U.S. v. Outdoor Systems, Inc.; Proposed Final Judgment and Competitive Impact Statement

DEPARTMENT OF JUSTICE

Antitrust Division

U.S. v. Outdoor Systems, Inc.; Proposed Final Judgment and

Competitive Impact Statement

Notice is hereby given pursuant to the Antitrust Procedures and

Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment,

Stipulation and Competitive Impact Statement have been filed with the

United States District Court for the Northern District of Georgia in

United States of America v. Outdoor Systems, Inc., Civil No. P1-94-CV-

2393-CC.

The Complaint alleges that the proposed acquisition by Outdoor

Systems, Inc. of the outdoor advertising business of Capitol Outdoor

Advertising, Inc. may be substantially to lessen competition in outdoor

advertising in the Atlanta area in violation of section 7 of the

Clayton Act.

The Proposed Final Judgment provides that Outdoor Systems, Inc. may

acquire the outdoor advertising business of Capitol Outdoor

Advertising, Inc. but that Outdoor Systems, Inc. must divest the assets

of its existing outdoor advertising business in the Atlanta area within

six months of the entry of the Final Judgment.

Public comment on the proposed Final Judgment is invited within the

statutory 60-day comment period. Such comments and responses thereto

will be published in the Federal Register and filed with the Court.

Comments should be directed to John T. Orr, Chief, Atlanta Field

Office, Antitrust Division, Department of Justice, Suite 1176, Richard

B. Russell Federal Building, 75 Spring Street, Atlanta, Georgia 30303

(telephone: (404) 331-7100).

Constance K. Robinson,

Director of Operations, Antitrust Division.

United States District Court, Northern District of Georgia, Atlanta

Division

United States of America, Plaintiff, v. Outdoor Systems, Inc.,

Defendant. Civil No. 94- . Filed: September 8, 1994.

Stipulation

It is stipulated by and between the undersigned parties, by their

respective attorneys, that:

1. This Court has jurisdiction over the subject matter of this

action and over each of the parties hereto, and venue of this action is

proper in the United States District Court for the Northern District of

Georgia, Atlanta Division;

2. The parties to this Stipulation consent that a Final Judgment in

the form attached may be filed and entered by the Court, upon any

party's or the Court's own motion, at any time after compliance with

the requirements of the Antitrust Procedures and Penalties Act (15

U.S.C. 16), and without further notice to any party or other

proceedings, provided that plaintiff has not withdrawn its consent,

which it may do at any time before entry of the proposed Final Judgment

by serving notice on the defendant and by filing that notice with the

Court;

3. Defendant agrees to be bound by the provisions of the proposed

Final Judgment pending its approval by the Court. If plaintiff

withdraws its consent or the proposed Final Judgment is not entered

pursuant to this Stipulation, this Stipulation shall be of no effect

whatever and its making shall be without prejudice to any party in this

or any other proceeding; and

4. This Stipulation and the Final Judgment to which it relates are

for settlement purposes only and do not constitute an admission by

defendant in this or any other proceeding that Section 7 of the Clayton

Act, 15 U.S.C. 18, or any other provision of law, has been violated.

Dated:

Anne K. Bingaman,

Assistant Attorney General.

Steven C. Sunshine,

Deputy Assistant Attorney General.

Constance K. Robinson

Director of Operations.

John T. Orr,

Chief, Atlanta Field Office, U.S. Department of Justice, Antitrust

Division.

Mark W. Ryan by David H. Fin

With express authorization Schreeder, Wheeler & Flint, 1600 Candler

Bldg, Atlanta, GA 30303-1845, 404-681-3450, GA. Bar, No. 264600.

Mark W. Ryan,

Counsel For defendant.

Mayer, Brown & Platt, 2000 Pennsylvania Avenue NW., Washington, D.C.

20006, (202) 778-0627.

Justin M. Nicholson,

William G. Traynor

Attorneys, Antitrust Division, U.S. Department of Justice, Richard B.

Russell Building, 75 Spring Street, SW., Suite 1176, Atlanta, Georgia

30303, (404) 331-7100.

United States District Court, Northern District of Georgia, Atlanta

Division

United States of America, Plaintiff, v. Outdoor Systems, Inc.,

Defendant. Civil No. 94- . Filed: September 8, 1994.

Final Judgment

Plaintiff, United States of America, filed its Complaint on

September 8, 1994. Plaintiff and defendant, by their respective

attorneys, have consented to the entry of this Final Judgment without

trial or adjudication of any issue of fact or law. This Final Judgment

shall not constitute any evidence against, or an admission by, any

party with respect to any issue of law or fact. Defendant has agreed to

be bound by the provisions of this Final Judgment pending its approval

by the Court. Prompt and certain diverstiture is the essence of this

agreement, and defendant has represented to plaintiff that the

diverstiture required below can and will be made and that defendant

will later raise no claims of hardship or difficulty as grounds for

asking the Court to modify any of the divestiture provisions contained

below. Therefore, before the taking of any testimony, and without trial

or adjudication of any issue of fact or law, and upon consent of the

parties.

