TRN files second amended complaint against DG

0

TRN - Talk Radio NetworkTalk Radio Network has filed a second amended complaint for antitrust violations, unfair competition, breach of contract and more against Dial Global, Excelsior Radio Networks, Triton Media Group, Oaktree Capital Management, Verge Media Companies, Courtside, LLC, Compass Media Networks, Compass Media Marketing, WYD Media Management (Ron Hartenbaum), Spencer Brown, Ken Williams, David Landau (of DG—no longer with the company), Norm Pattiz (of Courtside), Peter Kosann (of Compass) and Ron Hartenbaum.


On 8/27, TRN filed the original Federal action. Below is the second amended complaint, with additional claims placed in bold. They include TRN’s ARNN being forced to cease its short-form top-of-the-hour newscasts as of December 31, 2012 because Dial Global Satellite Services division strategically blocked the service while preserving its own NBC News product.

Bear in mind, CNN also recently sued Dial Global for breach of contract.

The amended TRN complaint (pardon the typographical inconsistencies–this is was from a large document):

1. This is an action arising out of mergers and agreements through which Defendants have taken control of, gained market power in, or benefitted from control of two markets: the “Independent Ad Rep Market,” which consists of the market for services as an advertising representative for news radio and talk radio programming that is produced or syndicated by a company that does not also own radio stations and is not an affiliate of any such owner (an “Independent Ad Rep”); and the “Satellite Services Market,” which consists of the market for transmission of radio programming by satellite signal from a producer or syndicator which does not own radio stations and is not an affiliate of any such owner to a radio station, which then broadcasts the programming in its local market.

2. At the same time that they have engaged in this unlawful, anticompetitive conduct, certain Defendants have also routinely ignored binding contractual commitments not to engage in the production or syndication of programming on their own or through affiliates. Those commitments were made to ensure that those Defendants could not have a conflict of interest in their performance of services as an Independent Ad Rep. Those Defendants have disregarded their obligations, however.

3. In addition to violating their promises not to develop a conflict of interest by producing and syndicating programming, the same Defendants have violated contractual commitments not to pursue Plaintiffs’ talent. Those promises were made to avoid creating a situation in which those Defendants were in a position to or had an incentive to use their position as Independent Ad Reps, with resulting levels of access to confidential knowledge concerning certain Plaintiffs’ hosts and/or programs, to lure hosts from those Plaintiffs to themselves or their affiliates for their own gain or otherwise to injure Plaintiffs. Despite having made contractual commitments that they would not interfere with those Plaintiffs’ relationships with hosts, those Defendants have made numerous efforts to lure away talent with whom certain Plaintiffs have existing contractual relationships.

Those Defendants’ conduct would not have been profitable, or likely even possible, but for their monopoly control over the Independent Ad Rep Market.

4. In addition to violating federal and state statutes and common law,

Defendants’ conduct poses a significant risk to free speech under the First

Amendment because it holds the prospect of eliminating or substantially reducing

the number of independent talk radio producers and limiting the news radio

broadcasts available. As a consequence of that conduct, the diversity of voices and viewpoints produced on talk radio is likely to decline.

27. OTRN, TRNE, TRN-FM, TRN-ENT, and ARNN (collectively, the

“Syndication Plaintiffs”) are engaged in the production and national syndication of

non-music, non-sports, spoken word radio programming, including both news and talk radio programming (“Spoken Word Syndication”). In particular, OTRN has at relevant times produced and syndicated The Michael Savage Show, among others; TRNE produces and syndicates The Jerry Doyle Show and has at relevant times produced and syndicated The Laura Ingraham Show, among others; TRN-FM produces and syndicates The Mancow Experience and The Phil Hendrie Show; TRN-ENT produces and syndicates America’s Morning News, among others; and ARNN produces and syndicates four separate three-hour daily weekday news programs, and has at all relevant times produced and syndicated top- and bottom of-the-hour news reports on a 24-hour per day, 7-day per week basis.

28. As set forth in more detail below, for more than a decade, the

Syndication Plaintiffs have retained Dial Global and/or its predecessors

(collectively, “Dial”) to sell advertising on the shows that the Syndication

Plaintiffs produce and/or syndicate. The Syndication Plaintiffs’ decision to retain

Dial was based, in significant part, on Dial’s repeated assurances that it would not

engage in the market for Spoken Word Syndication because doing so would create a conflict of interest for Dial. That was crucial for the Syndication Plaintiffs

because a syndicator or producer must share a significant amount of confidential,

proprietary information with its Independent Ad Rep and because an Independent Ad Rep that also produces or syndicates shows of its own – whether directly or indirectly – has a significant conflict of interest. For purposes of this complaint, programming that an Independent Ad Rep produces or syndicates, whether on its own or through affiliates, is referred to as “conflict-of-interest programming.”

29. Dial (including its predecessors) has repeatedly broken these

assurances, promises, and commitments, however. Moreover, during the time that the Syndication Plaintiffs have had a relationship with Dial, Dial has engaged in a series of mergers and other corporate transactions that have left it as the only meaningful alternative for independent producers or syndicators such as the

Syndication Plaintiffs to hire to sell certain types of advertising on their shows.

Dial’s broken promises and its monopoly power have enabled it to control the

market and enrich itself at the expense of the Syndication Plaintiffs and other

independent producers and syndicators.

A. The Market for Independent Ad Rep Services

30. Radio programming can be produced by a station owner (whether

directly or through an affiliated entity) or by an independent producer such as the

Syndication Plaintiffs. When a station owner produces a show, whether talk radio

or some other format, it can place the show on its own stations and sell advertising time on those stations to air during that show. Such vertically integrated entities, which are not directly at issue in this case, are referred to as “integrated networks.”

Those stations may or may not license programming from independent producers such as the Syndication Plaintiffs.

31. Clear Channel Communications is an example of a company that

operates an integrated network. Clear Channel owns Premiere Networks, Inc.,

which syndicates approximately 20 programs of Spoken Word Syndication, such

as The Rush Limbaugh Show and The Sean Hannity Show, as well as numerous

other programs in other genres (e.g., sports programming). At the same time,

Clear Channel owns radio stations throughout the country. Indeed, just in Los

Angeles, Clear Channel owns eight separate radio stations, including KTLK-AM

1150 and KFI-AM 640.

32. In contrast to an integrated network, the Syndication Plaintiffs and

other independent producers or syndicators offer shows that are produced

independently. After a show is produced, it is syndicated across a series of radio

station affiliates throughout a relevant geographic area. In the Syndication Plaintiffs’ case, their shows are syndicated nationally, in as many markets as the

Syndication Plaintiffs can find affiliate stations.

33. The Syndication Plaintiffs engage in a barter-type exchange with

radio stations pursuant to which the Syndication Plaintiffs provide the stations with content in exchange for the Syndication Plaintiffs’ right to sell advertising, some of which is during the Syndication Plaintiffs’ programs and some of which might be at other specified times throughout the day. The Syndication Plaintiffs generate revenue by selling commercials on the advertising time that they obtain through that barter exchange.

34. The Syndication Plaintiffs sell advertising inventory in two different

ways: direct response advertising and institutional advertising.

35. Direct response advertising is advertising from companies that seek to

make a direct connection with the listener. Such advertising often asks the listener to contact the company directly through a website, an e-mail address, or a toll-free phone number and typically tracks those contacts to measure the response to the advertisements. Direct response advertisers generally purchase advertising on a specific show for a specific cost, generally for one minute of air time. The Syndication Plaintiffs sell direct response advertising both through an affiliated company and through Dial.

36. In contrast to direct response advertising, institutional advertising

comes from companies that seek to market a brand image for a product, service, or store and generally do not seek to track the response to specific advertisements via a website, e-mail, or toll-free phone number. Solely by way of example, institutional advertising can include car brands such as Ford, consumer brands such as Tide or Skippy, appliance manufacturers such as Maytag, or national retail chains such as Sears.

