its subsidiaries, divisions, groups, affiliates, 
partnerships, and joint ventures, and their directors, officers, 
managers, agents, and employees.
    M. ``Scripps'' means the E.W. Scripps Company, an Ohio corporation 
headquartered in Cincinnati, Ohio, its successors and assigns, and its 
subsidiaries, divisions, groups, affiliates, partnerships, and joint 
ventures, and their directors, officers, managers, agents, and 
employees.
    N. ``TEGNA'' means TEGNA Inc., a Delaware corporation headquartered 
in McLean, Virginia, its successors and assigns, and its subsidiaries, 
divisions, groups, affiliates, partnerships, and joint ventures, and 
their directors, officers, managers, agents, and employees.
    O. ``Tribune'' means defendant Tribune Media Company, a Delaware 
corporation headquartered in Chicago, Illinois, its successors and 
assigns, and its subsidiaries, divisions, groups, affiliates, 
partnerships, and joint ventures, and their directors, officers, 
managers, agents, and employees.
    P. ``WATN-TV'' means the ABC-affiliated broadcast television 
station bearing that call sign located in the Memphis, Tennessee, DMA, 
owned by Defendant Nexstar.
    Q. ``WCCT-TV'' means the CW-affiliated broadcast television station 
bearing that call sign located in the Hartford-New Haven, Connecticut, 
DMA, owned by Defendant Tribune.
    R. ``WGNT'' means the CW-affiliated broadcast television station 
bearing that call sign located in the Norfolk-Portsmouth-Newport News, 
Virginia, DMA, owned by Dreamcatcher Broadcasting LLC, regarding which 
Tribune will exercise its option to acquire from Dreamcatcher 
Broadcasting LLC.
    S. ``WISH-TV'' means the CW-affiliated broadcast television station 
bearing that call sign located in the Indianapolis, Indiana, DMA, owned 
by Defendant Nexstar.
    T. ``WLMT'' means the CW-affiliated broadcast television station 
bearing that call sign located in the Memphis, Tennessee, DMA, owned by 
Defendant Nexstar.
    U. ``WNDY-TV'' means the MyNetworkTV-affiliated broadcast 
television station bearing that call sign located in the Indianapolis, 
Indiana, DMA, owned by Defendant Nexstar.
    V. ``WNEP-TV'' means the ABC-affiliated broadcast television 
station bearing that call sign located in the Wilkes Barre-Scranton, 
Pennsylvania, DMA, owned by Dreamcatcher Broadcasting LLC, regarding 
which Tribune will exercise its option to acquire from Dreamcatcher 
Broadcasting LLC.
    W. ``WOI-DT'' means the ABC-affiliated broadcast television station 
bearing that call sign located in the Des Moines-Ames, Iowa, DMA, owned 
by Defendant Nexstar.
    X. ``WPMT'' means the FOX-affiliated broadcast television station 
bearing that call sign located in the Harrisburg-Lancaster-Lebanon-
York, Pennsylvania, DMA, owned by Defendant Tribune.
    Y. ``WQAD-TV'' means the ABC-affiliated broadcast television 
station bearing that call sign located in the Davenport, Iowa-Rock 
Island-Moline, Illinois, DMA, owned by Defendant Tribune.
    Z. ``WTIC-TV'' means the FOX-affiliated broadcast television 
station bearing that call sign located in the Hartford-New Haven, 
Connecticut, DMA, owned by Defendant Tribune.
    AA. ``WTKR'' means the CBS-affiliated broadcast television station 
bearing that call sign located in the Norfolk-Portsmouth-Newport News, 
Virginia, DMA, owned by Dreamcatcher Broadcasting LLC, regarding which 
Tribune will exercise its option to acquire from Dreamcatcher 
Broadcasting LLC.
    BB. ``WTVR-TV'' means the CBS-affiliated broadcast television 
station bearing that call sign located in the Richmond-Petersburg, 
Virginia, DMA, owned by Defendant Tribune.
    CC. ``WXMI'' means the FOX-affiliated broadcast television station 
bearing that call sign located in the Grand Rapids-Kalamazoo-Battle 
Creek, Michigan, DMA, owned by Defendant Tribune.
    DD. ``WZDX'' means the FOX-affiliated broadcast television station 
bearing that call sign located in the Huntsville-Decatur-Florence, 
Alabama, DMA, owned by Defendant Nexstar.

III. APPLICABILITY

    A. This Final Judgment applies to Defendants 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.
    B. If, prior to complying with Sections IV and V of this Final 
Judgment, Defendants sell or otherwise dispose of all or substantially 
all of their assets or of lesser business units that include the 
Divestiture Assets, they shall require the purchaser to be bound by the 
provisions of this Final Judgment. Defendants need not obtain such an 
agreement from the Acquirers.

IV. DIVESTITURES

    A. Defendants are ordered and directed, within thirty calendar days 
after the Court's entry of the Hold Separate Stipulation and Order in 
this matter to divest the Divestiture Assets in a manner consistent 
with this Final Judgment to Acquirers acceptable to the United States, 
in its sole discretion. The United States, in its sole discretion, may 
agree to one or more extensions of this time period not to exceed 
ninety calendar days in total, and shall notify the Court in such 
circumstances.
    B. With respect to divestiture of the Divestiture Assets by 
Defendants, or by the Divestiture Trustee appointed pursuant to Section 
V of this Final Judgment, if applications have been filed with the FCC 
within the period permitted for divestiture seeking approval to assign 
or transfer licenses to the Acquirer(s) of the Divestiture Assets, but 
an order or other dispositive action by the FCC on such applications 
has not been issued before the end of the period permitted for 
divestiture, the period shall be extended with respect to divestiture 
of the Divestiture Assets for which no FCC order has issued until five 
days after such order is issued. Defendants agree to use their best 
efforts to divest the Divestiture Assets and to obtain all necessary 
FCC approvals as expeditiously as possible. This Final Judgment does 
not limit the FCC's exercise of its regulatory powers and process with 
respect to the Divestiture Assets. Authorization by the FCC to conduct 
the divestiture of a Divestiture Asset in a particular manner will not 
modify any of the requirements of this Final Judgment.
    C. In the event that Defendants are attempting to divest the WISH-
TV or WNDY-TV Divestiture Assets to an Acquirer other than Circle City 
Broadcasting; the KSTU, WGNT, WTKR,

[[Page 41746]]

WTVR-TV, or WXMI Divestiture Assets to an Acquirer other than Scripps; 
or the KFSM-TV, KCWI-TV, WATN-TV, WCCT-TV, WLMT, WOI-DT, WNEP-TV, WPMT, 
WQAD, WTIC-TV or WZDX Divestiture Assets to an Acquirer other than 
TEGNA:
    (1) Defendants promptly shall make known, by usual and customary 
means, the availability of the Divestiture Assets;
    (2) Defendants shall inform any person making an inquiry regarding 
a possible purchase of the relevant Divestiture Assets that they are 
being divested pursuant to this Final Judgment and provide that person 
with a copy of this Final Judgment;
    (3) Defendants shall offer to furnish to all prospective Acquirers, 
subject to customary confidentiality assurances, all information and 
documents relating to the relevant Divestiture Assets customarily 
provided in a due diligence process except such information or 
documents subject to the attorney-client privilege or work-product 
doctrine; and
    (4) Defendants shall make available such information to the United 
States at the same time that such information is made available to any 
other person.
    D. Defendants shall provide each Acquirer and the United States 
information relating to the personnel involved in the operation and 
management of the relevant Divestiture Assets to enable the Acquirer to 
make offers of employment. Defendants will not interfere with any 
negotiations by any Acquirer to employ or contract with any Defendant 
employee whose primary responsibility relates to the operation or 
management of the relevant Divestiture Assets.
    E. Defendants shall permit the prospective Acquirers of the 
Divestiture Assets to have reasonable access to personnel and to make 
inspections of the physical facilities of the Divestiture Assets; 
access to any and all environmental, zoning, and other permit documents 
and information; and access to any and all financial, operational, or 
other documents and information customarily provided as part of a due 
diligence process.
    F. Defendants shall warrant to the Acquirers that each asset will 
be operational on the date of sale.
    G. Defendants shall not take any action that will impede in any way 
the permitting, operation, or divestiture of the Divestiture Assets.
    H. At the option of the respective Acquirer, Defendants shall enter 
into a transition services agreement with each Acquirer for a period of 
up to six months to facilitate the continuous operations of the 
relevant Divestiture Assets until the Acquirer can provide such 
capabilities independently. The terms and conditions of any contractual 
arrangement intended to satisfy this provision must be reasonably 
related to market conditions for the services provided, and shall be 
subject to the approval of the United States, in its sole discretion. 
The United States in its sole discretion may approve one or more 
extensions of this agreement for a total of up to an additional six 
months, or, with respect to transition services provided by (1) 
Defendants to an Acquirer for Tribune's proprietary software; or (2) an 
Acquirer to Defendants for master control hub operating services and 
distribution services, for a total of up to an additional eighteen 
months.
    I. Defendants shall warrant to the Acquirers (1) that there are no 
material defects in the environmental, zoning, or other permits 
pertaining to the operation of the Divestiture Assets, and (2) that, 
following the sale of the Divestiture Assets, Defendants will not 
undertake, directly or indirectly, any challenges to the environmental, 
zoning, or other permits relating to the operation of the Divestiture 
Assets.
    J. Unless the United States otherwise consents in writing, the 
divestitures pursuant to Section IV, or by the Divestiture Trustee 
appointed pursuant to Section V of this Final Judgment, shall include 
the entire Divestiture Assets and shall be accomplished in such a way 
as to satisfy the United States, in its sole discretion, after 
consultation with the Plaintiff States, that the Divestiture Assets can 
and will be used by each Acquirer as part of a viable, ongoing 
commercial television broadcasting business. Divestiture of the 
Divestiture Assets may be made to one or more Acquirers, provided that 
in each instance it is demonstrated to the sole satisfaction of the 
United States, after consultation with the Plaintiff States, that the 
Divestiture Assets will remain viable, and the divestiture of such 
assets will remedy the competitive harm alleged in the Complaint. If 
any of the terms of an agreement between any Defendants and any 
Acquirer to effectuate the divestitures required by the Final Judgment 
varies from the terms of this Final Judgment then, to the extent that 
Defendants cannot fully comply with both terms, this Final Judgment 
shall determine Defendants' obligations. The divestitures, whether made 
pursuant to Section IV or Section V of this Final Judgment:
    (1) shall be made to Acquirers that, in the United States' sole 
judgment, after consultation with the Plaintiff States, have the intent 
and capability (including the necessary managerial, operational, 
technical, and financial capability) to compete effectively in the 
commercial television broadcasting business; and
    (2) shall be accomplished so as to satisfy the United States, in 
its sole discretion, after consultation with the Plaintiff States, that 
none of the terms of any agreement between any Acquirer and Defendants 
give Defendants the ability unreasonably to raise the costs of the 
Acquirer, to lower the efficiency of the Acquirer, or otherwise to 
interfere in the ability of the Acquirer to compete effectively.

