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Press Release

Justice Department Requires Divestitures to Resolve Antitrust Concerns in Gray’s Merger With Raycom

For Immediate Release
Office of Public Affairs
Gray and Raycom Must Divest Broadcast Television Stations in Nine Markets

The Department of Justice announced today that it will require Gray Television Inc., and Raycom Media Inc., to divest broadcast television stations in nine markets as a condition of resolving a challenge to the proposed $3.6 billion merger between Gray and Raycom.

The Justice Department’s Antitrust Division filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia to block the proposed merger. At the same time, the Division filed a proposed settlement that, if approved by the court, would resolve the suit by remedying the competitive harms alleged in the complaint, through the divestitures and related conditions.

“Without the required divestitures, Gray’s merger with Raycom threatens serious competitive harm to cable subscribers and small businesses,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “I am pleased, however, that we have been able to reach a speedy and complete resolution of the Division’s concerns, thanks in part to the parties’ commitment to engage in good faith settlement talks from the outset of our investigation.”

According to the complaint, without the divestitures the merger would eliminate head-to-head competition between Gray and Raycom in the nine local markets in which the divestitures are being required. In each of those markets, the transaction would increase the number of “Big Four” affiliate stations owned by Gray (i.e., affiliates of NBC, CBS, ABC, or FOX), leaving Gray with two or more Big Four stations in each area. The divestiture markets are Knoxville, Tennessee; Toledo, Ohio; Waco–Temple–Bryan, Texas; Tallahassee, Florida–Thomasville, Georgia; Augusta, Georgia; Odessa-Midland, Texas; Panama City, Florida; Albany, Goergia; and Dothan, Alabama.

As a result of the merger, the combined company would likely charge cable and satellite companies higher retransmission fees to carry the combined company’s broadcast stations, resulting in higher monthly cable and satellite bills for millions of Americans.

The merger would also enable the company to charge local businesses and other advertisers higher prices for spot advertising in the divestiture markets. Businesses rely on competition among broadcast station owners to obtain reasonable advertising prices. Gray and Raycom compete with one another for the business of local advertisers, and the proposed merger would eliminate that competition, harming local businesses.

The Antitrust Division has determined that the divestitures would resolve antitrust concerns related to the licensing of Big Four television retransmission consent and the sale of broadcast television spot advertising that would otherwise result from the merger. The divestitures required under the settlement announced today would, if approved by the court, require Gray to sell the Big Four affiliate stations currently owned by either Raycom or Gray in each of the nine markets where the companies have Big Four overlaps. The settlement requires that the divestitures be accomplished in such a way as to satisfy the United States that the divested stations and associated assets will be used by the buyers as part of a viable, ongoing commercial television broadcasting business.

Gray Television Inc. is a Georgia corporation with its headquarters in Atlanta, Georgia.  Gray owns 92 television stations in 56 local markets, of which 83 are Big Four affiliate stations.

Raycom Media Inc. is a Delaware corporation with its headquarters in Montgomery, Alabama.  Raycom owns 51 television stations in 43 local markets, of which 45 are Big Four affiliate stations.

As required by the Tunney Act, the proposed settlement, along with the department’s competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement within 60 days of its publication to Owen Kendler, Chief, Media, Entertainment, and Professional Services Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 4000, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.

Updated December 14, 2018

Press Release Number: 18-1649