Proposed Final Judgment and Competitive Impact Statement; United States of America v. Chancellor Media Corp. and Kunz & Co.

DEPARTMENT OF JUSTICE

Antitrust Division

Proposed Final Judgment and Competitive Impact Statement; United

States of America v. Chancellor Media Corp. and Kunz & Co.

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 District of Columbia in United

States of America v. Chancellor Media Corporation and Kunz & Company,

Case No. 1:98CV0273. The proposed Final Judgment is subject to approval

by the Court after the expiration of the statutory 60-day public

comment period and compliance with the Antitrust Procedures and

Penalties Act. 15 U.S.C. 16(b)-(h).

The United States filed a civil antitrust Complaint on November 12,

1998, alleging that the proposed acquisition of Kunz & Company

(``Kunz'') by Chancellor Media Corporation (``Chancellor'') would

violate Section 7 of the Clayton Act, 15 U.S.C. 18. The Complaint

alleges that Chancellor and Kunz compete head-to-head to sell outdoor

advertising in four counties: (1) Kern County, California; (2) Kings

County, California; (3) Inyo County, California; and (4) Mojave County,

Arizona (collectively ``the Four Counties''). Outdoor advertising

companies sell advertising space, such as on billboards, to local and

national customers. The outdoor advertising business in the Four

Counties is highly concentrated. Chancellor and Kunz have a combined

share of revenue ranging from about 60 percent to a virtual monopoly in

the Four Counties. Unless the acquisition is blocked, competition would

be substantially lessened in the Four Counties, and advertisers would

pay higher prices.

The prayer for relief seeks: (a) an adjudication that the proposed

transaction described in the Complaint would violate Section 7 of the

Clayton Act; (b) preliminary and permanent injunctive relief preventing

the consummation of the transaction; (c) an award to the United States

of the costs of his action; and (d) such other relief as is proper.

Shortly before this suit was filed, a proposed settlement was

reached that permits Chancellor to complete its acquisition of Kunz,

yet preserves competition in the Four Counties where the transaction

raises significant competitive concerns. A Stipulation and proposed

Final Judgment embodying the settlement were filed at the same time the

Complaint was filed.

The proposed settlement requires Chancellor to divest all of the

outdoor advertising assets of:

(1) Kunz in Kern County and Inyo County, California; and in

Mojave County, Arizona; and

(2) Chancellor in Kings County, California.

Unless the plaintiff grants a time extension, Chancellor must divest

these outdoor advertising assets within four (4) months after the

filing of the Complaint in this action. Finally, in the event that the

Court does not, for any reason, enter the Final Judgment within that

four-month period, the divestitures are to occur within five (5)

business days after notice of entry of the Final Judgment.

If Chancellor does not divest the advertising assets in the

specified counties within the divestiture period, the Court, upon

plaintiff's application, is to appoint a trustee to sell the assets.

The proposed Final Judgment also requires that, until the divestitures

mandated by the Final Judgment have been accomplished, Chancellor shall

take all steps necessary to maintain and operate the advertising assets

as active competitors; maintain the management, staffing, sales and

marketing of the advertising assets; and maintain the advertising

assets in operable condition at current capacity configurations.

Further, the proposed Final Judgment requires Chancellor to give the

United States prior notice regarding certain future outdoor advertising

acquisitions

[[Page 66821]]

or agreements pertaining to the sale of outdoor advertising in the Four

Counties.

The plaintiff and the defendants have stipulated that the proposed

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

the proposed Final Judgment would terminate this action, except that

the Court would retain jurisdiction to construe, modify, or enforce the

provisions of the proposed Final Judgment and to punish violations

thereof.

A Competitive Impact Statement filed by the United States describes

the Complaint, the proposed Final Judgment, and remedies available to

private litigants.

Public comment is invited within the statutory 60-day comment

period. Such comments, and the responses thereto, will be published in

the Federal Register and filed with the Court. Written comments should

be directed to Craig W. Conrath, Chief, Merger Task Force, Antitrust

Division, 1401 H Street, NW., Suite 4000, Washington, DC 20530

(telephone: 202-307-0001). Copies of the Complaint, Stipulation,

proposed Final Judgment and Competitive Impact Statement are available

for inspection in Room 215 of the Antitrust Division, Department of

Justice, 325 7th Street, NW., Washington, DC 20530 (telephone: 202-514-

2481) and at the office of the Clerk of the United States District

Court for the District of Columbia, Third Street and Constitution

Avenue, NW., Washington, DC 20001.