37. Companies purchasing air time for institutional advertising generally

do so through an agency and do not buy time for a specific show. Instead, they pay to reach a certain estimated number of listeners within a relevant demographic.

For example, the principal demographic for national institutional radio advertising

is persons between the ages of 25-54. Institutional advertisers generally therefore buy time on a bundle of shows packaged together to provide the estimated number of listeners that they want to reach. The cost of the purchase generally is based on a single price for the totality of the programming in the bundle of programs that is subject to the buy.

38. The programs of the Syndication Plaintiffs and other independent

syndicators, taken separately, do not reach an audience sufficient for institutional

advertising. Thus, as a rule, they cannot sell institutional advertising directly to

agencies. Instead, they must use the services of an Independent Ad Rep, which

pulls together programs from multiple syndicators to offer an agency a bundle of

programs having a sufficient number of estimated listeners. This market dynamic

creates a nationwide market for the services of Independent Ad Reps – the

Independent Ad Rep Market.

39. Independent Ad Reps generally sell agencies a bundle of shows at an

agreed-upon cost and then distribute the net proceeds of that sale to the various

syndicators whose shows comprised the bundle. Pursuant both to contracts and to industry custom and practice, the Independent Ad Rep should do so in proportion to the audience sizes that those syndicators’ shows contributed to the bundle (but, as explained below, Dial does not). The gross amount of the sale generally is reduced by two commissions before it is distributed to the syndicators. First, the agency that is purchasing the advertising on behalf of a national brand takes a commission, generally referred to as an “agency fee.” Then, the Independent Ad Rep takes a percentage commission (which is generally referred to as a “sales commission” or a “sales rep commission”) out of the remaining money. Only then are the remaining proceeds distributed to the syndicators.

40. By way of example, if an agency were to buy advertising from Dial at

a cost of $1 million for a specified audience size, Dial would, in turn, assemble a

bundle of shows that provides the requisite estimated audience size, potentially

including one or more shows syndicated by the Syndication Plaintiffs. Of the total

$1 million buy, the buyer’s agency generally would take a 15% agency fee off the

top, leaving $850,000 in proceeds. Dial would then take its agreed-upon sales rep commissions, often 25%, out of the remaining $850,000. That would leave

$637,500 for distribution to the independent syndicators. If the Syndication

Plaintiffs’ shows contributed 50% of the listeners to the overall bundle, then

Plaintiffs should receive 50% of the net proceeds, or a total of $318,750.

41. In order for this system to work, the Independent Ad Rep has to be

honest about the various aspects of this transaction, including the amount that the advertiser paid for the bundle and the share of listeners that any particular

syndicator provided for the bundle. If it is not forthcoming or honest about that,

then the opportunity exists for substantial mischief. As explained below,

Defendants have taken advantage of that opportunity to enrich themselves through a series of anticompetitive tactics.

B. The Satellite Services Market

42. After an independent producer or syndicator, such as the Syndication

Plaintiffs, signs an agreement with a radio station for the station to carry the

syndicator’s shows, the syndicator must find a way to deliver its content to the

radio station. Typically, that is done via a satellite transmission.

43. In a typical transmission, a syndicator will sign an agreement with a

satellite provider for access to one or more channels which the satellite provider

has on a satellite. In order to receive a broadcast, a radio station must have a

receiver for that particular satellite services provider.

44. For example, under the Dial LLC satellite services system, when one

of the Syndication Plaintiffs signs an agreement with a radio station for that station to carry one of its shows, it transmits the show to that station by satellite

transmission obtained by TRNO, which provides various facilities and services to

various entities, including the Syndication Plaintiffs. TRNO, in turn, contracts

with Dial LLC to secure satellite channel access from Dial LLC. To receive the

applicable show, the station must have the necessary Dial LLC receiver to receive the satellite signals by which the show is transmitted. If the radio station does not have a Dial LLC receiver, then it must acquire one.

45. On information and belief, there are currently only two companies in

the Satellite Services Market that provide satellite services to independent

producers and/or syndicators such as the Syndication Plaintiffs: Dial LLC and

Cumulus. Although other integrated networks such as Clear Channel may also

have their own satellite access for delivery of content to their stations, those other integrated networks generally do not sell their satellite space to independent content producers such as the Syndication Plaintiffs.

46. Upon information and belief, Dial LLC and Cumulus each controls

approximately 50% of the Satellite Services Market, and each exercises market

power in that market.

47. There are substantial barriers to a new entrant in the Satellite Services

Market, including acquisition of satellite space and signing a sufficient number of

clients to overcome fixed costs and other barriers.

C. Dial’s Monopolization of the Market for Independent Ad Rep

Services Through Mergers and Collusive Agreements

48. Dial is a product of several mergers and acquisitions. Its predecessors

include Dial Communications, Excelsior, Triton Group, Triton Radio Networks,

Verge, Inc., and Verge LLC. Of particular note here are two mergers that

contributed to the entity that is now Dial.

49. In or about June 2008, Dial acquired Jones Media Group and its

operating companies, Jones Media America, Jones Radio Networks, and JonesTM, from Jones International Ltd. (the “Dial/Jones Merger”). Through that acquisition, Dial eliminated its major competitor in the Independent Ad Rep Market.

50. In August 2011, Dial announced an agreement to merge with

Westwood One, Inc. (the “Dial/Westwood Merger”). The Dial/Westwood Merger

was consummated on or about October 21, 2011.

51. Prior to the Dial/Westwood Merger, Westwood One and Dial

competed in the Satellite Services Market. As part of the Dial/Westwood Merger,

however, Dial was able to combine its satellite services business with Westwood

One’s satellite services business, thus eliminating one of its two competitors and

creating a combined entity with a market share of approximately 50%, if not more, and imbuing that entity with market power in the Satellite Services Market.

52. Since its merger with Jones Media, Dial has faced no meaningful

competition in the market for Independent Ad Rep Services. Indeed, Dial now has an overwhelming share of that market, which upon information and belief

Plaintiffs allege to be over 90%.

53. There are substantial barriers to entry to the Independent Ad Rep

Market, due at least in part to significant network effects in that market. In

particular, any Independent Ad Rep must have a stable of clients whose shows can be packaged together into bundles of sufficient size to attract larger institutional advertising buys. It also must have requisite relationships with the four major agencies that buy institutional advertising. Indeed, the major agencies have a strong preference for dealing with Independent Ad Reps with which they have a relationship, rather than new market entrants.

54. Although it has a dominant position in the Independent Ad Rep

Market, Dial has attempted to create the false appearance of competition in that

market.

55. Compass Marketing was formed in late 2011 or early 2012 as an

Independent Ad Rep. Although the company ostensibly competes with Dial, Dial

owns 50% of Compass Marketing, and on information and belief, Compass Media

(or its affiliates) also owns a significant stake. Dial provides Compass Marketing

with support systems and marketing services. In fact, even though Compass

Marketing is partly owned by Compass Media (or its affiliates), Compass Media

uses Dial as its Independent Ad Rep, rather than its own affiliated Independent Ad Rep company.

56. Plaintiffs were not aware of Dial’s relationships with Compass

Marketing until the first quarter of 2012.

57. Once Plaintiffs challenged the apparent connections among Dial,

Compass Media, and Compass Marketing, Plaintiffs began to notice indications of connections among Dial and WYD and WYM.

58. WYD produces and syndicates Spoken Word Syndication

programming. WYD’s founder and owner Ron Hartenbaum worked for Jones

Media prior to the Dial/Jones Merger, and the company maintains significant

connections with Dial, including involvement with conflict-of-interest

programming in which Dial had and apparently maintains an interest. In

particular, WYD handles various aspects of: (a) the Michael Smerconish Show, a

show that Dial acquired the right to syndicate shortly after the Dial/Jones Merger;

(b) the Tom Hartmann Show, a show that Dial initially acquired the right to

syndicate in violation of its covenants not to engage in further conflict-of-interest

programming; and (c) other shows that are or were affiliated with Dial.