V. APPOINTMENT OF DIVESTITURE TRUSTEE

    A. If Defendants have not divested the Divestiture Assets within 
the time period specified in Paragraph IV(A) and Paragraph IV(B), 
Defendants shall notify the United States and a Plaintiff State, if any 
subject Divestiture Asset is located in that Plaintiff State, of that 
fact in writing, specifically identifying the Divestiture Assets that 
have not been divested. Upon application of the United States, the 
Court shall appoint a Divestiture Trustee selected by the United States 
and approved by the Court to effect the divestiture of the Divestiture 
Assets that have not yet been divested.
    B. After the appointment of a Divestiture Trustee becomes 
effective, only the Divestiture Trustee shall have the right to sell 
the relevant Divestiture Assets. The Divestiture Trustee shall have the 
power and authority to accomplish the divestiture to an Acquirer 
acceptable to the United States, in its sole discretion, after 
consultation with the Plaintiff States, at such price and on such terms 
as are then obtainable upon reasonable effort by the Divestiture 
Trustee, subject to the provisions of this Final Judgment, and shall 
have such other powers as this Court deems appropriate. Subject to 
Paragraph V(D) of this Final Judgment, the Divestiture Trustee may hire 
at the cost and expense of Defendants any agents or consultants, 
including, but not limited to, investment bankers, attorneys, and 
accountants, who shall be solely accountable to the Divestiture 
Trustee, reasonably necessary in the Divestiture Trustee's judgment to 
assist in the divestiture. Any such agents or consultants shall serve 
on such terms and conditions as the United States approves, including 
confidentiality requirements and conflict of interest certifications.
    C. Defendants shall not object to a sale by the Divestiture Trustee 
on any ground other than the Divestiture Trustee's malfeasance. Any 
such

[[Page 41747]]

objections by Defendants must be conveyed in writing to the United 
States and the Divestiture Trustee within ten calendar days after the 
Divestiture Trustee has provided the notice required under Section VI.
    D. The Divestiture Trustee shall serve at the cost and expense of 
Defendants pursuant to a written agreement, on such terms and 
conditions as the United States approves, including confidentiality 
requirements and conflict of interest certifications. The Divestiture 
Trustee shall account for all monies derived from the sale of the 
relevant Divestiture Assets and all costs and expenses so incurred. 
After approval by the Court of the Divestiture Trustee's accounting, 
including fees for its services yet unpaid and those of any agents and 
consultants retained by the Divestiture Trustee, all remaining money 
shall be paid to Defendants and the trust shall then be terminated. The 
compensation of the Divestiture Trustee and any agents and consultants 
retained by the Divestiture Trustee shall be reasonable in light of the 
value of the Divestiture Assets subject to sale by the Divestiture 
Trustee and based on a fee arrangement providing the Divestiture 
Trustee with incentives based on the price and terms of the divestiture 
and the speed with which it is accomplished, but the timeliness of the 
divestiture is paramount. If the Divestiture Trustee and Defendants are 
unable to reach agreement on the Divestiture Trustee's or any agent's 
or consultant's compensation or other terms and conditions of 
engagement within fourteen calendar days of the appointment of the 
Divestiture Trustee, agent, or consultant, the United States may, in 
its sole discretion, take appropriate action, including making a 
recommendation to the Court. The Divestiture Trustee shall, within 
three business days of hiring any other agents or consultants, provide 
written notice of such hiring and the rate of compensation to 
Defendants and the United States.
    E. Defendants shall use their best efforts to assist the 
Divestiture Trustee in accomplishing the required divestitures. The 
Divestiture Trustee and any agents or consultants retained by the 
Divestiture Trustee shall have full and complete access to the 
personnel, books, records, and facilities of the business to be 
divested, and Defendants shall provide or develop financial and other 
information relevant to such business as the Divestiture Trustee may 
reasonably request, subject to reasonable protection for trade secrets; 
other confidential research, development, or commercial information; or 
any applicable privileges. Defendants shall take no action to interfere 
with or to impede the Divestiture Trustee's accomplishment of the 
divestiture.
    F. After its appointment, the Divestiture Trustee shall file 
monthly reports with the United States and the Plaintiff States setting 
forth the Divestiture Trustee's efforts to accomplish the relevant 
divestitures ordered under this Final Judgment. 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 
Divestiture Assets, and shall describe in detail each contact with any 
such person. The Divestiture Trustee shall maintain full records of all 
efforts made to divest the relevant Divestiture Assets.
    G. If the Divestiture Trustee has not accomplished the divestitures 
ordered under this Final Judgment within six months after its 
appointment, the Divestiture Trustee shall promptly file with the Court 
a report setting forth (1) the Divestiture Trustee's efforts to 
accomplish the required divestitures, (2) the reasons, in the 
Divestiture Trustee's judgment, why the required divestitures have not 
been accomplished, and (3) the Divestiture Trustee's recommendations. 
To the extent such report contains information that the Divestiture 
Trustee deems confidential, such reports shall not be filed on the 
public docket of the Court. The Divestiture Trustee shall at the same 
time furnish such report to the United States, which shall have the 
right to make additional recommendations consistent with the purpose of 
the trust. The Court thereafter shall enter such orders as it shall 
deem appropriate to carry out the purpose of this Final Judgment, which 
may, if necessary, include extending the trust and the term of the 
Divestiture Trustee's appointment by a period requested by the United 
States.
    H. If the United States determines that the Divestiture Trustee has 
ceased to act or failed to act diligently or in a reasonably cost-
effective manner, the United States may recommend that the Court 
appoint a substitute Divestiture Trustee.

VI. NOTICE OF PROPOSED DIVESTITURE

    A. Within two business days following execution of a definitive 
divestiture agreement, Defendants or the Divestiture Trustee, whichever 
is then responsible for effecting the divestitures required herein, 
shall notify the United States and the Plaintiff States of any proposed 
divestiture required by Section IV or Section V of this Final Judgment. 
If the Divestiture Trustee is responsible, it shall similarly notify 
Defendants. The notice shall set forth the details of the proposed 
divestiture and list the name, address, and telephone number of each 
person not previously identified who tendered an offer for, or 
expressed an interest in or desire to acquire, any ownership interest 
in the relevant Divestiture Assets, together with full details of the 
same.
    B. Within fifteen calendar days of receipt by the United States of 
such notice, the United States, in its sole discretion, after 
consultation with the Plaintiff States, may request from Defendants, 
the proposed Acquirer, any other third party, or the Divestiture 
Trustee, if applicable, additional information concerning the proposed 
divestiture, the proposed Acquirer, and any other potential Acquirers. 
Defendants and the Divestiture Trustee shall furnish any additional 
information requested within fifteen calendar days of the receipt of 
the request, unless the parties shall otherwise agree.
    C. Within thirty calendar days after receipt of the notice or 
within twenty calendar days after the United States has been provided 
the additional information requested from Defendants, the proposed 
Acquirer, any third party, and the Divestiture Trustee, whichever is 
later, the United States shall provide written notice to Defendants and 
the Divestiture Trustee, if there is one, stating whether or not, in 
its sole discretion, after consultation with the Plaintiff States, it 
objects to the Acquirer or any aspect of the proposed divestiture. If 
the United States provides written notice that it does not object, the 
divestiture may be consummated, subject only to Defendants' limited 
right to object to the sale under Paragraph V(C) of this Final 
Judgment. Absent written notice that the United States does not object 
to the proposed Acquirer, or upon objection by the United States, a 
divestiture proposed under Section IV or Section V shall not be 
consummated. Upon objection by Defendants under Paragraph V(C), a 
divestiture proposed under Section V shall not be consummated unless 
approved by the Court.

