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DOJ Tells Gray to Divest Stations

The Department of Justice has filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia to block the proposed merger of the Gray and Quincy TV stations.

But this is more of a formality than anything else.

The DOJ announced that it will require Gray and Quincy Media Inc. to divest 10 broadcast television stations in seven local markets as a condition of resolving a challenge to Gray’s proposed $925 million acquisition of Quincy.

The Justice Department’s Antitrust Division filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia to block the proposed merger. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the suit by remedying competitive harms alleged in the complaint, through the divestitures and related conditions.

“Without the required divestitures, Gray’s acquisition of Quincy threatens significant competitive harm to cable and satellite TV subscribers and small businesses that advertise on broadcast television,” said Acting Assistant Attorney General Richard A. Powers of the Justice Department’s Antitrust Division. “I am pleased that we have been able to reach a complete resolution of the department’s concerns, thanks in part to the parties’ commitment to engage in good faith settlement talks from the outset of our investigation.”

According to the complaint, without the divestitures the merger would eliminate head-to-head competition between Gray and Quincy broadcast television stations in seven local markets, which are centered in: Tucson, Arizona; Rockford, Illinois; Cedar Rapids, Iowa; Paducah, Kentucky; Eau Claire, Wisconsin; Madison, Wisconsin; and Wausau, Wisconsin.

The combined company likely would charge cable and satellite companies higher retransmission fees to carry its broadcast television stations in those local markets, resulting in higher monthly cable and satellite bills for millions of Americans. The merger also would enable the combined company to charge local businesses higher prices to advertise on its broadcast television stations in those local markets.

Gray has already made deals to sell off a number of the stations in overlapping markets.

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