Ten Years Ago... Just How Much Merger can the Radio Industry Get Away With?

It's a time of uncertainty: just how much merger can the industry get away with?
[SOURCE: New York Times 11/04/1996, AUTHOR: Geraldine Fabrikant]
Since the Telecommunications Act of 1996 allowed radio companies to own as many as eight stations in a single market -- though not more than five on either the AM or FM band -- the Justice Department has started looking assiduously at the antitrust implications of mergers. In a speech, Lawrence Fullerton, an official in the department's antitrust division, said the department was investigating about 20 radio mergers around the country. The Justice Department has said it will make market-by-market decisions. And in addition to future mergers, it may also disqualify existing joint sales agreements, which are arrangements in which one station agrees to sell the advertising time for another station. The Justice Department is worried that such agreements, like mergers, give companies too much influence with advertisers. Measuring the absolute percentage of advertising dollars a single company controls in a single market is not the only issue. The Justice Department is also raising questions about single companies controlling too many stations with the same or similar formats in a single market. It may let an owner retain control of a number of stations if they have widely different formats, like classical music and rock music, that do not attract similar advertisers.
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