59. Upon information and belief, the transfer of conflict-of-interest

programming from Dial to WYD was effected, at least in part, to conceal Dial’s

interest in conflict-of-interest programming, which violated Dial covenants not to

engage in further conflict-of-interest programming.

60. WYM is an affiliate of WYD that serves as an Independent Ad Rep

and offers “affiliate relations” services (i.e., assisting syndicators to find radio

stations to carry a show and to handle customer relations with those stations once they do). Upon information and belief, WYM was established to conceal actions

taken by Dial in violation of its non-inurement covenants and its covenants not to

engage in further conflict-of-interest programming.

61. Courtside produces and syndicates Spoken Word Syndication

programs, among other things. Courtside was founded by Norm Pattiz, who also

founded Westwood One. Among other things, Courtside has engaged in joint

efforts with Dial to interfere with the Syndication Plaintiffs’ relationships with

hosts, including Michael Savage and Laura Ingraham. On information and belief,

Courtside is a vehicle through which Dial seeks to conceal that it engages in

conflict-of-interest programming in violation of its covenants to the Syndication

Plaintiffs.

62. Dial’s arrangements with WYD, WYM, and Courtside are also

designed to facilitate efforts by Dial to evade its non-inurement covenants with the Syndication Plaintiffs.

D. Dial’s Relationship with Plaintiffs

63. OTRN became a client of Dial in 2000. At the time, a significant part

of OTRN’s selection of Dial as its Independent Ad Rep was Dial’s representation

that it did not have a financial interest in any spoken word radio shows and

therefore did not have a conflict of interest in marketing OTRN’s programming.

Dial expressly advised OTRN of the dangers of contracting with an Independent

Ad Rep that had a direct or indirect interest in conflict-of-interest programming

and warranted to OTRN that Dial would not engage in Spoken Word Syndication.

OTRN chose Dial as its Independent Ad Rep, rather than another firm, based on

Dial’s promise that it would never engage in conflict-of-interest programming.

64. TRNE became a client of Dial shortly after TRNE’s formation in

2003. At that time, Dial again represented and warranted that Dial did not and

would not engage in conflict-of-interest programming.

65. TRN-FM became a client of Dial shortly after TRN-FM’s formation

in 2004. At that time, Dial again represented and warranted that Dial did not and

would not engage in conflict-of-interest programming.

66. TRN-ENT became a client of Dial in 2006, shortly after its formation.

At that time, Dial again represented and warranted that Dial did not and would not engage in conflict-of-interest programming.

67. ARNN became a client of Dial in 2010, shortly after its formation. At

the time, Dial further represented and warranted that Dial would not engage in any conflict-of-interest programming other than the specific Spoken Word Syndication programming to which OTRN, TRNE, TRN-FM, and TRN-ENT consented in the wake of the Dial/Jones Merger. Notably, Dial’s representation to that effect was consistent with contractual commitments it had made to some of the other Syndication Plaintiffs and was important to ARNN.

68. In September 2006, Dial and OTRN entered into a Sales

Representation Agreement for The Rusty Humphries Show (the “Humphries Rep

Agreement”), pursuant to which OTRN engaged Dial as its sales representative for The Rusty Humphries Show throughout the United States. Under the Humphries Rep Agreement, OTRN agrees to pay Dial a sales rep commission and Dial agrees to try to sell advertising on The Rusty Humphries Show. In addition, Dial agrees not to hire OTRN’s employees, hosts, or agents (all of whom had contact with Dial in connection with its role as OTRN’s sales agent) for a set period of time. The Humphries Rep Agreement also gives OTRN the right to examine Dial’s books and records.

69. On the same day that OTRN and Dial entered into the Humphries Rep

Agreement, OTRN and Dial also entered into a Sales Representation Agreement

for The Michael Savage Show (the “Savage Rep Agreement”). The Savage Rep

Agreement is substantially similar to the Humphries Rep Agreement, including all

of the provisions set forth in paragraph 68, above.

70. On the same day that OTRN and Dial entered into the Humphries Rep

Agreement, TRNE and Dial entered into a Sales Representation Agreement for

The Jerry Doyle Show (the “Doyle Rep Agreement”). The Doyle Rep Agreement

is substantially similar to the Humphries Rep Agreement, including all of the

provisions set forth in paragraph 68, above.

71. On the same day that OTRN and Dial entered into the Humphries Rep

Agreement, TRN-FM and Dial entered into a Sales Representation Agreement for Mancow’s Morning Madhouse (the “Mancow Rep Agreement”). The Mancow

Rep Agreement is substantially similar to the Humphries Rep Agreement,

including all of the provisions set forth in paragraph 68, above.

72. On the same day that OTRN and Dial entered into the Humphries Rep

Agreement, TRNE and Dial also entered into a Sales Representation Agreement

for The Laura Ingraham Show (the “Ingraham Rep Agreement”). The Ingraham

Rep Agreement is substantially similar to the Humphries Rep Agreement,

including all of the provisions set forth in paragraph 68, above.

73. On October 22, 2007, Dial agreed with OTRN, TRNE, and TRN-FM,

as appropriate, to modify each of the Humphries Rep Agreement, the Savage Rep Agreement, the Doyle Rep Agreement, the Mancow Rep Agreement, and the Ingraham Rep Agreement (collectively, the “Rep Agreements”) to expand the noninurement covenants in the Rep Agreements.

74. After the execution of the Rep Agreements, Dial continued to promise

that it would not engage in conflict-of-interest programming.

75. However, despite its repeated representations and contractual

commitments to Plaintiffs, Dial did not and has not stayed out of the Spoken Word Syndication business.

76. When it acquired Jones Media, Dial acquired Spoken Word

Syndication programming that presented direct conflicts of interest for Dial in

placing the Syndication Plaintiffs’ programs in program bundles and in properly

allocating the sales proceeds of such program bundles.

77. The Syndication Plaintiffs voiced concern to Dial about the fact that

Dial was now engaged in conflict-of-interest programming.

78. As a result of the Syndication Plaintiffs’ concerns, on or about

December 15, 2008, Dial agreed with OTRN, TRNE, and TRN-FM to a second

addendum to each of the Rep Agreements that extends their terms and expressly sets forth Dial’s promise not to engage in conflict-of-interest programming, with certain limited exceptions. In addition, both Excelsior and Triton Media executed an Agreement to be Bound, pursuant to which each of those entities agrees that they and any of their entities will be bound by the Second Addenda to the Rep Agreements.

79. In addition to the shows covered by the Rep Agreements, the

Syndication Plaintiffs have engaged Dial as an Independent Ad Rep for numerous other shows that they produce and/or syndicate, including but not limited to The Phil Hendrie Show, Science Fantastic, America’s Morning News, The Monica Crowley Show, The Barry Farber Show, Bottom Line On Your Health, Motor News Weekly, and all ARNN programming (including 3-hour news broadcasts and top- and bottom-of-the-hour newscasts, while applicable). Indeed, Dial serves, and, subject to nominal exceptions, has served at all relevant times as the sole Independent Ad Rep for institutional advertising for shows that the Syndication Plaintiffs produce and/or syndicate. Although Dial’s work with respect to those shows is not governed by a written contract, Dial’s role is the same: it sells advertising time on those shows, primarily to institutional advertisers.

80. During the course of their relationships, the Syndication Plaintiffs

have provided to Dial confidential business information, including business

models, business plans, and financial information. The Syndication Plaintiffs have provided this information to Dial specifically to allow Dial to fulfill its role as the Syndication Plaintiffs’ Independent Ad Rep.

81. In or about July 2010, TRNO and Dial LLC entered into a Satellite

Services Agreement (the “Satellite Services Agreement”), pursuant to which Dial

LLC provides to TRNO access to satellite communications channels through

which TRNO can transmit radio broadcasts that are produced and/or syndicated by OTRN, TRNE, TRN-FM, TRN-ENT, and/or ARNN to radio stations.