Copies of any of these materials may be obtained upon request and

payment of a copying fee.

Constance K. Robinson,

Director of Operations & Merger Enforcement, Antitrust Division.

United States District Court for the District of Columbia

United States of America, Plaintiff, v. Chancellor Media

Corporation and Kunz & Company, Defendants.

[Civil Action No. 982763]

Stipulation and Order

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

respective attorneys, as follows:

1. The 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 District of

Columbia.

2. The parties stipulate that a Final Judgment in the form hereto

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

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

the requirements of the Antitrust Procedures and Penalties Act (15

U.S.C. Sec. 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 the entry of the proposed Final

Judgment by serving notice thereof on defendants and by filing that

notice with the Court.

3. Defendants shall abide by and comply with the provisions of the

proposed Final Judgment pending entry of the Final Judgment by the

Court, or until expiration of time for all appeals of any Court ruling

declining entry of the proposed Final Judgment, and shall, from the

date of the signing of this Stipulation by the parties, comply with all

the terms and provisions of the proposed Final Judgment as though the

same were in full force and effect as an Order of the Court.

4. Defendants shall not consummate the transaction sought to be

enjoined by the Complaint herein before the Court has signed this

Stipulation and order.

5. This Stipulation shall apply with equal force and effect to any

amended proposed Final Judgment agreed upon in writing by the parties

and submitted to the Court.

6. In the event (a) the plaintiff withdraws its consent (as

provided in paragraph 2 above), or (b) the proposed Final Judgment is

not entered pursuant to this Stipulation, the time has expired for all

appeals of any Court ruling declining entry of the proposed Final

Judgment, and the Court has not otherwise ordered continued compliance

with the terms and provisions of the proposed Final Judgment, then the

parties are released from all further obligations under this

Stipulation, and the making of this Stipulation shall be without

prejudice to any party in this or any other proceeding.

7. Defendants represent that the divestitures ordered in the

proposed Final Judgment can and will be made, and that defendants will

later raise no claim of hardship or difficulty as grounds for asking

the Court to modify any of the divestiture provisions contained

therein.

Dated: November 12, 1998.

For Plaintiff United States of America:

Barry L. Creech,

D.C. Bar No.--421070, U.S. Department of Justice, Antitrust Division,

Merger Task Force, 1401 H Street, NW, Suite 4000, Washington, DC 20530,

(202) 307-0001.

For Defendant Kunz & Company:

Riccarda Heising,

Powell, Goldstein, Frazer & Murphy LLP, 191 Peachtree Street, NE, 16th

Floor, Atlanta, GA 30303, (404) 572-6730.

For Defendant Chancellor Media Corporation:

Steven H. Schulman,

Bruce J. Prager,

Latham & Watkins, 1001 Pennsylvania Ave., NW; Suite 1300, Washington,

DC 20004, (202) 637-2184.

So Ordered:

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United States District Judge

Certificate of Service

I, Barry L. Creech, hereby certify that, on November 12, 1998, I

caused the foregoing document to be served on defendants Kunz & Company

and Chancellor Media Corporation by having a copy mailed, first-class,

postage prepaid, to:

Steven H. Schulman, Bruce J. Prager, Latham & Watkins, 1001

Pennsylvania Ave., NW, Suite 1300, Washington, DC 20004, Counsel for

Chancellor Media Corporation

Riccarda Heising, Powell, Goldstein, Frazer & Murphy LLP, 191 Peachtree

Street, NE, 16th Floor, Atlanta, GA 30603, Counsel for Kunz & Company

Barry L. Creech,

D.C. Bar No.--421070

Final Judgment

Whereas, plaintiff, the United States of America, filed its

Complaint in this action on November 12, 1998, and plaintiff and

defendants by their respective attorneys, having consented to the entry

of this Final Judgment without trial or adjudication of any issue of

fact or law herein, and without this Final Judgment constituting any

evidence against or an admission by any party with respect to any issue

of law or fact herein;

And whereas, defendants have agreed to be bound by the provisions

of this Final Judgment pending its approval by the Court;

And whereas, the essence of this Final Judgment is prompt and

certain divestiture of the outdoor advertising assets in the four

counties identified below to ensure that competition is substantially

preserved;

