CBS, Fox and Cox Media Group have agreed to pay a combined $48 million to resolve a long-running class-action antitrust complaint alleging that they shared information about local stations' ad revenue in order to drive up advertising prices.
The settlement agreement, unveiled late last week, requires Cox to pay $37 million, Fox to pay $6 million and CBS to pay $5 million. The deal also requires Cox, CBS and Fox to cooperate with advertisers who are suing other station owners -- including Sinclair Broadcast Group, Raycom Media, Meredith Corp., Nexstar, and Tribune Media -- over similar antitrust allegations.
The proposed deal calls for settlement funds to be distributed to anyone who purchased broadcast television spot advertising between 2014 and 2018 directly from Cox, CBS or Fox, in a designated market area where at least two defendants operated.
U.S. District Court Judge Virginia Kendall in Chicago hasn't yet approved the deal.
The settlement stems from litigation dating to 2018, when local TV advertisers alleged that Sinclair Broadcast Group and Tribune Media conspired to set ad prices.
Later that year, the Department of Justice said it had settled antitrust charges with Sinclair, Raycom, Tribune, Meredith, Griffin Communications and Dreamcatcher Broadcasting, which allegedly shared information about advertising.
The class-action on behalf of advertisers eventually ballooned to include multiple television station owners as defendants, including the three that agreed to settle. Plaintiffs included a Birmingham, Alabama air conditioning and heating company, and a furniture store in Cleveland.
The antitrust claims centered on allegations that the defendants manipulated ad pricing by exchanging sensitive information, including “pacing” information -- characterized in the court papers as critical to price negotiations.
“Pacing information 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,” the advertisers alleged in their complaint. “Simply put, the exchange of pacing information reveals the defendants’ remaining supply, with supply being a, if not the, key factor informing negotiations over price.”
Three years ago, the broadcasters lost a key battle in the case when Kendall rejected their request to throw out the lawsuit. She ruled that the allegations, if proven true, would support the antitrust claims.
“Plaintiffs allege that they paid higher prices because of Defendants’ price-fixing scheme,” she wrote in a November 2022 order. “This is a quintessential antitrust injury.”
Cox, CBS and Fox did not admit wrongdoing as part of the settlement.