VII. FINANCING

    Defendants shall not finance all or any part of any purchase made 
pursuant to Section IV or Section V of this Final Judgment.

[[Page 41748]]

VIII. HOLD SEPARATE

    Until the divestitures required by this Final Judgment have been 
accomplished, Defendants shall take all steps necessary to comply with 
the Hold Separate Stipulation and Order entered by this Court. 
Defendants shall take no action that would jeopardize the divestitures 
ordered by this Court.

IX. AFFIDAVITS

    A. Within twenty calendar days of the filing of the Complaint in 
this matter, and every thirty calendar days thereafter until the 
divestitures have been completed under Section IV and Section V of this 
Final Judgment, Defendants shall deliver to the United States and the 
Plaintiff States an affidavit, signed by each Defendant's Chief 
Financial Officer and General Counsel, which shall describe the fact 
and manner of Defendants' compliance with Section IV and Section V of 
this Final Judgment. Each such affidavit shall include the name, 
address, and telephone number of each person who, during the preceding 
thirty calendar days, 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 Divestiture 
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 Defendants have taken to solicit buyers for 
and complete the sale of the Divestiture Assets, including efforts to 
secure FCC or other regulatory approvals, and to provide required 
information to prospective Acquirers, including the limitations, if 
any, on such information. Assuming the information set forth in the 
affidavit is true and complete, any objection by the United States to 
information provided by Defendants, including limitations on 
information, shall be made within fourteen calendar days of receipt of 
such affidavit.
    B. Within twenty calendar days after the filing of the Complaint in 
this matter, Defendants shall deliver to the United States an affidavit 
that describes in reasonable detail all actions Defendants have taken 
and all steps Defendants have implemented on an ongoing basis to comply 
with Section VIII of this Final Judgment. Defendants shall deliver to 
the United States an affidavit describing any changes to the efforts 
and actions outlined in Defendants' earlier affidavits filed pursuant 
to this Paragraph IX(B) within fifteen calendar days after the change 
is implemented.
    C. Defendants shall keep all records of all efforts made to 
preserve and divest the Divestiture Assets until one year after such 
divestitures have been completed.

X. COMPLIANCE INSPECTION

    A. For the purposes of determining or securing compliance with this 
Final Judgment, or of any related orders such as any Hold Separate 
Stipulation and Order, or of determining whether the Final Judgment 
should be modified or vacated, and subject to any legally recognized 
privilege, from time to time authorized representatives of the United 
States, including agents retained by the United States, shall, upon 
written request of an 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 the option of the United States, to require Defendants to provide 
electronic copies of, all books, ledgers, accounts, records, data, and 
documents in the possession, custody, or control of Defendants, 
relating to any matters contained in this Final Judgment; and
    (2) to interview, either informally or on the record, Defendants' 
officers, employees, or agents, who may have their individual counsel 
present, regarding such matters. The interviews shall be subject to the 
reasonable convenience of the interviewee and without restraint or 
interference by Defendants.
    B. Upon the written request of an authorized representative of the 
Assistant Attorney General in charge of the Antitrust Division, 
Defendants shall submit written reports or responses to written 
interrogatories, 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 the United States 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 that Defendants furnish information or documents 
to the United States, 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)(1)(G) 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)(1)(G) of 
the Federal Rules of Civil Procedure,'' then the United States shall 
give Defendants ten calendar days' notice prior to divulging such 
material in any legal proceeding (other than a grand jury proceeding).

XI. NO REACQUISITION AND LIMITATIONS ON COLLABORATIONS

    A. During the term of this Final Judgment, Defendants may not (1) 
reacquire any part of the Divestiture Assets, unless approved by the 
United States in its sole discretion; (2) acquire any option to 
reacquire any part of the Divestiture Assets or to assign the 
Divestiture Assets to any other person; (3) enter into any Cooperative 
Agreement, (except as provided in this Paragraph XI(A) or in Paragraph 
XI(B)), or conduct other business negotiations jointly with any 
Acquirer with respect to the Divestiture Assets divested to such 
Acquirer; or (4) provide financing or guarantees of financing with 
respect to the Divestiture Assets. The Cooperative Agreement 
prohibition does not preclude Defendants from continuing or entering 
into agreements in a form customarily used in the industry to (a) share 
news helicopters or (b) pool generic video footage that does not 
include recording a reporter or other on-air talent, and does not 
preclude Defendants from entering into any non-sales-related shared 
services agreement or transition services agreement that is approved in 
advance by the United States in its sole discretion.
    B. Paragraph XI(A) shall not prevent Defendants from entering into 
agreements to provide news programming to broadcast television stations 
included in the Divestiture Assets, provided that Defendants do not 
sell, price, market, hold out for sale, or profit from the sale of 
advertising associated with the news programming provided by Defendants 
under such agreements except by approval of the United States in its 
sole discretion.

XII. RETENTION OF JURISDICTION

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

[[Page 41749]]

XIII. ENFORCEMENT OF FINAL JUDGMENT

    A. The United States retains and reserves all rights to enforce the 
provisions of this Final Judgment, including the right to seek an order 
of contempt from the Court. Defendants agree that in any civil contempt 
action, any motion to show cause, or any similar action brought by the 
United States regarding an alleged violation of this Final Judgment, 
the United States may establish a violation of the Final Judgment and 
the appropriateness of any remedy therefor by a preponderance of the 
evidence, and Defendants waive any argument that a different standard 
of proof should apply.
    B. This Final Judgment should be interpreted to give full effect to 
the procompetitive purposes of the antitrust laws and to restore all 
competition the United States alleged was harmed by the challenged 
conduct. Defendants agree that they may be held in contempt of, and 
that the Court may enforce, any provision of this Final Judgment that, 
as interpreted by the Court in light of these procompetitive principles 
and applying ordinary tools of interpretation, is stated specifically 
and in reasonable detail, whether or not it is clear and unambiguous on 
its face. In any such interpretation, the terms of this Final Judgment 
should not be construed against either party as the drafter.
    C. In any enforcement proceeding in which the Court finds that 
Defendants have violated this Final Judgment, the United States may 
apply to the Court for a one-time extension of this Final Judgment, 
together with other relief as may be appropriate. In connection with 
any successful effort by the United States to enforce this Final 
Judgment against a Defendant, whether litigated or resolved before 
litigation, that Defendant agrees to reimburse the United States for 
the fees and expenses of its attorneys, as well as any other costs, 
including experts' fees, incurred in connection with that enforcement 
effort, including in the investigation of the potential violation.
    D. For a period of four years following the expiration of the Final 
Judgment, if the United States has evidence that a Defendant violated 
this Final Judgment before it expired, the United States may file an 
action against that Defendant in this Court requesting that the Court 
order (1) Defendant to comply with the terms of this Final Judgment for 
an additional term of at least four years following the filing of the 
enforcement action under this Section, (2) any appropriate contempt 
remedies, (3) any additional relief needed to ensure the Defendant 
complies with the terms of the Final Judgment, and (4) fees or expenses 
as called for in Paragraph XIII(C).

XIV. EXPIRATION OF FINAL JUDGMENT

    Unless the Court grants an extension, this Final Judgment shall 
expire ten years from the date of its entry, except that after five 
years from the date of its entry, this Final Judgment may be terminated 
upon notice by the United States, after consultation with the Plaintiff 
States, to the Court and Defendants that the divestitures have been 
completed and that the continuation of the Final Judgment no longer is 
necessary or in the public interest.

XV. PUBLIC INTEREST DETERMINATION

    Entry of this Final Judgment is in the public interest. The parties 
have complied with the requirements of the Antitrust Procedures and 
Penalties Act, 15 U.S.C Sec.  16, including making copies available to 
the public of this Final Judgment, the Competitive Impact Statement, 
any comments thereon, and the United States' responses to comments. 
Based upon the record before the Court, which includes the Competitive 
Impact Statement and any comments and responses to comments filed with 
the Court, entry of this Final Judgment is in the public interest.

Date:------------------------------------------------------------------

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

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

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

    UNITED STATES OF AMERICA, STATE OF ILLINOIS, COMMONWEALTH OF 
PENNSYLVANIA, and COMMONWEALTH OF VIRGINIA, Plaintiffs, v. NEXSTAR 
MEDIA GROUP, INC. and TRIBUNE MEDIA COMPANY, Defendants.

