Following “extensive negotiations,” CBS News & Stations parent Paramount Global; FOX Corporation; and Cox Media Group have each come to terms with settlement agreements that will resolve advertising price-fixing claims against the three television station ownership groups.
The total payout is in the tens of millions of dollars. But, the fight is hardly over, as three other broadcast TV groups are declining to settle.
And, CMG, controlled by Apollo Global Management, is on the hook for the bulk of a settlement totaling $48 million in value.
The settlement resolves a matter that started in the late summer of 2018, when individual complaints were filed in various jurisdictions across the United States alleging an anticompetitive scheme by the television broadcasting companies and their sales representative firms asserted artificially inflated the price of broadcast television spot advertisements.
The plaintiffs are comprised of One Source Heating & Cooling, ThoughtWorx Inc. (doing business as Minnesota-based ad shop MCM Services Group), Minneapolis-based creative shop Hunt Adkins and Cleveland-area retailer Fish Furniture.
The cases were subsequently transferred and consolidated before the Illinois Northern District Court in October 2018, with Megan Jones of Hausfeld LLP appointed Interim Lead Counsel. Amended complaints came in 2019, adding Nexstar Media Group to a group of companies that originally included Raycom Media and Meredith Local Media — entities that no longer exist thanks to deals with Nexstar; Oklahoma-based broadcast company Griffin Communications; the former Tribune Broadcasting; Sinclair Broadcast Group; and the former Dreamcatcher Broadcasting. The second amended complaint added CBS, Cox Media Group, The E.W. Scripps Co., TEGNA and FOX as defendants, based on Department of Justice investigations uncovering their involvement in the alleged activity.
This activity, the plaintiffs argued, involved the broadcast TV station owners engaging in “a unitary scheme” to raise the prices of broadcast television spot advertisements to “supra-competitive levels” by agreeing to fix prices and exchange competitively sensitive information, including pacing data. This is a violation of Section 1 of the Sherman Act and various state unfair competition laws.
To settle, Cox, through various entities including Cox Enterprises, is paying the plaintiffs $37 million.
For CBS, settlement discussions began in summer 2021. Now, they’ve signed off on a $5 million payment while providing “valuable cooperation” to the plaintiffs. Meanwhile, “hard fought and arms-length negotiations” with Fox led to an October 2021 agreement in principle to settle; this was finalized with Fox agreeing to pay $6 million.
Also named as a defendant: CRM and sales pricing company ShareBuilders Inc., which in March 2022 was fingered as the facilitator of the alleged price-fixing conspiracy. The court approved a motion to dismiss filed in August 2022 by that company’s legal counsel, agreeing that there was a lack of evidence to have ShareBuilders included. The settlement says ShareBuilders will help settle the claims against it, but is not required to pay the plaintiffs as part of the settlement,
As the plaintiffs see it, “the proposed settlements are fair, reasonable and adequate.”
While Sinclair settled with the DOJ in 2018, Nexstar, TEGNA, Scripps and Griffin remain in litigation.