82. There is an industry practice that satellite services providers such as

Dial LLC maintain a “wall” between satellite services operations and competition

between the satellite provider’s affiliates and their customers. That wall is

necessary because a customer must provide a satellite service operator such as Dial LLC with confidential information as to affiliates’ programming arrangements in order to make the relationship work.

83. Dial LLC was provided with necessary confidential information about

the Syndication Plaintiffs’ syndication operations, including advance notice of new affiliate contracts and new affiliate start dates, including those start dates that would replace Dial’s conflict-of-interest programming, as well as programming of other Defendants such as Compass Media, Courtside, and/or WYD.

D. Dial’s Anticompetitive Conduct, Breach of Its Contracts with, and

Tortious Conduct Directed Towards Plaintiffs

84. Dial has used its power in the Independent Ad Rep Market to enrich

itself at the expense of the Syndication Plaintiffs and other independent producers and/or syndicators.

85. As described above, after Dial sells advertising time to institutional

advertisers, it should allocate the resulting revenues in proportion to the estimated audience size generated by each show in an advertising bundle.

86. Dial has not been transparent in its allocations. It does not tell the

Syndication Plaintiffs or, to Plaintiffs’ knowledge, other producers or syndicators

whose shows are included in an advertising bundle what the relative share of

listeners generated by any particular show in the bundle is. Nor does it tell the

Syndication Plaintiffs or other producers or syndicators whose shows are included in particular bundles or what the advertiser actually paid. Because Dial conceals this information from the Syndication Plaintiffs and other producers or syndicators, Dial has the opportunity to manipulate ultimate payments made to the participants in a particular bundle.

87. Dial has taken advantage of its opportunity to manipulate the

allocation process by enriching itself. In particular, as Dial has increasingly

pushed into the market for Spoken Word Syndication, it has included in advertising bundles programs that it or its affiliates at Compass Media, WYD and/or Courtside produce and/or syndicate. Then, Dial steers outsized shares of the net advertising revenue from institutional advertisers to itself and its affiliates, at the expense of the Syndication Plaintiffs and other independent producers and/or syndicators.

88. Dial is able to steer outsized shares of net advertising revenue to itself

because it fails to state the amounts that institutional advertisers have paid or the

audience size of each show in the bundle. Dial then either retains the excess for

itself or it credits it to a show that it owns, produces, and/or syndicates and that

was included in the same advertising bundle. In doing so, Dial also effectively

misrepresents to the Syndication Plaintiffs the amounts that the advertiser is paying for the Syndication Plaintiffs’ programming. It is able to do this because it refuses to disclose to the Syndication Plaintiffs or other producers or syndicators the specifics of shows in any particular bundle and, more specifically, the percentage of the audience represented by each show, the separate allocations to each show, or the total amount paid. By misrepresenting the amounts paid for the syndicators’ advertising, Dial is able to reduce the disclosed allocation of revenue that it owes to shows that are owned, produced, or syndicated by anyone but Dial and its affiliates. Dial then claims an outsized share of the revenue for itself or its affiliates.

89. Dial would not be able to engage in this conduct but for its monopoly

power in the Independent Ad Rep Market. If Dial did not have a monopoly, but

rather faced meaningful competition in the Independent Ad Rep Market, Dial

would face competitive pressure to be transparent in handling bundles of programs. However, Dial faces no such competitive pressure and therefore has no need to be transparent in its dealings with the Syndication Plaintiffs or any other independent producers or syndicators.

90. In addition to manipulating the allocations, Dial uses its monopoly

power in the Independent Ad Rep Market to advantage its own shows at the

expense of shows of other independent producers and/or syndicators, including but not limited to the Syndication Plaintiffs. In particular, Dial includes its shows in

more bundles and/or more profitable bundles of shows, at the expense of shows

produced and/or syndicated by the Syndication Plaintiffs and other independent

producers and/or syndicators.

91. Dial could not engage in such conduct but for its monopoly power in

the Independent Ad Rep Market. In particular, if Dial faced any meaningful

constraint on its market power, it would be forced to include shows from other

producers, even at the expense of its own shows.

92. Dial’s results, as reported to the Syndication Plaintiffs, for 2012

illustrate the effect of Dial’s manipulation, as Dial claims that its institutional sales

in that year for the Syndication Plaintiffs’ programs have decreased so

substantially as to be strikingly suspicious.

93. Pursuant to their rights under the Rep Agreements, the Syndication

Plaintiffs have sought access to Dial’s books and records relating to the sale of

advertising on the Syndication Plaintiffs’ shows, but Dial has refused to permit the Syndication Plaintiffs to conduct any such audit. The Syndication Plaintiffs have therefore been unable to determine the exact amount by which they have been underpaid.

94. Dial’s conduct, all of which is a product of its power in the

Independent Ad Rep Market, has a significant effect on consumers and consumer welfare, in several respects.

a. Producers and syndicators, who are the consumers of Dial’s

services as an Independent Ad Rep, must pay what amounts to a higher price to

Dial for Dial’s services because each of them must accept that its shows will

receive a smaller share of the revenue than shows that Dial or its affiliates control.

The net effect of that conduct is the same as if Dial were to use its market power to raise its commission rates – syndicators and producers receive less than they

otherwise would because Dial has market power.

b. Because producers and syndicators receive less revenue from

Dial, they produce fewer shows. Relatedly, as Dial consolidates shows to its own

account or the account of its affiliates, it becomes increasingly able to exclude

other producers and syndicators from its bundles entirely. As a result, those

producers and syndicators cannot sell advertising time to institutional advertisers,

and many therefore are forced to stop producing or syndicating shows. As a result of all of this, there are fewer shows produced in total, and the listening public has fewer options from which to choose. As described in more detail below, CNN Radio and ARNN’s short form, top-of-the-hour newscasts are examples of products that Dial’s anticompetitive conduct have driven from the market, thus diminishing total output and reducing consumer choice.

c. Just as listeners have fewer shows from which to choose, so too

do advertisers, which is another form of the consuming public here.

95. Contrary to their representations and contractual commitments, Dial,

Excelsior, and Triton Media have not refrained from engaging in further conflict of-interest programming in the market for Spoken Word Syndication. To the contrary, as a result of the Dial/Westwood Merger, and other activities, Dial has

confirmed that it now has an interest in several programs in the Spoken Word

Syndication market, which directly breach and violate its agreements with and

commitments to the Syndication Plaintiffs, both directly and via its arrangements

with Courtside, Compass Media, and WYD, among others.

96. Dial and its affiliates have used the Syndication Plaintiffs’ proprietary

business models, plans, and information to develop the strategies for expanding the Defendants’ business activities into the intellectual rights ownership inherent in the production and ownership of programming content in the Independent Spoken Word Syndication market.

97. Dial LLC has not maintained the requisite separation between its

operations and the operations of Dial and its affiliates. To the contrary, Dial LLC

has sought to use Plaintiffs’ orders for satellite services, which are confidential and provided to Dial LLC only to implement the Satellite Services Agreement, to

permit Dial and other Defendants to promote shows that one or more Defendants

owns, produces, and/or syndicates and/or to interfere with or delay the placement of the Syndication Plaintiffs’ programming with certain radio affiliates.

98. Dial LLC has failed to use its best efforts to address satellite services

issues for the Syndication Plaintiffs’ programs in order to harm the Syndication

Plaintiffs. In particular, Dial LLC has either refused or delayed responding to

requests by radio stations and by the Syndication Plaintiffs to transmit to the

stations programs that are syndicated by the Syndication Plaintiffs. In many of

those cases, the station in question was seeking to replace one of Dial’s conflict-of interest programs with one of the Syndication Plaintiffs’ programs. Thus, Dial

LLC’s conduct caused harm to the Syndication Plaintiffs and advantaged Dial.

Dial LLC’s conduct is at odds with its obligations under the Satellite Services

Agreement.

