Sinclair Broadcast Group Inc., Tribune Media Co. and other local TV station owners have settled Justice Department claims they colluded to reduce competition in the advertising market.
The case, which was filed in federal court in Washington, alleged that those broadcast station owners, as well as Meredith Corp. and Raycom Media Inc., exchanged “competitively sensitive information” that gave them an advantage when negotiating advertising prices with ad buyers.
These companies are the local affiliates for broadcasters like CBS, NBC, ABC and Fox, and are crucial to local businesses that want to advertise in their communities.
The companies had agreed, through a sales representative, to exchange what’s called “pacing information,” which compares a TV station’s revenue during a certain period to the previous year and offers insights into how much advertising inventory they have left. By exchanging that information, the broadcasters were better able to anticipate whether their competitors were likely to raise or lower advertising prices, which helped inform their own pricing strategies, the Justice Department said.
“The unlawful exchange of competitively sensitive information allowed these television broadcast companies to disrupt the normal competitive process of spot advertising in markets across the United States,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division.
On the earnings call last week, Sinclair Chief Executive Officer Chris Ripley said his company did nothing wrong and the cost of complying with the settlement were “minimal.”
“This allows us to avoid the potential significant costs of continuing to dispute this with the DOJ and the potential lawsuit,” he said.