And whereas, plaintiff requires Chancellor and Kunz to make the

divestitures for the purpose of

[[Page 66822]]

maintaining the current level of competition in the sale of outdoor

advertising;

And whereas, Chancellor and Kunz have represented to the plaintiff

that the divestitures ordered herein can and will be made and that

Chancellor and Kunz will not later raise claims of hardship or

difficulty as grounds for asking the Court to modify any of the

divestitures contained below;

Now, therefore, before the taking of any testimony, and without

trial or adjudication of any issue of fact or law herein, and upon

consent of the parties hereto, it is hereby Ordered, adjudged, and

decreed as follows:

I. Jurisdiction

This Court has jurisdiction over each of the defendants hereto and

over the subject matter of this action. The Complaint states a claim

upon which relief may be granted against the defendants, as hereinafter

defined, under Section 7 of the Clayton Act, as amended (15 U.S.C. 18).

II. Definitions

As used in this Final Judgment:

A. DOJ means the Antitrust Division of the United States Department

of Justice.

B. Chancellor means defendant Chancellor Media Corporation, a

Delaware corporation with its headquarters in Dallas, Texas, and its

successors, assigns, subsidiaries, divisions, groups, affiliates,

partnerships and joint ventures, and directors, officers, managers,

agents, and employees, including but not limited to Martin &

MacFarlane, Inc. (``Martin''), a California corporation with its

headquarters in Dallas, Texas.

C. Kunz means defendant Kunz & Company, a California corporation

with its headquarters in Larkspur, California, and its successors,

assigns, subsidiaries, divisions groups, affiliates, partnerships and

joint ventures, and directors, officers, managers, agents, and

employees.

D. Defendants means Chancellor and Kunz.

E. Advertising Assets means the outdoor advertising display faces

owned by:

(1) Kunz in each of these three counties: Kern County, California;

Inyo County, California; and Mojave County, Arizona; and

(2) Chancellor in Kings County, California (collectively ``the Four

Counties'').

This includes all tangible and intangible assets relating to these

display faces, including all real property (owned or leased); all

licenses, permits and authorizations issued by any governmental

organization relating to the operation of the bulletins; and all

contracts, agreements, leases, licenses, commitments and understandings

pertaining to the sale of outdoor advertising on display faces.

F. Acquirer (or ``Acquirers'') means the entity or entities to whom

Chancellor and Kunz divest the Advertising Assets pursuant to this

Final Judgment.

III. Applicability

A. The provisions of this Final Judgment apply to the defendants,

their successors and assigns, their subsidiaries, directors, officers,

managers, agents, and employees, and 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. The defendants shall require, as a condition of the sale or

other disposition of all or substantially all of their outdoor

advertising business in any of the Four Counties, that the acquirer or

acquirers agree to be bound by the provisions of this Final Judgment.

IV. Divestiture

A. Chancellor and Kunz are hereby ordered and directed in

accordance with the terms of this Final Judgment, within four (4)

months after the filing of the Complaint in this matter or five (5)

days after notice of the entry of this Final Judgment by the Court,

whichever is later, to divest the Advertising Assets to an Acquirer (or

Acquirers) acceptable to DOJ in its sole discretion.

B. Chancellor and Kunz shall use their best efforts to accomplish

the divestitures as expeditiously and timely as possible. DOJ, in its

sole discretion, may extend the time period for any divestiture for two

(2) additional thirty (30) day periods of time, not to exceed sixty (60

calendar days in total.

C. In accomplishing the divestitures ordered by this Final

Judgment, Chancellor and Kunz promptly shall make known, by usual and

customary means, the availability of the Advertising Assets described

in this Final Judgment. Chancellor and Kunz shall inform any person

making an inquiry regarding a possible purchase that the sale is being

made pursuant to this Final Judgment and provide such person with a

copy of this Final Judgment. Chancellor and Kunz shall also offer to

furnish to all prospective Acquirers, subject to customary

confidentiality assurances, all information regarding the Advertising

Assets customarily provided in a due diligence process except such

information subject to attorney-client privilege or attorney work-

product privilege. Chancellor and Kunz shall make available such

information to DOJ at the same time that such information is made

available to any other person.

D. Chancellor and Kunz shall permit prospective Acquirers of the

Advertising Assets to have reasonable access to personnel and to make

such inspection of the physical facilities of the Advertising Assets

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

information customarily provided as part of due diligence process.

