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Broadcasters will pay millions to settle ad price-fixing claims

Cox Media, Paramount Global and Fox Corporation have agreed to pay $48 million and cooperate in pending litigation against other media companies.

Cox Media, Paramount Global and Fox Corporation have agreed to pay $48 million and cooperate in pending litigation against other media companies.

The CBS Building in New York City.
The CBS Building in New York City. (Photo via Wikimedia Commons, Graphic by The Desk)

Cox Media Group, Fox Corporation and Paramount Global have agreed to pay a collective $48 million to settle a civil antitrust case brought by local businesses that accused the broadcasters of conspiring to fix spot advertising prices in television markets across the country.

Cox Media will pay $37 million to settle its part of the case. The company operates around a dozen television stations from coast to coast, and is majority-owned by investment firm Apollo Global Management.

Paramount, which owns the CBS television network and around two dozen broadcast stations, will pay $5 million, and Fox will shell out $6 million. The two media firms reached settlements with the plaintiffs in the case two years ago, but the financial awards were only revealed this week.

None of the three companies are admitting any wrongdoing as part of the settlement, but all three have agreed to cooperate with ongoing lawsuits against other broadcasters who are still being sued by the plaintiffs. Those broadcasters include Nexstar Media Group, the E. W. Scripps Company and TEGNA.

The case was brought in 2018 by a consortium of local businesses who argued the broadcasters conspired together to artificially inflate the price of spot advertisements. Those ads run anywhere from 15 seconds in length to a full minute, with the average ad lasting approximately 30 seconds. Inventory is typically sold in bulk, with companies agreeing to purchase multiple spot ads at once that are broadcast over a period of time.

The plaintiffs in the case include a heating and air conditioning company in Alabama, an advertising agency in Minnesota and an Ohio home furnishing business, among others.

The initial complaint brought by the group said broadcasters illegal shared sensitive commercial information with one another in an attempt to drive up the cost of advertising inventory beyond a fair market rate. The group says the practice violated Section 1 of the Sherman Antitrust Act, as well as various state and federal laws.

An amended complaint added Paramount, Cox Media, Scripps and TEGNA as defendants based on information that was uncovered by the U.S. Department of Justice, which launched its own inquiry into the matter. The number of individual television stations connected to the alleged price-fixing scheme originally stood at 670, and has been lowered by around 50 with the pending settlements announced on Tuesday. Sinclair settled with the DOJ in 2018.

A federal judge overseeing the case still has to approve the settlements reached with Cox Media, Paramount and Fox, but a representative for the plaintiffs said the proposals were “fair, reasonable and adequate.”

If the settlement is approved, lawyers for the plaintiffs will receive around $16 million in compensation.

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 11 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.
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