99. In addition, Dial LLC has, at times, informed radio stations that

wanted to receive one or more of the Syndication Plaintiffs’ programs that Dial

LLC would not change the satellite feed delivered to that radio station unless the

station either first obtained permission from a business person within Dial or the

station also agreed to carry one or more of Dial’s conflict-of-interest programs

such as The Neal Boortz Show.

100. Dial LLC’s conduct would not be possible but for the market power

that it maintains in the Satellite Services Market because it would face significant

competitive pressure to adhere to industry custom and keep its operations separate from other entities or divisions within Dial that engage in conflict-of-interest programming.

101. Some Defendants have on multiple occasions interacted improperly

with some of the hosts with whom Plaintiffs have ongoing contractual

relationships, notably including Michael Savage and Laura Ingraham. In

particular, Dial and Courtside jointly interfered with OTRN’s agreements with Savage and Ingraham in multiple respects.

102. In November 2010, Courtside sent to Savage a proposed term sheet

that purported to set forth the material terms of an agreement between Courtside

and Savage. OTRN had a contractual right to match Courtside’s offer sheet, and

Savage therefore conveyed the term sheet to OTRN on or about November 17,

2010. On November 30, 2010, OTRN matched Courtside’s term sheet. Savage

challenged whether OTRN had in fact matched, and an arbitration panel ultimately ruled in OTRN’s favor.

103. On December 1, 2010, OTRN advised Courtside by letter of its

decision to match the term sheet for Savage and to advise Courtside that OTRN

therefore had an exclusive relationship with Savage. On December 14, 2010,

OTRN again advised Courtside of its decision to match Courtside’s term sheet for Savage and explained that there was a binding and enforceable contract between OTRN and Savage. OTRN explained to Courtside that, at that point, any effort by Courtside to secure Savage’s services would be inconsistent with, and interfere with, OTRN’s relationship with Savage.

104. Despite its knowledge of Savage’s contractual commitment to OTRN,

Courtside did not cease its efforts to recruit Savage. To the contrary, it persisted in its efforts. Among other things, even after OTRN matched Courtside’s term sheet, Courtside continued to spread knowingly false rumors at industry conferences that Savage would soon be under contract with Courtside. Indeed, as late as August 2011, Courtside was spreading such rumors.

105. On information and belief, Dial joined in Courtside’s efforts to recruit

Savage, including its efforts to interfere with OTRN’s agreement with Savage.

Dial enlisted Courtside in this effort to avoid breaching its own contractual

commitments to OTRN. However, Courtside’s term sheet for Savage’s services

expressly contemplated that Dial would provide both affiliate and advertising sales services (i.e., serve as an ad rep). Moreover, the term sheet contemplated that, if Savage moved to Courtside, then Courtside would exercise control over Dial in various respects, including by “causing Dial to agree” that Savage’s show would be distributed on regularly-scheduled basis and ensuring that there was no “pay-orplay” alternative.

106. Upon information and belief, both Dial and Courtside maintained

direct contact with Savage even after OTRN exercised its right to match the term

sheet. For example, Savage’s arbitration claims with OTRN were conducted

confidentially. Yet shortly after the decision affirming OTRN’s match was

rendered, and without OTRN informing anyone of the decision, a representative of Dial made reference to the decision at an industry conference in September 2011.

Because OTRN did not tell Dial (or anyone else) about that ruling, Dial could only

have learned about it directly from Savage or indirectly through Courtside. Either

way, it is evidence of improper contact that Dial and/or Courtside had with Savage.

107. On information and belief, Dial and/or Courtside continued to

interfere with the relationship between Savage and OTRN even after the arbitration ruling, in an effort to lure Savage to Courtside and/or Dial, ultimately giving rise to the end of the relationship between Savage and OTRN. OTRN has been damaged as a result.

108. Dial and Courtside engaged in similar efforts with respect to Laura

Ingraham, ultimately resulting in the end of that relationship, as well. Within a

month of the end of that relationship – a notably short period of time in the

industry – Ingraham and Courtside announced a new show to be hosted by

Ingraham for Courtside, which began broadcasting on January 2, 2013. On

information and belief, Dial serves as an ad rep for that show, despite its

commitment in the Ingraham Ad Rep Agreement not to do so.

109. Dial has used its power in the Satellite Services Market to aid

Courtside’s launch of Courtside’s show with Ingraham. In particular, because

TRNE syndicated its show with Ingraham, radio station affiliates that received the

show did so on a satellite channel that TRNO rents from Dial LLC. When

Courtside launched its new show with Ingraham, Dial LLC immediately switched

various stations’ receivers to receive the new Ingraham show distributed by

Courtside. Dial’s actions evidence Dial’s interest in the success of Courtside’s

new show hosted by Ingraham.

110. On information and belief, Dial and Courtside were negotiating with

Ingraham on the parameters of a contract even before the end of her contract with TRNE. This is evidenced by the fact that Ingraham asked TRNE for detailed

information about the TRNE show hosted by Ingraham – including financial

information, sponsorship information, and specific affiliate agreement terms –

during the final months of the TRNE/Ingraham relationship. It is further evidenced

by the speed with which Courtside and Dial were able to launch her show.

111. The effect of Dial’s market power in the Satellite Services Market

coupled with its market power in the Independent Ad Rep Market is clearly

illustrated by Dial’s ability to drive CNN Radio and ARNN from the market for

top- and bottom-of-the-hour newscasts.

112. For approximately 25 years, CNN Radio was an independent producer

and syndicator of CNN-branded newscasts. CNN used Dial as its Independent Ad Rep at all relevant times, and Dial also provided CNN with other services, such as affiliate relations. However, in early 2012, Dial informed CNN that Dial was terminating all of the services that it provided to CNN Radio, including services as an Independent Ad Rep. Dial confirmed that fact in writing in a letter dated on or about March 1, 2012, which provided 30-days notice of Dial’s termination of services to CNN. Because Dial terminated its services as an Independent Ad Rep

to CNN, CNN had no avenue through which it could sell institutional advertising

on its newscasts. As a result, there was no economically viable way for CNN

Radio to continue to remain in the market, and it therefore terminated its radio

newscasts on or about April 1, 2012, only 7 months before a Presidential election.

113. Dial had a significant economic incentive to drive CNN Radio out of

the market because Dial has a licensing arrangement with NBC Radio pursuant to which Dial pays a set licensing fee to use the NBC Radio name for newscasts.

Dial produces and syndicates those NBC Radio-branded newscasts, and it sells

advertising on them. It also serves as the Independent Ad Rep for them. Thus, if

Dial can place and then sell advertisements on NBC Radio-branded newscasts, it

can earn substantial profits of its own.

114. After Dial drove CNN Radio from the market, it continued to take

advantage of its market dominance. When CNN Radio announced that it was

withdrawing from the market, ARNN introduced a new, short-form top-of-the-hour

newscast to the market as a replacement for CNN Radio. ARNN then began

contacting former CNN Radio-affiliated radio stations to solicit those stations as

potential affiliates for ARNN’s new newscast. While those solicitations were

going on, Armed Forces Radio Network chose ARNN’s newscast for its own

network, thus indicating its quality and reach.

115. Dial, however, prevented former CNN affiliates from selecting

ARNN’s newscast. In particular, Dial LLC refused to permit numerous radio

stations to change the channel on their satellite receiver to receive ARNN’s

newscast. Instead, on information and belief, Dial informed those stations that

they were “deemed” to be affiliates of NBC Radio, even though the stations had no affiliation agreement with NBC Radio. Dial then announced to the market that

NBC Radio had more than 700 affiliates for newscasts, even though the vast

majority of those stations had not signed affiliation agreements for NBC Radio

newscasts. By issuing that press release, Dial created the false impression that

NBC Radio newscasts were widely accepted, when in fact they were not. Dial also falsely claimed difficulties in providing ARNN’s newscasts via Dial LLC’s

satellite channels, which the Syndication Plaintiffs were entitled to use, and failed

to provide proper Independent Ad Rep Services for the sale of advertising on

ARNN’s top- and bottom-of-the-hour newscasts.

