United States v. Gannett Co., Inc., Belo Corp., and Sander Media LLC; Proposed Final Judgment and Competitive Impact Statement, 79485-79498 [2013-31182]

Download as PDF Federal Register / Vol. 78, No. 250 / Monday, December 30, 2013 / Notices reproduction cost) payable to the United States Treasury. Maureen Katz, Assistant Section Chief, Environmental Enforcement Section, Environment and Natural Resources Division. Chief, Telecommunications and Media Section, Antitrust Division, Department of Justice, 450 Fifth Street NW., Suite 7000, Washington, DC 20530 (telephone: 202–514–5621). Patricia A. Brink, Director of Civil Enforcement. [FR Doc. 2013–31199 Filed 12–27–13; 8:45 am] BILLING CODE 4410–15–P UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA DEPARTMENT OF JUSTICE UNITED STATES OF AMERICA, Department of Justice, Antitrust Division, 450 5th Street, NW., Suite 7000, Washington, D.C. 20530, Plaintiff, v. GANNETT CO., INC., 7950 Jones Branch Drive, McLean, Virginia 22107, BELO CORP., 400 South Record Street, Dallas, Texas 75202, and SANDER MEDIA LLC, 28150 N. Alma School Parkway #103, PBM 509, Scottsdale, Arizona 85262, Defendants. Antitrust Division maindgalligan on DSK5TPTVN1PROD with NOTICES United States v. Gannett Co., Inc., Belo Corp., and Sander Media LLC; 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 v. Gannett Co., Inc., Belo Corp., and Sander Media LLC, Civil Action No. 1:13–cv–01984. On December 16, 2013, the United States filed a Complaint alleging that Gannett’s proposed acquisition of Belo, the sale of KMOV– TV in St. Louis to Sander, and Sander’s operation of KMOV–TV subject to various agreements between Sander and Gannett would violate Section 7 of the Clayton Act, 15 U.S.C. 18, and Section 1 of the Sherman Act, 15 U.S.C. 1. The proposed Final Judgment, filed the same time as the Complaint, requires Gannett Co., Inc., Belo Corp., and Sander Media LLC to divest KMOV–TV. Copies of the Complaint, proposed Final Judgment and Competitive Impact Statement are available for inspection at the Department of Justice, Antitrust Division, Antitrust Documents Group, 450 Fifth Street NW., Suite 1010, Washington, DC, 20530 (telephone: 202–514–2481), on the Department of Justice’s Web site at http://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 U.S. Department of Justice, Antitrust Division’s internet Web site, filed with the Court and, under certain circumstances, published in the Federal Register. Comments should be directed to Scott A. Scheele, VerDate Mar<15>2010 17:15 Dec 27, 2013 Jkt 232001 Case No. 1:13–cv–01984–RBW Judge: Reggie B. Walton Filed: 12/16/2013 COMPLAINT The United States of America, acting under the direction of the Attorney General of the United States, brings this civil action to enjoin the proposed acquisition of Belo Corp. (‘‘Belo’’) by Gannett Co., Inc. (‘‘Gannett’’), and the simultaneous implementation of related agreements between Gannett and Sander Holdings Co. LLC, a wholly owned subsidiary of Sander Media LLC (‘‘Sander’’), pursuant to which broadcast television station KMOV–TV in St. Louis, Missouri, along with certain other broadcast television stations owned by Belo, will be transferred to and operated by Sander (collectively ‘‘the Transaction’’), and to obtain other equitable relief. The Transaction likely would lessen competition substantially and would restrain trade in the sale of broadcast television spot advertising in the St. Louis Designated Market Area (‘‘DMA’’), which includes parts of Missouri and Illinois, in violation of Section 1 of the Sherman Act and Section 7 of the Clayton Act, 15 U.S.C. §§ 1 and 18. The United States alleges as follows: I. NATURE OF THE ACTION 1. Pursuant to the June 12, 2013, Agreement and Plan of Merger, Gannett will acquire all outstanding stock of Belo for approximately $1.5 billion, with a total transaction value of $2.2 billion including assumed debt. Gannett owns 23 broadcast television stations and numerous newspapers throughout the United States. Consummation of Gannett’s acquisition of Belo would give Gannett ownership of Belo’s 20 broadcast television stations; however, Federal Communications Commission PO 00000 Frm 00096 Fmt 4703 Sfmt 4703 79485 (‘‘FCC’’) rules prohibit Gannett from owning Belo stations in five DMAs where Gannett already owns broadcast television stations or newspapers. To comply with these ownership rules, Gannett has entered into an Asset Purchase Agreement and other related agreements with Sander Holdings Co., LLC, a wholly owned subsidiary of Sander, which would transfer ownership of six Belo stations in five DMAs, including KMOV–TV in St. Louis, to Sander. Sander will pay Gannett approximately $101 million for the six stations, significantly less than their actual market value. The agreements between Gannett and Sander are mutually contingent on and intended to close simultaneously with the merger between Gannett and Belo. 2. Gannett owns and operates KSDK– TV, the NBC affiliate in the St. Louis DMA. As the owner and operator of that station, Gannett sells KSDK–TV’s advertising time. Based on advertising sales revenues, KSDK–TV is one of the three largest commercial broadcast television stations in St. Louis. 3. Belo owns and operates KMOV–TV, the CBS affiliate in the St. Louis DMA. As the owner and operator of that station, Belo sells KMOV–TV’s advertising time. Based on advertising sales revenues, KMOV–TV is one of the three largest commercial broadcast television stations in St. Louis. 4. Currently, Gannett’s KSDK–TV and Belo’s KMOV–TV vigorously compete for the business of local and national companies that seek to purchase local spot advertisements on broadcast television stations in St. Louis. This competition benefits advertisers by reducing prices and improving the quality of services advertisers receive from the stations. 5. Although Gannett will transfer ownership of six stations to Sander, the agreements between Gannett and Sander include: (1) eight-year assignable option agreements that permit Gannett to reacquire any of the stations (should existing FCC prohibitions be eliminated) or to transfer the options to a third party; (2) eight-year Shared Services Agreements under which Gannett will provide a variety of services to help Sander operate the stations, excluding joint advertising sales and negotiation of retransmission consent rights in DMAs such as St. Louis where Gannett also has television stations, in return for substantial payments from Sander to Gannett; (3) a financing guarantee obligating Gannett to repay, should Sander default, the balance of the $101 million loan Sander is obtaining to purchase the stations; and (4) Joint Sales Agreements in DMAs where Gannett E:\FR\FM\30DEN1.SGM 30DEN1 79486 Federal Register / Vol. 78, No. 250 / Monday, December 30, 2013 / Notices owns newspapers but not television stations giving Gannett control of advertising sales at these Sander stations. Together, these agreements give Gannett significant influence over Sander’s conduct in operating the stations, including KMOV–TV, and also diminish Gannett’s and Sander’s incentives to compete vigorously with each other in sales of broadcast television advertising in St. Louis. 6. If consummated, the Transaction would result in Gannett owning one of the top three commercial broadcast television stations in St. Louis and having significant influence over a second top three station serving the same area. Together, KMOV–TV and KSDK–TV have approximately a 50% market share of gross broadcast television advertising revenues in the St. Louis DMA. The St. Louis Fox affiliate is the only significant advertising competitor to those stations, while the next strongest stations, an ABC affiliate and a CW affiliate, are much weaker. 7. The Transaction would eliminate or greatly reduce the head-to-head competition between KSDK–TV and KMOV–TV in St. Louis and so eliminate or greatly reduce the benefits of that competition. Unless blocked, the Transaction is likely to lead to higher prices for broadcast television spot advertising in the St. Louis DMA in violation of Section 1 of the Sherman Act and Section 7 of the Clayton Act, 15 U.S.C. §§ 1 and 18. maindgalligan on DSK5TPTVN1PROD with NOTICES II. JURISDICTION AND VENUE 8. The United States brings this action pursuant to Section 4 of the Sherman Act and Section 15 of the Clayton Act, as amended, 15 U.S.C. §§ 4 and 25, to prevent and restrain Defendants from violating Section 1 of the Sherman Act and Section 7 of the Clayton Act, 15 U.S.C. §§ 1 and 18. 9. Gannett and Belo sell broadcast television spot advertising in the St. Louis DMA, a commercial activity that substantially affects, and is in the flow of, interstate commerce. The Court has subject-matter jurisdiction over this action pursuant to Section 4 of the Sherman Act and Section 15 of the Clayton Act, 15 U.S.C. §§ 4 and 25, and 28 U.S.C. §§ 1331, 1337(a), and 1345. 10. Gannett transacts business and is found in the District of Columbia, where it owns and operates broadcast television station WUSA–TV, and is subject to the personal jurisdiction of this Court. All Defendants have consented to venue and personal jurisdiction in this District. Therefore, venue is proper in this District under VerDate Mar<15>2010 17:15 Dec 27, 2013 Jkt 232001 Section 12 of the Clayton Act, 15 U.S.C. § 22, and 28 U.S.C. §§ 1391(b) and (c). III. THE DEFENDANTS 11. Gannett is a Delaware corporation, with its headquarters in McLean, Virginia. Gannett reported revenues of over $5.3 billion in 2012. Gannett owns 23 commercial broadcast television stations in 19 markets in the United States, as well as 82 daily newspapers in markets throughout the United States. The broadcast television stations that Gannett owns include KSDK–TV, the NBC affiliate in St. Louis, Missouri. 12. Belo is a Delaware corporation, with its headquarters in Dallas, Texas. Belo reported revenues of over $714 million in 2012. Belo owns 20 commercial broadcast television stations in 15 markets throughout the United States, including KMOV–TV, the CBS affiliate in St. Louis, Missouri. 13. Sander is a Delaware limited liability company, with its headquarters in Scottsdale, Arizona. Sander Holdings Co. LLC (‘‘Sander Holdings’’) is a wholly owned subsidiary of Sander. Sander is also the owner of proposed license assignees of six commercial broadcast television stations, including KMOV–TV in St. Louis, Missouri, to be acquired pursuant to agreements between Gannett and Belo and between Gannett and Sander Holdings that are part of the Transaction. Sander has no current business activity apart from this planned acquisition. IV. THE TRANSACTION WOULD LIKELY SUBSTANTIALLY LESSEN COMPETITION AND UNREASONABLY RESTRAIN INTERSTATE TRADE AND COMMERCE A. Broadcast Television Spot Advertising Is a Relevant Product Market 14. Broadcast television stations attract viewers through their programming, which is delivered for free over the air or retransmitted to viewers, mainly through wired cable or other terrestrial television systems and through satellite television systems. Broadcast television stations then sell advertising time to businesses that want to advertise their products to television viewers. Broadcast television ‘‘spot’’ advertising, which comprises the majority of a television station’s revenues, is sold directly by the station itself or through its national representative on a localized basis and is purchased by advertisers who want to target potential customers in specific geographic areas. Spot advertising differs from network and syndicated television advertising, which are sold by PO 00000 Frm 00097 Fmt 4703 Sfmt 4703 television networks and producers of syndicated programs on a nationwide basis and broadcast in every market where the network or syndicated program is aired. 15. Broadcast television spot advertising possesses a unique combination of attributes that set it apart from advertising using other types of media. Television combines sight, sound, and motion, thereby creating a more memorable advertisement. Moreover, of all media, broadcast television spot advertising reaches the largest percentage of all potential customers in a particular target geographic area and is therefore especially effective in introducing and establishing the image of a product. For a significant number of advertisers, broadcast television spot advertising, because of its unique combination of attributes, is an advertising medium for which there is no close substitute. Other media, such as radio, newspapers, or outdoor billboards, are not desirable substitutes for broadcast television advertising. None of these media can provide the important combination of sight, sound, and motion that makes television unique and impactful as a medium for advertising. 16. Like broadcast television, cable television and satellite television channels combine elements of sight, sound, and motion, but they are not a desirable substitute for broadcast television spot advertising for two important reasons. First, satellite, cable, and other landline content delivery systems do not have the ‘‘reach’’ of broadcast television. Typically, broadcast television can reach well-over 90% of homes in a DMA, while cable television often reaches much less, e.g., 50% or fewer of the homes in the St. Louis DMA. As a result, an advertiser can achieve greater audience penetration through broadcast television spot advertising than through cable television. Second, because cable and satellite television may offer more than 100 channels, they fragment the audience into small demographic segments. Because broadcast television programming typically has higher rating points than cable television programming, it is much easier and more efficient for an advertiser to reach its target demographic on broadcast television. Media buyers often buy cable television and satellite television not so much as a substitute for broadcast television, but rather to supplement a broadcast television message, to reach a narrow demographic with greater frequency (e.g., 18–24 year olds) or to target narrow geographic areas within a DMA. A small but significant price E:\FR\FM\30DEN1.SGM 30DEN1 Federal Register / Vol. 78, No. 250 / Monday, December 30, 2013 / Notices maindgalligan on DSK5TPTVN1PROD with NOTICES increase by broadcast television spot advertising providers would not be made unprofitable by advertisers switching to cable and satellite advertising. 17. Internet-based media is not currently a substitute for broadcast television spot advertising. Although Online Video Distributors (‘‘OVDs’’) such as Netflix and Hulu are important sources of video programming, as with cable television advertising, the local video advertising of OVDs lacks the reach of broadcast television spot advertising. Non-video Internet advertising, e.g., Web site banner advertising, lacks the important combination of sight, sound, and motion that gives television its impact. Consequently, local media buyers currently purchase Internet-based advertising primarily as a supplement to broadcast television spot advertising, and a small but significant price increase by broadcast television spot advertising providers would not be made unprofitable by advertisers switching to Internet-based advertising. 18. Broadcast television stations generally can identify advertisers with strong preferences for using broadcast television advertising. Broadcast television stations negotiate prices individually with advertisers and consequently can charge different advertisers different prices. During the individualized negotiations on price and available advertising slots that commonly occur between advertisers and broadcast television stations, advertisers provide stations with information about their advertising needs, including their target audience. Broadcast television stations could profitably raise prices to those advertisers who view broadcast television as a necessary advertising medium, either as their sole means of advertising or as a necessary part of a total advertising plan. 19. Accordingly, the sale of broadcast television spot advertising is a line of commerce under Section 7 of the Clayton Act and a relevant product market for purposes of analyzing the Transaction under Section 7 of the Clayton Act and Section 1 of the Sherman Act. B. The St. Louis DMA Is the Relevant Geographic Market 20. DMAs are geographic units defined by A.C. Nielsen Company, a firm that surveys television viewers and furnishes broadcast television stations, advertisers, and advertising agencies in a particular area with data to aid in evaluating audience size and composition. DMAs are ranked VerDate Mar<15>2010 17:15 Dec 27, 2013 Jkt 232001 according to the number of households therein, and the St. Louis DMA is the 21st largest in the United States, containing over 1.2 million television households. The St. Louis DMA is centered on the city of St. Louis, Missouri, and encompasses 31 counties in the states of Illinois and Missouri. Signals from broadcast television stations located in St. Louis reach viewers throughout the DMA, but signals from broadcast television stations located outside the DMA reach few viewers within the DMA. DMAs are used to analyze revenues and shares of broadcast television stations in the Investing In Television BIA Market Report 2013 (1st edition), a standard industry reference. 21. Advertisers use broadcast television stations within the St. Louis DMA to reach the largest possible number of viewers across the DMA. Some of these advertisers are located in the St. Louis DMA and need to reach customers there; others are regional or national businesses that want to target consumers in the St. Louis, DMA. Advertising on television stations outside the St. Louis DMA is not an alternative for these advertisers because such stations cannot be viewed by a significant number of potential customers within the DMA. Thus, if there were a small but significant increase in broadcast television spot advertising prices within the St. Louis DMA, an insufficient number of advertisers would switch advertising purchases to television stations outside the St. Louis DMA to render the price increase unprofitable. 22. Accordingly, the St. Louis DMA is a section of the country under Section 7 of the Clayton Act and a relevant geographic market for the sale of broadcast television spot advertising for purposes of analyzing the Transaction under Section 7 of the Clayton Act and Section 1 of the Sherman Act. C. The Transaction Would Harm Competition in the St. Louis DMA 23. Broadcast television stations compete for advertisers through programming that attracts viewers to their stations. In developing their own programming and in considering the programming of the networks with which they may be affiliated, broadcast television stations try to select programs that appeal to the greatest number of viewers and also try to differentiate their stations from others in the same DMA by appealing to specific demographic groups. Advertisers, in turn, are interested in using broadcast television spot advertising to reach a large audience, as well as to reach a PO 00000 Frm 00098 Fmt 4703 Sfmt 4703 79487 high proportion of the type of viewers that are most likely to buy their products. 24. Broadcast station ownership in the St. Louis DMA is already significantly concentrated. Three stations, each affiliated with a major network, had more than 80% of gross advertising revenues in 2012, with Gannett’s KSDK–TV having a revenue share of nearly 30% and Belo’s KMOV–TV having a revenue share of nearly 20%. Together, the Gannett and Belo stations have approximately 50% of all television station gross advertising revenues in the St. Louis DMA. 25. After the Transaction, even though KSDK–TV and KMOV–TV will continue to have different owners and maintain separate sales forces, the various agreements between Gannett and Sander create an ongoing relationship between Gannett and Sander that did not exist between competitors Gannett and Belo. These long-term agreements are likely to align Gannett’s and Sander’s incentives in the St. Louis DMA: a. With the eight-year assignable option, Gannett will be able to sell to a third party the ability to buy KMOV–TV at any time, giving Gannett influence over Sander’s future in the market and the power to choose its competitor in the St. Louis DMA; b. Under its financing guarantee to Sander, Gannett is obligated to repay the balance of the loan financing Sander’s purchase of the Belo stations and thus will have an incentive to avoid competing aggressively and forcing Sander into a position where it might default; and c. Pursuant to the eight-year Shared Services Agreements, Sander will be dependent upon Gannett for key services necessary to run KMOV–TV and its other stations successfully and thus will be in a close ongoing business relationship with a key competitor. Taken together, these agreements are likely to give Gannett significant influence over Sander and over Sander’s operation of KMOV–TV. The agreements give each the ability and incentive to work cooperatively with the other to maximize their joint profits, to the detriment of their customers. 26. If KSDK–TV and KMOV–TV were to coordinate their competitive behavior, the market structure would operate as if the two stations were commonly owned. Using the Herfindahl-Hirschman Index (‘‘HHI’’), a standard measure of market concentration (defined and explained in Appendix A), a combination of KSDK– TV and KMOV–TV in the St. Louis DMA would result both in high E:\FR\FM\30DEN1.SGM 30DEN1 maindgalligan on DSK5TPTVN1PROD with NOTICES 79488 Federal Register / Vol. 78, No. 250 / Monday, December 30, 2013 / Notices concentration and a large change in concentration, increasing the HHI by 1161 points from 2431 to 3592. Under the Horizontal Merger Guidelines issued by the Department of Justice and Federal Trade Commission, mergers resulting in highly concentrated markets (with an HHI in excess of 2500) and with an increase in the HHI of more than 200 points are presumed to be likely to enhance market power. 27. In addition to increasing concentration in the St. Louis DMA, the Transaction involves two stations that are close substitutes for one another in a market with limited alternatives. KMOV–TV and KSDK–TV appeal to similar demographic groups, making them close substitutes for many viewers and advertisers. Only one other station in the St. Louis DMA, a Fox affiliate, has a comparable gross advertising revenue share. The St. Louis ABC and CW affiliates, which each have gross advertising revenue shares of less than 10%, are much less acceptable substitutes for many advertisers. The CW affiliate’s programming tends to appeal to a different demographic, and neither the ABC nor the CW affiliate has strong local news programming, an important differentiator to advertisers in the St. Louis DMA. 28. In the St. Louis DMA, KMOV–TV and KSDK–TV compete head-to-head in the sale of broadcast television spot advertising and are close substitutes for a significant number of advertisers. Advertisers benefit from this competition. During individual price negotiations between advertisers and television stations in the St. Louis DMA, advertisers are able to ‘‘play off’’ the stations against each other and obtain competitive rates from programs targeting similar demographics. 