Civil Action No. 1:19-cv-2295 (DLF)

COMPETITIVE IMPACT STATEMENT

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

I. NATURE AND PURPOSE OF THE PROCEEDING

    On November 30, 2018, Defendant Nexstar Media Group, Inc. 
(``Nexstar'') agreed to acquire Tribune Media Company (``Tribune,'' and 
together with Nexstar, ``Defendants'') for approximately $6.4 billion. 
The United States filed a civil antitrust Complaint on July 31, 2019, 
seeking to enjoin the proposed merger. The Complaint alleges that the 
likely effect of this merger would be to substantially lessen 
competition in violation of Section 7 of the Clayton Act, 15 U.S.C. 
Sec.  18, in thirteen Designated Market Areas (``DMAs'' \3\): (1) 
Twelve DMAs in which Defendants license the television programming of 
NBC, CBS, ABC, and FOX (collectively, ``Big 4'') affiliate stations to 
cable, satellite, fiber optic television, and over-the-top providers 
(referred to collectively as multichannel video programming 
distributors, or ``MVPDs'') for retransmission to their subscribers 
(collectively referred to in this Competitive Impact Statement as the 
``Big 4 Overlap DMAs''), and (2) those twelve DMAs plus the 
Indianapolis, Indiana DMA in which Defendants sell broadcast television 
spot advertising (collectively referred to in this Competitive Impact 
Statement as the ``Overlap DMAs'').
---------------------------------------------------------------------------

    \3\ A DMA is a geographic unit for which A.C. Nielsen Company--a 
firm that surveys television viewers--furnishes broadcast television 
stations, MVPDs, cable and satellite television networks, 
advertisers, and advertising agencies in a particular area with data 
to aid in evaluating audience size and composition. DMAs are widely 
accepted by industry participants as the standard geographic areas 
to use in evaluating television audience size and demographic 
composition. The Federal Communications Commission (``FCC'') also 
uses DMAs as geographic units with respect to its MVPD regulations.
---------------------------------------------------------------------------

    At the same time the Complaint was filed, the United States filed a 
Hold Separate Stipulation and Order (``Hold Separate'') and proposed 
Final Judgment, which are designed to eliminate the anticompetitive 
effects of the acquisition. Under the proposed Final Judgment, which is 
explained more fully below, Defendants are required to divest the 
following broadcast television stations (the ``Divestiture Stations'') 
to acquirers acceptable to the United States in its sole discretion: 
(i) WQAD-TV, located in the Davenport, Iowa-Rock Island-Moline, 
Illinois, DMA; (ii) WOI-DT and KCWI-TV, located in the Des Moines-Ames, 
Iowa, DMA; (iii) KFSM-TV, located in the Ft. Smith-Fayetteville-
Springdale-Rogers, Arkansas, DMA; (iv) WXMI, located in the Grand 
Rapids-Kalamazoo-Battle Creek, Michigan, DMA; (v) WPMT, located in the 
Harrisburg-Lancaster-Lebanon-York, Pennsylvania, DMA; (vi) WTIC-TV and 
WCCT-TV, located in the Hartford-New Haven, Connecticut, DMA; (vii) 
WZDX,

[[Page 41750]]

located in the Huntsville-Decatur-Florence, Alabama, DMA; (viii) WNDY-
TV and WISH-TV, located in the Indianapolis, Indiana, DMA; (ix) WATN-TV 
and WLMT, located in the Memphis, Tennessee, DMA; (x) WTKR and WGNT, 
located in the Norfolk-Portsmouth-Newport News, Virginia, DMA; (xi) 
WTVR-TV, located in the Richmond-Petersburg, Virginia, DMA; (xii) KSTU, 
located in the Salt Lake City, Utah, DMA; and (xiii) WNEP-TV, located 
in the Wilkes-Barre-Scranton, Pennsylvania, DMA. Under the terms of the 
Hold Separate, Defendants will take certain steps to ensure that the 
Divestiture Stations are operated as competitively independent, 
economically viable, and ongoing business concerns, which will remain 
independent and uninfluenced by the non-owner Defendant, and that 
competition is maintained during the pendency of the required 
divestitures.
    The United States and Defendants have stipulated that the proposed 
Final Judgment may be entered after compliance with the APPA. Entry of 
the proposed Final Judgment will terminate this action, except that the 
Court will retain jurisdiction to construe, modify, or enforce the 
provisions of the proposed Final Judgment and to punish violations 
thereof.

II. DESCRIPTION OF EVENTS GIVING RISE TO THE ALLEGED VIOLATION

A. The Defendants and the Proposed Transaction
    Nexstar is a Delaware corporation with its headquarters in Irving, 
Texas. Nexstar owns 171 television stations in 100 DMAs, of which 136 
stations are Big 4 affiliates. In 2018, Nexstar reported revenues of 
$2.8 billion.
    Tribune is a Delaware corporation with its headquarters in Chicago, 
Illinois. Tribune owns 44 television stations in 33 DMAs, of which 27 
stations are Big 4 affiliates. In 2018, Tribune earned revenues of more 
than $2.0 billion.
B. Big 4 Television Retransmission Consent
1. Background
    MVPDs, such as Comcast, DirecTV, and Charter, typically pay the 
owner of each local Big 4 broadcast station in a given DMA a per-
subscriber fee for the right to retransmit the station's content to the 
MVPD's subscribers. The per-subscriber fee and other terms under which 
an MVPD is permitted to distribute a station's content to its 
subscribers are set forth in a retransmission agreement. A 
retransmission agreement is negotiated directly between a broadcast 
station group, such as Nexstar or Tribune, and a given MVPD, and this 
agreement typically covers all of the station group's stations located 
in the MVPD's service area, or ``footprint.''
    Each broadcast station group typically renegotiates retransmission 
agreements with the MVPDs every few years. If an MVPD and a broadcast 
station group cannot agree on a retransmission consent fee at the 
expiration of a retransmission agreement, the result may be a 
``blackout'' of the broadcast group's stations from the particular 
MVPD--i.e., an open-ended period during which the MVPD may not 
distribute those stations to its subscribers, until a new contract is 
successfully negotiated.
2. Relevant Markets
    Big 4 broadcast content has special appeal to televisioan viewers 
in comparison to the content that is available through other broadcast 
stations and cable channels. Big 4 stations usually are the highest 
ranked in terms of audience share and ratings in each DMA, largely 
because of unique offerings such as local news, sports, and highly 
ranked primetime programs. Viewers typically consider the Big 4 
stations to be close substitutes for one another. Because of Big 4 
stations' popular national content and valued local coverage, MVPDs 
regard Big 4 programming as highly desirable for inclusion in the 
packages they offer subscribers. Non-Big 4 broadcast stations are 
typically not close substitutes for viewers of Big 4 stations. Stations 
that are affiliates of networks other than the Big 4, such as the CW 
Network, MyNetworkTV, or Telemundo, typically feature niche programming 
without local news or sports--or, in the case of Telemundo, aimed at a 
Spanish-speaking audience. Stations that are unaffiliated with any 
network are similarly unlikely to carry programming with broad popular 
appeal.
    If an MVPD suffers a blackout of a Big 4 station in a given DMA, 
many of the MVPD's subscribers in that DMA are likely to turn to other 
Big 4 stations in the DMA to watch similar content, such as sports, 
primetime shows, and local news and weather. This willingness of 
viewers to switch between competing Big 4 broadcast stations limits an 
MVPD's expected losses in the case of a blackout, and thus limits a 
broadcaster's ability to extract higher fees from that MVPD--since an 
MVPD's willingness to pay higher retransmission consent fees for 
content rises or falls with the harm it would suffer if that content 
were lost. Due to the limited programming typically offered by non-Big 
4 stations, viewers are much less likely to switch to a non-Big 4 
station than to switch to other Big 4 stations in the event of a 
blackout of a Big 4 station. Accordingly, competition from non-Big 4 
stations does not typically impose a significant competitive constraint 
on the retransmission consent fees charged by the owners of Big 4 
stations. For the same reasons, subscribers--and therefore MVPDs--
generally do not view cable network programming as a close substitute 
for Big 4 network content. This is primarily because cable channels 
offer different content. For example, cable channels generally do not 
offer local news, which provides a valuable connection to the local 
community that is important to viewers of Big 4 stations.
    Because viewers do not regard non-Big 4 broadcast stations or cable 
networks as close substitutes for the programming they receive from Big 
4 stations, these other sources of programming are not sufficient to 
discipline an increase in the fees charged for Big 4 television 
retransmission consent. Accordingly, a small but significant increase 
in the retransmission consent fees of Big 4 affiliates would not cause 
enough MVPDs to forego carrying the content of the Big 4 stations to 
make such an increase unprofitable for the Big 4 stations.
    The relevant geographic markets for the licensing of Big 4 
television retransmission consent are the individual DMAs in which such 
licensing occurs. The Complaint alleges a substantial reduction of 
competition in the market for the licensing of Big 4 television 
retransmission consent in the following twelve DMAs: (i) Davenport, 
Iowa-Rock Island-Moline, Illinois; (ii) Des Moines-Ames, Iowa; (iii) 
Ft. Smith-Fayetteville-Springdale-Rogers, Arkansas; (iv) Grand Rapids-
Kalamazoo-Battle Creek, Michigan; (v) Harrisburg-Lancaster-Lebanon-
York, Pennsylvania; (vi) Hartford-New Haven, Connecticut; (vii) 
Huntsville-Decatur-Florence, Alabama; (viii) Memphis, Tennessee; (ix) 
Norfolk-Portsmouth-Newport News, Virginia; (x) Richmond-Petersburg, 
Virginia; (xi) Salt Lake City, Utah; and (xii) Wilkes Barre-Scranton, 
Pennsylvania (collectively, ``the Big 4 Overlap DMAs'').
    In the event of a blackout of a Big 4 network station, FCC rules 
generally prohibit an MVPD from importing the same network's content 
from another DMA. Thus, Big 4 viewers in one DMA cannot switch to Big 4 
programming in another DMA in the face of a blackout.