116. Dial’s actions prevented numerous radio stations from affiliating with

ARNN for its newscasts and materially depressed ARNN’s revenue stream for the newscasts. As a result, ARNN was forced to cease its short-form top-of-the-hour newscasts as of December 31, 2012. Thus, Dial’s actions forced at least two potential competitors from the market – CNN Radio and ARNN – to clear the way for Dial’s own NBC Radio-branded newscasts.

117. ARNN has been injured as a result of Dial’s conduct, which would

not have been possible but for Dial’s market power in both the Independent Ad Rep Market and the Satellite Services Market.

FIRST CAUSE OF ACTION

(Monopolization of the Independent Ad Rep Market)

(Syndication Plaintiffs vs. Dial)

118. Plaintiffs incorporate by reference the allegations in paragraphs 1 –

117, above.

119. The Independent Ad Rep Market is a discrete, nationwide product

market for the services of an Independent Ad Rep – i.e., a company that can bundle shows produced by independent syndicators and/or producers and sell advertising on those shows to institutional advertisers.

120. Dial has monopoly power in the Independent Ad Rep Market by

virtue of its 90% market share in that market.

121. Dial willfully acquired and maintained its monopoly in the

Independent Ad Rep Market by its acts and practices described above, including its conduct with respect to allocation of advertising revenues to independent

producers such as the Syndication Plaintiffs, all in violation of Section 2 of the

Sherman Antitrust Act, 15 U.S.C. § 2.

122. The goal, purpose, and/or effect of Defendants’ scheme was to reduce

payments made to independent syndicators such as the Syndication Plaintiffs by

steering money to Dial and/or its affiliates via improper allocations and other

improper practices.

123. The Syndication Plaintiffs have been injured in their business and

property by reason of Defendants’ unlawful conduct. In particular, as a result of

Dial’s violations, Dial’s payments to the Syndication Plaintiffs and to other

independent producers have been lower than they otherwise would have been.

124. Dial’s conduct affected both the Syndication Plaintiffs and most, if

not all, other consumers of Dial’s services (i.e., independent producers and

syndicators). It also eliminates shows from the market, with CNN Radio being one such example. It therefore diminishes consumer choice and damages consumer welfare.

125. This unlawful conduct threatens continuing loss and damage to the

Syndication Plaintiffs if not enjoined by this Court.

SECOND CAUSE OF ACTION

(Attempted Monopolization of the Independent Ad Rep Market)

(Syndication Plaintiffs vs. Dial)

126. Plaintiffs incorporate by reference the allegations in paragraphs 1 –

125, above.

127. If Dial does not already have monopoly power, then Dial has a

dangerous probability of success in achieving monopoly power in the Independent

Ad Rep Market.

128. With the specific intent to achieve a monopoly, Dial, by its acts and

practices described herein, including its conduct with respect to allocation of

advertising revenues to independent producers such as the Syndication Plaintiffs, has attempted to monopolize the Independent Ad Rep Market, in violation of Section 2 of the Sherman Antitrust Act, 15 U.S.C. § 2.

129. The goal, purpose, and/or effect of Defendants’ scheme was to reduce

payments made to independent syndicators such as Plaintiffs by steering money to Defendants and/or their affiliates.

130. The Syndication Plaintiffs have been injured in their business and

property by reason of Defendants’ unlawful conduct. In particular, as a result of

Dial’s violations, Dial’s payments to the Syndication Plaintiffs and to other

independent producers have been lower than they otherwise would have been.

131. This unlawful conduct threatens continuing loss and damage to

Plaintiffs and to competition in the market more generally if not enjoined by this

Court.

THIRD CAUSE OF ACTION

(Conspiracy to Monopolize the Independent Ad Rep Market)

(Syndication Plaintiffs vs. Dial, Compass Media, Compass Marketing and WYM)

132. Plaintiffs incorporate by reference the allegations in paragraphs 1 –

131, above.

133. Defendants shared a conscious commitment to a common scheme

designed to achieve the unlawful objective of the monopolization of the

Independent Ad Rep Market.

134. At the time of the agreement, Dial, Compass Media, and WYM were

actual and/or potential competitors in the Independent Ad Rep Market.

135. Defendants conspired with the specific intent, knowledge, and

purpose that their anticompetitive agreement would result in Dial willfully

acquiring and maintaining a monopoly in the Independent Ad Rep Market.

136. Compass Media and WYM knew that the natural and probable

consequences of their agreements with Dial would be the monopolization of the

relevant market by Dial.

137. Defendants have committed overt acts in furtherance of their

conspiracy. For example, Compass Media entered into an agreement with Dial to

set up Compass Marketing, and Compass Media and Compass Marketing have

continued to present Compass Marketing as an independent competitor to Dial,

when it in fact it is not. Similarly, on information and belief, WYM has engaged in

marketing for conflict-of-interest programming in an effort to avoid evidence of

Dial’s involvement. Thus, Defendants have entered into, complied with, and

implemented agreements relating to allocation of advertising revenues in the

Independent Ad Rep Market, in violation of Section 2 of the Sherman Antitrust

Act, 15 U.S.C. § 2.

138. But for the Defendants’ conspiracy to monopolize, Defendants or their

competitors would have honestly allocated revenues generated by shows within an advertising bundle, and the Syndication Plaintiffs and other independent

syndicators would have been paid more as a result.

139. The Syndication Plaintiffs have been injured in their business and

property by reason of Defendants’ unlawful conduct. During the relevant period,

Defendants sold significant numbers of advertisement bundles including the

Syndication Plaintiffs’ shows, and, as a result of the illegal conduct alleged herein, the Syndication Plaintiffs were not paid a market rate for the advertising time on the shows that they produce.

140. This unlawful conduct threatens continuing loss and damage to

Plaintiffs if not enjoined by this Court.

FOURTH CAUSE OF ACTION

(Unlawful Agreement in Restraint of Trade)

(Syndication Plaintiffs vs. Dial, Compass Marketing, Compass Media,

WYD, and WYM)

141. Plaintiffs incorporate by reference the allegations in paragraphs 1 –

140 of the Complaint.

142. Dial, Compass Marketing, and WYM were, ostensibly, actual competitors in the Independent Ad Rep Market.

143. Those Defendants, Compass Media, and WYD engaged in a

continuing illegal contract, combination, and conspiracy in restraint of trade, the

purpose and effect of which was to create the false appearance of competition in

the Independent Ad Rep Market, allocate the Independent Ad Rep Market between them, and fix and/or misallocate amounts that Independent Ad Reps would have to pay independent producers such as the Syndication Plaintiffs.

144. Defendants shared a conscious commitment to a common scheme

designed to achieve the unlawful objective of controlling and/or dividing the

Independent Ad Rep Market.

145. By entering into such unlawful agreements, Defendants have

unlawfully conspired in restraint of trade and violated Section 1 of the Sherman

Act, 15 U.S.C. § 1. Defendants’ agreements constitute a horizontal market

allocation and price-fixing agreement between actual or potential competitors, and this is a per se violation of Section 1.

146. In the alternative, Defendants’ agreements are an unreasonable

restraint of trade in violation of Section 1 under either a “quick look” or a “rule of

reason” analysis. There are no precompetitive justifications for the agreements

between Dial and the other Defendants. On the other hand, there are significant

anticompetitive effects as a result of those agreements.

147. But for this unlawful agreement, the Defendants would have

competed in the Independent Ad Rep Market, and as a result, Defendants would

have paid more to independent producers such as the Syndication Plaintiffs.

148. The Syndication Plaintiffs have been injured in their business and

property by reason of the unlawful contract, combination, and/or conspiracy.