29. After the Transaction, advertisers in the St. Louis DMA would likely find it more difficult to ‘‘buy around’’ both KMOV–TV and KDSK–TV in response to higher advertising rates, than to buy around either one individually as they could have done before. The presence of the Fox affiliate alone would not be sufficient to enable enough advertisers to ‘‘buy around’’ KMOV–TV and KSDK– TV to defeat a price increase. Because a significant number of advertisers would likely be unable to reach their desired audiences as effectively unless they advertise on at least one station that is controlled or significantly influenced by Gannett, their bargaining positions will be weaker after the Transaction, and the advertising rates they pay would be likely to increase. 30. Accordingly, the Transaction is likely to substantially reduce competition and will restrain trade in VerDate Mar<15>2010 17:15 Dec 27, 2013 Jkt 232001 the sale of broadcast television spot advertising in the St. Louis DMA. D. Lack of Countervailing Factors 1. Entry and Expansion Are Unlikely 31. De novo entry into the St. Louis DMA is unlikely because 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 became available, commercial success would come, at best, over a period of many years. In the St. Louis DMA, all of the major broadcast networks (CBS, NBC, ABC, Fox) are already affiliated with a licensee, the contracts last for many years, and the broadcast networks rarely switch licensees when the contracts expire. Thus, entry into the St. Louis DMA broadcast television advertising spot market would not be timely, likely, or sufficient to deter Gannett and Sander, acting together, from anticompetitive increases in price or other anticompetitive conduct after the Transaction occurs. 32. Other broadcast television stations in the St. Louis DMA could not readily increase their advertising capacity or change their programming sufficiently in response to a price increase by KSDK–TV and KMOV–TV. The number of 30-second spots in a DMA are largely fixed. More slots cannot be created. This fact makes the pricing of spots very responsive to changes in demand. During so-called political years, for example, political advertisements crowd out commercial advertising and makes the spots available for commercial advertisers more expensive than they would be in nonpolitical years. Adjusting programming in response to a pricing change is risky, difficult, and time-consuming. Network affiliates are often committed to the programming provided by the network with which they are affiliated, and it often takes years for a station to build its audience. Programming schedules are complex and carefully constructed, taking many factors into account, such as audience flow, station identity, and program popularity. In addition, stations typically have multi-year contractual commitments for individual shows. Accordingly, a television station is unlikely to change its programming sufficiently or with sufficient rapidity to overcome a small but significant price increase imposed by KSDK–TV and KMOV–TV. PO 00000 Frm 00099 Fmt 4703 Sfmt 4703 2. The Alleged Efficiencies Do Not Offset the Harm 33. Although Defendants assert that the Transaction would produce efficiencies, they cannot demonstrate acquisition-specific and cognizable efficiencies that would be sufficient to offset the Transaction’s anticompetitive effects. V. VIOLATIONS ALLEGED 34. The United States hereby repeats and realleges the allegations of paragraphs 1 through 33 as if fully set forth herein. 35. The Transaction likely would lessen competition substantially in interstate trade and commerce, in violation of Section 7 of the Clayton Act, 15 U.S.C. § 18, and also constitute entry into contracts and combinations that would unreasonably restrain interstate trade and commerce, in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. These acquisitions and agreements likely would have the following effects, among others: a. competition in the sale of broadcast television spot advertising in the St. Louis DMA would be lessened substantially; b. actual and perceived competition between KMOV–TV and KSDK–TV in the sale of broadcast television spot advertising in the St. Louis DMA would be diminished; and c. the prices for spot advertising time on broadcast television stations in the St. Louis DMA would likely increase, and the quality of services likely would decline. 36. Unless restrained, the acquisition will violate Section 1 of the Sherman Act, 15 U.S.C. § 1, and Section 7 of the Clayton Act, 15 U.S.C. § 18. VI. REQEST FOR RELIEF 37. The United States requests: a. that the Court adjudge the proposed acquisition to violate Section 1 of the Sherman Act, 15 U.S.C. § 1, and Section 7 of the Clayton Act, 15 U.S.C. § 18; b. that the Court permanently enjoin and restrain Defendants from carrying out the Transaction, or entering into any other agreement, understanding, or plan by which Belo would be acquired by Gannett, unless Defendants divest KMOV–TV in accordance with the proposed Final Judgment and Asset Preservation Stipulation and Order filed concurrently with this Complaint; c. that the proposed Final Judgment giving effect to the divestiture be entered by the Court after compliance with the Antitrust Procedures and Penalties Act, 15 U.S.C. § 16; d. that the Court award the United States the costs of this action; and E:\FR\FM\30DEN1.SGM 30DEN1 Federal Register / Vol. 78, No. 250 / Monday, December 30, 2013 / Notices points are considered to be highly concentrated. See U.S. Department of Justice & FTC, Horizontal Merger Guidelines § 5.3 (2010). Transactions that increase the HHI by more than 200 For Plaintiff United States: points in highly concentrated markets llllllllllllllllll l presumptively raise antitrust concerns under the Horizontal Merger Guidelines William J. Baer (D.C. Bar #324723), issued by the Department of Justice and Assistant Attorney General, llllllllllllllllll l the Federal Trade Commission. See id. Renata B. Hesse (D.C. Bar #466107) UNITED STATES DISTRICT COURT Deputy Assistant Attorney General, FOR THE DISTRICT OF COLUMBIA llllllllllllllllll l UNITED STATES OF AMERICA, Plaintiff, Patricia A. Brink v. GANNETT CO., INC., BELO CORP., and Director of Civil Enforcement, SANDER MEDIA LLC, Defendants. llllllllllllllllll l Scott A. Scheele (D.C. Bar #429061) Case No. 1:13-cv-01984–RBW Chief, Telecommunications and Media Judge: Reggie B. Walton Section, Filed: 12/16/2013 llllllllllllllllll l Lawrence M. Frankel (D.C. Bar #441532) COMPETITIVE IMPACT STATEMENT Assistant Chief, Telecommunications Pursuant to Section 2(b) of the and Media Section Antitrust Procedures and Penalties Act llllllllllllllllll l (‘‘APPA’’ or ‘‘Tunney Act’’), 15 U.S.C. § 16(b)–(h), plaintiff United States of Anupama Sawkar,* America (‘‘United States’’) files this Carl Willner (D.C. Bar #412841), Competitive Impact Statement relating Brent E. Marshall, to the proposed Final Judgment Robert E. Draba (D.C. Bar #496815), submitted for entry in this civil antitrust Trial Attorneys, United States proceeding. Department of Justice, Antitrust Division, Telecommunications and I. NATURE AND PURPOSE OF THE Media Section, 450 Fifth Street NW., PROCEEDING Suite 7000, Washington, DC 20530, Defendants Gannett Co., Inc. Phone: 202-514-5813, Facsimile: (‘‘Gannett’’), and Belo Corp. (‘‘Belo’’) 202-514-6381, Email: entered into an Agreement and Plan of anupama.sawkar@usdoj.gov. Merger, dated June 12, 2013, pursuant to * Attorney of Record which Gannett will acquire Belo for Dated: December 16, 2013 approximately $1.5 billion, with a total transaction value of $2.2 billion, APPENDIX A including assumed debt. Gannett has Herfindahl-Hirschman Index also entered into an Asset Purchase The term ‘‘HHI’’ means the Agreement and other related agreements Herfindahl-Hirschman Index, a with Sander Holdings Co. LLC, a commonly accepted measure of market wholly-owned subsidiary of defendant concentration. The HHI is calculated by Sander Media LLC (‘‘Sander’’), which squaring the market share of each firm would sell KMOV–TV in St. Louis, competing in the market and then Missouri, and five other Belo broadcast summing the resulting numbers. For television stations to Sander for example, for a market consisting of four considerably below market price and firms with shares of 30, 30, 20, and 20 would create a close, ongoing business percent, the HHI is 2,600 (30 2 + 30 2 + relationship between Gannett and 20 2 + 20 2 = 2,600). The HHI takes into Sander. This merger, asset purchase, account the relative size distribution of and other related agreements are the firms in a market. It approaches zero referred to herein collectively as ‘‘the when a market is occupied by a large Transaction.’’ The United States filed a civil number of firms of relatively equal size antitrust Complaint on December 16, and reaches its maximum of 10,000 2013, seeking to prevent the points when a market is controlled by a single firm. The HHI increases both as Transaction. The Complaint alleges that the Transaction’s likely effect would be the number of firms in the market to increase broadcast television spot decreases and as the disparity in size advertising prices in the St. Louis between those firms increases. Markets Designated Market Area (‘‘DMA’’) in in which the HHI is between 1,500 and violation of Section 1 of the Sherman 2,500 points are considered to be Act and Section 7 of the Clayton Act, 15 moderately concentrated, and markets U.S.C. §§ 1, 18. in which the HHI is in excess of 2,500 maindgalligan on DSK5TPTVN1PROD with NOTICES e. that the Court award such other relief to the United States as the Court may deem just and proper. Respectfully submitted, VerDate Mar<15>2010 17:15 Dec 27, 2013 Jkt 232001 PO 00000 Frm 00100 Fmt 4703 Sfmt 4703 79489 At the same time the Complaint was filed, the United States also filed a Hold Separate Stipulation and Order (‘‘Hold Separate’’) and proposed Final Judgment designed to eliminate the anticompetitive effects of the Transaction. The proposed Final Judgment, which is explained more fully below, requires Defendants to divest KMOV–TV to an Acquirer approved by the United States in a manner that preserves competition in the St. Louis DMA. The Hold Separate requires Defendants to take certain steps to ensure that KMOV–TV is operated as a competitively independent, economically viable business that is uninfluenced by Gannett so that competition is maintained until the required divestiture occurs. 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 would terminate this action, except that the Court would retain jurisdiction to construe, modify, or enforce the provisions of the proposed Final Judgment and to punish violations thereof. II. DESCRIPTION OF THE EVENTS GIVING RISE TO THE ALLEGED VIOLATION A. The Defendants and the Proposed Transaction 1. The Defendants Gannett, a Delaware corporation with headquarters in McLean, Virginia, owns and operates 23 broadcast television stations nationwide, 12 in top-25 markets. Belo, a Delaware corporation with headquarters in Dallas, Texas, owns and operates 20 broadcast television stations nationwide, 9 in top25 markets. Sander, a Delaware limited liability company with headquarters in Scottsdale, Arizona, has no current business activity other than preparing to acquire six Belo stations, including KMOV–TV in St. Louis, as part of the Transaction. 2. The Proposed Transaction Federal Communications Commission (‘‘FCC’’) rules prohibit Gannett from acquiring the Belo stations in five markets where Gannett already owns television stations or newspapers. To comply with these rules, Gannett has agreed to transfer six Belo stations in five DMAs, including KMOV–TV in St. Louis, to Sander simultaneously with the merger of Gannett and Belo. Although Gannett will formally transfer KMOV–TV to Sander, the Transaction includes additional agreements between E:\FR\FM\30DEN1.SGM 30DEN1 79490 Federal Register / Vol. 78, No. 250 / Monday, December 30, 2013 / Notices Gannett and Sander that would likely give Gannett significant influence over Sander’s operation of the stations, including KMOV–TV, and would likely diminish Gannett’s incentives to compete vigorously against Sander in the sale of broadcast television spot advertising in St. Louis. These agreements include: (1) eight-year assignable options permitting Gannett to reacquire any of the stations (should existing FCC prohibitions be eliminated) or to transfer the options to a third party; (2) eight-year Shared Services Agreements under which Gannett will provide a variety of services (excluding joint advertising sales and negotiation of retransmission consent rights in DMAs such as St. Louis where Gannett also has television stations) to help Sander operate the stations, in return for substantial payments from Sander to Gannett; (3) a financing guarantee obligating Gannett to repay the balance of the $101 million loan Sander is obtaining to purchase the stations should Sander default; and (4) Joint Sales Agreements (only in DMAs where Gannett does not own television stations) giving Gannett control of advertising sales. The Transaction, as initially agreed to by Defendants on June 12, 2013, and as subsequently amended, would lessen competition substantially and restrain trade in the sale of broadcast television spot advertising in the St. Louis DMA, which includes parts of Missouri and Illinois. This Transaction is the subject of the Complaint and proposed Final Judgment filed by the United States on December 16, 2013. B. Anticompetitive Consequences of the Transaction maindgalligan on DSK5TPTVN1PROD with NOTICES 1. The Relevant Product The Complaint alleges that the sale of broadcast television spot advertising constitutes a relevant product market for analyzing this acquisition under the Clayton and Sherman Acts. Television stations attract viewers through their programming and then sell advertising time to businesses wanting to advertise their products to those television viewers. Broadcast television ‘‘spot’’ advertising is purchased by advertisers seeking to target potential customers in specific geographic markets. It differs from network and syndicated television advertising, which are sold on a nationwide basis by major television networks and by producers of syndicated programs and are broadcast in every market where the network or syndicated program is aired. Broadcast television spot advertising possesses a unique combination of VerDate Mar<15>2010 17:15 Dec 27, 2013 Jkt 232001 attributes that sets it apart from advertising using other types of media. Television combines sight, sound, and motion, thereby creating a more memorable advertisement. Broadcast television spot advertising reaches the largest percentage of potential customers in a targeted geographic market and is therefore especially effective in introducing and establishing a product’s image. Because of this unique combination of attributes, broadcast television spot advertising has no close substitute for a significant number of advertisers. Cable television spot advertising and Internetbased video advertising lack the same reach; radio spots lack the visual impact; and newspaper and billboard ads lack sound and motion, as do many internet search engine and Web site banner ads. Through information provided during individualized price negotiations, stations can readily identify advertisers with strong preferences for using broadcast television advertising and ultimately can charge different advertisers different prices. Consequently, a small but significant increase in the price of broadcast television spot advertising is unlikely to cause enough advertising customers to switch enough advertising purchases to other media to make the price increase unprofitable. 2. The Relevant Market The Complaint alleges that the St. Louis DMA constitutes a relevant geographic market for analyzing this acquisition under the Clayton and Sherman Acts. DMAs are geographic units defined by A.C. Nielsen Company for advertising purposes. The St. Louis DMA is the 21st largest in the United States, containing over 1.2 million television households. Signals from fullpowered television stations in the St. Louis area reach viewers throughout that DMA, so advertisers use television stations in the St. Louis DMA to target the largest possible number of viewers within the entire DMA. Some of these advertisers are located in the St. Louis area and trying to reach customers there; others are regional or national businesses wanting to target consumers in the St. Louis area. Advertising on television stations outside the St. Louis DMA is not an alternative for either group, because signals from television stations outside the St. Louis DMA reach few viewers in the St. Louis DMA. Thus, advertising on those stations does not reach a significant number of potential customers in the St. Louis DMA. PO 00000 Frm 00101 Fmt 4703 Sfmt 4703 3. Harm to Competition in the St. Louis DMA The Complaint alleges that the Transaction likely would lessen competition substantially in interstate trade and commerce, in violation of Section 7 of the Clayton Act, 15 U.S.C. § 18, and unreasonably restrain interstate trade and commerce, in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. Based on advertising sales revenues, Gannett’s NBC-affiliated KSDK–TV and Belo’s CBS-affiliated KMOV–TV are two of the three largest commercial broadcast television stations in the St. Louis DMA. Broadcast station ownership in the St. Louis DMA is already significantly concentrated, with more than 80% of gross advertising revenues in 2012 attributable to only three stations. Together, KMOV–TV and KSDK–TV have approximately 50% of all television station gross advertising revenues in the St. Louis DMA. The St. Louis Fox affiliate is the only significant advertising competitor to these stations. The St. Louis ABC and CW affiliates each have gross advertising revenue shares of less than 10%. If KSDK–TV and KMOV–TV were to coordinate their competitive behavior, then the market structure would operate as if the two stations were commonly owned in a highly concentrated market.1 KMOV–TV and KSDK–TV are not only two of the largest stations in St. Louis, they are also close substitutes for one another in this concentrated market with its limited alternatives. KMOV–TV and KSDK–TV appeal to similar demographic groups, making them close substitutes for many viewers and advertisers. The programming on the CW affiliate tends to appeal to a younger demographic, and neither the ABC nor the CW affiliate has strong local news programming, which is an important differentiator to advertisers in the St. Louis DMA. As a result, advertisers view the St. Louis ABC and CW affiliates as much less acceptable substitutes for KDSK–TV and KMOV– TV. The presence of the Fox affiliate alone would not be sufficient to enable enough advertisers to ‘‘buy around’’ KMOV–TV and KSDK–TV to defeat any price increase imposed by these two stations through coordinated action. 1 Using the Herfindahl-Hirschman Index (‘‘HHI’’), a standard measure of market concentration, the post-acquisition HHI (combining KMOV–TV’s and KDSK–TV’s shares) would be about 3592, an increase of about 1161 points. Under the Horizontal Merger Guidelines issued by the Department of Justice and Federal Trade Commission, mergers resulting in highly concentrated markets (i.e., HHI over 2500) with an increase in the HHI of more than 200 points are presumed to be likely to enhance market power. E:\FR\FM\30DEN1.SGM 30DEN1 maindgalligan on DSK5TPTVN1PROD with NOTICES Federal Register / Vol. 78, No. 250 / Monday, December 30, 2013 / Notices After the Transaction closes, KSDK– TV and KMOV–TV will continue to have different owners and maintain separate sales forces. Still, the Transaction would alter the competitive landscape in the St. Louis DMA and likely harm competition there by creating an ongoing, intertwined relationship between Gannett and Sander that did not exist between Gannett and Belo. In this new relationship, Gannett will have significant influence over Sander and Sander’s operation of KMOV–TV. This could reduce competition between KSDK–TV and KMOV–TV in at least three ways: 1. Through the eight-year assignable option, which gives Gannett the practical ability to sell KMOV–TV to any other person, Gannett can displace Sander at any time. Losing KMOV–TV would end Sander’s income stream from the station, so Sander’s knowledge that Gannett could exercise the option would create an incentive for Sander not to upset Gannett by competing vigorously with KSDK–TV going forward. Exercising the option also effectively lets Gannett choose its competitor in St. Louis. 2. Through the financing guarantee, which requires Gannett to repay the loan financing Sander’s purchase of the Belo stations if Sander defaults, Gannett has a reduced incentive to compete aggressively with Sander. Aggressive competition from Gannett could push Sander into default, in which case Gannett would have to pay off the loan. 3. Through the eight-year Shared Services Agreements, Sander will be dependent on a competitor for key services that Sander needs to run KMOV–TV successfully. This dependence on Gannett creates an incentive for Sander not to compete too strongly with KSDK–TV. In sum, the sale of KMOV–TV to Sander does not adequately address the competitive problem that would exist in the St. Louis DMA from the GannettBelo merger without the sale to Sander. With these entanglements, Sander is not sufficiently separate from Gannett to be an effective competitor. The agreements give both Gannett and Sander the incentive and the means to work together cooperatively to maximize their joint profits at the expense of their customers. Currently, KSDK–TV and KMOV–TV vigorously compete for the business of local, regional, and national firms seeking to advertise on St. Louis television stations. Advertisers benefit from this competition. During individual price negotiations between VerDate Mar<15>2010 17:15 Dec 27, 2013 Jkt 232001 advertisers and St. Louis television stations, advertisers are able to ‘‘play off’’ KSDK–TV and KMOV–TV against each other and obtain competitive rates for programs that target similar demographics. The Transaction is likely to attenuate this competition and thereby adversely affect a substantial volume of interstate commerce. It likely would have the following effects, among others: a. Competition in the sale of broadcast television spot advertising in the St. Louis DMA likely would be lessened substantially; b. Actual and perceived potential competition between Gannett and Sander in the sale of broadcast television spot advertising time in the St. Louis DMA likely would be diminished; and c. Prices for spot advertising time on television stations in the St. Louis DMA likely would increase, and the quality of services likely would decline. After the Transaction, a significant number of St. Louis DMA advertisers would not be able to reach their desired audiences with equivalent efficiency without advertising on stations controlled or significantly influenced by Gannett. The Transaction, therefore, is likely to enable Gannett to raise prices unilaterally. 