Accused of Coordinating Ad Rates, Nexstar Settles With US

WASHINGTON (CN) – A month to the day that six television networks settled similar charges, Nexstar Media Group struck a deal Thursday to resolve antitrust concerns by U.S. regulators.

As alleged in the amended complaint, which was filed in Washington alongside a proposed final judgment, Nexstar harmed the competitive price-setting process by exchanging revenue-pacing information with rival broadcasters.

“Pacing compares a broadcast station’s revenues booked for a certain time period to the revenues booked in the same point in the previous year,” the Justice Department explained in a statement. “Pacing indicates how each station is performing versus the rest of the market and provides insight into each station’s remaining spot advertising for the period.”

Trading this information allowed Nexstar and other broadcasters to better “anticipate whether their competitors were likely to raise, maintain, or lower spot advertising prices, which in turn helped inform their stations’ own pricing strategies and negotiations with advertisers,” the statement continues.

A $1.2 billion company with 105 television stations across 93 markets, Nexstar agreed Thursday to stop sharing of such competitively sensitive information either directly or indirectly.

“Understanding competitors’ pacing can help stations gauge competitors’ and advertisers’ negotiation strategies, inform their own pricing strategies, and help them resist more effectively advertisers’ attempts to obtain lower prices by playing stations off of one another,” the amended complaint explains.

The Justice Department learned of rate sharing in the industry when it was reviewing the proposed merger of Sinclair Broadcast Group with Tribune Media — a deal that has since been abandoned. 

Nexstar announced definitive plans on Dec. 3 to acquire Tribune, which will make the company the largest owner of TV stations in the country. All stations owned by Nexstar must abide by Thursday’s settlement for seven years, even if they are acquired by another company.

“Robust competition among broadcast stations allows American businesses to obtain competitive advertising rates,” Makan Delrahim, assistant attorney general of the Justice Department’s Antitrust Division, said in a statement. “The unlawful sharing of information reduced that competition and harmed businesses and the consumers they serve.”

Nexstar did not immediately respond to an email seeking comment.

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