During the relevant period, Defendants sold significant numbers of advertisement

bundles including the Syndication Plaintiffs’ shows, and, as a result of the illegal

conduct alleged herein, the Syndication Plaintiffs were not paid a market rate for

the advertising time on the shows that they produce.

149. This unlawful conduct threatens continuing loss and damage to

Plaintiffs if not enjoined by the Court.

FIFTH CAUSE OF ACTION

(Violation of Clayton Act § 7 – Dial/Jones Merger)

(Syndication Plaintiffs vs. Dial)

150. Plaintiffs incorporate by reference the allegations in paragraphs 1 –

149 of the Complaint.

151. Dial directly or indirectly acquired assets of its competitor Jones

Media, the effect of which was likely to reduce competition or to create a

monopoly in the Independent Ad Rep Market, in violation of Section 7 of the

Clayton Act, 15 U.S.C. § 18.

152. As a result of Dial’s acquisition and the anticompetitive conduct

enabled thereby as set forth herein, Plaintiffs have been injured in their business or property in the form of receiving lower advertising revenues than they would have received but for the merger.

SIXTH CAUSE OF ACTION

(Violation of Clayton Act § 7 – Dial/Compass Agreement)

(Syndication Plaintiffs vs. Dial, Compass Marketing, and Compass Media)

153. Plaintiffs incorporate by reference the allegations in paragraphs 1 –

152 of the Complaint.

154. Dial directly or indirectly acquired assets of its competitor Compass

Media, the effect of which was likely to reduce competition or to create a

monopoly in the Independent Ad Rep Market, in violation of Section 7 of the

Clayton Act, 15 U.S.C. § 18.

155. As a result of Dial’s acquisition and the anticompetitive conduct

enabled thereby as set forth herein, Plaintiffs have been injured in their business or property in the form of receiving lower advertising revenues than they would have received but for the merger.

SEVENTH CAUSE OF ACTION

(Violation of Clayton Act § 7 – Dial/Westwood Merger)

(Plaintiffs vs. Dial and Dial LLC)

156. Plaintiffs incorporate by reference the allegations in paragraphs 1 –

155 of the Complaint.

157. Dial directly or indirectly acquired assets of Westwood One, the effect

of which was likely to reduce competition or to create a monopoly in the

Independent Ad Rep Market and/or the Satellite Services Market, in violation of

Section 7 of the Clayton Act, 15 U.S.C. § 18.

158. As a result of Dial’s acquisition and the anticompetitive conduct

enabled thereby as set forth herein, Plaintiffs have been injured in their business or property in the form of receiving advertising revenues than they would have

received but for the merger.

EIGHTH CAUSE OF ACTION

(Monopolization of the Satellite Services Market)

(Plaintiffs vs. Dial and Dial LLC)

159. Plaintiffs incorporate by reference the allegations in paragraphs 1 –

158, above.

160. Dial has monopoly power in the Satellite Services Market.

161. Dial willfully acquired and maintained its monopoly in the Satellite

Services Market by its acts and practices described above, in violation of Section 2 of the Sherman Antitrust Act, 15 U.S.C. § 2.

162. The goal, purpose, and/or effect of Dial’s scheme was to reduce the

opportunities for distribution of shows by the Syndication Plaintiffs and other

independent producers and/or syndicators.

163. The Syndication Plaintiffs have been injured in their business and

property by reason of Defendants’ unlawful conduct.

164. This unlawful conduct threatens continuing loss and damage to the

Plaintiffs if not enjoined by this Court.

NINTH CAUSE OF ACTION

(Attempted Monopolization of the Satellite Services Market)

(Plaintiffs vs. Dial and Dial LLC)

165. Plaintiffs incorporate by reference the allegations in paragraphs 1 –

164, above.

166. If Dial does not already have monopoly power, then Dial has a

dangerous probability of success in achieving monopoly power in the Satellite

Services Market.

167. With the specific intent to achieve a monopoly, Dial, by its acts and

practices described herein, has attempted to monopolize the Satellite Services

Market, in violation of Section 2 of the Sherman Antitrust Act, 15 U.S.C. § 2.

168. The goal, purpose, and/or effect of Dial’s scheme was to reduce the

opportunities for distribution of shows by the Syndication Plaintiffs and other

independent producers and/or syndicators.

169. The Syndication Plaintiffs have been injured in their business and

property by reason of Defendants’ unlawful conduct.

170. This unlawful conduct threatens continuing loss and damage to

Plaintiffs if not enjoined by this Court.

TENTH CAUSE OF ACTION

(Breach of Contract – Ad Rep Agreements)

(Syndication Plaintiffs vs. Dial)

171. Plaintiffs incorporate by reference paragraphs 1 – 170 of the

Complaint, above.

172. The Syndication Plaintiffs have entered into several contracts with

Dial, both written and unwritten. The written contracts are the Ad Rep

Agreements described above. Pursuant to the unwritten contracts, the Syndication

Plaintiffs have hired Dial as an Independent Ad Rep for all of their shows not

covered by the Ad Rep Agreements.

173. Dial has violated one or more obligations that it owes to the

Syndication Plaintiffs under each of the contracts described above. Dial’s

contractual violations include the misuse of confidential information provided to it

pursuant to the Agreements, underpayment of advertising revenues earned, the

failure to include the Syndication Plaintiffs’ shows in appropriate advertising

bundles, failure to represent the Syndication Plaintiffs to the best of Dial’s ability,

the inclusion of the Syndication Plaintiffs’ shows only in less favorable bundles,

the acquisition and/or maintenance of conflict-of-interest programming, improper

contacts or other inducements with the Syndication Plaintiffs’ hosts and/or refusal

to permit the Syndication Plaintiffs access to Dial’s books and accounting records.

174. Plaintiffs have been damaged as a result of Dial’s conduct.

175. The accounts of Dial’s sales of bundles are so complicated that

calculating an ordinary fixed sum as a measure of damages is likely impracticable.

ELEVENTH CAUSE OF ACTION

(Breach of Contract – Satellite Services Agreement)

(Plaintiffs vs. Dial LLC)

176. Plaintiffs incorporate by reference the allegations in paragraphs 1 –

175 of the Complaint.

177. The Satellite Services Agreement is a valid, existing contract between

TRNO and Dial LLC.

178. The Syndication Plaintiffs are intended third party beneficiaries of the

Satellite Services Agreement because the Satellite Services Agreement is intended to provide a means to distribute their shows to affiliate stations to broadcast in their respective local areas.

179. Dial LLC has breached its obligations under the Satellite Services

Agreement, including but not limited to its obligation to keep confidential the

proprietary materials that have been provided to it as necessary to execute the

Satellite Services Agreement and the obligation to provide satellite services as

directed.

180. Plaintiffs have been damaged as a result of Dial LLC’s breach of the

Satellite Services Agreement.

TWELFTH CAUSE OF ACTION

(Breach of Fiduciary Duty)

(Syndication Plaintiffs vs. Dial)

181. Plaintiffs incorporate by reference the allegations in paragraphs 1 –

180 of the Complaint.

182. The Syndication Plaintiffs and Dial were parties to a fiduciary

relationship because, when Dial acts as an Independent Ad Rep on the Syndication

Plaintiffs’ behalf, it is acting as the Syndication Plaintiffs’ agent.

183. Dial breached its fiduciary relationship with the Syndication Plaintiffs

by using the Syndication Plaintiffs’ confidential and proprietary business

information, which the Syndication Plaintiffs provided to Dial only because Dial

was acting as their agent, to facilitate Defendants’ own conflict-of-interest

programming to the Syndication Plaintiffs’ detriment and/or to the advantage of

Dial’s conflict-of-interest programming. Dial therefore violated its obligations to

the Syndication Plaintiffs.

184. Plaintiffs have been damaged as a result of Dial’s actions.

THIRTEENTH CAUSE OF ACTION

(Tortious Interference with Contractual Relations and Conspiracy to

Tortiously Interfere with Contractual Relations)

(Syndication Plaintiffs vs. Dial, Courtside, WYD, and Compass Media)

185. Plaintiffs incorporate by reference the allegations in paragraphs 1 –

184 of the Complaint.