It is hereby ordered, adjudged and decreed as follows:

I

Jurisdiction

This Court has jurisdiction over the subject matter of this action

and over each of the parties consenting to this Final Judgment. The

Compliant states a claim upon which relief may be granted against

defendant under Section 7 of the Clayton Act, as amended (15 U.S.C.

18).

II

Definitions

As used in this Final Judgment:

A. ``Capitol'' shall mean Capitol Outdoor Advertising, Inc.,

Capitol Outdoor Leasing Co., Inc., each of their subsidiaries and

affiliates and each officer, director, employee, attorney, agent or

other person acting for or on behalf of any of them. Such term shall

also mean the entity owned by defendant that acquires the assets of

Capitol Outdoor Advertising, Inc. and Capitol Outdoor Leasing Co.,

Inc.;

B. ``OSI-Atlanta'' shall mean the entity conducting the outdoor

advertising business of Outdoor Systems, Inc. as of the date of the

entry of this Final Judgment, or any successor entity, in the greater

Atlanta, Georgia metropolitan area, each of their subsidiaries and

affiliates and each officer, director, employee, attorney, agent or

other person acting for or on behalf of any of them;

C. ``Holding Company'' or ``defendant'' shall mean defendant

Outdoor Systems, Inc., each of its subsidiaries and affiliates and each

officer, director, employee, attorney, agent or other person acting for

or on behalf of any of them;

D. ``Separated Assets'' shall mean (1) all of the outdoor

advertising billboards (including bulletins and poster panels),

structures and leases of OSI-Atlanta, (2) all contracts, including but

not limited to advertising contracts, agreements, invoices, ledgers and

other books and records relating to the business of OSI-Atlanta and (3)

such equipment currently owned or operated by Capitol as the purchaser

may select that would provide the purchaser with the functional

equivalent of the equipment owned or operated by OSI-Atlanta;

E. ``Separated Business'' shall mean Capitol or OSI-Atlanta, as the

case may be;

F. ``Purchaser'' shall mean an independent third party, not

connected or affiliated in any way with Capitol, OSI-Atlanta or Holding

Company, that acquires the Separated Assets; and

G. ``Person'' shall mean any natural person, corporation,

association, firm, partnership or other business or legal entity.

III

Applicability

A. The provisions of this Final Judgment shall apply to defendant,

to its successors and assigns, to its subsidiaries, affiliates,

directors, officers, managers, agents and employees and to all other

persons in active concert or participation with any of them who shall

have received actual notice of this Final Judgment by personal service

or otherwise.

B. Nothing herein shall suggest that any portion of this Final

Judgment is or has been created for the benefit of any third party, and

nothing herein shall be construed to provide any rights to any third

party.

IV

Divestiture of OSI-Atlanta

A. Defendant is hereby ordered and directed to divest all of its

direct and indirect ownership and control of the Separated Assets to a

purchaser within six (6) months of the entry of this Final Judgment. In

addition, defendant shall offer to any purchaser of the Separated

Assets the opportunity, which may be exercised in the purchaser's sole

and absolute discretion, (1) To make offers of employment to all or any

of the employees currently employed by Capitol and (2) to assume the

lease of the facility now operated by Capitol in the conduct of its

outdoor advertising business. The obligation to divest shall be

satisfied if, within six (6) months of the entry of this Final

Judgment, defendant has entered into a binding contract with a

qualified purchaser for the sale of the Separated Assets according to

terms approved by plaintiff that are contingent upon compliance with

the terms of this Final Judgment and that specify a prompt and

reasonable date for the closing and if the sale is completed pursuant

to the contract.

B. Defendant agrees to take all reasonable steps to accomplish the

divestiture as quickly as possible. In carrying out the divestiture of

the Separated Assets, defendant may divest the Separated Assets alone,

or may divest along with the Separated Assets any other assets of

defendant.

C. In accomplishing the divestiture ordered by this Final Judgment,

defendant promptly shall make known, by usual and customary means, the

availability of the Separated Assets for sale and the opportunities

described in Paragraph IV.A. above. Defendant shall notify any person

making an inquiry regarding the possible purchase of the Separated

Assets that the sale is being made pursuant to this Final Judgment and

provide such person with a copy of the Final Judgment, if requested.

Defendant shall also offer to furnish to all bona fide prospective

purchasers of the Separated Assets, subject to customary

confidentiality assurances, all pertinent information regarding OSI-

Atlanta, except information subject to attorney-client privilege or

attorney work product privilege. Defendant shall make available to

plaintiff, upon plaintiff's request, such information as is made

available to such potential purchasers. Defendant shall permit

prospective purchasers of the Separated Assets to have access to

personnel at the business and to make such inspection of physical

facilities and any and all financial, operational, or other documents

and information as may be relevant and customary to the sale of an

outdoor advertising business.

