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Thursday, February 14, 2008

DOJ Requires Clear Channel To Divest In Four Markets To Complete Buyout

By Radio Ink - Feb. 13, 2008

WASHINGTON -- February 13, 2008: The Department of Justice says it will require Clear Channel to divest radio stations in Cincinnati, Houston, Las Vegas, and San Francisco in order for the company to proceed with a buyout led by private equity groups Bain Capital and Thomas H. Lee Partners.

Additionally, the DOJ's Antitrust Division has filed suit in Washington, DC, to block the acquisition, and at the same time has filed a proposed settlement that, if the U.S. District Court in Washington approves it, will resolve the lawsuit and the DOJ's competitive concerns.

The divestitures will be required, the DOJ said, because "the transaction, as originally proposed, likely would have resulted in higher prices to purchasers of radio advertising in Cincinnati, Houston, Las Vegas, and San Francisco because [buyers] Bain Capital and Thomas H. Lee Partners already have substantial ownership interests in two firms that compete with Clear Channel in those cities. Bain and THL have ownership interests in Cumulus Media Partners LLC (Cumulus), a large nationwide operator of radio stations, and THL also has an ownership interest in Univision Communications Inc. (Univision), a large nationwide operator of radio stations that broadcast primarily in Spanish."

According to the complaint filed by the Antitrust Division, radio stations owned by Clear Channel and Cumulus compete head-to-head in Cincinnati and Houston, while Clear Channel and Univision own competing Spanish-language radio stations in Houston, Las Vegas, and San Francisco. The division must approve the buyers of the divested Clear Channel stations.

"Without the divestitures obtained by the department, advertisers that rely on radio advertising in the affected cities likely would have faced higher prices," said Thomas O. Barnett, Assistant Attorney General in charge of the Antitrust Division. "The divestitures will ensure that advertisers will continue to receive the benefits of competition."

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