186. The Syndication Plaintiffs have or have had contracts with numerous

hosts, including but not limited to Michael Savage and Laura Ingraham.

187. Dial, WYD, Compass Media, and Courtside were aware of the

Syndication Plaintiffs’ relationships with their hosts. Those Defendants formed a

conspiracy designed to rupture one or more of those relationships.

188. One or more of those Defendants has taken an intentional, overt act to

induce one or more hosts, including Michael Savage and Laura Ingraham, to

breach their contracts with the Syndication Plaintiffs or otherwise to disrupt the

Syndication Plaintiffs’ contractual relationships with those hosts.

189. There has been an actual breach or disruption of the Syndication

Plaintiffs’ contractual relations with Michael Savage and Laura Ingraham as a

result of that conduct.

190. The Syndication Plaintiffs have been damaged as a result of that

conduct.

FOURTEENTH CAUSE OF ACTION

(Tortious Interference with Prospective Contractual Relations)

(Syndication Plaintiffs vs. Dial and Dial LLC)

191. Plaintiffs incorporate by reference the allegations in paragraphs 1 –

190 of the Complaint.

192. Plaintiffs have economic relationships with affiliate stations, and they

have a probability of economic benefit from those relationships.

193. Dial and Dial LLC are aware of Plaintiffs’ relationships with affiliate

stations.

194. Dial and Dial LLC have acted to disrupt the Syndication Plaintiffs’

relationships with affiliate stations by delaying implementation of satellite service

orders and otherwise interfering with affiliate relations between the Syndication

Plaintiffs and their affiliate stations relating to providing the Syndication Plaintiffs’

programming via satellite to their radio station affiliates.

195. Dial’s and Dial LLC’s conduct has disrupted the Syndication

Plaintiffs’ relationships with affiliate stations.

196. Dial’s and Dial LLC’s actions have proximately caused economic

harm to Plaintiffs.

FIFTEENTH CAUSE OF ACTION

(Violation of Cartwright Act)

(Syndication Plaintiffs vs. Dial, Compass Marketing, and WYM)

197. Plaintiffs incorporate by reference the allegations in paragraphs 1 –

196 of the Complaint.

198. Dial, Compass Marketing and WYM have agreed and/or conspired to

combine their resources for the purpose of restraining commerce and preventing

competition in the market for Independent Ad Rep Services.

199. Those Defendants have taken illegal actions in furtherance of their

agreement.

200. Those Defendants conduct violates the Cartwright Act, Cal Bus. and

Prof. Code § 16700 et seq.

201. Plaintiffs have suffered economic damage as a proximate result of

those acts.

SIXTEENTH CAUSE OF ACTION

(Violation of Cal. Bus. and Prof. Code § 17200)

(Plaintiffs vs. Defendants)

202. Plaintiffs incorporate by reference the allegations in paragraphs 1 –

201 of the Complaint.

203. Each of the Defendants has engaged in unfair competition by virtue of

an unlawful act, as follows:

a. Dial and Dial LLC have unlawfully monopolized or attempted

to monopolize the Independent Ad Rep and Satellite Services Markets, and they

have lessened competition in those markets through the Dial/Jones Merger, the

Dial/Compass Agreement, and the Dial/Westwood Merger;

b. Dial and Dial LLC acted unlawfully when they required radio

stations to carry one or more of Dial’s conflict-of-interest programs if those

stations wanted to receive one or more of the Syndication Plaintiffs’ programs;

c. Dial, Compass Media, Compass Marketing, WYD, and WYM

have conspired to monopolize the Independent Ad Rep Market, to create the false impression of competition in that market, and to misallocate revenues from

advertising bundles;

d. Dial and Courtside have interfered with the Syndication

Plaintiffs’ contractual relationships with hosts, including Michael Savage and

Laura Ingraham.

204. Dial, Compass Media, and Compass Marketing have engaged in

unfair competition by virtue of a fraudulent act, as follows:

a. Dial, Compass Media, and Compass Marketing misrepresented

that Compass Marketing is a competitor to Dial in the Independent Ad Rep

Market, and the public was likely to be deceived by those representations into

thinking that Compass Marketing was a competitor to Dial in that market;

b. Dial falsely claimed that it was an honest broker in the

Independent Ad Rep Market when in fact it was manipulating payments from

advertising bundles in favor of itself and its affiliates; and

c. Dial falsely claimed that it had hundreds of NBC Radio

affiliates after it forced CNN Radio from the market.

205. Each Defendant has engaged in unfair competition by virtue of an

unfair act, as follows:

a. Dial acted unfairly when it concealed the composition of and

revenues earned from its bundles and when it misallocated revenues from those

bundles to favor its own account;

b. Dial and Dial LLC acted unfairly when they leveraged their

control over the Satellite Services Market to refuse or delay responding to directions from Plaintiffs as to the radio stations to receive the Syndication

Plaintiffs’ shows;

c. Dial and Courtside acted unfairly when they spread rumors

about and otherwise acted to interfere with the Syndication Plaintiffs’ relationships

with their hosts, including Michael Savage and Laura Ingraham;

d. Dial, Compass Marketing, and Compass Media acted unfairly

when they falsely created the impression of competition in the Independent Ad

Rep Market;

e. Dial and Dial LLC acted unfairly when they deemed former CNN Radio affiliates to be affiliates of NBC Radio and interfered with switching

those stations to ARNN newscasts; and

f. Dial and Dial LLC acted unfairly when they unilaterally switched radio stations’ satellite channel to Courtside’s show hosted by Laura Ingraham without notice to any Plaintiffs, directly contrary to the position taken by Dial and Dial LLC on receipt of instructions from Plaintiffs with respect to starting programming from the Syndication Plaintiffs to replace conflict-of-interest programming of Dial and/or Compass Media and, upon information and belief, programming of Courtside and/or WYD.

206. Plaintiffs have been damaged as a result of Defendants’ conduct.

SEVENTEENTH CAUSE OF ACTION

(Unjust Enrichment (Oregon Law) – Alternative to Breach of Contract)

(Syndication Plaintiffs vs. Dial)

207. Plaintiffs incorporate by reference the allegations in paragraphs 1 –

206 of the Complaint.

208. The Syndication Plaintiffs conferred a benefit upon Dial by permitting

Dial to sell advertising time on the Syndication Plaintiffs’ shows and by paying

Dial a commission for that service.

209. Dial was aware that it received those benefits.

210. Under the circumstances, it would be unjust to allow Dial to receive

those benefits without paying the Syndication Plaintiffs for them, in full.

211. By engaging in the conduct described above, Defendants have been

unjustly enriched at the expense of the Syndication Plaintiffs and they are required,

in equity and good conscience, to disgorge and pay their ill-gotten gains to the

Syndication Plaintiffs.

PRAYER FOR RELIEF

WHEREFORE, for the reasons stated herein, Plaintiffs pray for judgment

against Defendants and for the following relief:

A. A judgment for three times the damages actually sustained by

Plaintiffs, as determined by a jury;

B. A declaration that Defendants have violated the antitrust laws,

committed the torts described above, and/or breached their contracts with and

fiduciary duties to Plaintiffs;

C. Permanent injunctive relief, which enjoins Defendants from entering

into any further illegal agreements and requires them to take affirmative steps to

dissipate the anticompetitive effects of their prior violations, including but not

limited to divestment of their merger with Jones Media and/or Westwood One, as

well as a requirement that Dial continue to represent the Syndication Plaintiffs

properly and to the best of its ability until the divestment is complete and/or

competitive balance is restored to the Independent Ad Rep Market;

D. An accounting;

E. The costs of this suit, including an award of attorneys’ fees; and

F. Such other and further relief as the Court deems just and proper.

DEMAND FOR JURY TRIAL

Plaintiffs demand a jury trial as to all issues so triable.