Entercom Communications agreed to divest three radio stations in Denver as a condition of its purchase of Lincoln Financial Media, which owns 20 Stations in four markets.
While the Department of Justice requiring divestitures isn’t unusual, the the Department of Justice factored in station demographics when it reviewed competition in the Denver market.
“Without these divestitures, the transaction would have resulted in higher prices and a reduced quality of service to purchasers of English-language radio advertising in Denver,” the DOJ said in a statement.
As a result, Entercom ended up negotiating a deal with Bonneville to trade three Denver stations and one of the Lincoln Financial stations it was acquiring to Bonneville, in exchange for Bonneville’s stand-alone station in Los Angeles plus $5 million.
“We spent millions of dollars and seven months attempting to persuade the DOJ to approve the transaction as originally proposed, [but] they remained unconvinced,” David Field, Entercom CEO told Tom Taylor’s Now newsletter.
“Entercom and Lincoln own some of the most highly rated radio stations in Denver, and advertisers targeting radio listeners in Denver have benefitted from competition between them,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “These divestures will preserve that competitive dynamic.”
Entercom has received FCC approval for the acquisition and is expected to close the agreements within a few business days.