D. The divestiture required by this Final Judgment shall be

accomplished in such a way as to satisfy plaintiff, in its sole

discretion, that the Separated Assets can and will be operated by the

purchaser as a viable, ongoing business. Divestiture shall be made to a

purchaser for whom it is demonstrated to plaintiff's satisfaction that

(1) The purchase is for the purpose of competing effectively in the

outdoor advertising business in the greater Atlanta, Georgia

metropolitan area, and (2) the purchaser has the managerial,

operational, and financial capability to compete effectively in the

outdoor advertising business.

V

Financing

With prior consent of plaintiff, defendant may finance all or any

part of any purchase made pursuant to this Final Judgment.

VI

Appointment of Trustee for OSI-Atlanta

A. If defendant has not accomplished the divestiture required by

Section IV. of this Final Judgment within five (5) months of the entry

of this Final Judgment, then defendant shall notify plaintiff of that

fact. Within ten (10) days after notification, plaintiff shall provide

defendant with written notice of the names and qualifications of not

more than two (2) nominees for the position of trustee for the required

divestiture. Defendant shall notify plaintiff within ten (10) days

thereafter whether either or both of such nominees are acceptable. If

either or both of such nominees are acceptable to defendant, plaintiff

shall notify the Court of the person upon whom the parties have agreed

and the Court shall appoint that person as the trustee. If neither of

such nominees is acceptable to defendant, it shall furnish to

plaintiff, within ten (10) days after plaintiff provides the names of

its nominees, written notice of the names and qualifications of not

more than two (2) nominees for the position of trustee for the required

divestiture. If either or both of such nominees are acceptable to

plaintiff, plaintiff shall notify the Court of the person upon whom the

parties have agreed and the Court shall appoint that person as the

trustee. If neither of such nominees is acceptable to plaintiff, it

shall furnish the Court the names and qualifications of its proposed

nominess and the names and qualifications of the nominees proposed by

defendant. The Court may hear the parties as to the qualifications of

the nominees and shall appoint one of the nominees as the trustee.

B. If defendant has not accomplished the required divestiture at

the expiration of the period specified in paragraph IV.A. of this Final

Judgment, the appointment by the Court of the trustee shall become

effective. The trustee shall then take steps to effect divestiture of

the Separated Assets.

C. After the trustee's appointment has become effective, only the

trustee shall have the right to sell the Separated Assets and to offer

any prospective purchasers the same opportunities as defendant is

obligated to extend as provided in paragraph IV.A. The trustee shall

have the power and authority to accomplish the divestiture to a

purchaser acceptable to plaintiff at such price and on such terms as

are then obtainable upon a reasonable effort by the trustee, subject to

the provisions of paragraph IX.A. of this Final Judgment, and shall

have such other powers as this Court shall deem appropriate. Defendant

shall not object to a sale of the Separated Assets by the trustee on

any grounds other than the trustee's malfeasance. Any such objection by

defendant must be conveyed in writing to plaintiff and the trustee

within fifteen (15) days after the trustee has notified defendant of

the proposed sale.

D. The trustee shall serve at the cost and expense of defendant,

shall receive compensation based on a fee arrangement providing an

incentive based on the price and terms of the divestiture and the speed

with which it is accomplished and shall serve on such other terms and

conditions as the Court may prescribe; provided, however, that the

trustee shall receive no compensation, nor incur any costs or expenses,

prior to the effective date of his or her appointment. The trustee

shall account for all monies derived from a sale of the Separated

Assets and all costs and expenses incurred in connection therewith.

After approval by the Court of the trustee's accounting, including fees

for the trustee's services, all remaining monies shall be paid to

defendant and the trust shall then be terminated.

E. Defendant shall take no action to interfere with or impede the

trustee's accomplishment of the divestiture of the Separated Assets and

shall use its best efforts to assist the trustee in accomplishing the

required divestiture. The trustee shall have full and complete access

to the personnel, books, records and facilities of OSI-Atlanta.

F. After his or her appointment becomes effective, the trustee

shall file monthly reports with the parties and the Court setting forth

the trustee's efforts to accomplish divestiture of the Separated Assets

as contemplated under this Final Judgment; provided, however, that to

the extent such reports contain information that the trustee deems

confidential, such reports shall not be filed in the public docket of

the Court. Such reports shall include the name, address and telephone

number of each person who, during the preceding thirty (30) days, made

an offer to acquire, expressed an interest in acquiring, entered into

negotiations to acquire or was contacted or made an inquiry about

acquiring any ownership interest in the Separated Assets, and shall

describe in detail each contact with any such person during that

period. The trustee shall maintain full records of all efforts made to

divest these operations.

G. Within six (6) months after his or her appointment has become

effective, if the trustee has not accomplished the divestiture required

by this Final Judgment, the trustee shall promptly file with the Court

a report setting forth (1) the trustee's efforts to accomplish the

required divestiture, (2) the reasons, in the trustee's judgment, why

the required divestiture has not been accomplished and (3) the

trustee's recommendations; provided, however, that to the extent such

reports contain information that the trustee deems confidential, such

reports shall not be filed in the public docket of the Court. The

trustee shall at the same time furnish such report to the parties, who

shall each have the right to be heard and to make additional

recommendations consistent with the purpose of the trust. The Court

shall thereafter enter such orders as it shall deem appropriate in

order to carry out the purpose of the trust, which shall, if necessary,

include extending the trust and the term of the trustee's appointment.