4. Lack of Countervailing Factors The Complaint alleges that entry or expansion in the St. Louis DMA broadcast television spot advertising market would not be timely, likely, or sufficient to prevent anticompetitive effects. New entry in the St. Louis DMA is unlikely since a new station would require an FCC license, which is difficult to obtain. Even if a new station became operational, commercial success would come over a period of many years at best. Other television stations in the St. Louis DMA could not readily increase their advertising capacity or change their programming in response to a price increase by KDSD–TV and KMOV–TV. The number of 30-second spots available at a station is generally fixed, and additional slots cannot be created. Adjusting programming in response to a pricing change is risky, difficult, and time-consuming. Programming schedules are complex and carefully constructed, and television stations often have multi-year contractual commitments for individual shows or are otherwise committed to programming provided by their affiliated network. PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 79491 III. EXPLANATION OF THE PROPOSED FINAL JUDGMENT The divestiture requirement of the proposed Final Judgment will eliminate the anticompetitive effects of the Transaction in the St. Louis DMA by maintaining KMOV–TV as an independent, economically viable competitor. The proposed Final Judgment requires Defendants to divest KMOV–TV to an Acquirer selected by Defendants and approved by the United States. To achieve this result, Gannett will divest its option on KMOV–TV to the Acquirer, and Sander will divest its interests in the station and the assets used to operate KMOV–TV. The ‘‘Divestiture Assets’’ are defined in Paragraph II.G of the proposed Final Judgment to cover all assets used primarily in the operation of KMOV– TV. These assets include real property, equipment, FCC licenses, contracts, intellectual property rights, programming materials, and customer lists maintained by Belo or Sander in connection with KMOV–TV. These do not include assets that are not primarily used in the operation of KMOV–TV, but are maintained at the corporate level and used to support multiple stations. Thus, Defendants will be able to retain back-office systems or other assets and contracts used at the corporate level to support multiple broadcast television stations, which they would need to conduct their remaining operations, and which an Acquirer experienced in operating broadcast television stations could supply for itself. The Shared Services Agreement between Gannett and Sander, which Paragraph IV.A of the proposed Final Judgment requires to be terminated with respect to KMOV– TV upon divestiture, is also excluded from the Divestiture Assets. To ensure that KMOV–TV is operated as an independent competitor after the divestiture, Paragraph IV.A and Section XI of the proposed Final Judgment prohibit Defendants from entering into any agreements during the term of the Final Judgment that create a long-term relationship with the Divestiture Assets after the divestiture is completed. Examples of prohibited agreements include options to repurchase or assign interests in KMOV–TV; agreements to provide financing or guarantees for financing; local marketing agreements, joint sales agreements, or any other cooperative selling arrangements; shared services agreements; and agreements to jointly conduct any business negotiations with the Acquirer with respect to KMOV–TV. Any such agreements that may exist between Gannett and Sander shall be terminated E:\FR\FM\30DEN1.SGM 30DEN1 maindgalligan on DSK5TPTVN1PROD with NOTICES 79492 Federal Register / Vol. 78, No. 250 / Monday, December 30, 2013 / Notices with respect to the KMOV–TV upon divestiture. This shared services prohibition does not preclude agreements limited to helicopter sharing and stock video pooling in the form that are customary in the industry. Gannett and Belo currently have a helicopter sharing agreement in St. Louis, and the Acquirer and Gannett may continue this arrangement after the divestiture. These limited exceptions do not permit Defendants to enter into broader news sharing agreements with respect to KMOV–TV. To the extent the Acquirer needs Defendants to provide any transitional services that facilitate continuous operation of KMOV–TV until the Acquirer can provide such capabilities independently, the United States retains discretion to approve such arrangements. Defendants are required to take all steps reasonably necessary to accomplish the divestiture quickly and to cooperate with prospective purchasers. Because transferring the KMOV–TV license requires FCC approval, Defendants are specifically required to use their best efforts to obtain all necessary FCC approvals as expeditiously as possible. This divestiture of KMOV–TV must occur within 120 calendar days after the filing of the Complaint in this matter (i.e., by April 15, 2013) or 5 days after notice that the Court has entered the Final Judgment, whichever is later. The United States, in its sole discretion, may agree to one or more extensions of this time period, not to exceed ninety (90) calendar days in total, and shall notify the Court in such circumstances. If the divestiture does not occur within this prescribed timeframe, the proposed Final Judgment provides that the Court, upon application of the United States, will appoint a trustee selected by the United States to sell KMOV–TV. Gannett will pay all costs and expenses of the trustee. The trustee’s commission will be structured to provide an incentive for the trustee based on the price obtained and the speed with which the divestiture is accomplished. The trustee would file monthly reports with the Court and the United States describing efforts to divest KMOV–TV. If the divestiture has not been accomplished after 6 months, the trustee and the United States will make recommendations to the Court, which shall enter such orders as appropriate, to carry out the purpose of the trust. IV. REMEDIES AVAILABLE TO POTENTIAL PRIVATE LITIGANTS Section 4 of the Clayton Act, 15 U.S.C. § 15, provides that any person who has been injured as a result of VerDate Mar<15>2010 17:15 Dec 27, 2013 Jkt 232001 conduct prohibited by the antitrust laws may bring suit in federal court to recover three times the damages the person has suffered, as well as costs and reasonable attorneys’ fees. Entry of the proposed Final Judgment will neither impair nor assist the bringing of any private antitrust damage action. Under the provisions of Section 5(a) of the Clayton Act, 15 U.S.C. § 16(a), the proposed Final Judgment has no prima facie 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 sixty (60) days preceding the effective date of the proposed Final Judgment within which any person may submit to the United States written comments regarding the proposed Final Judgment. Any person who wishes to comment should do so within sixty (60) days of the date of publication of this Competitive Impact Statement in the Federal Register, 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 United States Department of Justice, which remains free to withdraw its consent to the proposed Final Judgment at any time prior to the Court’s entry of judgment. The comments and the response of the United States will be filed with the Court. In addition, comments will be posted on the United States Department of Justice, Antitrust Division’s Internet Web site and, under certain circumstances, published in the Federal Register. Written comments should be submitted to: Scott A. Scheele, Chief, Telecommunications and Media Enforcement Section, Antitrust Division, United States Department of Justice, 450 5th Street NW., Suite 7000, Washington, DC 20530. The proposed Final Judgment provides that the Court retains jurisdiction over this action, and Defendants may apply to the Court for any order necessary or appropriate for the modification, interpretation, or enforcement of the Final Judgment. PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 VI. ALTERNATIVES TO THE PROPOSED FINAL JUDGMENT The United States considered, as an alternative to the proposed Final Judgment, a full trial on the merits against Defendants. The United States could have continued the litigation and sought preliminary and permanent injunctions against consummation of the Transaction. The United States is satisfied, however, that the divestiture of assets described in the proposed Final Judgment will preserve competition for the sale of broadcast television spot advertising in the St. Louis DMA. Thus, the proposed Final Judgment would achieve 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 sixtyday comment period, after which the court shall determine whether entry of the proposed Final Judgment ‘‘is in the public interest.’’ 15 U.S.C. § 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. § 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); see generally United E:\FR\FM\30DEN1.SGM 30DEN1 Federal Register / Vol. 78, No. 250 / Monday, December 30, 2013 / Notices maindgalligan on DSK5TPTVN1PROD with NOTICES States v. SBC Commc’ns, Inc., 489 F. Supp. 2d 1 (D.D.C. 2007) (assessing public interest standard under the Tunney Act); United States v. InBev N.V./S.A., 2009–2 Trade Cas. (CCH) ¶ 76,736, 2009 U.S. Dist. LEXIS 84787, No. 08–1965 (JR), at *3, (D.D.C. Aug. 11, 2009) (noting that the 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.’’).2 As the United States 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 set forth in the government’s complaint, whether the decree is sufficiently clear, whether enforcement mechanisms are sufficient, and whether the decree may positively harm third parties. See Microsoft, 56 F.3d at 1458–62. With respect to the adequacy of the relief secured by the decree, a court may not ‘‘engage in an unrestricted evaluation of what relief would best serve the public.’’ United States v. BNS, Inc., 858 F.2d 456, 462 (9th Cir. 1988) (citing United States v. Bechtel Corp., 648 F.2d 660, 666 (9th Cir. 1981)); see also Microsoft, 56 F.3d at 1460–62; United States v. Alcoa, Inc., 152 F. Supp. 2d 37, 40 (D.D.C. 2001); InBev, 2009 U.S. Dist. LEXIS 84787, at *3. Courts have held that: [t]he balancing of competing social and political interests affected by a proposed antitrust consent decree must be left, in the first instance, to the discretion of the Attorney General. The court’s role in protecting the public interest is one of insuring that the government has not breached its duty to the public in consenting to the decree. The court is required to determine not whether a particular decree is the one that will best serve society, but whether the settlement is ‘‘within the reaches of the public interest.’’ More elaborate requirements might undermine the effectiveness of antitrust enforcement by consent decree. Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted).3 In 2 The 2004 amendments substituted ‘‘shall’’ for ‘‘may’’ in directing relevant factors for court to consider and amended the list of factors to focus on competitive considerations and to address potentially ambiguous judgment terms. Compare 15 U.S.C. § 16(e) (2004) with 15 U.S.C. § 16(e)(1) (2006); see also SBC Commc’ns, 489 F. Supp. 2d at 11 (concluding that the 2004 amendments ‘‘effected minimal changes’’ to Tunney Act review). 3 Cf. BNS, 858 F.2d at 464 (holding that the court’s ‘‘ultimate authority under the [APPA] is VerDate Mar<15>2010 17:15 Dec 27, 2013 Jkt 232001 determining whether a proposed settlement is in the public interest, a district court ‘‘must accord deference to the government’s predictions about the efficacy of its remedies, and may not require that the remedies perfectly match the alleged violations.’’ SBC Commc’ns, 489 F. Supp. 2d at 17; see also Microsoft, 56 F.3d at 1461 (noting the need for courts to be ‘‘deferential to the government’s predictions as to the effect of the proposed remedies’’); United States v. Archer-DanielsMidland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (noting that the court should grant due respect to the United States’ prediction as to the effect of proposed remedies, its perception of the market structure, and its views of the nature of the case). Courts have greater flexibility in approving proposed consent decrees than in crafting their own decrees following a finding of liability in a litigated matter. ‘‘[A] proposed decree must be approved even if it falls short of the remedy the court would impose on its own, as long as it falls within the range of acceptability or is ‘within the reaches of public interest.’ ’’ United States v. Am. Tel. & Tel. Co., 552 F. Supp. 131, 151 (D.D.C. 1982) (citations omitted) (quoting United States v. Gillette Co., 406 F. Supp. 713, 716 (D. Mass. 1975)), aff’d sub nom. Maryland v. United States, 460 U.S. 1001 (1983); see also United States v. Alcan Aluminum Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 1985) (approving the consent decree even though the court would have imposed a greater remedy). To meet this standard, the United States ‘‘need only provide a factual basis for concluding that the settlements are reasonably adequate remedies for the alleged harms.’’ SBC Commc’ns, 489 F. Supp. 2d at 17. 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 InBev, 2009 U.S. Dist. LEXIS 84787, at *20 (‘‘the ‘public interest’ is not to be measured by comparing the violations alleged in the 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’’). See generally Microsoft, 56 F.3d at 1461 (discussing whether ‘‘the remedies [obtained in the decree are] so inconsonant with the allegations charged as to fall outside of the ‘reaches of the public interest’ ’’). PO 00000 Frm 00104 Fmt 4703 Sfmt 4703 79493 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 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. As this Court recently confirmed in SBC Communications, courts ‘‘cannot look beyond the complaint in making the public interest determination unless the complaint is drafted so narrowly as to make a mockery of judicial power.’’ SBC Commc’ns, 489 F. Supp. 2d at 15. In its 2004 amendments, Congress made clear its intent to preserve the practical benefits of utilizing consent decrees in antitrust enforcement, adding 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. § 16(e)(2). The language wrote into the statute what Congress intended when it enacted 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 Senator Tunney). Rather, the procedure for the public interest determination is left to the discretion of the court, with the recognition that the court’s ‘‘scope of review remains sharply proscribed by precedent and the nature of Tunney Act proceedings.’’ SBC Commc’ns, 489 F. Supp. 2d at 11.4 VIII. DETERMINATIVE DOCUMENTS There are no determinative materials or documents within the meaning of the 4 See United States v. Enova Corp., 107 F. Supp. 2d 10, 17 (D.D.C. 2000) (noting that the ‘‘Tunney Act expressly allows the court to make its public interest determination on the basis of the competitive impact statement and response to comments alone’’); United States v. Mid-Am. Dairymen, Inc., 1977–1 Trade Cas. (CCH) ¶ 61,508, at 71,980 (W.D. Mo. 1977) (‘‘Absent a showing of corrupt failure of the government to discharge its duty, the Court, in making its public interest finding, should . . . carefully consider the explanations of the government in the competitive impact statement and its responses to comments in order to determine whether those explanations are reasonable under the circumstances.’’); S. Rep. No. 93–298, 93d Cong., 1st Sess., at 6 (1973) (‘‘Where the public interest can be meaningfully evaluated simply on the basis of briefs and oral arguments, that is the approach that should be utilized.’’). E:\FR\FM\30DEN1.SGM 30DEN1 79494 Federal Register / Vol. 78, No. 250 / Monday, December 30, 2013 / Notices APPA that were considered by the United States in formulating the proposed Final Judgment. Dated: December 16, 2013 Respectfully submitted, /s/ lllllllllllllllll Anupama Sawkar*, Carl Willner (D.C. Bar #412841), Brent E. Marshall, Robert E. Draba (D.C. Bar #496815), Trial Attorneys, United States Department of Justice, Antitrust Division, Telecommunications and Media Section, 450 Fifth Street NW., Suite 7000, Washington, DC 20530, Phone: 202–598–2344, Facsimile: 202– 514–6381, Email: Anupama.Sawkar@ usdoj.gov. *Attorney of Record UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA UNITED STATES OF AMERICA, Plaintiff, v. GANNETT CO., INC., BELO CORP., and SANDER MEDIA LLC, Defendants. Case No. 1:13–cv–01984–RBW Judge: Reggie B. Walton maindgalligan on DSK5TPTVN1PROD with NOTICES UNITED STATES OF AMERICA, Plaintiff, v. GANNETT CO., INC., BELO CORP., and SANDER MEDIA LLC, Defendants. Judge: Reggie B. Walton CERTIFICATE OF SERVICE I, Anupama Sawkar, hereby certify that on December 16, 2013, I caused copies of the Complaint, Competitive Impact Statement, Hold Separate Stipulation and Order, Proposed Final Judgment, and Plaintiff’s Explanation of Consent Decree Procedures to be served upon defendants Gannett Corporation, Inc., Belo Corporation, and Sander Media LLC, by mailing the documents electronically to the duly authorized legal representatives of Defendants as follows: Counsel for Defendant Gannett Co., Inc.: Michael P. A. Cohen (DC Bar #435024), Paul Hastings LLP, 875 15th Street NW., Washington, DC 20005, Telephone: (202) 551–1880, Facsimile: (202) 551– 0280, Email: michaelcohen@ paulhastings.com. Gordon L. Lang (DC Bar #932731), Nixon Peabody LLP, 401 9th Street NW., Suite 900, Washington, DC 20004, Telephone: (202) 585–8319, Facsimile: (866) 947–3542, Email: glang@ nixonpeabody.com. Elizabeth A. Allen (DC Bar #121403), Gannett Co., Inc., 7950 Jones Branch Drive, McLean, VA 22107, Telephone: (703) 854–6953, Facsimile: (703) 854– 2031, Email: eaallen@gannett.com. Counsel for Defendant Belo Corp.: Joseph D. Larson (applying for pro hace vice admission), Wachtell, Lipton, Rosen & Katz, 51 West 52nd Street, New York, NY 10019, Telephone: (212) 403– 17:15 Dec 27, 2013 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA Case No. 1:13–cv–01984–RBW Filed: 12/16/2013 VerDate Mar<15>2010 1360, Facsimile: (212) 403–2360, Email: JDLarson@WLRK.com. Counsel for Defendant Sander Media LLC: J. Parker Erkmann (DC Bar #489965), Dow Lohnes LLP, 1200 New Hampshire Ave. NW., Suite 800, Washington, DC 20036–6802, Telephone: (202) 776– 2036, Facsimile: (202) 776–4036, Email: perkmann@dowlohnes.com. /s/ lllllllllllllllll Anupama Sawkar*, Attorney, United States Department of Justice, Antitrust Division, Telecommunications and Media, Enforcement Section, 450 Fifth Street NW., Suite 7000, Washington, DC 20530, Phone: 202–598–2344, Facsimile: (202) 514–6381, Email: Anupama.Sawkar@usdoj.gov. *Attorney of Record Jkt 232001 Filed: 12/16/2013 PROPOSED FINAL JUDGMENT WHEREAS, plaintiff, the United States of America, filed its Complaint on December 16, 2013, and plaintiff and Defendants Gannett Co., Inc. (‘‘Gannett’’), Belo Corp. (‘‘Belo’’), and Sander Media LLC (‘‘Sander’’), by their respective attorneys, have consented to the entry of this Final Judgment without trial or adjudication of any issue of fact or law herein, and without this Final Judgment constituting any evidence against or an admission by any party with respect to any issue of law or fact herein; AND WHEREAS, Defendants have agreed to be bound by the provisions of this Final Judgment pending its approval by the Court; AND WHEREAS, the essence of this Final Judgment is the prompt and certain divestiture of certain rights and assets by the Defendants to assure that competition is not substantially lessened; AND WHEREAS, the United States requires Defendants to make certain divestitures for the purpose of remedying the loss of competition alleged in the Complaint; AND WHEREAS, Defendants have represented to the United States that the divestitures required below can and will be made, and that Defendants will later raise no claim of hardship or difficulty as grounds for asking the Court to PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 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 hereby ORDERED, ADJUDGED, AND DECREED: I. JURISDICTION This Court has jurisdiction over each of the parties hereto and over the subject matter of this action. The Complaint states a claim upon which relief may be granted against Defendants under Section 1 of the Sherman Act, and Section 7 of the Clayton Act, as amended, 15 U.S.C. §§ 1 and 18. II. DEFINITIONS As used in this Final Judgment: A. ‘‘Acquirer’’ means the entity to which the Defendants divest the Divestiture Assets. B. ‘‘Gannett’’ means defendant Gannett Co., Inc., a Delaware corporation, with its headquarters in McLean, Virginia, and includes its successors and assigns, and its subsidiaries, divisions, groups, affiliates, partnerships, joint ventures, directors, officers, managers, agents, and employees. C. ‘‘Belo’’ means defendant Belo Corp., a Delaware corporation, with its headquarters in Dallas, Texas, and includes its successors and assigns, and its subsidiaries, divisions, groups, affiliates, partnerships, joint ventures, directors, officers, managers, agents, and employees. D. ‘‘Sander’’ means defendant Sander Media LLC, a Delaware limited liability company, with its headquarters in Scottsdale, Arizona, and includes its successors and assigns, and its subsidiaries, divisions, groups, affiliates, partnerships, joint ventures, directors, owners, officers, managers, agents, and employees. E. ‘‘DMA’’ means Designated Market Area as defined by A.C. Nielsen Company based upon viewing patterns and used by the Investing In Television BIA Market Report 2013 (1st edition). DMAs are ranked according to the number of households therein and are used by broadcasters, advertisers, and advertising agencies to aid in evaluating television audience size and composition. F. ‘‘KMOV–TV’’ means the CBSaffiliated broadcast television station located in the St. Louis DMA owned by Belo and being sold to Sander as part of the