[[Page 41751]]

Therefore, substitution to stations outside the DMA cannot discipline 
an increase in the fees charged for retransmission consent for 
broadcast stations in the DMA.
3. Anticompetitive Effects
    In each of the Big 4 Overlap DMAs, Nexstar and Tribune each own at 
least one Big 4 affiliate broadcast television station. By combining 
the Defendants' Big 4 stations, the proposed merger would increase the 
Defendants' market shares in the licensing of Big 4 television 
retransmission consent in each Big 4 Overlap DMA, and would increase 
the market concentration in that business in each Big 4 Overlap DMA. 
The chart below summarizes the Defendants' approximate Big 4 
retransmission consent market shares, and market concentrations 
measured by the widely used Herfindahl-Hirschman Index (``HHI'') \4\, 
in each Big 4 Overlap DMA, before and after the proposed merger.
---------------------------------------------------------------------------

    \4\ The HHI is calculated by squaring the market share of each 
firm competing in the market and then summing the resulting numbers. 
For example, for a market consisting of four firms with shares of 
30, 30, 20, and 20 percent, the HHI is 2,600 (30\2\+ 30\2\+ 20\2\+ 
20\2\= 2,600). The HHI takes into account the relative size 
distribution of the firms in a market. It approaches zero when a 
market is occupied by a large number of firms of relatively equal 
size, and reaches its maximum of 10,000 points when a market is 
controlled by a single firm. The HHI increases both as the number of 
firms in the market decreases and as the disparity in size between 
those firms increases.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Nexstar share   Tribune share   Merged share                     Post-merger
                  Big 4 overlap DMA \5\                         (%)             (%)             (%)       Pre-merger HHI        HHI        HHI increase
--------------------------------------------------------------------------------------------------------------------------------------------------------
Wilkes Barre, PA........................................            54.0            24.7            78.7            3981            6645            2664
Ft. Smith, AR...........................................            63.4            15.0            78.4            4708            6613            1906
Norfolk, VA.............................................            56.0            21.1            77.1            4104            6465            2361
Grand Rapids, MI........................................            43.4            16.3            59.7            2974            4391            1417
Hartford, CT............................................            33.5            25.4            58.9            2636            4338            1702
Memphis, TN.............................................            38.4            17.6            56.1            2762            4118            1356
Davenport, IA...........................................            36.8            14.9            51.6            2744            3838            1094
Des Moines, IA..........................................            34.5            13.9            48.4            2798            3756             958
Huntsville, AL..........................................            32.5            16.6            49.1            2630            3710            1080
Salt Lake City, UT......................................            32.1            15.5            47.5            2691            3683             992
Harrisburg, PA..........................................            25.3            22.1            47.4            2553            3670            1117
Richmond, VA............................................            28.0            16.9            44.9            2672            3617             945
--------------------------------------------------------------------------------------------------------------------------------------------------------

    As indicated by the preceding chart, in each Big 4 Overlap DMA the 
post-merger HHI would exceed 2,500 and the merger would increase the 
HHI by more than 200 points. As a result, the proposed merger is 
presumed likely to enhance market power under the Horizontal Merger 
Guidelines issued by the Department of Justice and the Federal Trade 
Commission.
---------------------------------------------------------------------------

    \5\ In this chart and the one below, sums that do not agree 
precisely reflect rounding.
---------------------------------------------------------------------------

    The proposed merger would enable Nexstar to black out more Big 4 
stations simultaneously in each of the Big 4 Overlap DMAs than either 
Nexstar or Tribune could black out independently today, likely leading 
to increased retransmission consent fees to any MVPD whose footprint 
includes any of the Big 4 Overlap DMAs. Retransmission consent fees 
generally are passed through to an MVPD's subscribers in the form of 
higher subscription fees or as a line item on their bills.
C. Broadcast Television Spot Advertising
1. Background
    Broadcast television stations, including both Big 4 broadcast 
stations and non-Big 4 stations in the Overlap DMAs, sell advertising 
``spots'' during breaks in their programming. Advertisers purchase 
spots from a broadcast station to communicate with viewers within the 
DMA in which the broadcast television station is located. Broadcast 
television spot advertising is distinguished from ``network'' 
advertising, which consists of advertising time slots sold on 
nationwide broadcast networks by those networks, and not by local 
broadcast stations or their representatives. Nexstar and Tribune 
compete with one another to sell broadcast television spot advertising 
in each DMA in which both Defendants have stations.
2. Relevant Markets
    Broadcast television spot advertising, including spot advertising 
on both Big 4 and non-Big 4 broadcast stations, constitutes a relevant 
product market and line of commerce under Section 7 of the Clayton Act. 
Advertisers' inability or unwillingness to substitute to other types of 
advertising in response to a price increase in broadcast television 
spot advertising supports this relevant market definition.
    Typically, an advertiser purchases broadcast television advertising 
spots as one component of an advertising strategy that may also include 
cable spots, newspaper advertisements, billboards, radio spots, digital 
advertisements, email advertisements, and direct mail. Different 
components of an advertising strategy generally target different 
audiences and serve distinct purposes. Advertisers that advertise on 
broadcast stations do so because the stations offer popular programming 
such as local news, sports, and primetime and syndicated shows that are 
especially attractive to a broad demographic base and a large audience 
of viewers. Other categories of advertising may offer different 
characteristics, making them potential complements to broadcast 
television advertising, but not close substitutes. For example, ads 
associated with online search results target individual consumers or 
respond to specific keyword searches, whereas broadcast television 
advertising reaches a broad audience throughout a DMA. Technological 
developments may bring various advertising categories into closer 
competition with each other. For example, broadcasters and cable 
networks are developing technology to make their spot advertising 
addressable, meaning that broadcasters could deliver targeted 
advertising in live broadcast and on-demand formats to smart 
televisions or streaming devices. For certain advertisers, these 
technological changes may make other categories of advertising closer 
substitutes for advertising on broadcast television in the future. 
However, at this time, for many broadcast television spot advertising 
advertisers, these projected developments are insufficient to mitigate 
the effects of the merger in the Overlap DMAs.

[[Page 41752]]

    MVPDs sell spot advertising to be shown during breaks in cable 
network programming. For viewers, these advertisements are similar to 
broadcast ads. That, however, does not mean that cable television spot 
advertising should be included in the product market. For the following 
reasons, cable television spot advertising is at this time a relatively 
ineffective substitute for broadcast television spot advertising for 
most advertisers. First, broadcast television spot advertising is a 
more efficient option than cable television spot advertising for many 
advertisers. Because broadcast television offers highly rated 
programming with broad appeal, each broadcast television advertising 
spot typically offers the opportunity to reach more viewers (more 
``ratings points'') than a single spot on a cable channel. By contrast, 
MVPDs offer dozens of cable channels with specialized programs that 
appeal to niche audiences. This fragmentation allows advertisers to 
target narrower demographic subsets by buying cable spots on particular 
channels, but it does not meet the needs of advertisers who want to 
reach a large percentage of a DMA's population. Second, households that 
have access to cable networks are divided among multiple MVPDs within a 
DMA. In some DMAs, MVPDs sell some spot advertising through consortia 
called ``interconnects.'' Sometimes these interconnects include all of 
the largest MVPDs in a DMA, approaching but not matching broadcast 
stations' reach. But in other, especially smaller DMAs, the 
interconnect only contains a subset of MVPDs, which reduces the reach 
of the interconnect's advertisements. In contrast, broadcast television 
spot advertising reaches all households that subscribe to an MVPD and, 
through an over-the-air signal, most households with a television that 
do not. Finally, MVPDs' inventory of cable television spot advertising 
is limited--typically to two minutes per hour--contrasting sharply with 
broadcast stations' much larger number of minutes per hour. The 
inventory of DMA-wide cable television spot advertising is 
substantially further reduced by the large portion of those spots 
allocated to local zone advertising, in which an MVPD sells spots by 
geographic zones within a DMA, allowing advertisers to target smaller 
geographic areas. Due to the limited inventories and lower ratings 
associated with cable television spot programming, cable television 
spot advertisements cannot offer a sufficient volume of ratings points, 
or broad enough household penetration, to provide a viable alternative 
to broadcast television spot advertising, at this time. Because of 
these limitations, MVPDs and interconnects would be unable to expand 
output or increase sales sufficiently to defeat a small but significant 
increase in the prices charged for broadcast television spot 
advertising in a given DMA.
    Digital advertising is not a sufficiently close substitute for 
broadcast television spot advertising. Some digital advertising, such 
as static and floating banner advertisements, static images, text 
advertisements, wallpaper advertisements, pop-up advertisements, flash 
advertisements, and paid search results, lacks the combination of 
sight, sound, and motion that makes television spot advertising 
particularly impactful and memorable, and therefore effective for 
advertisers. Digital video advertisements, on the other hand, do allow 
for a combination of sight, sound, and motion, and on this basis are 
more comparable to broadcast television spot advertising than other 
types of digital advertising, but are still not close substitutes for 
broadcast television spot advertising for the reasons stated below. 
First, digital advertisements typically reach a different audience than 
broadcast television spot advertising. Whereas advertisers use 
broadcast television spots to reach a large percentage of households in 
a DMA, advertisers use digital advertising to reach a variety of 
different audiences. While a small portion of advertisers purchase DMA-
wide advertisements on digital platforms, digital advertisements 
usually are targeted either very broadly, such as nationwide or 
regional, or to a smaller geographic target, such as a city or a zip 
code, or to narrow demographic subsets of a population. Second, 
inventory of ad-supported, high-quality, long-form video on the 
internet is limited. Advertisers see value to advertising on video that 
is watched by the audience they seek to target. High-quality, long-form 
video is the most similar content to broadcast television programming 
available on the internet. The most popular high-quality, long-form 
video available on the internet is provided through ad-free 
subscription services (like Netflix or Amazon Prime), over-the-top 
MVPDs that sell cable television spot advertisements (like Sling and 
YouTube TV), or sold directly by the networks on their own network 
sites. The remaining inventory of digital advertisements attached to 
high-quality, long-form video on the internet, which is primarily sold 
by digital advertising platforms, is small today. Because of these 
limitations, digital video advertising would be unable to expand output 
or increase sales sufficiently to defeat a small but significant 
increase in the prices charged for broadcast television spot 
advertising in a given DMA.
    Other forms of advertising, such as radio, newspaper, billboard, 
and direct-mail advertising, also do not constitute effective 
substitutes for broadcast television spot advertising. These forms of 
media do not reach as many local viewers or drive brand awareness to 
the same extent as broadcast television does. Broadcast television spot 
advertising possesses a unique combination of attributes that 
advertisers value in a way that sets it apart from advertising on other 
media. Broadcast television spot advertising combines sight, sound, and 
motion in a way that makes television advertisements particularly 
memorable and impactful. For all of these reasons, advertisers likely 
would not respond to a small but significant non-transitory increase in 
the price of broadcast television spot advertising by switching to 
other forms of advertising--such as cable, digital, print, radio, or 
billboard advertising--in sufficiently large numbers to make the price 
increase unprofitable.
    While cable spot or digital advertising may constrain broadcast 
television spot advertising prices in the future, it does not do so 
today. On a cost-per-point basis (cost to reach one percent of a 
relevant target population), over the last few years broadcast 
television spot advertising prices have generally remained steady or 
increased. If cable spot or digital advertising was a close and robust 
competitor to broadcast television spot advertising, then, all else 
being equal, this competition from cable spot or digital advertising 
would place downward pressure on broadcast television spot advertising 
pricing. But they have not had this effect.
    The differentiation between broadcast television spot advertising 
and cable spot and digital advertising bears out in negotiations 
between broadcasters and advertisers. Advertisers usually will put an 
advertising buy out to bid to many or all broadcast stations in a DMA, 
and will not include MVPDs or digital advertisers in that same bid. In 
negotiations with broadcast stations, advertisers regularly discuss 
offered prices and opportunities from other broadcast stations in the 
same DMA to try to bargain down price, but they rarely discuss price 
offers or opportunities from MVPDs or digital advertisers in those 
negotiations. When a broadcaster salesperson internally analyzes the 
station's performance on any particular buy, the salesperson