VII

Notification

Immediately following entry of a binding contract, contingent upon

compliance with the terms of this Final Judgment, to effect the

proposed divestiture pursuant to Section IV. or VI. of this Final

Judgment, defendant or the trustee, whichever is then responsible for

effecting the divestiture, shall notify plaintiff of the proposed

divestiture. If the trustee is responsible, it shall similarly notify

defendant. The notice shall set forth the details of the proposed

transaction and list the name, address and telephone number of each

person not previously identified who offered to, or expressed an

interest in the business that is the subject of the binding contract,

together with full details of same. Within fifteen (15) days of receipt

by plaintiff of such notice, plaintiff may request additional

information concerning the proposed divestiture and the proposed

purchaser. Defendant and/or the trustee shall furnish any additional

information requested within twenty (20) days of the receipt of the

request, unless the parties shall otherwise agree. Within thirty (30)

days after receipt of the notice or within twenty (20) days after

plaintiff has been provided the additional information requested

(excluding any additional information requested of persons other than

defendant or the trustee), whichever is later, plaintiff shall provide

written notice to defendant and the trustee, if there is one, stating

whether or not it objects to the proposed divestiture. If plaintiff

provides written notice to defendant or the trustee that it does not

object, then the divestiture may be consummated, subject only to

defendant's limited right to object to the sale under the provisions in

Section VI.C. Absent written notice that the plaintiff does not object

to the proposed purchaser, a divestiture under Section IV. shall not be

consummated. Upon objection by plaintiff, or by defendant under the

proviso in Section IV.C., a divestiture proposed under Section VI.

shall not be consummated.

VIII

Affidavits

Upon filing of this Final Judgment and every thirty (30) days

thereafter until the divestiture has been completed or authority to

effect divestiture passes to the trustee pursuant to Section VI. of

this Final Judgment, defendant shall deliver to plaintiff an affidavit

as to the fact and manner of compliance with Section IV. of this Final

Judgment. Each such affidavit shall include the name, address and

telephone number of each person who, at any time after the period

covered by the last such report, made an offer to acquire, expressed an

interest in acquiring, entered into negotiations to acquire or was

contacted or made an inquiry about acquiring any ownership interest in

the Separated Assets and shall describe in detail each contact with any

such person during that period. Defendant shall maintain full records

of all efforts made to divest the Separated Assets.

IX

Preservation of Assets

A. The Holding Company shall be created and take all steps

necessary to assure that Capitol and OSI-Atlanta will be maintained as

separate, independent and economically viable, ongoing businesses with

their assets, management and operations separate, distinct and apart

from one another. Without limitation of the foregoing, the Holding

Company and the Separated Businesses shall comply with the following

provisions during the pendency of this Final Judgment:

1. The Holding Company and the Separated Businesses shall refrain

from causing or permitting any commingling of the assets of one

Separated Business with those of the other Separated Business;

provided, however, that financial statements may be consolidated at the

Holding Company, subject to the accounting provisions set forth herein.

2. The Holding Company and the Separated Businesses shall assure

that neither Separated Business, nor any of its directors, officers,

employees or agents, influences or attempts to influence, directly or

indirectly, any operational, marketing or financial decisions of the

other Separated Business.

3. a. Within five (5) days of the entry of this Final Judgment, the

Holding Company shall establish a Sales Committee (``Holding Company

Sales Committee''), consisting of not less than two (2) members of the

current Board of Directors of the Holding Company, or their designees,

who are not involved in the management of the Holding Company or of

either of the Separated Businesses.

b. The Holding Company shall designate an ``Operating President''

for each of OSI-Atlanta and Capitol and said Operating Presidents shall

serve in those capacities for the respective Separated Businesses until

the divestiture required by this Final Judgment shall have been

accomplished.

c. Without limiting his or her other responsibilities, each

Operating President shall be responsible to supervise and assist in the

respective Separated Business's outdoor advertising businesses and

shall exercise such authority and responsibilities without consulting

with any officer, director or employee of the other Separated Business

regarding the terms and conditions of the operation of the other

Separated Business.

d. Insofar as any contract or proposal of either Separated Business

shall entail actions that would otherwise require approval by either

the Chief Executive Officer or Board of Directors of the Holding

Company, the Operating President of the Separated Business shall report

the proposal to the Holding Company Sales Committee for its

consideration and any requisite action. With respect to matters that

are brought to it pursuant to the terms of this subsection, the Holding

Company Sales Committee shall be authorized to bind the Holding

Company.

e. Insofar as either Separated Business anticipates a need to

exceed the amounts provided in its annual budget for capital

expenditures, authority for such additional expenditures shall be

sought and first obtained by the Operating President of the Separated

Business from the Holding Company Sales Committee.

