Setting new limits on broadcast mergers, the U.S. Justice Department sided with ad agencies in deciding that radio is indeed a separate market from other advertising and subject to anti-trust concentration rules. The decision forces Jacor Communications to spin off WKRQ-FM when it acquires Citicasters Broadcasting in Cincinnati and impacts other radio deals including Westinghouse Broadcasting's purchase of Infinity Broadcasting.
Further, the American Association of Advertising Agencies on Friday said it will object to Jacor's proposed settlement--selling the station--as insufficient.
Jacor's purchase would have given it nearly 60% of the Cincinnati radio advertising market, but the company had argued that concentration didn't represent monopoly power because advertisers could go to other forms of advertising. The Justice Department rejected the argument.
"This acquisition could have reduced competition and made it more difficult for businesses of all sizes to get competitive rates when buying radio time in Cincinnati," said Assistant Attorney General Anne Bingaman. "The Telecommunications Act repealed the old limits on how many stations one company could own in a given market, but it did not grant radio group owners a license to monopolize the sale of advertising time."