Dial Global Accused of Talk Radio Monopoly
(CN) - After merging with Westwood One, radio network giant Dial Global has been swallowing up talk radio ad rep firms and draining independent syndicators of their "life blood," the three largest privately held syndicators claim in a federal antitrust lawsuit.
The Original Talk Radio Network, which produces "The Michael Savage Show," Talk Radio Network Enterprises, syndicator of "The Laura Ingraham Show" and "The Jerry Doyle Show," and the Talk Radio Network-FM Inc., producer of "The Mancow Experience" and "The Phil Hendrie Show," filed a federal lawsuit in Los Angeles against Dial Global, Dial Communications and a slew of other networks and executives it claims are part of the "Dial Group" monopoly.
Because the plaintiffs are independent syndicators, they claim they rely heavily on radio ad rep firms to bundle their air time with the air time of other radio programming to attract major advertisers.
But since Dial Global's merger with Westwood One in 2011, many rep firms have effectively been put out of business or "swallowed up by one company - Dial Global - and, now, most of America's independent spoken word syndicators are dependent on this one company for their revenue," according to the lawsuit.
The independent syndicators say this deprives them of ad sales, the "life blood of radio programming."
"Through acquisition after acquisition, the Dial Group's market position has evolved now to the point where they have an unprecedented monopoly power to potentially decide which independent spoken word syndicators will be financially viable on radio, which will not, and which they may be acquiring at their discretion as a result of their monopoly power within the independent ad rep market," the lawsuit states.
As an example, it cites the "sudden death" of CNN Radio News after Dial Global replaced it with NBC programming that allegedly carried more favorable terms for the Dial networks.
The plaintiffs claim the financial fate of more than 100 independent talk radio syndicators now lies "in the hands of unelected Wall Street executives." They say this monopoly "is chilling to the First Amendment," because it silences independent programmers from speaking out for fear of financial repercussions.
"The Dial Group's power has grown to the point where they now have decided to compete with the very clients they rep, not only for content ownership - in violation of their original mission and inducements - but for their own clients' customers/radio station affiliates," according to the complaint.
The plaintiffs claim this will eliminate more and more independent syndicators, further concentrating the Dial group's monopoly power.
"As the largest privately held independent spoken word syndicators, it falls upon the plaintiffs' shoulders to stand up to the advance of this danger," the networks claim.
"Plaintiffs have watched the Dial Group move aggressively in the light of day to enter into the business of its own clients, while their clients stand by helplessly, unable to say a word for fear of being financially deprived - or left without a revenue stream at the Dial Group's hands," the lawsuit states. "As such, it falls to plaintiffs to speak up for those who cannot speak for themselves."
The independent networks say they are standing up for the "10,000 plus" commercial radio stations and their more than 290 million listeners nationwide. They are suing for alleged violations of the Sherman Act and the Cartwright Act, fraudulent inducement, interference with contract and interference with prospective advantage.
The talk radio syndicators demand exemplary and punitive damages, and an order forcing the defendants to disgorge profits, pay restitution and divest any "illegally acquired" assets.
Ronald Severald of Severald & Glahn is representing them in federal court in Los Angeles.
Defendants are Dial Global, Dial Communications - Global Media, Excelsior Radio Networks, Triton Radio Networks, Triton Media Group, Triton Media, Oaktree Capital Management, Verge Media Companies, Courtside LLC, Courtside Entertainment Group, Compass Media Networks, Compass Media Marketing, WYD Media Management, and current or former radio network executives Spencer Brown, Ken Williams, David Landau, Norman Pattiz, Peter Kosann and Ron Hartenbaum.