[[Page 41753]]

typically looks at the percentage of the buy that was allocated to each 
broadcast station, adding up to 100% of the buy. The salesperson 
typically does not consider any allocation of an advertiser's spending 
on cable or digital advertising. Likewise, if an advertiser reports to 
a broadcaster salesperson the percentage of a buy that the broadcaster 
received, the advertiser typically reports the broadcaster's percentage 
of the amount awarded to all broadcast stations in the DMA, but does 
not include any amount spent on cable or digital advertising.
    Internally, broadcasters make most of their competitor comparisons 
against other broadcasters in the same DMA, not against MVPDs in that 
DMA or digital advertisers. When reporting to their station managers 
and corporate headquarters, broadcast station sales executives 
regularly report on their performance vis-[agrave]-vis other broadcast 
stations in the DMA; they rarely report on their performance against 
cable or digital platforms. When looking for new business, broadcast 
stations use third-party services to identify advertisers advertising 
on those other broadcast stations, but do not subscribe to similar 
services for cable or digital advertising. Similarly, the national 
sales representation firms regularly report to broadcast stations about 
competition from representatives for other broadcasters in the same 
DMA, but rarely report on competition from representatives for cable or 
digital platforms. Many broadcasters use a third-party data analysis 
service to help set their spot advertising rate cards; that service 
uses market share estimates from other broadcasters as input data to 
generate the rate cards, but does not use market share estimates from 
cable or digital advertising platforms.
    The relevant geographic markets for the sale of broadcast 
television spot advertising are the individual DMAs in which such 
advertising is viewed. The Complaint alleges a substantial reduction of 
competition in the market for sale of broadcast television spot 
advertising in the following thirteen DMAs: (i) Davenport, Iowa-Rock 
Island-Moline, Illinois; (ii) Des Moines-Ames, Iowa; (iii) Ft. Smith-
Fayetteville-Springdale-Rogers, Arkansas; (iv) Grand Rapids-Kalamazoo-
Battle Creek, Michigan; (v) Harrisburg-Lancaster-Lebanon-York, 
Pennsylvania; (vi) Hartford-New Haven, Connecticut; (vii) Huntsville-
Decatur-Florence, Alabama; (viii) Indianapolis, Indiana; (ix) Memphis, 
Tennessee; (x) Norfolk-Portsmouth-Newport News, Virginia; (xi) 
Richmond-Petersburg, Virginia; (xii) Salt Lake City, Utah; and (xiii) 
Wilkes-Barre-Scranton, Pennsylvania (collectively, ``the Overlap 
DMAs''). For an advertiser seeking to reach potential customers in a 
given DMA, broadcast television stations located outside of the DMA do 
not provide effective access to the advertiser's target audience. The 
signals of broadcast television stations located outside of the DMA 
generally do not reach any significant portion of the target DMA 
through either over-the-air signal or MVPD distribution. Accordingly, a 
small but significant increase in the spot advertising prices of 
stations broadcasting into the DMA would not cause a sufficient number 
of advertisers to switch to stations outside the DMA to make such an 
increase unprofitable for the stations.
3. Anticompetitive Effects
    The chart below summarizes Defendants' approximate market shares 
and the result of the transaction on the HHIs in the sale of broadcast 
television spot advertising in each of the Overlap DMAs.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Nexstar share   Tribune share   Merged share                     Post-merger
                       Overlap DMA                              (%)             (%)             (%)       Pre-merger HHI        HHI        HHI increase
--------------------------------------------------------------------------------------------------------------------------------------------------------
Wilkes Barre, PA........................................            35.8            47.6            83.4            3749            7161            3412
Norfolk, VA.............................................            44.0            31.4            75.4            3277            6038            2761
Ft. Smith, AR...........................................            29.1            41.3            70.3            3361            5761            2400
Davenport, IA...........................................            27.0            27.1            54.2            3568            5035            1467
Grand Rapids, MI........................................            36.0            19.0            55.0            2700            4065            1365
Des Moines, IA..........................................            11.2            34.6            45.8            3235            4009             774
Richmond, VA............................................            20.9            29.9            50.8            2733            3981            1248
Huntsville, AL..........................................            13.9            33.0            46.9            2786            3704             918
Memphis, TN.............................................            14.5            33.3            47.9            2558            3527             969
Harrisburg, PA..........................................            21.8            20.8            42.5            2524            3427             903
Indianapolis, IN........................................            13.1            31.0            44.2            2577            3393             815
Hartford, CT............................................            22.7            20.6            43.3            2306            3240             934
Salt Lake City, UT......................................            16.0            24.1            40.0            2329            3098             769
--------------------------------------------------------------------------------------------------------------------------------------------------------

Defendants' large market shares reflect the fact that, in each Overlap 
DMA, Nexstar and Tribune each own one or more significant broadcast 
stations

    As indicated by the preceding chart, the post-merger HHI in each 
Overlap DMA is well above 2,500, and the HHI increase in each Overlap 
DMA far exceeds the 200-point threshold above which a transaction is 
presumed to enhance market power and harm competition. Defendants' 
proposed transaction is thus presumptively unlawful in each Overlap 
DMA. In addition to substantially increasing the concentration levels 
in each Overlap DMA, the proposed merger would combine Nexstar's and 
Tribune's broadcast television stations, which are close substitutes 
and generally vigorous competitors in the sale of broadcast television 
spot advertising.
    In each Overlap DMA, Defendants' broadcast stations compete head-
to-head in the sale of broadcast television spot advertising. 
Advertisers obtain lower prices as a result of this competition. In 
particular, advertisers in the Overlap DMAs can respond to an increase 
in one station's spot advertising prices by purchasing, or threatening 
to purchase, advertising spots on one or more stations owned by 
different broadcast station groups--``buying around'' the station that 
raises its prices. This practice allows the advertisers either to avoid 
the first station's price increase, or to pressure the first station to 
lower its prices.
    If Nexstar acquires Tribune's stations, advertisers seeking to 
reach audiences in the Overlap DMAs would have fewer competing 
broadcast television alternatives available to meet their advertising 
needs, and would find it more difficult and costly to buy around higher 
prices imposed by the combined stations. This would likely result in 
increased advertising prices, lower quality local programming to which 
the spot advertising is attached (for example, less investment in local 
news), and less innovation in providing advertising solutions to 
advertisers.