Transaction. G. ‘‘Divestiture Assets’’ means all of the assets, tangible or intangible, used in the operation of KMOV–TV, including, E:\FR\FM\30DEN1.SGM 30DEN1 Federal Register / Vol. 78, No. 250 / Monday, December 30, 2013 / Notices maindgalligan on DSK5TPTVN1PROD with NOTICES but not limited to, all real property (owned or leased) used in the operation of the station, all broadcast equipment, office equipment, office furniture, fixtures, materials, supplies, and other tangible property used in the operation of the station; all licenses, permits, authorizations, and applications therefore issued by the Federal Communications Commission (‘‘FCC’’) and other government agencies related to that station; all contracts (including programming contracts and rights), agreements, network affiliation agreements, leases and commitments and understandings of Belo or Sander relating to the operation of KMOV–TV; all trademarks, service marks, trade names, copyrights, patents, slogans, programming materials, and promotional materials relating to KMOV–TV; all customer lists, contracts, accounts, and credit records; and all logs and other records maintained by Belo or Sander in connection with KMOV–TV, provided, however, that Divestiture Assets does not include physical assets located outside of the St. Louis DMA (e.g., corporate infrastructure), group-wide corporate records, employee benefit plans, groupwide insurance policies, group-wide service contracts, group-wide software licenses and digital systems, the trademarks ‘‘Belo’’ or ‘‘Sander,’’ or the Shared Services Agreement or other agreements referenced in the Asset Purchase Agreement dated June 12, 2013, and its subsequent amendments. H. ‘‘Transaction’’ means the merger and acquisition contemplated by the Agreement and Plan of Merger, dated June 12, 2013, by and among Belo, Gannett, and Delta Acquisition Corp. and all related agreements, including Sander’s acquisition of certain Belo stations and all agreements entered into between Gannett and Sander contemplated by the Asset Purchase Agreement, dated June 12, 2013, and its subsequent amendments. I. ‘‘Shared Services Agreement’’ means the Shared Services Agreement between Gannett and Sander contemplated by the Transaction in substantially the same form as Exhibit C(2) to the Agreement and Plan of Merger dated June 12, 2013, by and among Belo, Gannett, and Delta Acquisition Corp. III. APPLICABILITY A. This Final Judgment applies to Gannett, Belo, and Sander as defined above, 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. VerDate Mar<15>2010 17:15 Dec 27, 2013 Jkt 232001 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 Defendants’ 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 Acquirer of the assets divested pursuant to the Final Judgment. IV. DIVESTITURES A. Defendants are ordered and directed to divest the Divestiture Assets to an Acquirer acceptable to the United States in its sole discretion, in a manner consistent with this Final Judgment and the Hold Separate Stipulation and Order in this case. Such divestiture shall include all ownership interests and options to acquire or to transfer to others any ownership interests in the Divestiture Assets, and Defendants shall not retain any options to acquire or transfer to others ownership interests in the Divestiture Assets after completing the divestiture required by this Final Judgment. Defendants shall not enter into any agreements to provide financing, guarantees of financing or services to, or to conduct any sales or any business negotiations jointly with, the Acquirer with respect to the Divestiture Assets, and any such agreements that may exist between Gannett and Sander shall be terminated with respect to the Divestiture Assets upon divestiture, except to the extent that the United States in its sole discretion approves in writing any transitional services that may be necessary to facilitate continuous operation of the Divestiture Assets until the Acquirer can provide such capabilities independently. The divestiture pursuant to this section shall take place within one hundred and twenty (120) calendar days after the filing of the Complaint in this matter, or five (5) days after notice of entry of this Final Judgment by the Court, whichever is later. The United States, in its sole discretion, may agree to one or more extensions of this time period, not to exceed ninety (90) calendar days in total, and shall notify the Court in such circumstances. Defendants shall use their best efforts to accomplish the divestiture ordered by this Final Judgment, including using their best efforts to obtain all necessary FCC approvals, as expeditiously as possible. B. In accomplishing the divestiture ordered by this Final Judgment, Defendants promptly shall make known, by usual and customary means, the availability of the Divestiture Assets. PO 00000 Frm 00106 Fmt 4703 Sfmt 4703 79495 Defendants shall inform any person making inquiry regarding a possible purchase of the Divestiture Assets that they are being divested pursuant to this Final Judgment and provide that person with a copy of this Final Judgment. Defendants shall furnish to all prospective Acquirers, subject to customary confidentiality assurances, all information and documents relating to the Divestiture Assets customarily provided in a due diligence process, except such information or documents subject to the attorney-client privilege or work-product doctrine. Defendants shall make available such information to the United States at the same time that such information is made available to any other person. C. Defendants shall provide the Acquirer and the United States information relating to the personnel involved in the operation and management of the Divestiture Assets to enable the Acquirer to make offers of employment. Defendants shall not interfere with any negotiations by the Acquirer to employ or contract with any employee of any defendant whose primary responsibility relates to the operation or management of the Divestiture Assets. D. Defendants shall permit prospective acquirers of the Divestiture Assets to have reasonable access to personnel and to make inspections of the physical facilities of KMOV–TV; 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. E. Defendants shall warrant to the Acquirer that each asset will be operational on the date of sale. F. Defendants shall not take any action that will impede in any way the permitting, operation, or divestiture of the Divestiture Assets. G. Defendants shall warrant to the Acquirer that there are no material defects in the environmental, zoning, or other permits pertaining to the operation of each asset, and 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. H. Unless the United States otherwise consents in writing, the divestiture pursuant to Section IV, or by trustee appointed pursuant to Section V of this Final Judgment, shall include the entire Divestiture Assets, and be accomplished in such a way as to satisfy the United E:\FR\FM\30DEN1.SGM 30DEN1 79496 Federal Register / Vol. 78, No. 250 / Monday, December 30, 2013 / Notices maindgalligan on DSK5TPTVN1PROD with NOTICES States, in its sole discretion, that the Divestiture Assets can and will be used by the Acquirer as part of a viable, ongoing commercial television broadcasting business, and the divestiture of such assets will achieve the purposes of this Final Judgment and remedy the competitive harm alleged in the Complaint. The divestitures, whether pursuant to Section IV or Section V of this Final Judgment: (1) shall be made to an Acquirer that, in the United States’ sole judgment, has the intent and capability (including the necessary managerial, operational, technical, and financial capability) of competing effectively in the television broadcasting business in the St. Louis DMA; and (2) shall be accomplished so as to satisfy the United States, in its sole discretion, that none of the terms of any agreement between the Acquirer and Defendants gives Defendants the ability unreasonably to raise the Acquirer’s costs, to lower the Acquirer’s efficiency, or otherwise to interfere in the ability of the Acquirer to compete effectively. V. APPOINTMENT OF TRUSTEE A. If the Defendants have not divested the Divestiture Assets within the time period specified in Paragraph IV(A), Defendants shall notify the United States of that fact in writing. B. If (a) the Defendants have not divested the Divestiture Assets within the time period specified by Paragraph IV(A), or (b) the United States decides in its sole discretion that the Acquirer is likely to be unable to complete the purchase of the Divestiture Assets, upon application of the United States in its sole discretion, the Court shall appoint a trustee selected by the United States and approved by the Court to effect the divestiture of the Divestiture Assets. C. After the appointment of a trustee becomes effective, only the trustee shall have the right to sell the Divestiture Assets. The trustee shall have the power and authority to accomplish the divestiture to an Acquirer, and in a manner acceptable to the United States in its sole discretion, at such price and on such terms as are then obtainable upon reasonable effort by the trustee, subject to the provisions of Sections IV, V, and VI 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 trustee may hire at the cost and expense of Gannett any investment bankers, attorneys, or other agents, who shall be solely accountable to the trustee, reasonably necessary in the trustee’s judgment to assist in the divestiture. Defendants shall inform any VerDate Mar<15>2010 17:15 Dec 27, 2013 Jkt 232001 person making an inquiry regarding a possible purchase of the Divestiture Assets that they are being divested pursuant to this Final Judgment and provide that person with a copy of this Final Judgment and contact information for the trustee. D. Defendants shall not object to a sale by the trustee on any ground other than the trustee’s malfeasance. Any such objection by Defendants must be conveyed in writing to the United States and the trustee within ten (10) calendar days after the trustee has provided the notice required under Section VI. E. The trustee shall serve at the cost and expense of Gannett, on such terms and conditions as the United States approves, and shall account for all monies derived from the sale of the assets sold by the trustee and all costs and expenses so incurred. After approval by the Court of the trustee’s accounting, including fees for its services and those of any professionals and agents retained by the trustee, all remaining money shall be paid to Defendants and the trust shall then be terminated. The compensation of the trustee and any professionals and agents retained by the trustee shall be reasonable in light of the value of the Divestiture Assets and based on a fee arrangement providing the trustee with an incentive based on the price and terms of the divestiture and the speed with which it is accomplished, but timeliness is paramount. F. Defendants shall use their best efforts to assist the trustee in accomplishing the required divestiture. The trustee and any consultants, accountants, attorneys, and other persons retained by the trustee shall have full and complete access to the personnel, books, records, and facilities of the business to be divested, and Defendants shall develop financial and other information relevant to such business as the trustee may reasonably request, subject to reasonable protection for trade secret or other confidential research, development or commercial information. Defendants shall take no action to interfere with or to impede the trustee’s accomplishment of the divestiture. G. After its appointment, the trustee shall file monthly reports with the United States setting forth the trustee’s efforts to accomplish the divestiture 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 PO 00000 Frm 00107 Fmt 4703 Sfmt 4703 acquiring, any interest in the Divestiture Assets, and shall describe in detail each contact with any such person. The trustee shall maintain full records of all efforts made to divest the Divestiture Assets. H. If the trustee has not accomplished the divestiture ordered under this Final Judgment within six (6) months after its appointment, the trustee shall promptly file with the Court a report setting forth: (1) the trustee’s efforts to accomplish the required divestiture, (2) the reasons, in the trustee’s judgment, why the required divestiture has not been accomplished, and (3) the trustee’s recommendations. To the extent that such report contains information that the trustee deems confidential, such report shall not be filed in the public docket of the Court. The 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 the Final Judgment, which may, if necessary, include extending the trust and the term of the trustee’s appointment by a period requested by the United States. VI. NOTICE OF PROPOSED DIVESTITURE A. Within two (2) business days following execution of a definitive divestiture agreement, Defendants or the trustee, whichever is then responsible for effecting the divestiture required herein, shall notify the United States of any proposed divestiture required by Section IV or V of this Final Judgment. If the 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 offered or expressed an interest in or desire to acquire any ownership interest in the Divestiture Assets, together with full details of the same. B. Within fifteen (15) calendar days of receipt by the United States of such notice, the United States may request from Defendants, the proposed Acquirer, any other third party, or the trustee if applicable, additional information concerning the proposed divestiture, the proposed Acquirer, and any other potential Acquirer. Defendants and the trustee shall furnish any additional information requested within fifteen (15) calendar days of the receipt of the request, unless the parties shall otherwise agree. C. Within thirty (30) calendar days after receipt of the notice or within E:\FR\FM\30DEN1.SGM 30DEN1 Federal Register / Vol. 78, No. 250 / Monday, December 30, 2013 / Notices twenty (20) calendar days after the United States has been provided the additional information requested from Defendants, the proposed Acquirer, any third party, and the trustee, whichever is later, the United States shall provide written notice to Defendants and the trustee, if there is one, stating whether or not it objects to the proposed divestiture in its sole discretion. 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 V of this Final Judgment. maindgalligan on DSK5TPTVN1PROD with NOTICES VIII. HOLD SEPARATE Until the divestiture required by this Final Judgment has 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 divestiture ordered by this Court. IX. AFFIDAVITS A. Within twenty (20) calendar days of the filing of the Complaint in this matter, and every thirty (30) calendar days thereafter until the divestiture has been completed under Section IV or V of this Final Judgment, Defendants shall deliver to the United States an affidavit as to the fact and manner of their compliance with Section IV or V of this Final Judgment. Each such affidavit shall include the name, address and telephone number of each person who, during the preceding thirty (30) 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 VerDate Mar<15>2010 17:15 Dec 27, 2013 Jkt 232001 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 (14) days of receipt of such affidavit. B. Within twenty (20) calendar days of the filing of the Complaint in this matter, each Defendant 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 section within fifteen (15) 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 divestiture has 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 the 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 duly authorized representatives of the United States Department of Justice, including consultants and other persons retained by the United States, shall, upon written request of 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 hard copies or 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 PO 00000 Frm 00108 Fmt 4703 Sfmt 4703 79497 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 information or documents are furnished by Defendants 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 (10) calendar days notice prior to divulging such material in any legal proceeding (other than a grand jury proceeding). XI. NO REACQUISITION OR OTHER PROHIBITED ACTIVITIES Defendants may not (1) reacquire any part of the Divestiture Assets, (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 local marketing agreement, joint sales agreement, other cooperative selling arrangement, or shared services agreement, or conduct other business negotiations jointly with the Acquirer with respect to the Divestiture Assets, or (4) provide financing or guarantees of financing with respect to the Divestiture Assets, during the term of this Final Judgment. The shared services prohibition does not preclude Defendants from continuing or entering into agreements in a form customarily used in the industry to (1) share news helicopters or (2) pool generic video footage that does not include recording a reporter or other on-air talent. E:\FR\FM\30DEN1.SGM 30DEN1 79498 Federal Register / Vol. 78, No. 250 / Monday, December 30, 2013 / Notices XII. RETENTION OF JURISDICTION This Court retains jurisdiction to enable any party to this Final Judgment to apply to this 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. XIII. EXPIRATION OF FINAL JUDGMENT Unless this Court grants an extension, this Final Judgment shall expire ten (10) years from the date of its entry. XIV. 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 § 16, including making copies available to the public of this Final Judgment, the Competitive Impact Statement, and any comments thereon, and the United States’ responses to comments. Based on 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: llllllllllllllll Court approval subject to procedures of Antitrust Procedures and Penalties Act, 15 U.S.C. § 16 United States District Judge [FR Doc. 2013–31182 Filed 12–27–13; 8:45 am] BILLING CODE P DEPARTMENT OF JUSTICE Antitrust Division maindgalligan on DSK5TPTVN1PROD with NOTICES Notice Pursuant to the National Cooperative Research and Production Act of 1993—OpenDaylight Project, Inc. Notice is hereby given that, on November 13, 2013, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. § 4301 et seq. (‘‘the Act’’), OpenDaylight Project, Inc. (‘‘OpenDaylight’’) has filed written notifications simultaneously with the Attorney General and the Federal Trade Commission disclosing changes in its membership. The notifications were filed for the purpose of extending the Act’s provisions limiting the recovery of antitrust plaintiffs to actual damages under specified circumstances. Specifically, A10 Networks, San Jose, CA; and Midokura, Lausanne, VerDate Mar<15>2010 17:15 Dec 27, 2013 Jkt 232001 SWITZERLAND, have been added as parties to this venture. In addition, Versa Networks, Santa Clara, CA, has withdrawn as a party to this venture. No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and OpenDaylight intends to file additional written notifications disclosing all changes in membership. On May 23, 2013, OpenDaylight filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the Federal Register pursuant to Section 6(b) of the Act on July 1, 2013 (78 FR 39326). The last notification was filed with the Department on August 14, 2013. A notice was published in the Federal Register pursuant to Section 6(b) of the Act on September 16, 2013 (78 FR 56939). Patricia A. Brink, Director of Civil Enforcement, Antitrust Division. [FR Doc. 2013–31244 Filed 12–27–13; 8:45 am] BILLING CODE 4410–11–P DEPARTMENT OF JUSTICE Antitrust Division Notice Pursuant to The National Cooperative Research and Production Act of 1993—IMS Global Learning Consortium, Inc. Notice is hereby given that, on November 22, 2013, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. § 4301 et seq. (‘‘the Act’’), IMS Global Learning Consortium, Inc. (‘‘IMS Global’’) has filed written notifications simultaneously with the Attorney General and the Federal Trade Commission disclosing changes in its membership. The notifications were filed for the purpose of extending the Act’s provisions limiting the recovery of antitrust plaintiffs to actual damages under specified circumstances. Specifically, Carson-Dellosa Publishing, Greensboro, NC; Data Recognition Group, Maple Grove, MN; Nelson Education Ltd., Toronto, Ontario, CANADA; The Northwest Evaluation Association, Portland, OR; Pacific Metrics, Monterey, CA; and The Constitution Foundation dba The Saylor Foundation, Washington, DC, have been added as parties to this venture. Also, Ucompass.com, Inc., Tallahassee, FL; Tegrity, Santa Clara, PO 00000 Frm 00109 Fmt 4703 Sfmt 4703 CA; Utah State Office of Education, Salt Lake City, UT; Rhode Island Department of Elementary and Secondary Education Office of Instruction, Assessment, and Curriculum, Providence, RI; and State of Michigan Dept. of Education, Bureau of Assessments and Accountability, Lansing, MI, have withdrawn as parties to this venture. In addition, Department of Education, Employment and Workplace Relations has changed its name to Australian Government Department of Education, Canberra City, AUSTRALIA. No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and IMS Global intends to file additional written notifications disclosing all changes in membership. On April 7, 2000, IMS Global filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the Federal Register pursuant to Section 6(b) of the Act on September 13, 2000 (65 FR 55283). The last notification was filed with the Department on August 16, 2013. A notice was published in the Federal Register pursuant to Section 6(b) of the Act on September 16, 2013 (78 FR 56939). Patricia A. Brink, Director of Civil Enforcement, Antitrust Division. [FR Doc. 2013–31228 Filed 12–27–13; 8:45 am] BILLING CODE P DEPARTMENT OF JUSTICE Antitrust Division Notice Pursuant to the National Cooperative Research and Production Act of 1993—Open-IX Association Notice is hereby given that, on December 3, 2013, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. § 4301 et seq. (‘‘the Act’’), Open-IX Association (‘‘Open-IX’’) has filed written notifications simultaneously with the Attorney General and the Federal Trade Commission disclosing (1) the name and principal place of business of the standards development organization and (2) the nature and scope of its standards development activities. The notifications were filed for the purpose of invoking the Act’s provisions limiting the recovery of antitrust plaintiffs to actual damages under specified circumstances. E:\FR\FM\30DEN1.SGM 30DEN1