E. The defendants shall not take any action that will impede in any

way the divestiture of the Advertising Assets.

F. Divestiture of the Advertising Assets may be made to one or more

Acquires, so long as:

(1) There is only one Acquirer for any particular county's

assets in King and Inyo Counties, California and Mojave County,

Arizona;

(2) There are no more than two Acquirers for the assets in Kern

County California; and

(3) In each instance it is demonstrated to the sole satisfaction

of DOJ that the Advertising Assets will remain viable and the

divestiture of such Advertising Assets will remedy the competitive

harm alleged in the Complaint.

The divestitures, whether pursuant to Section IV or Section V of

this Final Judgment, shall be:

(1) Made to an Acquirer or Acquirers who it is demonstrated to

DOJ's sole satisfaction has or have the intent and capability

(including the necessary managerial, operational, and financial

capability) of competing effectively in the sale of outdoor

advertising; and

(2) Accomplished so as to satisfy DOJ, in its sole discretion,

that none of the terms of any agreement between an Acquirer (or

Acquirers) and Chancellor or Kunz give Chancellor or Kunz the

ability unreasonably to raise the Acquirer's (or Acquirers') costs,

to lower the Acquirer's (or Acquirers') efficiency, or otherwise to

interfere with the ability of the Acquirer (or Acquirers) to compete

effectively.

V. Appointment of Trustee

A. In the event that chancellor and Kunz have not divested the

Advertising Assets within the time specified in Section IV(A) of this

Final Judgment, the Court shall appoint, on application of the United

States, a trustee selected by DOJ in its sole discretion to effect the

divestiture of the Advertising Assets.

B. After the appointment of a trustee becomes effective, only the

trustee shall have the right to sell the Advertising Assets. The

trustee shall have the power

[[Page 66823]]

and authority to accomplish the divestitures at the best price than

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

provisions of Sections IV and X of this Final Judgment, and shall have

such other powers as the Court shall deem appropriate. Subject to

Section V(C) of this Final Judgment, the trustee shall have the power

and authority to hire at the cost and expense of Chancellor any

investment bankers, attorneys, or other agents reasonably necessary in

the judgment of the trustee to assist in the divestitures, and such

professionals and agents shall be accountable solely to the trustee.

The trustee shall have the power and authority to accomplish the

divestitures of the Advertising Assets at the earliest possible time to

an Acquirer or Acquirers acceptable to DOJ in its sole discretion, and

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

Chancellor and Kunz shall not object to a sale by the trustee on any

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

Chancellor and Kunz must be conveyed in writing to the plaintiff and

trustee within ten (10) calendar days after the trustee has provided

the notice required under Section VII of this Final Judgment.

C. The trustee shall serve at the cost and expense of Chancellor,

on such terms and conditions as the Court may prescribe, and shall

account for all monies derived from the sale of the assets sold by the

trustee and all costs and expenses so incurred. After approval by the

Court of the trustee's accounting, including fees for its services and

those of any professionals and agents retained by the trustee, all

remaining money shall be paid to Chancellor or Kunz, as appropriate,

and the trust shall then be terminated. The compensation of such

trustee and of any professionals and agents retained by the trustee

shall be reasonable in light of the value of the divested business and

based on a fee arrangement providing the trustee with an incentive

based on the price and terms of the divestitures and the speed with

which they are accomplished.

D. Chancellor and Kunz shall use their best efforts to assist the

trustee in accomplishing the required divestitures, including best

efforts to effect all necessary consents and regulatory approvals. The

trustee, and any consultants, accountants, attorneys and other persons

retained by the trustee, shall have full and complete access to the

personnel, books, records, and facilities of the businesses to be

divested, and Chancellor and Kunz shall develop financial or other

information relevant to the businesses to be divested customarily

provided in a due diligence process as the trustee may reasonably

request, subject to customary confidentiality assurances. Chancellor

and Kunz shall permit prospective Acquirers of the Advertising Assets

to have reasonable access to personnel and to make such inspection of

physical facilities and any and all financial, operational or other

documents and other information as may be relevant to the divestitures

required by this Final Judgment.

E. After its appointment, the trustee shall file monthly reports

with the parties and the Court setting forth the trustee's efforts to

accomplish the divestitures ordered pursuant to 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

month, 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 interest in the businesses to be divested,

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 the businesses to be divested.