[[Page 41754]]

D. Entry
    Entry of a new broadcast station into an Overlap DMA would not be 
timely, likely, or sufficient to prevent or remedy the proposed 
merger's likely anticompetitive effects in the relevant markets. The 
FCC regulates entry through the issuance of broadcast television 
licenses, which are difficult to obtain because the availability of 
spectrum is limited and the regulatory process associated with 
obtaining a license is lengthy. Even if a new signal were to become 
available, commercial success would come over a period of many years, 
if at all.
III. EXPLANATION OF THE PROPOSED FINAL JUDGMENT
    The divestitures required by the proposed Final Judgment will 
remedy the loss of competition alleged in the Complaint by maintaining 
the Divestiture Stations as independent and economically viable 
competitors. The proposed Final Judgment requires Nexstar, within 
thirty days after the entry of the Hold Separate by the Court, to 
divest the station or stations owned by either Nexstar or Tribune in 
each of the Overlap DMAs, as shown in the following chart:

----------------------------------------------------------------------------------------------------------------
                                                               Primary
                                                           affiliations of       Current owner of divestiture
           Overlap DMA             Divestiture stations      divestiture                   stations
                                                               stations
----------------------------------------------------------------------------------------------------------------
Wilkes Barre, PA.................  WNEP-TV.............  ABC................  Tribune. \6\
Norfolk, VA......................  WTKR and WGNT.......  CBS/CW.............  Tribune. \7\
Ft. Smith, AR....................  KFSM-TV.............  CBS................  Tribune.
Davenport, IA....................  WQAD-TV.............  ABC................  Tribune.
Grand Rapids, MI.................  WXMI................  FOX................  Tribune.
Des Moines, IA...................  WOI-DT and KCWI-TV..  ABC/CW.............  Nexstar.
Richmond, VA.....................  WTVR-TV.............  CBS................  Tribune.
Huntsville, AL...................  WZDX................  FOX................  Nexstar.
Memphis, TN......................  WATN-TV and WLMT....  ABC/CW.............  Nexstar.
Harrisburg, PA...................  WPMT................  FOX................  Tribune.
Indianapolis, IN.................  WNDY-TV and WISH-TV.  MyNetworkTV/CW.....  Nexstar.
Hartford, CT.....................  WTIC-TV and WCCT-TV.  FOX/CW.............  Tribune.
Salt Lake City, UT...............  KSTU................  FOX................  Tribune.
----------------------------------------------------------------------------------------------------------------

    The Divestiture Stations must be divested in such a way as to 
satisfy the United States in its sole discretion that the Divestiture 
Stations can and will be operated by each purchaser as part of a 
viable, ongoing commercial television broadcasting business with the 
intent and capability to compete effectively in the applicable DMA in 
(1) the licensing of Big 4 network content to MVPDs for distribution to 
their subscribers (except as to the Indianapolis DMA), and (2) the sale 
of broadcast television spot advertising to advertisers interested in 
reaching viewers in the DMA. The United States has determined that the 
following companies are acceptable purchasers of Divestiture Stations: 
Circle City Broadcasting I, Inc.; The E.W. Scripps Company; and TEGNA 
Inc. (respectively, together with their subsidiaries and affiliated 
entities and individuals, ``Circle City,'' ``Scripps,'' and ``TEGNA''). 
The following table sets out the proposed purchaser for each 
Divestiture Station.
---------------------------------------------------------------------------

    \6\ WNEP-TV is currently owned by Dreamcatcher Broadcasting LLC; 
however, Tribune will exercise its option to acquire the station 
prior to the divestiture.
    \7\ WTKR and WGNT are currently owned by Dreamcatcher 
Broadcasting LLC; however, Tribune will exercise its option to 
acquire the stations prior to the divestiture.

------------------------------------------------------------------------
                                                            Proposed
          Overlap DMA            Divestiture stations       purchaser
------------------------------------------------------------------------
Wilkes Barre, PA..............  WNEP-TV...............  TEGNA.
Norfolk, VA...................  WTKR and WGNT.........  Scripps.
Ft. Smith, AR.................  KFSM-TV...............  TEGNA.
Davenport, IA.................  WQAD-TV...............  TEGNA.
Grand Rapids, MI..............  WXMI..................  Scripps.
Des Moines, IA................  WOI-DT and KCWI-TV....  TEGNA.
Richmond, VA..................  WTVR-TV...............  Scripps.
Huntsville, AL................  WZDX..................  TEGNA.
Memphis, TN...................  WATN-TV and WLMT......  TEGNA.
Harrisburg, PA................  WPMT..................  TEGNA.
Indianapolis, IN..............  WNDY-TV and WISH-TV...  Circle City.
Hartford, CT..................  WTIC-TV and WCCT-TV...  TEGNA.
Salt Lake City, UT............  KSTU..................  Scripps.
------------------------------------------------------------------------

    Defendants must take all reasonable steps necessary to accomplish 
the divestiture quickly and must cooperate with the purchasers.
    To facilitate the immediate and continuous operations of the 
relevant Divestiture Stations until the acquirer can provide such 
capabilities independently, Paragraph IV(H) of the proposed Final 
Judgment requires Defendants, at each acquirer's option, to enter into 
a transition services agreement. After an initial period of six months, 
a transition services agreement may be extended by an additional six 
months, subject to the United States' sole discretion, with exceptions 
regarding Tribune proprietary software and master control and hubbing 
services and distribution services, which can be extended for up to an 
additional eighteen months, subject to the United States' sole 
discretion.

[[Page 41755]]

    If Defendants do not accomplish the divestiture within the period 
prescribed in the proposed Final Judgment, the proposed Final Judgment 
provides that the Court will appoint a divestiture trustee selected by 
the United States to effect the divestiture. If a divestiture trustee 
is appointed, the proposed Final Judgment provides that Defendants will 
pay all costs and expenses of the trustee. The divestiture trustee's 
commission will be structured so as to provide an incentive for the 
trustee based on the price obtained and the speed with which the 
divestiture is accomplished. After the divestiture trustee's 
appointment becomes effective, the trustee will provide monthly reports 
to the United States and the Plaintiff States setting forth his or her 
efforts to accomplish the divestiture. At the end of six months, if the 
divestiture has not been accomplished, the divestiture trustee and the 
United States will make recommendations to the Court, which will enter 
such orders as appropriate, in order to carry out the purpose of the 
trust, including by extending the trust or the term of the divestiture 
trustee's appointment.
    The proposed Final Judgment also contains provisions designed to 
promote compliance and make the enforcement of the Final Judgment as 
effective as possible. Paragraph XIII(A) provides that the United 
States retains and reserves all rights to enforce the provisions of the 
proposed Final Judgment, including its rights to seek an order of 
contempt from the Court. Under the terms of this paragraph, Defendants 
have agreed that in any civil contempt action, any motion to show 
cause, or any similar action brought by the United States regarding an 
alleged violation of the Final Judgment, the United States may 
establish the violation and the appropriateness of any remedy by a 
preponderance of the evidence and that Defendants have waived any 
argument that a different standard of proof should apply. This 
provision aligns the standard for compliance obligations with the 
standard of proof that applies to the underlying offense that the 
compliance commitments address.
    Paragraph XIII(B) provides additional clarification regarding the 
interpretation of the provisions of the proposed Final Judgment. The 
proposed Final Judgment was drafted to restore all competition that the 
Complaint alleges would otherwise be harmed by the transaction. 
Defendants agree that they will abide by the proposed Final Judgment, 
and that they may be held in contempt of this Court for failing to 
comply with any provision of the proposed Final Judgment that is stated 
specifically and in reasonable detail, as interpreted in light of this 
procompetitive purpose.
    Paragraph XIII(C) of the proposed Final Judgment provides that if 
the Court finds in an enforcement proceeding that Defendants have 
violated the Final Judgment, the United States may apply to the Court 
for a one-time extension of the Final Judgment, together with such 
other relief as may be appropriate. In addition, to compensate American 
taxpayers for any costs associated with investigating and enforcing 
violations of the proposed Final Judgment, Paragraph XIII(C) provides 
that in any successful effort by the United States to enforce the Final 
Judgment against a Defendant, whether litigated or resolved before 
litigation, that Defendants will reimburse the United States for 
attorneys' fees, experts' fees, and other costs incurred in connection 
with any enforcement effort, including the investigation of the 
potential violation.
    Paragraph XIII(D) states that the United States may file an action 
against a Defendant for violating the Final Judgment for up to four 
years after the Final Judgment has expired or been terminated. This 
provision is meant to address circumstances such as when evidence that 
a violation of the Final Judgment occurred during the term of the Final 
Judgment is not discovered until after the Final Judgment has expired 
or been terminated or when there is not sufficient time for the United 
States to complete an investigation of an alleged violation until after 
the Final Judgment has expired or been terminated. This provision, 
therefore, makes clear that, for four years after the Final Judgment 
has expired or been terminated, the United States may still challenge a 
violation that occurred during the term of the Final Judgment.
    Finally, Section XIV of the proposed Final Judgment provides that 
the Final Judgment will expire ten years from the date of its entry, 
except that after five years from the date of its entry, the Final 
Judgment may be terminated upon notice by the United States, after 
consultation with the Plaintiff States, to the Court and Defendants 
that the divestiture has been completed and that the continuation of 
the Final Judgment is no longer necessary or in the public interest.

