The out-of-home subsidiary of iHeartMedia has been instructed by the U.S. Department of Justice to divest billboards in Atlanta and Indianapolis in order to proceed with a $150 million swap of outdoor advertising assets, spread across multiple U.S. markets, with Fairway Media Group LLC.
The DOJ ruling comes after the U.S. Justice Department’s antitrust division filed on Dec. 22 a civil antitrust lawsuit in the U.S. District Court for the District of Columbia challenging the proposed transaction between Fairway Media Group and Clear Channel Outdoor Holdings Inc. — and simultaneously filed a proposed settlement that, if approved by the court, would resolve the competitive harm alleged in the lawsuit.
“The loss of competition between Clear Channel and Fairway as a result of the proposed transaction would have led to higher prices for advertisers who rely on billboards to reach consumers located within the Atlanta and Indianapolis metropolitan markets,” Acting Assistant Attorney General Renata Hesse of the Justice Department’s Antitrust Division said. “[The] settlement will ensure that advertisers will continue to enjoy the benefits of competition when they seek to place advertisements on billboards in these areas.”
According to the department’s complaint, Clear Channel and Fairway own and operate billboards in the Atlanta and Indianapolis metropolitan areas that are located in close proximity to each other and, therefore, constitute attractive competitive alternatives for advertisers seeking to reach consumers in these areas.
The proposed swap transaction, in which Clear Channel would acquire Fairway billboards in Atlanta in exchange for Clear Channel billboards in Indianapolis and certain other areas, would have eliminated “substantial head-to-head competition between Clear Channel and Fairway for the business of local and national advertisers seeking to reach customers within the Atlanta and Indianapolis metropolitan markets,” DOJ argued.
Under the terms of the proposed settlement, Clear Channel and Fairway must divest 13 billboard structures in Indianapolis to Circle City Outdoor and 44 billboard structures in Atlanta to Link Media Georgia, following completion of the asset swap.
Clear Channel, a separate entity from the company once known as Clear Channel Communications — iHeartMedia — is one of the largest outdoor advertising companies in the U.S. and reported consolidated revenues of $2.8 billion in 2015.
As required by the Tunney Act, the proposed settlement, along with the department’s competitive impact statement, will be published in the Federal Register.
Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Owen Kendler, Acting Chief, Litigation III Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Fourth Floor, Washington, D.C. 20530.
At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.
