At least a couple of class action suits, and there could be more, have been filed against Sinclair, Tribune and other top TV station group owners, stemming from a reported Justice Department investigation into TV ad sales, which itself came out of the DOJ's vetting of the Sinclair-Tribune deal.
One suit alleges the broadcasters colluded to raise ad prices, or as Hollis Salzman of representing law firm Robins Kaplan put it: “In today’s media landscape, spending on television ads is falling fast. Our client’s complaint alleges that the defendants tried to defy the gravity of that decline by colluding to raise their prices."
The suit was actually filed by Robins Kaplan on behalf of another law firm, Clay, Massey & Associates, of Mobile, Alabama, which said it purchased some of the allegedly inflated advertising "from one or more of the Defendants or their co-conspirators" and "has suffered monetary loss as a result of the antitrust violations alleged herein."
The plaintiffs are seeking to enjoin the alleged action, which appears based on the initial news account, as well as treble damages (money) and other relief. The more members join the class, the larger the damages would be.
Also cited in the complaint were Gray, Hearst and Nexstar—together the five have over 500 TV stations.
Tribune and Hearst declined comment. Sinclair, Gray and Nexstar could not be reached for comment at press time.
Given the news account of a broad DOJ investigation, that law firms would be looking to capitalize is no surprise. The complaint was filed only days after the Wall Street Journal reported that the DOJ was investigating potential antitrust violations in local television ad sales.
Elsewhere, a lawsuit has been filed by class action law firm Kessler Topaz Melzer and Check on behalf of Little Rock lawyer Peter Miller, according to the Arkansas Times. Miller also said he had bought local TV ads.
DOJ's concerns about Sinclair's control of inventory in markets where it wanted to own two stations was one of the reasons Sinclair restructured its merger agreement, according to a source familiar with the review. But the Journal story suggested the investigation was wider than just Sinclair and was looking into whether TV stations coordinated efforts in a way that raised prices, which would obviously implicate antitrust issues if true.
Sinclair had fueled speculation about a wider investigation, and likely the class action efforts that followed, in its response to the WSJ story, saying: "It is our understanding that this is not specific to Sinclair but focuses on the larger broadcast industry.”
The Television Bureau of Advertising had no comment on the suits, but said it had not been served with any actions and pointed out that Sinclair, for one, is not a member of TV.
Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.
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