/// DOJ Orders Only One Divestiture to Approve Gannett’s Purchase of Belo

December 16, 2013  |  Media Week

No doubt some in Washington will think the Dept. of Justice let Gannett off easy in order to close its purchase of Belo by requiring the companies divest KMOV-TV, Belo's CBS affiliate, in St. Louis next year. KMOV-TV, Belo's CBS affiliate and KSDK, Gannett's NBC affiliate are the top two stations in the market. The combined company planned to spin-off KMOV, along with five other TV stations to Sander Media, run by former Belo CEO Jack Sander, who would then operate the stations as part of a shared service agreement with Gannett. Even though the arrangement with Sander Media would have called for separate sales forces, the DOJ concluded the arrangement would have lessened competition in the market and resulted in higher prices to advertisers. “Gannett's KSDK-TV and Belo's KMOV-TV compete head-to-head in the sale of broadcast television spot advertising in the St. Louis area and this rivalry constrains advertising rates,” said Bill Baer, assistant attorney general in the DOJ's antitrust division. “The full divestiture required by the department will ensure that KMOV-TV will remain a vigorous competitor in St. Louis. In a press release, Gannett, which will become the fourth largest owner of big four network affiliates after it closes on Belo, said the condition will have a “minimal impact” on the synergies it expects to get out of the $1.5 billion merger. The transaction still has to win approval from the Federal Communications Commission, which is receiving a lot of comments from consumer groups and cable operators about limiting the kind of business arrangements, known as shared service agreements, Gannett and Belo proposed with Sander Media

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DOJ Orders Only One Divestiture to Approve Gannett’s Purchase of Belo

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