Agencies

[Federal Register Volume 78, Number 250 (Monday, December 30, 2013)]
[Notices]
[Pages 79485-79498]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-31182]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Gannett Co., Inc., Belo Corp., and Sander Media 
LLC; 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 v. Gannett Co., Inc., Belo Corp., and Sander Media 
LLC, Civil Action No. 1:13-cv-01984. On December 16, 2013, the United 
States filed a Complaint alleging that Gannett's proposed acquisition 
of Belo, the sale of KMOV-TV in St. Louis to Sander, and Sander's 
operation of KMOV-TV subject to various agreements between Sander and 
Gannett would violate Section 7 of the Clayton Act, 15 U.S.C. 18, and 
Section 1 of the Sherman Act, 15 U.S.C. 1. The proposed Final Judgment, 
filed the same time as the Complaint, requires Gannett Co., Inc., Belo 
Corp., and Sander Media LLC to divest KMOV-TV.
    Copies of the Complaint, proposed Final Judgment and Competitive 
Impact Statement are available for inspection at the Department of 
Justice, Antitrust Division, Antitrust Documents Group, 450 Fifth 
Street NW., Suite 1010, Washington, DC, 20530 (telephone: 202-514-
2481), on the Department of Justice's Web site at http://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 U.S. Department of Justice, 
Antitrust Division's internet Web site, filed with the Court and, under 
certain circumstances, published in the Federal Register. Comments 
should be directed to Scott A. Scheele, Chief, Telecommunications and 
Media Section, Antitrust Division, Department of Justice, 450 Fifth 
Street NW., Suite 7000, Washington, DC 20530 (telephone: 202-514-5621).

Patricia A. Brink,
Director of Civil Enforcement.

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

    UNITED STATES OF AMERICA, Department of Justice, Antitrust 
Division, 450 5th Street, NW., Suite 7000, Washington, D.C. 20530, 
Plaintiff, v. GANNETT CO., INC., 7950 Jones Branch Drive, McLean, 
Virginia 22107, BELO CORP., 400 South Record Street, Dallas, Texas 
75202, and SANDER MEDIA LLC, 28150 N. Alma School Parkway #103, PBM 
509, Scottsdale, Arizona 85262, Defendants.
Case No. 1:13-cv-01984-RBW
Judge: Reggie B. Walton
Filed: 12/16/2013

COMPLAINT

    The United States of America, acting under the direction of the 
Attorney General of the United States, brings this civil action to 
enjoin the proposed acquisition of Belo Corp. (``Belo'') by Gannett 
Co., Inc. (``Gannett''), and the simultaneous implementation of related 
agreements between Gannett and Sander Holdings Co. LLC, a wholly owned 
subsidiary of Sander Media LLC (``Sander''), pursuant to which 
broadcast television station KMOV-TV in St. Louis, Missouri, along with 
certain other broadcast television stations owned by Belo, will be 
transferred to and operated by Sander (collectively ``the 
Transaction''), and to obtain other equitable relief. The Transaction 
likely would lessen competition substantially and would restrain trade 
in the sale of broadcast television spot advertising in the St. Louis 
Designated Market Area (``DMA''), which includes parts of Missouri and 
Illinois, in violation of Section 1 of the Sherman Act and Section 7 of 
the Clayton Act, 15 U.S.C. Sec. Sec.  1 and 18. The United States 
alleges as follows:

I. NATURE OF THE ACTION

    1. Pursuant to the June 12, 2013, Agreement and Plan of Merger, 
Gannett will acquire all outstanding stock of Belo for approximately 
$1.5 billion, with a total transaction value of $2.2 billion including 
assumed debt. Gannett owns 23 broadcast television stations and 
numerous newspapers throughout the United States. Consummation of 
Gannett's acquisition of Belo would give Gannett ownership of Belo's 20 
broadcast television stations; however, Federal Communications 
Commission (``FCC'') rules prohibit Gannett from owning Belo stations 
in five DMAs where Gannett already owns broadcast television stations 
or newspapers. To comply with these ownership rules, Gannett has 
entered into an Asset Purchase Agreement and other related agreements 
with Sander Holdings Co., LLC, a wholly owned subsidiary of Sander, 
which would transfer ownership of six Belo stations in five DMAs, 
including KMOV-TV in St. Louis, to Sander. Sander will pay Gannett 
approximately $101 million for the six stations, significantly less 
than their actual market value. The agreements between Gannett and 
Sander are mutually contingent on and intended to close simultaneously 
with the merger between Gannett and Belo.
    2. Gannett owns and operates KSDK-TV, the NBC affiliate in the St. 
Louis DMA. As the owner and operator of that station, Gannett sells 
KSDK-TV's advertising time. Based on advertising sales revenues, KSDK-
TV is one of the three largest commercial broadcast television stations 
in St. Louis.
    3. Belo owns and operates KMOV-TV, the CBS affiliate in the St. 
Louis DMA. As the owner and operator of that station, Belo sells KMOV-
TV's advertising time. Based on advertising sales revenues, KMOV-TV is 
one of the three largest commercial broadcast television stations in 
St. Louis.
    4. Currently, Gannett's KSDK-TV and Belo's KMOV-TV vigorously 
compete for the business of local and national companies that seek to 
purchase local spot advertisements on broadcast television stations in 
St. Louis. This competition benefits advertisers by reducing prices and 
improving the quality of services advertisers receive from the 
stations.
    5. Although Gannett will transfer ownership of six stations to 
Sander, the agreements between Gannett and Sander include: (1) eight-
year assignable option agreements that permit Gannett to reacquire any 
of the stations (should existing FCC prohibitions be eliminated) or to 
transfer the options to a third party; (2) eight-year Shared Services 
Agreements under which Gannett will provide a variety of services to 
help Sander operate the stations, excluding joint advertising sales and 
negotiation of retransmission consent rights in DMAs such as St. Louis 
where Gannett also has television stations, in return for substantial 
payments from Sander to Gannett; (3) a financing guarantee obligating 
Gannett to repay, should Sander default, the balance of the $101 
million loan Sander is obtaining to purchase the stations; and (4) 
Joint Sales Agreements in DMAs where Gannett

[[Page 79486]]

owns newspapers but not television stations giving Gannett control of 
advertising sales at these Sander stations. Together, these agreements 
give Gannett significant influence over Sander's conduct in operating 
the stations, including KMOV-TV, and also diminish Gannett's and 
Sander's incentives to compete vigorously with each other in sales of 
broadcast television advertising in St. Louis.
    6. If consummated, the Transaction would result in Gannett owning 
one of the top three commercial broadcast television stations in St. 
Louis and having significant influence over a second top three station 
serving the same area. Together, KMOV-TV and KSDK-TV have approximately 
a 50% market share of gross broadcast television advertising revenues 
in the St. Louis DMA. The St. Louis Fox affiliate is the only 
significant advertising competitor to those stations, while the next 
strongest stations, an ABC affiliate and a CW affiliate, are much 
weaker.
    7. The Transaction would eliminate or greatly reduce the head-to-
head competition between KSDK-TV and KMOV-TV in St. Louis and so 
eliminate or greatly reduce the benefits of that competition. Unless 
blocked, the Transaction is likely to lead to higher prices for 
broadcast television spot advertising in the St. Louis DMA in violation 
of Section 1 of the Sherman Act and Section 7 of the Clayton Act, 15 
U.S.C. Sec. Sec.  1 and 18.

II. JURISDICTION AND VENUE

    8. The United States brings this action pursuant to Section 4 of 
the Sherman Act and Section 15 of the Clayton Act, as amended, 15 
U.S.C. Sec. Sec.  4 and 25, to prevent and restrain Defendants from 
violating Section 1 of the Sherman Act and Section 7 of the Clayton 
Act, 15 U.S.C. Sec. Sec.  1 and 18.
    9. Gannett and Belo sell broadcast television spot advertising in 
the St. Louis DMA, a commercial activity that substantially affects, 
and is in the flow of, interstate commerce. The Court has subject-
matter jurisdiction over this action pursuant to Section 4 of the 
Sherman Act and Section 15 of the Clayton Act, 15 U.S.C. Sec. Sec.  4 
and 25, and 28 U.S.C. Sec. Sec.  1331, 1337(a), and 1345.
    10. Gannett transacts business and is found in the District of 
Columbia, where it owns and operates broadcast television station WUSA-
TV, and is subject to the personal jurisdiction of this Court. All 
Defendants have consented to venue and personal jurisdiction in this 
District. Therefore, venue is proper in this District under Section 12 
of the Clayton Act, 15 U.S.C. Sec.  22, and 28 U.S.C. Sec. Sec.  
1391(b) and (c).

III. THE DEFENDANTS

    11. Gannett is a Delaware corporation, with its headquarters in 
McLean, Virginia. Gannett reported revenues of over $5.3 billion in 
2012. Gannett owns 23 commercial broadcast television stations in 19 
markets in the United States, as well as 82 daily newspapers in markets 
throughout the United States. The broadcast television stations that 
Gannett owns include KSDK-TV, the NBC affiliate in St. Louis, Missouri.
    12. Belo is a Delaware corporation, with its headquarters in 
Dallas, Texas. Belo reported revenues of over $714 million in 2012. 
Belo owns 20 commercial broadcast television stations in 15 markets 
throughout the United States, including KMOV-TV, the CBS affiliate in 
St. Louis, Missouri.
    13. Sander is a Delaware limited liability company, with its 
headquarters in Scottsdale, Arizona. Sander Holdings Co. LLC (``Sander 
Holdings'') is a wholly owned subsidiary of Sander. Sander is also the 
owner of proposed license assignees of six commercial broadcast 
television stations, including KMOV-TV in St. Louis, Missouri, to be 
acquired pursuant to agreements between Gannett and Belo and between 
Gannett and Sander Holdings that are part of the Transaction. Sander 
has no current business activity apart from this planned acquisition.

IV. THE TRANSACTION WOULD LIKELY SUBSTANTIALLY LESSEN COMPETITION AND 
UNREASONABLY RESTRAIN INTERSTATE TRADE AND COMMERCE

    A. Broadcast Television Spot Advertising Is a Relevant Product 
Market
    14. Broadcast television stations attract viewers through their 
programming, which is delivered for free over the air or retransmitted 
to viewers, mainly through wired cable or other terrestrial television 
systems and through satellite television systems. Broadcast television 
stations then sell advertising time to businesses that want to 
advertise their products to television viewers. Broadcast television 
``spot'' advertising, which comprises the majority of a television 
station's revenues, is sold directly by the station itself or through 
its national representative on a localized basis and is purchased by 
advertisers who want to target potential customers in specific 
geographic areas. Spot advertising differs from network and syndicated 
television advertising, which are sold by television networks and 
producers of syndicated programs on a nationwide basis and broadcast in 
every market where the network or syndicated program is aired.
    15. Broadcast television spot advertising possesses a unique 
combination of attributes that set it apart from advertising using 
other types of media. Television combines sight, sound, and motion, 
thereby creating a more memorable advertisement. Moreover, of all 
media, broadcast television spot advertising reaches the largest 
percentage of all potential customers in a particular target geographic 
area and is therefore especially effective in introducing and 
establishing the image of a product. For a significant number of 
advertisers, broadcast television spot advertising, because of its 
unique combination of attributes, is an advertising medium for which 
there is no close substitute. Other media, such as radio, newspapers, 
or outdoor billboards, are not desirable substitutes for broadcast 
television advertising. None of these media can provide the important 
combination of sight, sound, and motion that makes television unique 
and impactful as a medium for advertising.
    16. Like broadcast television, cable television and satellite 
television channels combine elements of sight, sound, and motion, but 
they are not a desirable substitute for broadcast television spot 
advertising for two important reasons. First, satellite, cable, and 
other landline content delivery systems do not have the ``reach'' of 
broadcast television. Typically, broadcast television can reach well-
over 90% of homes in a DMA, while cable television often reaches much 
less, e.g., 50% or fewer of the homes in the St. Louis DMA. As a 
result, an advertiser can achieve greater audience penetration through 
broadcast television spot advertising than through cable television. 
Second, because cable and satellite television may offer more than 100 
channels, they fragment the audience into small demographic segments. 
Because broadcast television programming typically has higher rating 
points than cable television programming, it is much easier and more 
efficient for an advertiser to reach its target demographic on 
broadcast television. Media buyers often buy cable television and 
satellite television not so much as a substitute for broadcast 
television, but rather to supplement a broadcast television message, to 
reach a narrow demographic with greater frequency (e.g., 18-24 year 
olds) or to target narrow geographic areas within a DMA. A small but 
significant price

[[Page 79487]]

increase by broadcast television spot advertising providers would not 
be made unprofitable by advertisers switching to cable and satellite 
advertising.
    17. Internet-based media is not currently a substitute for 
broadcast television spot advertising. Although Online Video 
Distributors (``OVDs'') such as Netflix and Hulu are important sources 
of video programming, as with cable television advertising, the local 
video advertising of OVDs lacks the reach of broadcast television spot 
advertising. Non-video Internet advertising, e.g., Web site banner 
advertising, lacks the important combination of sight, sound, and 
motion that gives television its impact. Consequently, local media 
buyers currently purchase Internet-based advertising primarily as a 
supplement to broadcast television spot advertising, and a small but 
significant price increase by broadcast television spot advertising 
providers would not be made unprofitable by advertisers switching to 
Internet-based advertising.
    18. Broadcast television stations generally can identify 
advertisers with strong preferences for using broadcast television 
advertising. Broadcast television stations negotiate prices 
individually with advertisers and consequently can charge different 
advertisers different prices. During the individualized negotiations on 
price and available advertising slots that commonly occur between 
advertisers and broadcast television stations, advertisers provide 
stations with information about their advertising needs, including 
their target audience. Broadcast television stations could profitably 
raise prices to those advertisers who view broadcast television as a 
necessary advertising medium, either as their sole means of advertising 
or as a necessary part of a total advertising plan.
    19. Accordingly, the sale of broadcast television spot advertising 
is a line of commerce under Section 7 of the Clayton Act and a relevant 
product market for purposes of analyzing the Transaction under Section 
7 of the Clayton Act and Section 1 of the Sherman Act.

B. The St. Louis DMA Is the Relevant Geographic Market

    20. DMAs are geographic units defined by A.C. Nielsen Company, a 
firm that surveys television viewers and furnishes broadcast television 
stations, advertisers, and advertising agencies in a particular area 
with data to aid in evaluating audience size and composition. DMAs are 
ranked according to the number of households therein, and the St. Louis 
DMA is the 21st largest in the United States, containing over 1.2 
million television households. The St. Louis DMA is centered on the 
city of St. Louis, Missouri, and encompasses 31 counties in the states 
of Illinois and Missouri. Signals from broadcast television stations 
located in St. Louis reach viewers throughout the DMA, but signals from 
broadcast television stations located outside the DMA reach few viewers 
within the DMA. DMAs are used to analyze revenues and shares of 
broadcast television stations in the Investing In Television BIA Market 
Report 2013 (1st edition), a standard industry reference.
    21. Advertisers use broadcast television stations within the St. 
Louis DMA to reach the largest possible number of viewers across the 
DMA. Some of these advertisers are located in the St. Louis DMA and 
need to reach customers there; others are regional or national 
businesses that want to target consumers in the St. Louis, DMA. 
Advertising on television stations outside the St. Louis DMA is not an 
alternative for these advertisers because such stations cannot be 
viewed by a significant number of potential customers within the DMA. 
Thus, if there were a small but significant increase in broadcast 
television spot advertising prices within the St. Louis DMA, an 
insufficient number of advertisers would switch advertising purchases 
to television stations outside the St. Louis DMA to render the price 
increase unprofitable.
    22. Accordingly, the St. Louis DMA is a section of the country 
under Section 7 of the Clayton Act and a relevant geographic market for 
the sale of broadcast television spot advertising for purposes of 
analyzing the Transaction under Section 7 of the Clayton Act and 
Section 1 of the Sherman Act.