IV. REMEDIES AVAILABLE TO POTENTIAL PRIVATE LITIGANTS

    Section 4 of the Clayton Act, 15 U.S.C. Sec.  15, provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover three times 
the damages the person has suffered, as well as costs and reasonable 
attorneys' fees. Entry of the proposed Final Judgment neither impairs 
nor assists the bringing of any private antitrust damage action. Under 
the provisions of Section 5(a) of the Clayton Act, 15 U.S.C. Sec.  
16(a), the proposed Final Judgment has no prima facie effect in any 
subsequent private lawsuit that may be brought against Defendants.

V. PROCEDURES AVAILABLE FOR MODIFICATION OF THE PROPOSED FINAL JUDGMENT

    The United States and Defendants have stipulated that the proposed 
Final Judgment may be entered by the Court after compliance with the 
provisions of the APPA, provided that the United States has not 
withdrawn its consent. The APPA conditions entry upon the Court's 
determination that the proposed Final Judgment is in the public 
interest.
    The APPA provides a period of at least 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 60 
days of the date of publication of this Competitive Impact Statement in 
the Federal Register, or the last date of publication in a newspaper of 
the summary of this Competitive Impact Statement, whichever is later. 
All comments received during this period will be considered by the U.S. 
Department of Justice, which remains free to withdraw its consent to 
the proposed Final Judgment at any time before the Court's entry of the 
Final Judgment. The comments and the response of the United States will 
be filed with the Court. In addition, comments will be posted on the 
U.S. Department of Justice, Antitrust Division's internet website and, 
under certain circumstances, published in the Federal Register.
    Written comments should be submitted to: Owen M. Kendler, Chief, 
Media, Entertainment, & Professional Services Section, Antitrust 
Division, United States Department of Justice, 450 Fifth 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.

[[Page 41756]]

VI. ALTERNATIVES TO THE PROPOSED FINAL JUDGMENT

    As an alternative to the proposed Final Judgment, the United States 
considered a full trial on the merits against Defendants. The United 
States could have continued the litigation and sought preliminary and 
permanent injunctions against Nexstar's acquisition of Tribune. The 
United States is satisfied, however, that the divestiture of assets 
described in the proposed Final Judgment will preserve competition for 
(1) the provision of the licensing of Big 4 network content to MVPDs 
for distribution to their subscribers in each of the Big 4 Overlap 
DMAs, and (2) the sale of broadcast television spot advertising to 
advertisers interested in reaching viewers in each of the Overlap DMAs. 
Thus, the proposed Final Judgment achieves all or substantially all of 
the relief the United States 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 THE PROPOSED FINAL JUDGMENT

    The Clayton Act, as amended by 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.'' 15 U.S.C. Sec.  16(e)(1). In making that 
determination, the Court, in accordance with the statute as amended in 
2004, is required to consider:
    (A) the competitive impact of such judgment, including termination 
of alleged violations, provisions for enforcement and modification, 
duration of relief sought, anticipated effects of alternative remedies 
actually considered, whether its terms are ambiguous, and any other 
competitive considerations bearing upon the adequacy of such judgment 
that the court deems necessary to a determination of whether the 
consent judgment is in the public interest; and
    (B) the impact of entry of such judgment upon competition in the 
relevant market or markets, upon the public generally and individuals 
alleging specific injury from the violations set forth in the complaint 
including consideration of the public benefit, if any, to be derived 
from a determination of the issues at trial.

15 U.S.C. Sec.  16(e)(1)(A) & (B). In considering these statutory 
factors, the Court's inquiry is necessarily a limited one as the 
government is entitled to ``broad discretion to settle with the 
defendant within the reaches of the public interest.'' United States v. 
Microsoft Corp., 56 F.3d 1448, 1461 (D.C. Cir. 1995); United States v. 
U.S. Airways Grp., Inc., 38 F. Supp. 3d 69, 75 (D.D.C. 2014) 
(explaining that the ``court's inquiry is limited'' in Tunney Act 
settlements); United States v. InBev N.V./S.A., No. 08-1965 (JR), 2009 
U.S. Dist. LEXIS 84787, at *3 (D.D.C. Aug. 11, 2009) (noting that a 
court's review of a consent judgment is limited and only inquires 
``into whether the government's determination that the proposed 
remedies will cure the antitrust violations alleged in the complaint 
was reasonable, and whether the mechanism to enforce the final judgment 
are clear and manageable'').
    As the U.S. Court of Appeals for the District of Columbia Circuit 
has held, under the APPA a court considers, among other things, the 
relationship between the remedy secured and the specific allegations in 
the government's complaint, whether the proposed Final Judgment is 
sufficiently clear, whether its enforcement mechanisms are sufficient, 
and whether it may positively harm third parties. See Microsoft, 56 
F.3d at 1458-62. With respect to the adequacy of the relief secured by 
the proposed Final Judgment, 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) (quoting 
United States v. Bechtel Corp., 648 F.2d 660, 666 (9th Cir. 1981)); see 
also Microsoft, 56 F.3d at 1460-62; United States v. Alcoa, Inc., 152 
F. Supp. 2d 37, 40 (D.D.C. 2001); InBev, 2009 U.S. Dist. LEXIS 84787, 
at *3. Instead:

[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).\8\
---------------------------------------------------------------------------

    \8\ See also BNS, 858 F.2d at 464 (holding that the court's 
``ultimate authority under the [APPA] is limited to approving or 
disapproving the consent decree''); United States v. Gillette Co., 
406 F. Supp. 713, 716 (D. Mass. 1975) (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'').
---------------------------------------------------------------------------

    The United States' predictions about the efficacy of the remedy are 
to be afforded deference by the Court. See, e.g., Microsoft, 56 F.3d at 
1461 (recognizing courts should give ``due respect to the Justice 
Department's . . . view of the nature of its case''); United States v. 
Iron Mountain, Inc., 217 F. Supp. 3d 146, 152-53 (D.D.C. 2016) (``In 
evaluating objections to settlement agreements under the Tunney Act, a 
court must be mindful that [t]he government need not prove that the 
settlements will perfectly remedy the alleged antitrust harms[;] it 
need only provide a factual basis for concluding that the settlements 
are reasonably adequate remedies for the alleged harms.'') (internal 
citations omitted); United States v. Republic Servs., Inc., 723 F. 
Supp. 2d 157, 160 (D.D.C. 2010) (noting ``the deferential review to 
which the government's proposed remedy is accorded''); United States v. 
Archer-Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (``A 
district court must accord due respect to the government's prediction 
as to the effect of proposed remedies, its perception of the market 
structure, and its view of the nature of the case''). The ultimate 
question is whether ``the remedies [obtained by the Final Judgment are] 
so inconsonant with the allegations charged as to fall outside of the 
`''reaches of the public interest.' '' Microsoft, 56 F.3d at 1461 
(quoting United States v. Western Elec. Co., 900 F.2d 283, 309 (D.C. 
Cir. 1990)).
    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; see also U.S. Airways, 
38 F. Supp. 3d at 75 (noting that the court must simply determine 
whether there is a factual foundation for the government's decisions 
such that its conclusions regarding the proposed settlements are 
reasonable); InBev, 2009 U.S. Dist. LEXIS 84787, at *20 (``the `public 
interest' is not to be measured by comparing the violations alleged in 
the complaint against those the court believes could have, or even 
should have, been alleged''). 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

[[Page 41757]]

authorized to review the decree itself,'' and not to ``effectively 
redraft the complaint'' to inquire into other matters that the United 
States did not pursue. Microsoft, 56 F.3d at 1459-60.
    In its 2004 amendments to the APPA,\ \Congress made clear its 
intent to preserve the practical benefits of using consent judgments 
proposed by the United States in antitrust enforcement, Pub. L. 108-237 
Sec.  221, and added the unambiguous instruction that ``[n]othing in 
this section shall be construed to require the court to conduct an 
evidentiary hearing or to require the court to permit anyone to 
intervene.'' 15 U.S.C. Sec.  16(e)(2); see also U.S. Airways, 38 F. 
Supp. 3d at 76 (indicating that a court is not required to hold an 
evidentiary hearing or to permit intervenors as part of its review 
under the Tunney Act). This language explicitly wrote into the statute 
what Congress intended when it first nacted the Tunney Act in 1974. As 
Senator Tunney explained: ``[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 Sen. Tunney). ``A court can make ts public interest determination 
based on the competitive impact statement and response to public 
comments alone.'' U.S. Airways, 38 F. Supp. 3d at 76 (citing United 
States v. Enova Corp., 107 F. Supp. 2d 10, 17 (D.D.C. 2000).

VIII. DETERMINATIVE DOCUMENTS

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

Dated: August 1, 2019
Respectfully submitted,
-----------------------------------------------------------------------
Lee F. Berger (D.C. Bar  482435) *

Trial Attorney, Media, Entertainment, and Professional Services 
Section, Antitrust Division, United States Department of Justice, 
450 Fifth Street, NW, Suite 4000, Washington, DC 20530, Phone: 202-
598-2698, Email: [email protected]
* Attorney of Record
[FR Doc. 2019-17522 Filed 8-14-19; 8:45 am]
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