Antitrust Class Action Alleges Broadcast Heavyweights Conspired to Fix TV Ad Prices, Exchange Sales Data

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Nearly a dozen major players in the broadcasting industry face a proposed class action that alleges they’ve secretly orchestrated a “unitary, overarching scheme” to artificially fix price levels for local and national television advertisements. 

The 71-page antitrust lawsuit alleges the 11 defendants, who together account for billions in annual TV ad revenue, have since at least 2014 agreed to not only fix prices industry-wide but exchange amongst each other “competitively sensitive” historic, current and forward-looking sales data, including inventory or pacing data. 

Pacing data, as the case explains it, “is used to compare a broadcast station’s revenues booked for a certain time period to the revenues booked for the same point in time in the previous year,” and allows a company to forecast would-be competitors’ remaining inventory of TV spot advertising. According to the complaint, inventory is “a, if not the, key factor affecting pricing negotiations.” 

According to the suit, the existence of the data exchange between the defendants, listed below, and the data itself were withheld from TV ad buyers, creating “an asymmetrical information advantage” for the companies in their dealings with customers over the price of television spot advertisements:

• Dreamcatcher Broadcasting, LLC;
• The E.W. Scripps Company;
• Griffin Communications, LLC;
• Fox Corporation;
• Meredith Corporation;
• Nexstar Media Group, Inc.;
• Gray Media Group;
• Sinclair Broadcast Group, Inc.;
• TEGNA, Inc.;
• Tribune Broadcasting Company, LLC; and
• Tribune Media Company. 

The information exchanged between the companies covered both local and national broadcast TV ads and was disseminated to employees with authority over pricing, the suit alleges. The lawsuit says that by allowing the broadcasting giants to better understand, in real time, the availability of their would-be competitors’ inventory through the exchange of pacing data, the scheme wholly disrupted the competitive process and allowed the defendants to avoid price competition. 

According to the complaint, the U.S. Department of Justice (DOJ) explained that the defendants’ anti-competitive conduct allowed them to “better [] anticipate whether their competitors were likely to raise, maintain, or lower spot advertising prices,” as well as gauge competitors’ and customers’ negotiating strategies.

In November and December 2018 and June 2019, the DOJ intervened when it filed a series of proposed judgments and stipulations and orders against the defendants, the lawsuit relays.

The case says the TV ad price-fixing scheme among the companies was effectuated “in large part” through the same two national sales rep firms, Katz and Cox Reps, which the suit states served as the broadcasters’ agents in virtually every relevant designated market area, acting as the “focal points and conduits” of the plot. Additionally, several of the defendants used consultant and software company ShareBuilders to aid with inventory management and pricing, the complaint states. Per the suit, ShareBuilders provided some clients with “rate cards and/or recommendations” that were used to further the alleged conspiracy. 

The lawsuit looks to represent all persons and entities in the United States who bought broadcast television spot advertising from one or more of the broadcasting companies listed above in a designated market area within which two or more of the companies sold broadcast television spot ads on stations and who paid one or more of the companies directly (or paid any current or former subsidiary or affiliate) for all or a portion of the cost of the advertisement(s) during the period between January 1, 2014 “until the effects of the unlawful conduct are adjudged to have ceased.”

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