C. The Transaction Would Harm Competition in the St. Louis DMA

    23. Broadcast television stations compete for advertisers through 
programming that attracts viewers to their stations. In developing 
their own programming and in considering the programming of the 
networks with which they may be affiliated, broadcast television 
stations try to select programs that appeal to the greatest number of 
viewers and also try to differentiate their stations from others in the 
same DMA by appealing to specific demographic groups. Advertisers, in 
turn, are interested in using broadcast television spot advertising to 
reach a large audience, as well as to reach a high proportion of the 
type of viewers that are most likely to buy their products.
    24. Broadcast station ownership in the St. Louis DMA is already 
significantly concentrated. Three stations, each affiliated with a 
major network, had more than 80% of gross advertising revenues in 2012, 
with Gannett's KSDK-TV having a revenue share of nearly 30% and Belo's 
KMOV-TV having a revenue share of nearly 20%. Together, the Gannett and 
Belo stations have approximately 50% of all television station gross 
advertising revenues in the St. Louis DMA.
    25. After the Transaction, even though KSDK-TV and KMOV-TV will 
continue to have different owners and maintain separate sales forces, 
the various agreements between Gannett and Sander create an ongoing 
relationship between Gannett and Sander that did not exist between 
competitors Gannett and Belo. These long-term agreements are likely to 
align Gannett's and Sander's incentives in the St. Louis DMA:
    a. With the eight-year assignable option, Gannett will be able to 
sell to a third party the ability to buy KMOV-TV at any time, giving 
Gannett influence over Sander's future in the market and the power to 
choose its competitor in the St. Louis DMA;
    b. Under its financing guarantee to Sander, Gannett is obligated to 
repay the balance of the loan financing Sander's purchase of the Belo 
stations and thus will have an incentive to avoid competing 
aggressively and forcing Sander into a position where it might default; 
and
    c. Pursuant to the eight-year Shared Services Agreements, Sander 
will be dependent upon Gannett for key services necessary to run KMOV-
TV and its other stations successfully and thus will be in a close 
ongoing business relationship with a key competitor.

Taken together, these agreements are likely to give Gannett significant 
influence over Sander and over Sander's operation of KMOV-TV. The 
agreements give each the ability and incentive to work cooperatively 
with the other to maximize their joint profits, to the detriment of 
their customers.
    26. If KSDK-TV and KMOV-TV were to coordinate their competitive 
behavior, the market structure would operate as if the two stations 
were commonly owned. Using the Herfindahl-Hirschman Index (``HHI''), a 
standard measure of market concentration (defined and explained in 
Appendix A), a combination of KSDK-TV and KMOV-TV in the St. Louis DMA 
would result both in high

[[Page 79488]]

concentration and a large change in concentration, increasing the HHI 
by 1161 points from 2431 to 3592. Under the Horizontal Merger 
Guidelines issued by the Department of Justice and Federal Trade 
Commission, mergers resulting in highly concentrated markets (with an 
HHI in excess of 2500) and with an increase in the HHI of more than 200 
points are presumed to be likely to enhance market power.
    27. In addition to increasing concentration in the St. Louis DMA, 
the Transaction involves two stations that are close substitutes for 
one another in a market with limited alternatives. KMOV-TV and KSDK-TV 
appeal to similar demographic groups, making them close substitutes for 
many viewers and advertisers. Only one other station in the St. Louis 
DMA, a Fox affiliate, has a comparable gross advertising revenue share. 
The St. Louis ABC and CW affiliates, which each have gross advertising 
revenue shares of less than 10%, are much less acceptable substitutes 
for many advertisers. The CW affiliate's programming tends to appeal to 
a different demographic, and neither the ABC nor the CW affiliate has 
strong local news programming, an important differentiator to 
advertisers in the St. Louis DMA.
    28. In the St. Louis DMA, KMOV-TV and KSDK-TV compete head-to-head 
in the sale of broadcast television spot advertising and are close 
substitutes for a significant number of advertisers. Advertisers 
benefit from this competition. During individual price negotiations 
between advertisers and television stations in the St. Louis DMA, 
advertisers are able to ``play off'' the stations against each other 
and obtain competitive rates from programs targeting similar 
demographics.
    29. After the Transaction, advertisers in the St. Louis DMA would 
likely find it more difficult to ``buy around'' both KMOV-TV and KDSK-
TV in response to higher advertising rates, than to buy around either 
one individually as they could have done before. The presence of the 
Fox affiliate alone would not be sufficient to enable enough 
advertisers to ``buy around'' KMOV-TV and KSDK-TV to defeat a price 
increase. Because a significant number of advertisers would likely be 
unable to reach their desired audiences as effectively unless they 
advertise on at least one station that is controlled or significantly 
influenced by Gannett, their bargaining positions will be weaker after 
the Transaction, and the advertising rates they pay would be likely to 
increase.
    30. Accordingly, the Transaction is likely to substantially reduce 
competition and will restrain trade in the sale of broadcast television 
spot advertising in the St. Louis DMA.

D. Lack of Countervailing Factors

1. Entry and Expansion Are Unlikely

    31. De novo entry into the St. Louis DMA is unlikely because 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 became available, 
commercial success would come, at best, over a period of many years. In 
the St. Louis DMA, all of the major broadcast networks (CBS, NBC, ABC, 
Fox) are already affiliated with a licensee, the contracts last for 
many years, and the broadcast networks rarely switch licensees when the 
contracts expire. Thus, entry into the St. Louis DMA broadcast 
television advertising spot market would not be timely, likely, or 
sufficient to deter Gannett and Sander, acting together, from 
anticompetitive increases in price or other anticompetitive conduct 
after the Transaction occurs.
    32. Other broadcast television stations in the St. Louis DMA could 
not readily increase their advertising capacity or change their 
programming sufficiently in response to a price increase by KSDK-TV and 
KMOV-TV. The number of 30-second spots in a DMA are largely fixed. More 
slots cannot be created. This fact makes the pricing of spots very 
responsive to changes in demand. During so-called political years, for 
example, political advertisements crowd out commercial advertising and 
makes the spots available for commercial advertisers more expensive 
than they would be in nonpolitical years. Adjusting programming in 
response to a pricing change is risky, difficult, and time-consuming. 
Network affiliates are often committed to the programming provided by 
the network with which they are affiliated, and it often takes years 
for a station to build its audience. Programming schedules are complex 
and carefully constructed, taking many factors into account, such as 
audience flow, station identity, and program popularity. In addition, 
stations typically have multi-year contractual commitments for 
individual shows. Accordingly, a television station is unlikely to 
change its programming sufficiently or with sufficient rapidity to 
overcome a small but significant price increase imposed by KSDK-TV and 
KMOV-TV.

2. The Alleged Efficiencies Do Not Offset the Harm

    33. Although Defendants assert that the Transaction would produce 
efficiencies, they cannot demonstrate acquisition-specific and 
cognizable efficiencies that would be sufficient to offset the 
Transaction's anticompetitive effects.

V. VIOLATIONS ALLEGED

    34. The United States hereby repeats and realleges the allegations 
of paragraphs 1 through 33 as if fully set forth herein.
    35. The Transaction likely would lessen competition substantially 
in interstate trade and commerce, in violation of Section 7 of the 
Clayton Act, 15 U.S.C. Sec.  18, and also constitute entry into 
contracts and combinations that would unreasonably restrain interstate 
trade and commerce, in violation of Section 1 of the Sherman Act, 15 
U.S.C. Sec.  1. These acquisitions and agreements likely would have the 
following effects, among others:
    a. competition in the sale of broadcast television spot advertising 
in the St. Louis DMA would be lessened substantially;
    b. actual and perceived competition between KMOV-TV and KSDK-TV in 
the sale of broadcast television spot advertising in the St. Louis DMA 
would be diminished; and
    c. the prices for spot advertising time on broadcast television 
stations in the St. Louis DMA would likely increase, and the quality of 
services likely would decline.
    36. Unless restrained, the acquisition will violate Section 1 of 
the Sherman Act, 15 U.S.C. Sec.  1, and Section 7 of the Clayton Act, 
15 U.S.C. Sec.  18.

VI. REQEST FOR RELIEF

    37. The United States requests:
    a. that the Court adjudge the proposed acquisition to violate 
Section 1 of the Sherman Act, 15 U.S.C. Sec.  1, and Section 7 of the 
Clayton Act, 15 U.S.C. Sec.  18;
    b. that the Court permanently enjoin and restrain Defendants from 
carrying out the Transaction, or entering into any other agreement, 
understanding, or plan by which Belo would be acquired by Gannett, 
unless Defendants divest KMOV-TV in accordance with the proposed Final 
Judgment and Asset Preservation Stipulation and Order filed 
concurrently with this Complaint;
    c. that the proposed Final Judgment giving effect to the 
divestiture be entered by the Court after compliance with the Antitrust 
Procedures and Penalties Act, 15 U.S.C. Sec.  16;
    d. that the Court award the United States the costs of this action; 
and

[[Page 79489]]

    e. that the Court award such other relief to the United States as 
the Court may deem just and proper.
Respectfully submitted,

For Plaintiff United States:
-----------------------------------------------------------------------
William J. Baer (D.C. Bar 324723),

Assistant Attorney General,
-----------------------------------------------------------------------
Renata B. Hesse (D.C. Bar 466107)

Deputy Assistant Attorney General,

-----------------------------------------------------------------------
Patricia A. Brink

Director of Civil Enforcement,

-----------------------------------------------------------------------
Scott A. Scheele (D.C. Bar 429061)

Chief, Telecommunications and Media Section,

-----------------------------------------------------------------------
Lawrence M. Frankel (D.C. Bar 441532)

Assistant Chief, Telecommunications and Media Section

-----------------------------------------------------------------------
Anupama Sawkar,*
Carl Willner (D.C. Bar 412841),
Brent E. Marshall,
Robert E. Draba (D.C. Bar 496815),

Trial Attorneys, United States Department of Justice, Antitrust 
Division, Telecommunications and Media Section, 450 Fifth Street NW., 
Suite 7000, Washington, DC 20530, Phone: 202[dash]514[dash]5813, 
Facsimile: 202[dash]514[dash]6381, Email: anupama.sawkar@usdoj.gov.

* Attorney of Record
Dated: December 16, 2013
APPENDIX A

Herfindahl-Hirschman Index

    The term ``HHI'' means the Herfindahl-Hirschman Index, a commonly 
accepted measure of market concentration. 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. Markets in which the HHI is between 1,500 and 
2,500 points are considered to be moderately concentrated, and markets 
in which the HHI is in excess of 2,500 points are considered to be 
highly concentrated. See U.S. Department of Justice & FTC, Horizontal 
Merger Guidelines Sec.  5.3 (2010). Transactions that increase the HHI 
by more than 200 points in highly concentrated markets presumptively 
raise antitrust concerns under the Horizontal Merger Guidelines issued 
by the Department of Justice and the Federal Trade Commission. See id.

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

    UNITED STATES OF AMERICA, Plaintiff, v.
    GANNETT CO., INC., BELO CORP., and SANDER MEDIA LLC, Defendants.
Case No. 1:13-cv-01984-RBW
Judge: Reggie B. Walton
Filed: 12/16/2013

COMPETITIVE IMPACT STATEMENT

    Pursuant to Section 2(b) of the Antitrust Procedures and Penalties 
Act (``APPA'' or ``Tunney Act''), 15 U.S.C. Sec.  16(b)-(h), plaintiff 
United States of America (``United States'') 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

    Defendants Gannett Co., Inc. (``Gannett''), and Belo Corp. 
(``Belo'') entered into an Agreement and Plan of Merger, dated June 12, 
2013, pursuant to which Gannett will acquire Belo for approximately 
$1.5 billion, with a total transaction value of $2.2 billion, including 
assumed debt. Gannett has also entered into an Asset Purchase Agreement 
and other related agreements with Sander Holdings Co. LLC, a wholly-
owned subsidiary of defendant Sander Media LLC (``Sander''), which 
would sell KMOV-TV in St. Louis, Missouri, and five other Belo 
broadcast television stations to Sander for considerably below market 
price and would create a close, ongoing business relationship between 
Gannett and Sander. This merger, asset purchase, and other related 
agreements are referred to herein collectively as ``the Transaction.''
    The United States filed a civil antitrust Complaint on December 16, 
2013, seeking to prevent the Transaction. The Complaint alleges that 
the Transaction's likely effect would be to increase broadcast 
television spot advertising prices in the St. Louis Designated Market 
Area (``DMA'') in violation of Section 1 of the Sherman Act and Section 
7 of the Clayton Act, 15 U.S.C. Sec. Sec.  1, 18.
    At the same time the Complaint was filed, the United States also 
filed a Hold Separate Stipulation and Order (``Hold Separate'') and 
proposed Final Judgment designed to eliminate the anticompetitive 
effects of the Transaction. The proposed Final Judgment, which is 
explained more fully below, requires Defendants to divest KMOV-TV to an 
Acquirer approved by the United States in a manner that preserves 
competition in the St. Louis DMA. The Hold Separate requires Defendants 
to take certain steps to ensure that KMOV-TV is operated as a 
competitively independent, economically viable business that is 
uninfluenced by Gannett so that competition is maintained until the 
required divestiture occurs.
    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 would terminate this action, except that 
the Court would retain jurisdiction to construe, modify, or enforce the 
provisions of the proposed Final Judgment and to punish violations 
thereof.

II. DESCRIPTION OF THE EVENTS GIVING RISE TO THE ALLEGED VIOLATION

A. The Defendants and the Proposed Transaction

1. The Defendants

    Gannett, a Delaware corporation with headquarters in McLean, 
Virginia, owns and operates 23 broadcast television stations 
nationwide, 12 in top-25 markets. Belo, a Delaware corporation with 
headquarters in Dallas, Texas, owns and operates 20 broadcast 
television stations nationwide, 9 in top-25 markets. Sander, a Delaware 
limited liability company with headquarters in Scottsdale, Arizona, has 
no current business activity other than preparing to acquire six Belo 
stations, including KMOV-TV in St. Louis, as part of the Transaction.

2. The Proposed Transaction

    Federal Communications Commission (``FCC'') rules prohibit Gannett 
from acquiring the Belo stations in five markets where Gannett already 
owns television stations or newspapers. To comply with these rules, 
Gannett has agreed to transfer six Belo stations in five DMAs, 
including KMOV-TV in St. Louis, to Sander simultaneously with the 
merger of Gannett and Belo. Although Gannett will formally transfer 
KMOV-TV to Sander, the Transaction includes additional agreements 
between

[[Page 79490]]

Gannett and Sander that would likely give Gannett significant influence 
over Sander's operation of the stations, including KMOV-TV, and would 
likely diminish Gannett's incentives to compete vigorously against 
Sander in the sale of broadcast television spot advertising in St. 
Louis. These agreements include: (1) eight-year assignable options 
permitting Gannett to reacquire any of the stations (should existing 
FCC prohibitions be eliminated) or to transfer the options to a third 
party; (2) eight-year Shared Services Agreements under which Gannett 
will provide a variety of services (excluding joint advertising sales 
and negotiation of retransmission consent rights in DMAs such as St. 
Louis where Gannett also has television stations) to help Sander 
operate the stations, in return for substantial payments from Sander to 
Gannett; (3) a financing guarantee obligating Gannett to repay the 
balance of the $101 million loan Sander is obtaining to purchase the 
stations should Sander default; and (4) Joint Sales Agreements (only in 
DMAs where Gannett does not own television stations) giving Gannett 
control of advertising sales.
    The Transaction, as initially agreed to by Defendants on June 12, 
2013, and as subsequently amended, would lessen competition 
substantially and restrain trade in the sale of broadcast television 
spot advertising in the St. Louis DMA, which includes parts of Missouri 
and Illinois. This Transaction is the subject of the Complaint and 
proposed Final Judgment filed by the United States on December 16, 
2013.

B. Anticompetitive Consequences of the Transaction

1. The Relevant Product

    The Complaint alleges that the sale of broadcast television spot 
advertising constitutes a relevant product market for analyzing this 
acquisition under the Clayton and Sherman Acts. Television stations 
attract viewers through their programming and then sell advertising 
time to businesses wanting to advertise their products to those 
television viewers. Broadcast television ``spot'' advertising is 
purchased by advertisers seeking to target potential customers in 
specific geographic markets. It differs from network and syndicated 
television advertising, which are sold on a nationwide basis by major 
television networks and by producers of syndicated programs and are 
broadcast in every market where the network or syndicated program is 
aired.
    Broadcast television spot advertising possesses a unique 
combination of attributes that sets it apart from advertising using 
other types of media. Television combines sight, sound, and motion, 
thereby creating a more memorable advertisement. Broadcast television 
spot advertising reaches the largest percentage of potential customers 
in a targeted geographic market and is therefore especially effective 
in introducing and establishing a product's image.
    Because of this unique combination of attributes, broadcast 
television spot advertising has no close substitute for a significant 
number of advertisers. Cable television spot advertising and Internet-
based video advertising lack the same reach; radio spots lack the 
visual impact; and newspaper and billboard ads lack sound and motion, 
as do many internet search engine and Web site banner ads. Through 
information provided during individualized price negotiations, stations 
can readily identify advertisers with strong preferences for using 
broadcast television advertising and ultimately can charge different 
advertisers different prices. Consequently, a small but significant 
increase in the price of broadcast television spot advertising is 
unlikely to cause enough advertising customers to switch enough 
advertising purchases to other media to make the price increase 
unprofitable.

2. The Relevant Market

    The Complaint alleges that the St. Louis DMA constitutes a relevant 
geographic market for analyzing this acquisition under the Clayton and 
Sherman Acts. DMAs are geographic units defined by A.C. Nielsen Company 
for advertising purposes. The St. Louis DMA is the 21st largest in the 
United States, containing over 1.2 million television households. 
Signals from full-powered television stations in the St. Louis area 
reach viewers throughout that DMA, so advertisers use television 
stations in the St. Louis DMA to target the largest possible number of 
viewers within the entire DMA. Some of these advertisers are located in 
the St. Louis area and trying to reach customers there; others are 
regional or national businesses wanting to target consumers in the St. 
Louis area. Advertising on television stations outside the St. Louis 
DMA is not an alternative for either group, because signals from 
television stations outside the St. Louis DMA reach few viewers in the 
St. Louis DMA. Thus, advertising on those stations does not reach a 
significant number of potential customers in the St. Louis DMA.

