JUSTICE DEPARTMENT REQUIRES DIVESTITURES IN CBS/INFINITY BROADCASTING’S ACQUISITION OF OUTDOOR SYSTEMS

JUSTICE DEPARTMENT REQUIRES DIVESTITURES IN CBS/INFINITY BROADCASTING’S ACQUISITION OF OUTDOOR SYSTEMS

Washington, D.C.-The Department of Justice today announced

that it will require Infinity Broadcasting and Outdoor Systems

Inc. to divest certain advertising displays in New York City, New

Orleans, and Phoenix, in order to go forward with their $8.3

billion merger. The Department’s Antitrust Division said the

deal, as originally proposed, would have been anticompetitive,

giving the company a dominant share of out-of-home advertising–billboards, subway displays, and signs that appear on the sides

of buses and bus shelters–in these three geographic markets.

The Department’s antitrust lawsuit and proposed consent

decree were filed today in U.S. District Court in Washington,

D.C. The consent decree, if approved by the Court, would resolve

the Department’s competitive concerns, as well as the lawsuit.

CBS Corporation is also named in the court papers, since that

company owns 82 percent of Infinity.

According to the complaint, the proposed acquisition would

have substantially lessened competition in out-of-home

advertising in New York City, New Orleans, and Phoenix because

Infinity Broadcasting and Outdoor Systems compete head-to-head

and, for many advertisers, are each other’s closest competitor.

“Without these divestitures, purchasers of out-of-home

advertising displays in New York City, New Orleans, and Phoenix

would have lost a significant competitive alternative,” said Joel

I. Klein, Assistant Attorney General in charge of the

Department’s Antitrust Division, “This resolution ensures that

advertisers in these three markets will continue to have the

benefits of competition.”

Under the consent decree, Infinity Broadcasting and Outdoor

Systems must sell a package of advertising displays in New York

City generating revenues equal to at least $25.3 million, which

constitutes Outdoor Systems’ billboard advertising business. In

addition, the companies are required to divest either Outdoor

Systems’ bus shelter advertising or its subway advertising

operations, if they are still selling both types of advertising

in February 2000.

In New Orleans, the merging parties must divest Infinity

Broadcasting’s entire bus advertising operations. In Phoenix,

the merging parties are required to divest either Infinity

Broadcasting’s bus advertising operations or a package of out-of-home advertising displays generating the same amount of revenues.

The divestitures will be at least equal to Infinity

Broadcasting’s out-of-home advertising sales in both New Orleans

and Phoenix.

CBS, a Pennsylvania corporation, is headquartered in New

York City. CBS had 1998 revenues of $6.8 billion. CBS owns 82

percent of Infinity Broadcasting, a Delaware corporation

headquartered in New York City. Infinity Broadcasting owns more

than 160 radio stations in 34 markets across the country, in

addition to its out-of-home advertising assets held by its

subsidiary, TDI Worldwide Inc. TDI’s out-of-home advertising

business includes operations in 20 U.S. markets, the U.K.,

Ireland, and the Netherlands. Infinity Broadcasting posted 1998

revenues of $1.8 billion.

Outdoor Systems, a Delaware corporation based in Phoenix,

has out-of-home advertising holdings in 90 markets across the

country in addition to approximately 12,000 billboard displays in

Mexico. Outdoor Systems generated $705 million in sales in 1998.

As required by the Tunney Act, the proposed consent decree

resolving this lawsuit, along with the Department’s Competitive

Impact Statement, will be published in the Federal Register. Any

person may submit written comments concerning the proposed decree

during a 60-day comment period to Willie Hudgins, Assistant

Chief, Litigation Section, Antitrust Division, U.S. Department of

Justice, Suite 3000, 1401 H Street, N.W., Washington, D.C. 20530.

At the conclusion of the comment period, the Court may enter the

consent decree upon a finding that it serves the public interest.