The United States Department of Justice announced that it has filed a lawsuit to block the proposed acquisition of Citadel Broadcasting Corporation by Cumulus Media Inc. At the same time, the Justice Department has entered into a settlement agreement with Cumulus that would require the Atlanta-based broadcasting company to divest or sell off two radio stations in the Harrisburg-Lebanon-Carlisle, Pennsylvania market and one radio station in the Flint, Michigan market.
The Justice Department is concerned that the acquisition of Citadel by Cumulus would eliminate head-to-head competition between the two companies, causing a shortage in radio advertising space, and leading to an increase in advertising rates. If approved by the court, the settlement will result in a reduction of Cumulus’ advertising revenue shares to less than 40% in both markets.
“The divestitures required by the consent decree will enable radio advertisers to continue to receive the benefits of competition in Harrisburg and Flint,” said Sharis A. Pozen, acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.
The lawsuit and proposed settlement have been filed in the United States District Court-District of Columbia. The proposed settlement between the Justice Department and Cumulus will be published in the Federal Register and open for public comment for 60 days. After the comment period closes, the court will issue its final ruling on the consent agreement and the acquisition.