3. Harm to Competition in the St. Louis DMA

    The Complaint alleges that the Transaction likely would lessen 
competition substantially in interstate trade and commerce, in 
violation of Section 7 of the Clayton Act, 15 U.S.C. Sec.  18, and 
unreasonably restrain interstate trade and commerce, in violation of 
Section 1 of the Sherman Act, 15 U.S.C. Sec.  1. Based on advertising 
sales revenues, Gannett's NBC-affiliated KSDK-TV and Belo's CBS-
affiliated KMOV-TV are two of the three largest commercial broadcast 
television stations in the St. Louis DMA. Broadcast station ownership 
in the St. Louis DMA is already significantly concentrated, with more 
than 80% of gross advertising revenues in 2012 attributable to only 
three stations. Together, KMOV-TV and KSDK-TV have approximately 50% of 
all television station gross advertising revenues in the St. Louis DMA. 
The St. Louis Fox affiliate is the only significant advertising 
competitor to these stations. The St. Louis ABC and CW affiliates each 
have gross advertising revenue shares of less than 10%. If KSDK-TV and 
KMOV-TV were to coordinate their competitive behavior, then the market 
structure would operate as if the two stations were commonly owned in a 
highly concentrated market.\1\
---------------------------------------------------------------------------

    \1\ Using the Herfindahl-Hirschman Index (``HHI''), a standard 
measure of market concentration, the post-acquisition HHI (combining 
KMOV-TV's and KDSK-TV's shares) would be about 3592, an increase of 
about 1161 points. Under the Horizontal Merger Guidelines issued by 
the Department of Justice and Federal Trade Commission, mergers 
resulting in highly concentrated markets (i.e., HHI over 2500) with 
an increase in the HHI of more than 200 points are presumed to be 
likely to enhance market power.
---------------------------------------------------------------------------

    KMOV-TV and KSDK-TV are not only two of the largest stations in St. 
Louis, they are also close substitutes for one another in this 
concentrated market with its limited alternatives. KMOV-TV and KSDK-TV 
appeal to similar demographic groups, making them close substitutes for 
many viewers and advertisers. The programming on the CW affiliate tends 
to appeal to a younger demographic, and neither the ABC nor the CW 
affiliate has strong local news programming, which is an important 
differentiator to advertisers in the St. Louis DMA. As a result, 
advertisers view the St. Louis ABC and CW affiliates as much less 
acceptable substitutes for KDSK-TV and KMOV-TV. The presence of the Fox 
affiliate alone would not be sufficient to enable enough advertisers to 
``buy around'' KMOV-TV and KSDK-TV to defeat any price increase imposed 
by these two stations through coordinated action.

[[Page 79491]]

    After the Transaction closes, KSDK-TV and KMOV-TV will continue to 
have different owners and maintain separate sales forces. Still, the 
Transaction would alter the competitive landscape in the St. Louis DMA 
and likely harm competition there by creating an ongoing, intertwined 
relationship between Gannett and Sander that did not exist between 
Gannett and Belo. In this new relationship, Gannett will have 
significant influence over Sander and Sander's operation of KMOV-TV. 
This could reduce competition between KSDK-TV and KMOV-TV in at least 
three ways:
    1. Through the eight-year assignable option, which gives Gannett 
the practical ability to sell KMOV-TV to any other person, Gannett can 
displace Sander at any time. Losing KMOV-TV would end Sander's income 
stream from the station, so Sander's knowledge that Gannett could 
exercise the option would create an incentive for Sander not to upset 
Gannett by competing vigorously with KSDK-TV going forward. Exercising 
the option also effectively lets Gannett choose its competitor in St. 
Louis.
    2. Through the financing guarantee, which requires Gannett to repay 
the loan financing Sander's purchase of the Belo stations if Sander 
defaults, Gannett has a reduced incentive to compete aggressively with 
Sander. Aggressive competition from Gannett could push Sander into 
default, in which case Gannett would have to pay off the loan.
    3. Through the eight-year Shared Services Agreements, Sander will 
be dependent on a competitor for key services that Sander needs to run 
KMOV-TV successfully. This dependence on Gannett creates an incentive 
for Sander not to compete too strongly with KSDK-TV.

In sum, the sale of KMOV-TV to Sander does not adequately address the 
competitive problem that would exist in the St. Louis DMA from the 
Gannett-Belo merger without the sale to Sander. With these 
entanglements, Sander is not sufficiently separate from Gannett to be 
an effective competitor. The agreements give both Gannett and Sander 
the incentive and the means to work together cooperatively to maximize 
their joint profits at the expense of their customers.

    Currently, KSDK-TV and KMOV-TV vigorously compete for the business 
of local, regional, and national firms seeking to advertise on St. 
Louis television stations. Advertisers benefit from this competition. 
During individual price negotiations between advertisers and St. Louis 
television stations, advertisers are able to ``play off'' KSDK-TV and 
KMOV-TV against each other and obtain competitive rates for programs 
that target similar demographics. The Transaction is likely to 
attenuate this competition and thereby adversely affect a substantial 
volume of interstate commerce. It likely would have the following 
effects, among others:
    a. Competition in the sale of broadcast television spot advertising 
in the St. Louis DMA likely would be lessened substantially;
    b. Actual and perceived potential competition between Gannett and 
Sander in the sale of broadcast television spot advertising time in the 
St. Louis DMA likely would be diminished; and
    c. Prices for spot advertising time on television stations in the 
St. Louis DMA likely would increase, and the quality of services likely 
would decline.

After the Transaction, a significant number of St. Louis DMA 
advertisers would not be able to reach their desired audiences with 
equivalent efficiency without advertising on stations controlled or 
significantly influenced by Gannett. The Transaction, therefore, is 
likely to enable Gannett to raise prices unilaterally.

4. Lack of Countervailing Factors

    The Complaint alleges that entry or expansion in the St. Louis DMA 
broadcast television spot advertising market would not be timely, 
likely, or sufficient to prevent anticompetitive effects. New entry in 
the St. Louis DMA is unlikely since a new station would require an FCC 
license, which is difficult to obtain. Even if a new station became 
operational, commercial success would come over a period of many years 
at best. Other television stations in the St. Louis DMA could not 
readily increase their advertising capacity or change their programming 
in response to a price increase by KDSD-TV and KMOV-TV. The number of 
30-second spots available at a station is generally fixed, and 
additional slots cannot be created. Adjusting programming in response 
to a pricing change is risky, difficult, and time-consuming. 
Programming schedules are complex and carefully constructed, and 
television stations often have multi-year contractual commitments for 
individual shows or are otherwise committed to programming provided by 
their affiliated network.

III. EXPLANATION OF THE PROPOSED FINAL JUDGMENT

    The divestiture requirement of the proposed Final Judgment will 
eliminate the anticompetitive effects of the Transaction in the St. 
Louis DMA by maintaining KMOV-TV as an independent, economically viable 
competitor. The proposed Final Judgment requires Defendants to divest 
KMOV-TV to an Acquirer selected by Defendants and approved by the 
United States. To achieve this result, Gannett will divest its option 
on KMOV-TV to the Acquirer, and Sander will divest its interests in the 
station and the assets used to operate KMOV-TV.
    The ``Divestiture Assets'' are defined in Paragraph II.G of the 
proposed Final Judgment to cover all assets used primarily in the 
operation of KMOV-TV. These assets include real property, equipment, 
FCC licenses, contracts, intellectual property rights, programming 
materials, and customer lists maintained by Belo or Sander in 
connection with KMOV-TV. These do not include assets that are not 
primarily used in the operation of KMOV-TV, but are maintained at the 
corporate level and used to support multiple stations. Thus, Defendants 
will be able to retain back-office systems or other assets and 
contracts used at the corporate level to support multiple broadcast 
television stations, which they would need to conduct their remaining 
operations, and which an Acquirer experienced in operating broadcast 
television stations could supply for itself. The Shared Services 
Agreement between Gannett and Sander, which Paragraph IV.A of the 
proposed Final Judgment requires to be terminated with respect to KMOV-
TV upon divestiture, is also excluded from the Divestiture Assets.
    To ensure that KMOV-TV is operated as an independent competitor 
after the divestiture, Paragraph IV.A and Section XI of the proposed 
Final Judgment prohibit Defendants from entering into any agreements 
during the term of the Final Judgment that create a long-term 
relationship with the Divestiture Assets after the divestiture is 
completed. Examples of prohibited agreements include options to 
repurchase or assign interests in KMOV-TV; agreements to provide 
financing or guarantees for financing; local marketing agreements, 
joint sales agreements, or any other cooperative selling arrangements; 
shared services agreements; and agreements to jointly conduct any 
business negotiations with the Acquirer with respect to KMOV-TV. Any 
such agreements that may exist between Gannett and Sander shall be 
terminated

[[Page 79492]]

with respect to the KMOV-TV upon divestiture. This shared services 
prohibition does not preclude agreements limited to helicopter sharing 
and stock video pooling in the form that are customary in the industry. 
Gannett and Belo currently have a helicopter sharing agreement in St. 
Louis, and the Acquirer and Gannett may continue this arrangement after 
the divestiture. These limited exceptions do not permit Defendants to 
enter into broader news sharing agreements with respect to KMOV-TV. To 
the extent the Acquirer needs Defendants to provide any transitional 
services that facilitate continuous operation of KMOV-TV until the 
Acquirer can provide such capabilities independently, the United States 
retains discretion to approve such arrangements.
    Defendants are required to take all steps reasonably necessary to 
accomplish the divestiture quickly and to cooperate with prospective 
purchasers. Because transferring the KMOV-TV license requires FCC 
approval, Defendants are specifically required to use their best 
efforts to obtain all necessary FCC approvals as expeditiously as 
possible. This divestiture of KMOV-TV must occur within 120 calendar 
days after the filing of the Complaint in this matter (i.e., by April 
15, 2013) or 5 days after notice that the Court has entered the Final 
Judgment, whichever is later. The United States, in its sole 
discretion, may agree to one or more extensions of this time period, 
not to exceed ninety (90) calendar days in total, and shall notify the 
Court in such circumstances.
    If the divestiture does not occur within this prescribed timeframe, 
the proposed Final Judgment provides that the Court, upon application 
of the United States, will appoint a trustee selected by the United 
States to sell KMOV-TV. Gannett will pay all costs and expenses of the 
trustee. The trustee's commission will be structured to provide an 
incentive for the trustee based on the price obtained and the speed 
with which the divestiture is accomplished. The trustee would file 
monthly reports with the Court and the United States describing efforts 
to divest KMOV-TV. If the divestiture has not been accomplished after 6 
months, the trustee and the United States will make recommendations to 
the Court, which shall enter such orders as appropriate, to carry out 
the purpose of the trust.

IV. REMEDIES AVAILABLE TO POTENTIAL PRIVATE LITIGANTS

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

V. PROCEDURES AVAILABLE FOR MODIFICATION OF THE PROPOSED FINAL JUDGMENT

    The 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 sixty (60) days preceding 
the effective date of the proposed Final Judgment within which any 
person may submit to the United States written comments regarding the 
proposed Final Judgment. Any person who wishes to comment should do so 
within sixty (60) days of the date of publication of this Competitive 
Impact Statement in the Federal Register, 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 United States Department of Justice, which 
remains free to withdraw its consent to the proposed Final Judgment at 
any time prior to the Court's entry of judgment. The comments and the 
response of the United States will be filed with the Court. In 
addition, comments will be posted on the United States Department of 
Justice, Antitrust Division's Internet Web site and, under certain 
circumstances, published in the Federal Register.
    Written comments should be submitted to: Scott A. Scheele, Chief, 
Telecommunications and Media Enforcement Section, Antitrust Division, 
United States Department of Justice, 450 5th Street NW., Suite 7000, 
Washington, DC 20530.

The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and Defendants may apply to the Court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.

VI. ALTERNATIVES TO THE PROPOSED FINAL JUDGMENT

    The United States considered, as an alternative to the proposed 
Final Judgment, a full trial on the merits against Defendants. The 
United States could have continued the litigation and sought 
preliminary and permanent injunctions against consummation of the 
Transaction. The United States is satisfied, however, that the 
divestiture of assets described in the proposed Final Judgment will 
preserve competition for the sale of broadcast television spot 
advertising in the St. Louis DMA. Thus, the proposed Final Judgment 
would achieve 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 sixty-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); see generally 
United

[[Page 79493]]

States v. SBC Commc'ns, Inc., 489 F. Supp. 2d 1 (D.D.C. 2007) 
(assessing public interest standard under the Tunney Act); United 
States v. InBev N.V./S.A., 2009-2 Trade Cas. (CCH) ] 76,736, 2009 U.S. 
Dist. LEXIS 84787, No. 08-1965 (JR), at *3, (D.D.C. Aug. 11, 2009) 
(noting that the 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.'').\2\
---------------------------------------------------------------------------

    \2\ The 2004 amendments substituted ``shall'' for ``may'' in 
directing relevant factors for court to consider and amended the 
list of factors to focus on competitive considerations and to 
address potentially ambiguous judgment terms. Compare 15 U.S.C. 
Sec.  16(e) (2004) with 15 U.S.C. Sec.  16(e)(1) (2006); see also 
SBC Commc'ns, 489 F. Supp. 2d at 11 (concluding that the 2004 
amendments ``effected minimal changes'' to Tunney Act review).
---------------------------------------------------------------------------

    As the United States 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 set forth in the government's complaint, whether the decree 
is sufficiently clear, whether enforcement mechanisms are sufficient, 
and whether the decree may positively harm third parties. See 
Microsoft, 56 F.3d at 1458-62. With respect to the adequacy of the 
relief secured by the decree, a court may not ``engage in an 
unrestricted evaluation of what relief would best serve the public.'' 
United States v. BNS, Inc., 858 F.2d 456, 462 (9th Cir. 1988) (citing 
United States v. Bechtel Corp., 648 F.2d 660, 666 (9th Cir. 1981)); see 
also Microsoft, 56 F.3d at 1460-62; United States v. Alcoa, Inc., 152 
F. Supp. 2d 37, 40 (D.D.C. 2001); InBev, 2009 U.S. Dist. LEXIS 84787, 
at *3. Courts have held that:
    [t]he balancing of competing social and political interests 
affected by a proposed antitrust consent decree must be left, in the 
first instance, to the discretion of the Attorney General. The court's 
role in protecting the public interest is one of insuring that the 
government has not breached its duty to the public in consenting to the 
decree. The court is required to determine not whether a particular 
decree is the one that will best serve society, but whether the 
settlement is ``within the reaches of the public interest.'' More 
elaborate requirements might undermine the effectiveness of antitrust 
enforcement by consent decree.

Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted).\3\ In 
determining whether a proposed settlement is in the public interest, a 
district court ``must accord deference to the government's predictions 
about the efficacy of its remedies, and may not require that the 
remedies perfectly match the alleged violations.'' SBC Commc'ns, 489 F. 
Supp. 2d at 17; see also Microsoft, 56 F.3d at 1461 (noting the need 
for courts to be ``deferential to the government's predictions as to 
the effect of the proposed remedies''); United States v. Archer-
Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (noting that 
the court should grant due respect to the United States' prediction as 
to the effect of proposed remedies, its perception of the market 
structure, and its views of the nature of the case).
---------------------------------------------------------------------------

    \3\ Cf. 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''). See generally Microsoft, 56 F.3d at 1461 
(discussing whether ``the remedies [obtained in the decree are] so 
inconsonant with the allegations charged as to fall outside of the 
`reaches of the public interest' '').

    Courts have greater flexibility in approving proposed consent 
decrees than in crafting their own decrees following a finding of 
liability in a litigated matter. ``[A] proposed decree must be approved 
even if it falls short of the remedy the court would impose on its own, 
as long as it falls within the range of acceptability or is `within the 
reaches of public interest.' '' United States v. Am. Tel. & Tel. Co., 
552 F. Supp. 131, 151 (D.D.C. 1982) (citations omitted) (quoting United 
States v. Gillette Co., 406 F. Supp. 713, 716 (D. Mass. 1975)), aff'd 
sub nom. Maryland v. United States, 460 U.S. 1001 (1983); see also 
United States v. Alcan Aluminum Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 
1985) (approving the consent decree even though the court would have 
imposed a greater remedy). To meet this standard, the United States 
``need only provide a factual basis for concluding that the settlements 
are reasonably adequate remedies for the alleged harms.'' SBC Commc'ns, 
489 F. Supp. 2d at 17.
    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 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 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. 
As this Court recently confirmed in SBC Communications, courts ``cannot 
look beyond the complaint in making the public interest determination 
unless the complaint is drafted so narrowly as to make a mockery of 
judicial power.'' SBC Commc'ns, 489 F. Supp. 2d at 15.
    In its 2004 amendments, Congress made clear its intent to preserve 
the practical benefits of utilizing consent decrees in antitrust 
enforcement, adding 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). The language wrote into the 
statute what Congress intended when it enacted 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 Senator Tunney). Rather, the procedure for the public 
interest determination is left to the discretion of the court, with the 
recognition that the court's ``scope of review remains sharply 
proscribed by precedent and the nature of Tunney Act proceedings.'' SBC 
Commc'ns, 489 F. Supp. 2d at 11.\4\
---------------------------------------------------------------------------

    \4\ See United States v. Enova Corp., 107 F. Supp. 2d 10, 17 
(D.D.C. 2000) (noting that the ``Tunney Act expressly allows the 
court to make its public interest determination on the basis of the 
competitive impact statement and response to comments alone''); 
United States v. Mid-Am. Dairymen, Inc., 1977-1 Trade Cas. (CCH) ] 
61,508, at 71,980 (W.D. Mo. 1977) (``Absent a showing of corrupt 
failure of the government to discharge its duty, the Court, in 
making its public interest finding, should . . . carefully consider 
the explanations of the government in the competitive impact 
statement and its responses to comments in order to determine 
whether those explanations are reasonable under the 
circumstances.''); S. Rep. No. 93-298, 93d Cong., 1st Sess., at 6 
(1973) (``Where the public interest can be meaningfully evaluated 
simply on the basis of briefs and oral arguments, that is the 
approach that should be utilized.'').
---------------------------------------------------------------------------

VIII. DETERMINATIVE DOCUMENTS

    There are no determinative materials or documents within the 
meaning of the

[[Page 79494]]

APPA that were considered by the United States in formulating the 
proposed Final Judgment.
Dated: December 16, 2013

Respectfully submitted,

/s/--------------------------------------------------------------------
Anupama Sawkar*,
Carl Willner (D.C. Bar 412841),
Brent E. Marshall,
Robert E. Draba (D.C. Bar 496815),

Trial Attorneys, United States Department of Justice, Antitrust 
Division, Telecommunications and Media Section, 450 Fifth Street NW., 
Suite 7000, Washington, DC 20530, Phone: 202-598-2344, Facsimile: 202-
514-6381, Email: Anupama.Sawkar@usdoj.gov.

*Attorney of Record

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

    UNITED STATES OF AMERICA, Plaintiff, v. GANNETT CO., INC., BELO 
CORP., and SANDER MEDIA LLC, Defendants.
Case No. 1:13-cv-01984-RBW
Judge: Reggie B. Walton
Filed: 12/16/2013

CERTIFICATE OF SERVICE

    I, Anupama Sawkar, hereby certify that on December 16, 2013, I 
caused copies of the Complaint, Competitive Impact Statement, Hold 
Separate Stipulation and Order, Proposed Final Judgment, and 
Plaintiff's Explanation of Consent Decree Procedures to be served upon 
defendants Gannett Corporation, Inc., Belo Corporation, and Sander 
Media LLC, by mailing the documents electronically to the duly 
authorized legal representatives of Defendants as follows:
Counsel for Defendant Gannett Co., Inc.:

Michael P. A. Cohen (DC Bar 435024), Paul Hastings LLP, 875 
15th Street NW., Washington, DC 20005, Telephone: (202) 551-1880, 
Facsimile: (202) 551-0280, Email: michaelcohen@paulhastings.com.