4. Except as expressly allowed by the terms of this Final Judgment,

neither Separated Business, nor any of its directors, officers,

employees or agents, shall provide to the other Separated Business, or

any director, officer, employee or agent of the other Separated

Business, any competitively sensitive information, including but not

limited to actual or proposed prices, costs, bids, contract terms,

financial data or profit data (other than aggregated monthly or

quarterly results provided to the Board of Directors of the Holding

Company). The Holding Company and the independent accounting firm

referred to in this Final Judgment shall not provide any competitively

sensitive information relating to one Separated Business to any

director, officer or employee of the other Separated Business.

5. Except as authorized by the terms of this Final Judgment,

Capitol and OSI-Atlanta shall not permit the use of the other's

trademarks or otherwise identify the relationship of these Separated

Businesses in their advertising, sales or promotional materials. In

dealing with third parties, the Separated Business shall indicate and

make clear that the Separated Businesses are being operated as discrete

and separate business entities during the pendency of this Final

Judgment.

6. Each Separated Business shall compete with the other Separated

Business in the same fashion as it competes with other outdoor

advertising businesses in the greater Atlanta, Georgia metropolitan

area.

7. Each Separated Business shall keep and maintain in accordance

with generally accepted accounting principles, separate financial

statements and records, including separate unaudited monthly and

quarterly financial statements. Additionally, the Holding Company shall

assure that an independent certified public accountant shall prepare

certified annual financial statements for each Separated Business.

8. Paragraph IX.E. of this Final Judgment shall not preclude Arte

Moreno from performing the following functions in his capacity as the

Chief Operating Officer of the Holding Company:

a. Participating in decisions regarding the management of the cash

and short-term assets of the Holding Company and the Separated

Businesses, subject to all of the explicit limitations contained in

this Final Judgment;

b. Participating in decisions regarding the deployment of existing

equipment of either Separated Business in servicing contracts that have

been awarded to that Separated Business;

c. Participating in decisions regarding the employment and

redeployment of staff and administrative personnel within each

Separated Business, as well as all personnel at the Holding Company

level; and

d. Participating in decisions regarding employee compensation and

employee benefits within the Holding Company.

B. The Holding Company and the Separated Businesses shall refrain

from taking any action that would jeopardize the sale or operation of

either Separated Business or would otherwise adversely affect the

capability of either Separated Business to compete effectively in the

sale of outdoor advertising, including but not limited to the

following:

1. The Holding Company and the Separated Businesses shall refrain

from taking any action, directly or indirectly, that would cause any

material adverse change or alteration to be made in the operations of

each Separated Business that would impair the ability of the Holding

Company to sell or dispose of such Separated Business;

2. Except as incident to obtaining financing or refinancing of the

transaction pursuant to which the Holding Company acquired Capitol, the

Holding Company and each Separated Business shall refrain from

disposing of, mortgaging, pledging or otherwise encumbering any of the

assets of the Separated Businesses, other than in the ordinary course

of business of the Holding Company or the respective Separated

Businesses; and

3. Upon the entry of this Final Judgment, the Holding Company may

move current employees of OSI-Atlanta a Capitol, but each employee

moved from OSI-Atlanta to Capitol must be replaced at OSI-Atlanta by an

employee of similar job description and experience. Replacement

employees may come from Capitol.

C. Each Separated Business shall maintain, in accordance with usual

industry standards, all outdoor advertising structures owned or

operated by it.

D. The Separated Businesses shall have such outside financing for

capital improvements and working capital available as is consistent

with their budgets and past practices. Holding Company shall provide,

consistent with the budgets established for the respective Separated

Businesses prior to the date of this Final Judgment, funds for

necessary capital improvements.

E. No director, officer or employee of one Separated Business shall

also serve as a director, officer or employee of the other Separated

Business. To the extent any director, officer or employee of the

Holding Company is also a director, officer or employee of a Separated

Business, that person may not receive any competitively sensitive

information provided to the Board of Directors of the Holding Company

by the other Separated Business.

X

Modifications

To the extent that either party later determines that modifications

of this Final Judgment are necessary or appropriate, the parties shall

first discuss any such proposed modifications among themselves, and

shall present to the Court any such proposed modifications on which

they agree in a form that they recommend the Court approve. In the

event the parties cannot agree on any such modifications, either party

may file a motion to the Court seeking a modification of this Final

Judgment only after having provided the other party fifteen days'

advance written notice of intention to seek such modification.

XI

Compliance Inspection

A. For purposes of determining or securing compliance with this

Final Judgment and subject to any legally recognized privilege, from

time to time, duly authorized representatives of the Department of

Justice shall, upon written request of the Assistant Attorney General

in charge of the Antitrust Division, and on reasonable notice to

defendant made to its principal office, be permitted:

1. access during office hours of defendant to inspect and copy all

books, ledgers, accounts, correspondence, memoranda and other records

and documents in the possession or under the control of defendant, who

may have counsel present, relating to any matters contained in this

Final Judgment; and

2. subject to the reasonable convenience of defendant and without

restraint or interference from it to interview officers, employees and

agents of defendant, who may have counsel present, regarding any such

matters.