Gordon L. Lang (DC Bar 932731), Nixon Peabody LLP, 401 9th 
Street NW., Suite 900, Washington, DC 20004, Telephone: (202) 585-8319, 
Facsimile: (866) 947-3542, Email: glang@nixonpeabody.com.

Elizabeth A. Allen (DC Bar 121403), Gannett Co., Inc., 7950 
Jones Branch Drive, McLean, VA 22107, Telephone: (703) 854-6953, 
Facsimile: (703) 854-2031, Email: eaallen@gannett.com.

Counsel for Defendant Belo Corp.:

Joseph D. Larson (applying for pro hace vice admission), Wachtell, 
Lipton, Rosen & Katz, 51 West 52nd Street, New York, NY 10019, 
Telephone: (212) 403-1360, Facsimile: (212) 403-2360, Email: 
JDLarson@WLRK.com.

Counsel for Defendant Sander Media LLC:

J. Parker Erkmann (DC Bar 489965), Dow Lohnes LLP, 1200 New 
Hampshire Ave. NW., Suite 800, Washington, DC 20036-6802, Telephone: 
(202) 776-2036, Facsimile: (202) 776-4036, Email: 
perkmann@dowlohnes.com.
/s/--------------------------------------------------------------------
Anupama Sawkar*,

Attorney, United States Department of Justice, Antitrust Division, 
Telecommunications and Media, Enforcement Section, 450 Fifth Street 
NW., Suite 7000, Washington, DC 20530, Phone: 202-598-2344, Facsimile: 
(202) 514-6381, Email: Anupama.Sawkar@usdoj.gov.

*Attorney of Record

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

    UNITED STATES OF AMERICA, Plaintiff, v. GANNETT CO., INC., BELO 
CORP., and SANDER MEDIA LLC, Defendants.
Case No. 1:13-cv-01984-RBW
Judge: Reggie B. Walton
Filed: 12/16/2013

PROPOSED FINAL JUDGMENT

    WHEREAS, plaintiff, the United States of America, filed its 
Complaint on December 16, 2013, and plaintiff and Defendants Gannett 
Co., Inc. (``Gannett''), Belo Corp. (``Belo''), and Sander Media LLC 
(``Sander''), by their respective attorneys, have consented to the 
entry of this Final Judgment without trial or adjudication of any issue 
of fact or law herein, and without this Final Judgment constituting any 
evidence against or an admission by any party with respect to any issue 
of law or fact herein;
    AND WHEREAS, Defendants have agreed to be bound by the provisions 
of this Final Judgment pending its approval by the Court;
    AND WHEREAS, the essence of this Final Judgment is the prompt and 
certain divestiture of certain rights and assets by the Defendants to 
assure that competition is not substantially lessened;
    AND WHEREAS, the United States requires Defendants to make certain 
divestitures for the purpose of remedying the loss of competition 
alleged in the Complaint;
    AND WHEREAS, Defendants have represented to the United States that 
the divestitures required below can and will be made, and that 
Defendants will later raise no claim of hardship or difficulty as 
grounds for asking the Court to modify any of the divestiture 
provisions contained 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 hereby ORDERED, ADJUDGED, AND DECREED:

I. JURISDICTION

    This Court has jurisdiction over each of the parties hereto and 
over the subject matter of this action. The Complaint states a claim 
upon which relief may be granted against Defendants under Section 1 of 
the Sherman Act, and Section 7 of the Clayton Act, as amended, 15 
U.S.C. Sec. Sec.  1 and 18.

II. DEFINITIONS

    As used in this Final Judgment:
    A. ``Acquirer'' means the entity to which the Defendants divest the 
Divestiture Assets.
    B. ``Gannett'' means defendant Gannett Co., Inc., a Delaware 
corporation, with its headquarters in McLean, Virginia, and includes 
its successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships, joint ventures, directors, officers, 
managers, agents, and employees.
    C. ``Belo'' means defendant Belo Corp., a Delaware corporation, 
with its headquarters in Dallas, Texas, and includes its successors and 
assigns, and its subsidiaries, divisions, groups, affiliates, 
partnerships, joint ventures, directors, officers, managers, agents, 
and employees.
    D. ``Sander'' means defendant Sander Media LLC, a Delaware limited 
liability company, with its headquarters in Scottsdale, Arizona, and 
includes its successors and assigns, and its subsidiaries, divisions, 
groups, affiliates, partnerships, joint ventures, directors, owners, 
officers, managers, agents, and employees.
    E. ``DMA'' means Designated Market Area as defined by A.C. Nielsen 
Company based upon viewing patterns and used by the Investing In 
Television BIA Market Report 2013 (1st edition). DMAs are ranked 
according to the number of households therein and are used by 
broadcasters, advertisers, and advertising agencies to aid in 
evaluating television audience size and composition.
    F. ``KMOV-TV'' means the CBS-affiliated broadcast television 
station located in the St. Louis DMA owned by Belo and being sold to 
Sander as part of the Transaction.
    G. ``Divestiture Assets'' means all of the assets, tangible or 
intangible, used in the operation of KMOV-TV, including,

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but not limited to, all real property (owned or leased) used in the 
operation of the station, all broadcast equipment, office equipment, 
office furniture, fixtures, materials, supplies, and other tangible 
property used in the operation of the station; all licenses, permits, 
authorizations, and applications therefore issued by the Federal 
Communications Commission (``FCC'') and other government agencies 
related to that station; all contracts (including programming contracts 
and rights), agreements, network affiliation agreements, leases and 
commitments and understandings of Belo or Sander relating to the 
operation of KMOV-TV; all trademarks, service marks, trade names, 
copyrights, patents, slogans, programming materials, and promotional 
materials relating to KMOV-TV; all customer lists, contracts, accounts, 
and credit records; and all logs and other records maintained by Belo 
or Sander in connection with KMOV-TV, provided, however, that 
Divestiture Assets does not include physical assets located outside of 
the St. Louis DMA (e.g., corporate infrastructure), group-wide 
corporate records, employee benefit plans, group-wide insurance 
policies, group-wide service contracts, group-wide software licenses 
and digital systems, the trademarks ``Belo'' or ``Sander,'' or the 
Shared Services Agreement or other agreements referenced in the Asset 
Purchase Agreement dated June 12, 2013, and its subsequent amendments.
    H. ``Transaction'' means the merger and acquisition contemplated by 
the Agreement and Plan of Merger, dated June 12, 2013, by and among 
Belo, Gannett, and Delta Acquisition Corp. and all related agreements, 
including Sander's acquisition of certain Belo stations and all 
agreements entered into between Gannett and Sander contemplated by the 
Asset Purchase Agreement, dated June 12, 2013, and its subsequent 
amendments.
    I. ``Shared Services Agreement'' means the Shared Services 
Agreement between Gannett and Sander contemplated by the Transaction in 
substantially the same form as Exhibit C(2) to the Agreement and Plan 
of Merger dated June 12, 2013, by and among Belo, Gannett, and Delta 
Acquisition Corp.

III. APPLICABILITY

    A. This Final Judgment applies to Gannett, Belo, and Sander as 
defined above, 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 
Defendants' 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 Acquirer of the assets divested 
pursuant to the Final Judgment.

IV. DIVESTITURES

    A. Defendants are ordered and directed to divest the Divestiture 
Assets to an Acquirer acceptable to the United States in its sole 
discretion, in a manner consistent with this Final Judgment and the 
Hold Separate Stipulation and Order in this case. Such divestiture 
shall include all ownership interests and options to acquire or to 
transfer to others any ownership interests in the Divestiture Assets, 
and Defendants shall not retain any options to acquire or transfer to 
others ownership interests in the Divestiture Assets after completing 
the divestiture required by this Final Judgment. Defendants shall not 
enter into any agreements to provide financing, guarantees of financing 
or services to, or to conduct any sales or any business negotiations 
jointly with, the Acquirer with respect to the Divestiture Assets, and 
any such agreements that may exist between Gannett and Sander shall be 
terminated with respect to the Divestiture Assets upon divestiture, 
except to the extent that the United States in its sole discretion 
approves in writing any transitional services that may be necessary to 
facilitate continuous operation of the Divestiture Assets until the 
Acquirer can provide such capabilities independently. The divestiture 
pursuant to this section shall take place within one hundred and twenty 
(120) calendar days after the filing of the Complaint in this matter, 
or five (5) days after notice of entry of this Final Judgment by the 
Court, whichever is later. The United States, in its sole discretion, 
may agree to one or more extensions of this time period, not to exceed 
ninety (90) calendar days in total, and shall notify the Court in such 
circumstances. Defendants shall use their best efforts to accomplish 
the divestiture ordered by this Final Judgment, including using their 
best efforts to obtain all necessary FCC approvals, as expeditiously as 
possible.
    B. In accomplishing the divestiture ordered by this Final Judgment, 
Defendants promptly shall make known, by usual and customary means, the 
availability of the Divestiture Assets. Defendants shall inform any 
person making inquiry regarding a possible purchase of the Divestiture 
Assets that they are being divested pursuant to this Final Judgment and 
provide that person with a copy of this Final Judgment. Defendants 
shall furnish to all prospective Acquirers, subject to customary 
confidentiality assurances, all information and documents relating to 
the Divestiture Assets customarily provided in a due diligence process, 
except such information or documents subject to the attorney-client 
privilege or work-product doctrine. Defendants shall make available 
such information to the United States at the same time that such 
information is made available to any other person.
    C. Defendants shall provide the Acquirer and the United States 
information relating to the personnel involved in the operation and 
management of the Divestiture Assets to enable the Acquirer to make 
offers of employment. Defendants shall not interfere with any 
negotiations by the Acquirer to employ or contract with any employee of 
any defendant whose primary responsibility relates to the operation or 
management of the Divestiture Assets.
    D. Defendants shall permit prospective acquirers of the Divestiture 
Assets to have reasonable access to personnel and to make inspections 
of the physical facilities of KMOV-TV; 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.
    E. Defendants shall warrant to the Acquirer that each asset will be 
operational on the date of sale.
    F. Defendants shall not take any action that will impede in any way 
the permitting, operation, or divestiture of the Divestiture Assets.
    G. Defendants shall warrant to the Acquirer that there are no 
material defects in the environmental, zoning, or other permits 
pertaining to the operation of each asset, and 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.
    H. Unless the United States otherwise consents in writing, the 
divestiture pursuant to Section IV, or by trustee appointed pursuant to 
Section V of this Final Judgment, shall include the entire Divestiture 
Assets, and be accomplished in such a way as to satisfy the United

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States, in its sole discretion, that the Divestiture Assets can and 
will be used by the Acquirer as part of a viable, ongoing commercial 
television broadcasting business, and the divestiture of such assets 
will achieve the purposes of this Final Judgment and remedy the 
competitive harm alleged in the Complaint. The divestitures, whether 
pursuant to Section IV or Section V of this Final Judgment:
    (1) shall be made to an Acquirer that, in the United States' sole 
judgment, has the intent and capability (including the necessary 
managerial, operational, technical, and financial capability) of 
competing effectively in the television broadcasting business in the 
St. Louis DMA; and
    (2) shall be accomplished so as to satisfy the United States, in 
its sole discretion, that none of the terms of any agreement between 
the Acquirer and Defendants gives Defendants the ability unreasonably 
to raise the Acquirer's costs, to lower the Acquirer's efficiency, or 
otherwise to interfere in the ability of the Acquirer to compete 
effectively.

V. APPOINTMENT OF TRUSTEE

    A. If the Defendants have not divested the Divestiture Assets 
within the time period specified in Paragraph IV(A), Defendants shall 
notify the United States of that fact in writing.
    B. If (a) the Defendants have not divested the Divestiture Assets 
within the time period specified by Paragraph IV(A), or (b) the United 
States decides in its sole discretion that the Acquirer is likely to be 
unable to complete the purchase of the Divestiture Assets, upon 
application of the United States in its sole discretion, the Court 
shall appoint a trustee selected by the United States and approved by 
the Court to effect the divestiture of the Divestiture Assets.
    C. After the appointment of a trustee becomes effective, only the 
trustee shall have the right to sell the Divestiture Assets. The 
trustee shall have the power and authority to accomplish the 
divestiture to an Acquirer, and in a manner acceptable to the United 
States in its sole discretion, at such price and on such terms as are 
then obtainable upon reasonable effort by the trustee, subject to the 
provisions of Sections IV, V, and VI 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 trustee may hire at the cost 
and expense of Gannett any investment bankers, attorneys, or other 
agents, who shall be solely accountable to the trustee, reasonably 
necessary in the trustee's judgment to assist in the divestiture. 
Defendants shall inform any person making an inquiry regarding a 
possible purchase of the Divestiture Assets that they are being 
divested pursuant to this Final Judgment and provide that person with a 
copy of this Final Judgment and contact information for the trustee.
    D. Defendants shall not object to a sale by the trustee on any 
ground other than the trustee's malfeasance. Any such objection by 
Defendants must be conveyed in writing to the United States and the 
trustee within ten (10) calendar days after the trustee has provided 
the notice required under Section VI.
    E. The trustee shall serve at the cost and expense of Gannett, on 
such terms and conditions as the United States approves, and shall 
account for all monies derived from the sale of the assets sold by the 
trustee and all costs and expenses so incurred. After approval by the 
Court of the trustee's accounting, including fees for its services and 
those of any professionals and agents retained by the trustee, all 
remaining money shall be paid to Defendants and the trust shall then be 
terminated. The compensation of the trustee and any professionals and 
agents retained by the trustee shall be reasonable in light of the 
value of the Divestiture Assets and based on a fee arrangement 
providing the trustee with an incentive based on the price and terms of 
the divestiture and the speed with which it is accomplished, but 
timeliness is paramount.
    F. Defendants shall use their best efforts to assist the trustee in 
accomplishing the required divestiture. The trustee and any 
consultants, accountants, attorneys, and other persons retained by the 
trustee shall have full and complete access to the personnel, books, 
records, and facilities of the business to be divested, and Defendants 
shall develop financial and other information relevant to such business 
as the trustee may reasonably request, subject to reasonable protection 
for trade secret or other confidential research, development or 
commercial information. Defendants shall take no action to interfere 
with or to impede the trustee's accomplishment of the divestiture.
    G. After its appointment, the trustee shall file monthly reports 
with the United States setting forth the trustee's efforts to 
accomplish the divestiture 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 trustee shall maintain full records 
of all efforts made to divest the Divestiture Assets.
    H. If the trustee has not accomplished the divestiture ordered 
under this Final Judgment within six (6) months after its appointment, 
the trustee shall promptly file with the Court a report setting forth: 
(1) the trustee's efforts to accomplish the required divestiture, (2) 
the reasons, in the trustee's judgment, why the required divestiture 
has not been accomplished, and (3) the trustee's recommendations. To 
the extent that such report contains information that the trustee deems 
confidential, such report shall not be filed in the public docket of 
the Court. The 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 the Final Judgment, which may, if necessary, 
include extending the trust and the term of the trustee's appointment 
by a period requested by the United States.

VI. NOTICE OF PROPOSED DIVESTITURE

    A. Within two (2) business days following execution of a definitive 
divestiture agreement, Defendants or the trustee, whichever is then 
responsible for effecting the divestiture required herein, shall notify 
the United States of any proposed divestiture required by Section IV or 
V of this Final Judgment. If the 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 offered or 
expressed an interest in or desire to acquire any ownership interest in 
the Divestiture Assets, together with full details of the same.
    B. Within fifteen (15) calendar days of receipt by the United 
States of such notice, the United States may request from Defendants, 
the proposed Acquirer, any other third party, or the trustee if 
applicable, additional information concerning the proposed divestiture, 
the proposed Acquirer, and any other potential Acquirer. Defendants and 
the trustee shall furnish any additional information requested within 
fifteen (15) calendar days of the receipt of the request, unless the 
parties shall otherwise agree.
    C. Within thirty (30) calendar days after receipt of the notice or 
within

[[Page 79497]]

twenty (20) calendar days after the United States has been provided the 
additional information requested from Defendants, the proposed 
Acquirer, any third party, and the trustee, whichever is later, the 
United States shall provide written notice to Defendants and the 
trustee, if there is one, stating whether or not it objects to the 
proposed divestiture in its sole discretion. 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 V of this Final Judgment.

VIII. HOLD SEPARATE

    Until the divestiture required by this Final Judgment has 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 divestiture 
ordered by this Court.

IX. AFFIDAVITS

    A. Within twenty (20) calendar days of the filing of the Complaint 
in this matter, and every thirty (30) calendar days thereafter until 
the divestiture has been completed under Section IV or V of this Final 
Judgment, Defendants shall deliver to the United States an affidavit as 
to the fact and manner of their compliance with Section IV or V of this 
Final Judgment. Each such affidavit shall include the name, address and 
telephone number of each person who, during the preceding thirty (30) 
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 (14) days of receipt of such affidavit.
    B. Within twenty (20) calendar days of the filing of the Complaint 
in this matter, each Defendant 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 section within fifteen (15) 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 
divestiture has 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 the 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 duly authorized representatives of the 
United States Department of Justice, including consultants and other 
persons retained by the United States, shall, upon written request of 
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 
hard copies or 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 information or documents are furnished by 
Defendants 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 (10) calendar days notice prior to 
divulging such material in any legal proceeding (other than a grand 
jury proceeding).

XI. NO REACQUISITION OR OTHER PROHIBITED ACTIVITIES

    Defendants may not (1) reacquire any part of the Divestiture 
Assets, (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 local marketing agreement, joint sales agreement, other 
cooperative selling arrangement, or shared services agreement, or 
conduct other business negotiations jointly with the Acquirer with 
respect to the Divestiture Assets, or (4) provide financing or 
guarantees of financing with respect to the Divestiture Assets, during 
the term of this Final Judgment. The shared services prohibition does 
not preclude Defendants from continuing or entering into agreements in 
a form customarily used in the industry to (1) share news helicopters 
or (2) pool generic video footage that does not include recording a 
reporter or other on-air talent.

[[Page 79498]]

XII. RETENTION OF JURISDICTION

    This Court retains jurisdiction to enable any party to this Final 
Judgment to apply to this 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.

XIII. EXPIRATION OF FINAL JUDGMENT

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

XIV. 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, 
and any comments thereon, and the United States' responses to comments. 
Based on 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

[FR Doc. 2013-31182 Filed 12-27-13; 8:45 am]
BILLING CODE P