B. Upon the written request of the Assistant Attorney General in

charge of the Antitrust Division made to defendant's principal office,

defendant shall submit such written reports, under oath if requested,

with respect to any of the matters contained in this Final Judgment as

may be requested.

C. No information or documents obtained by the means provided in

this Section XI shall be divulged by a representative of the Department

of Justice to any person other than a duly authorized representative of

the Executive Branch of the United States, except in the course of

legal proceedings to which the United States is a party (including

grand jury proceedings), or for the purpose of securing compliance with

this Final Judgment, or as otherwise required by law.

D. If at the time information or documents are furnished by

defendant to plaintiff, defendant represents and identifies in writing

the material in any such information or documents to which a claim of

protection may be asserted under Rule 26(c)(7) of the Federal Rules of

Civil Procedures, and defendant marks each pertinent page of such

material, ``Subject to claim of protection under Rule 26(c)(7) of the

Federal Rules of Civil Procedure,'' governing protection of trade

secrets and confidential commercial information, then ten days notice

shall be given by plaintiff to defendant prior to divulging such

material in any legal proceeding (other than a grand jury proceeding ).

XII

Retention of Jurisdiction

Jurisdiction is retained by this Court for the purpose of enabling

any of the parties to this Final Judgment to apply to this Court at any

time for such further orders and directions as may be necessary or

appropriate for the construction or carrying out of this Final

Judgment, for the modification of any of the provisions hereof, for the

enforcement of compliance herewith, and for the punishment of any

violations hereof.

XIII

Termination

This Final Judgment will expire upon consummation of the

divestiture of the Separated Assets in accordance with the terms

herein.

XIV

Public Interest

Entry of this Final Judgment is in the public interest.

So ordered.

----------------------------------------------------------------------

United States District Judge, Northern District of Georgia.

Dated:

United States District Court, Northern District of Georgia, Atlanta

Division

United States of America, Plaintiff, v. Outdoor Systems, Inc.,

Defendant. Civil No. 1-94-CV-2393-CC, Filed: September 8, 1994.

Competitive Impact Statement

Pursuant to Section 2(b) of the Antitrust Procedures and Penalties

Act (``APPA''), 15 U.S.C. 16(b)-(h), the United States submits this

Competitive Impact Statement relating to the proposed Final Judgment

submitted for entry with the consent of Outdoor Services, Inc., in this

civil antitrust proceeding.

I

Nature and Purpose of the Proceeding

On September 8, 1994, the United States filed a civil antitrust

complaint, under Section 15 of the Clayton Act, 15 U.S.C. 25, against

Outdoor Services, Inc., alleging that the proposed acquisition by

Outdoor Services, Inc. (``OSI'') of the outdoor advertising business of

Capitol Outdoor Advertising, Inc. (``Capitol'') would violate Section 7

of the Clayton Act, 15 U.S.C. 18. The Complaint alleges that the effect

of the merger may be substantially to lessen competition in outdoor

advertising in the Atlanta area. The Complaint seeks, among other

relief, a permanent injunction preventing defendant from combining its

outdoor advertising business with that of Capitol.

Also on September 8, 1994, the United States and OSI filed a

Stipulation by which they consented to the entry of a proposed Final

Judgment designed to preserve competition in the outdoor advertising

business in the Atlanta area. The proposed Final Judgment, as explained

more fully below, would allow OSI to acquire the outdoor advertising

business of Capitol but orders OSI to divest its own outdoor

advertising business in the Atlanta area within six months. The Final

Judgment also provides that pending the sale of OSI's outdoor

advertising business, a holding company will be established to hold

separate the businesses of OSI and Capitol.

The United States and OSI have stipulated that the proposed Final

Judgment may be entered after compliance with the APPA. Entry of the

proposed Final Judgment will terminate this action, except that the

Court will retain jurisdiction to construe, modify and enforce the

Final Judgment and to punish violations of the Final Judgment.

II

Background to the Alleged Violation

On or about July 27, 1994, OSI and Capitol entered into a purchase

agreement under which the two companies would merge and OSI would

become the sole surviving entity. This acquisition would, if

unchallenged, effectively merge all of the business of OSI and Capitol.

The purchase price was approximately $40 million.

OSI is a corporation organized and existing under the laws of the

State of Delaware. It maintains its principal offices at 2502 North

Black Canyon Highway, Phoenix, Arizona. OSI is in the business of

providing outdoor advertising services in the Atlanta area. OSI's

Atlanta area office is located at 3745 Atlanta Industrial Drive, N.W.,

Atlanta, Georgia. OSI had outdoor advertising revenues in the Atlanta

area of about $7.4 million in 1993.

Capitol is a corporation organized and existing under the laws of

the State of Delaware. It maintains its principal offices at 732 Ashby

Street, N.W., Atlanta, Georgia. Capitol is in the business of providing

outdoor advertising services in the Atlanta area. Capitol had outdoor

advertising revenues in the Atlanta area of about $17.1 million in

1992.

The Complaint alleges that OSI and Capital are significant

competitors in the outdoor advertising market in the Atlanta area.

Outdoor advertising is another name given to standardized billboard

advertising in the United States. There are several types of

billboards. The largest type of billboard is the ``bulletin,'' which

comes in two standard sizes, 14' tall by 48' long, or 20' high by 60'

long. If painting is the method of reproduction, the bulletin is called

a ``paint'' or a ``painted bulletin.'' If posting is the method of

reproduction, the bulletin is called a ``posted bulletin.'' Bulletin

billboards are frequently sold singly to advertisers at negotiated

rental prices that depend primarily on each billboard's location.

Bulletins sold in this fashion are called ``permanent bulletins'' and

command, on average, the highest rent of any type of billboard.

Bulletins are also rented as part of ``rotary'' plans by billboard

companies. A rotary plan consists of rotating an advertiser's bulletin

message to a number of well distributed bulletin locations within a

metropolitan area. Usually located adjacent to interstate highways and

high traffic arterials, bulletins are typically sold to advertisers for

longer contract periods than other types of billboards because of the

high initial expense in painting or posting the advertiser's message or

illustration.

A second type of standardized billboard is the ``poster panel,''

which comes in one size, 12' high by 25' long and which is customarily

sold in packages called ``showings.'' A ``100 showing'' of poster

panels means that the billboard company will provide enough

geographically distributed poster panels to deliver in one day a number

of exposure opportunities, as measured by the traffic count past all

the poster panels included in the showing, equal to 100% of the

population of that particular market. In the Atlanta area, for example,

a 100 showing requires approximately 120 poster panels. The advertising

message on a poster panel billboard is carried on a printed paper

poster. Poster panels are nearly always sold in groups by billboard

companies and usually for a shorter contract period than painted

bulletin billboards. Poster panels are generally located adjacent to

primary arterial roads and busy secondary streets. The rental price for

each poster panel is a showing averages about one-fifth of the rental

price for each painted bulletin in a rotary.

A third type of standardized billboard is the ``8-sheet,''

sometimes referred to as a ``junior billboard.'' An 8-sheet is

approximately 6' high by 12' long. An advertiser's message on an 8-

sheet is usually carried on a printed paper poster. In the Atlanta

area, nearly all 8-sheet locations are in inner city areas, and 8-

sheets are usually sold in packages directed to residents of the areas

in which they are located. An 8-sheet rents, on average, for less than

one-third the rental price of a poster panel.

Many customers who use outdoor advertising also advertise in other

media, especially radio, television, newspapers and magazines, but use

outdoor advertising when they want a large number of exposures to

consumers at a low cost per exposure. Since exposure is necessarily

brief, outdoor advertising is most suitable for highly visual, limited

informational advertising. Outdoor advertising's particular

characteristics make it a type of advertising for which there are no

close substitutes. The Complaint alleges that the customers who want or

need to use outdoor advertising would not switch to another advertising

medium in response to a small but significant increase in outdoor

advertising rental prices.

The Atlanta area includes the City of Atlanta and the five populous

counties that include and surround that city. The vast majority of the

population of the greater Atlanta region lives or works in the Atlanta

area and most of that region's commercial activity occurs in the

Atlanta area. Advertisers who desire to employ outdoor advertising to

reach the Atlanta consumer market have no reasonable substitute for

billboards located within the Atlanta area; in particular, a small but

significant increase in the price of outdoor advertising in the Atlanta

area would not cause advertisers to turn to billboards located in more

rural counties outside of the Atlanta area. About 93% of Capitol's and

OSI's billboard sites are located in the Atlanta area. The Atlanta area

constitutes a section of the country and relevant geographic market for

antitrust purposes.

OSI and Capitol are the only companies that offer a full line of

billboards in the Atlanta area. Together, OSI and Capitol control over

63% of all billboards in the Atlanta area. They are the only sellers of

poster panel billboards and are two of only four sellers of bulletin

rotary billboard service in the Atlanta area. A combined OSI-Capitol

entity would control about 4,000 bulletin and poster panel billboards

in the Atlanta area, over six times the total of the next largest

outdoor advertising company in the Atlanta area and approximately

eleven times the total of the third largest. The proposed acquisition

of Capitol by OSI would raise OSI's market share of the outdoor

advertising business in the Atlanta area, based upon the number of

billboards, from approximately 24% to approximately 63%.

The Complaint further alleges that successful new entry into the

outdoor advertising market in the Atlanta area is not easy, due in part

to the increasing amount of government regulation limiting billboard

construction, the scarcity of suitable billboard sites within in the

Atlanta area, paticularly within the I-285 Perimeter around Atlanta,

and the necessity of obtaining a sufficient number and geographic

dispersion of billboard sites in order to be an effective competitor.

OSI regularly contracts with customers outside the State of Georgia

for the sale of outdoor advertising in the Atlanta area and regularly

receives outdoor advertising materials from outside of Georgia. OSI is

engaged in interstate commerce, and its activities are in the flow of,

and substantially affect, interstate commerce.

III

Effect on Competition

The effect of OSI's acquisition of Capitol's outdoor advertising

business in the Atlanta area may be substantially to lessen competition

in outdoor advertising in the Atlanta area because actual and potential

competition between OSI and Capitol in outdoor advertising in the

Atlanta area will be eliminated, and competition generally in outdoor

advertising in the Atlanta area may be substantially lessened.

IV

Explanation of the Proposed Final Judgment

The United States brought this action because the effect of the

proposed merger of OSI and Capitol may be substantially to lessen

competition, in violation of Section 7, in the Atlanta area outdoor

advertising market. The risk posed to competition by this transaction,

however, would be substantially eliminated were defendant OSI to divest

its outdoor advertising business to a purchaser that would operate it

as an active, independent and financially viable competitor in the

Atlanta area. To this end, the provisions of the proposed Final

Judgment are designed to accomplish the sale of OSI's outdoor

advertising business and to prevent the anticompetitive effects of the

proposed acquisition.

The Final Judgment allows OSI to acquire the outdoor advertising

business of Capitol, but requires OSI to sell its Atlanta outdoor

advertising business to an independent third party within six months.

The United States has the right to approve the purchaser. If OSI does

not accomplish the sale within six months, a trustee will be appointed

by the Court with full powers to make the sale. Pending the sale of

OSI's Atlanta outdoor advertising business, a holding company will be

established to preserve and hold separate the assets and business

operations of OSI and Capitol. The proposed Final Judgment should

ensure that an appropriate purchaser will obtain OSI's divested outdoor

advertising business and operate it as a competitive member of the

Atlanta area outdoor advertising market.

V

Remedies Available to Potential Litigants

Section 4 of the Clayton Act, 15 U.S.C. Sec. 15, provides that any

person who has been injured as a result of conduct prohibited by the

antitrust laws may bring suit in federal court to recover three times

the damages the person has suffered, as well as costs and reasonable

attorneys' fees. Entry of the proposed Final Judgment will neither

impair not assist the bringing of any private antitrust actions. Under

the provisions of Section 5(a) of the Clayton Act, 15 U.S.C.

Sec. 16(a), the proposed Final Judgment has no prima facie effect in

any private lawsuit that may be brought against the defendant.

Procedures Available for Modification of the Proposed Final Judgment

The United States and OSI have stipulated that the Court may enter

the proposed Final Judgment after compliance with the APPA. The

stipulation provides that entry of the Final Judgment does not

constitute any evidence or admission by any party with respect to any

issue of fact or law. Under the provisions of the APPA, the proposed

Final Judgment may not be entered unless the Court finds that entry is

in the public interest. The Department believes that the proposed Final

Judgment provides an adequate remedy for the alleged violation and is

in the public interest. The term of the proposed Final Judgment is

until the divestiture of OSI's Atlanta business is accomplished.

As provided by the APPA, any person believing that the proposed

Final Judgment should be modified may submit written comments within

the sixty-day period from the date of publication in the Federal

Register to John T. Orr, Chief, Atlanta Field Office, Antitrust

Division, U.S. Department of Justice, Suite 1176, 75 Spring Street,

SW., Atlanta, GA 30303. These comments, and the Department's responses,

will be filed with the Court and published in the Federal Register. All

comments will be given due consideration by the Department of Justice,

which remains free to withdraw its consent at any time prior to entry.

The proposed Final Judgment provides that the Court retains

jurisdiction over these actions, and any party may apply to the Court

for any other necessary or appropriate for their modification,

interpretation or enforcement.

VII

Alternatives to the Proposed Final Judgment

The United States considered, as an alternative to the proposed

Final Judgment, litigation to enjoin the major. The United States

rejected that alternative because the relief in the proposed Final

Judgment should prevent the possible occurrence of conduct the effect

of which may be substantially to lessen competition in the outdoor

advertising industry in the Atlanta area. The United States believes

that in the hands of the appropriate purchaser, the outdoor advertising

business that is divested will likely maintain the present level of

competition in the Atlanta area.

VIII

Determinative Documents

No documents were determinative in the formulation of the proposed

Final Judgment. Consequently, the United States has not attached any

such documents to the proposed Final Judgment.

Dated: September 8, 1994.

John T. Orr,

Georgia Bar No.: 554625.

Justin M. Nicholson,

William G. Traynor,

Attorney, Antitrust Division, U.S. Department of Justice, Richard B.

Russell Building, 75 Spring Street SW., Suite 1176, Atlanta, Georgia

30303, (404) 331-7100.

[FR Doc. 94-23411 Filed 9-22-94; 8:45 am]

BILLING CODE 4410-01-M