F. If the trustee has not accomplished such divestitures within six

(6) months after its appointment, the trustee thereupon shall file

promptly with the Court a report setting forth: (1) the trustee's

efforts to accomplish the required divestitures, (2) the reasons, in

the trustee's judgment, why the required divestitures have 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 enter thereafter such orders as it shall deem

appropriate in order to carry out the purpose of the trust which may,

if necessary, include extending the trust and the term of the trustee's

appointment by a period requested by DOJ.

VI. Notice

Unless such transaction is otherwise subject to the reporting and

waiting period requirements of the Hart-Scott-Rodino Antitrust

Improvements Act of 1976, as amended, 15 U.S.C. 18a (the ``HSR Act''),

defendants, without providing advance notification to DOJ, shall not

directly or indirectly acquire any assets of or any interest, including

any financial security, loan, equity or management interest, in any

outdoor advertising business:

(1) In Kern County, California that constitutes the greater of

(a) four display faces or (b) $250,000 in assets over a twelve-month

period (beginning when this Final Judgment is entered and continuing

for the term of the Final Judgment); for the purposes of this

limitation, acquisitions during each twelve-month period shall be

aggregated;

(2) In Inyo County, California; Kings County, California; or

Mojave County, Arizona that constitutes the greater of (a) four

display faces or (b) $250,000 in assets in any one of these counties

during a five-year period; for the purposes of this limitation,

there shall be two consecutive five-year periods. Acquisitions

during each of these five-year periods shall be aggregated, with the

first period ending five years after the Final Judgment is ended,

and the second period beginning immediately upon the expiration of

the first-five year period.

Such notification shall be provided to the DOJ in the same format

as, and per the instructions relating to the Notification and Report

Form set forth in the Appendix to Part 803 of Title 16 of the Code of

Federal Regulations as amended, except that the information requested

in Items 5-9 of the instructions must be provided only about outdoor

advertising operations in the Four Counties. Notification shall be

provided at least thirty (30) days prior to acquiring any such

interest, and shall include, beyond what may be required by the

applicable instructions, the names of the principal representatives of

the parties to the agreement who negotiated the agreement, and any

management or strategic plans discussing the proposed transaction. If

within the 30-day period after notification, representatives of DOJ

make a written request for additional information, defendants shall not

consummate the proposed transaction or agreement until twenty (20) days

after submitting all such additional information. Early termination of

the waiting periods in this paragraph may be requested and, where

appropriate, granted in the same manner as is applicable under the

requirements and provisions of the HSR Act and rules promulgated

thereunder. This Section shall be broadly construed, and any ambiguity

or uncertainly regarding the filing of notice under this Section shall

be resolved in favor of filing notice.

[[Page 66824]]

VII. Notification

Within two (2) business days following execution of a definitive

agreement, contingent upon compliance with the terms of this Final

Judgment, to effect, in whole or in part, any proposed divestitures

pursuant to Sections IV or V of this Final Judgment, Chancellor and

Kunz or the trustee, whichever is then responsible for effecting the

divestitures, shall notify DOJ of the proposed divestitures. If the

trustee is responsible, it shall similarly notify Chancellor and Kunz.

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 or a

desire to, acquire any ownership interest in the businesses to be

divested that are the subject of the binding contract, together with

full details of same. Within fifteen (15) calendar days of receipt by

DOJ of notice, DOJ may request from Chancellor or Kunz, the proposed

Acquirer (or Acquirers), or any other third party Acquirer (or

Acquirers) additional information concerning the proposed divestitures

and the proposed Acquirer (or Acquirers). Chancellor and Kunz and the

trustee shall furnish any additional information requested from them

within fifteen (15) calendar days of the receipt of the request, unless

the parties shall otherwise agree. Within thirty (30) calendar days

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

DOJ has been provided the additional information requested from

Chancellor and Kunz, the proposed Acquirer (or Acquirers), and any

third party, whichever is later, DOJ shall provide written notice to

Chancellor and Kunz and the trustee, if there is one, stating whether

or not it objects to the proposed divestitures. If DOJ provides written

notice to Chancellor and Kunz and the trustee that DOJ does not object,

then the divestitures may be consummated, subject only to Chancellor

and Kunz's limited right to object to the sale under Section V (B) of

this Final Judgment. Absent written notice that DOJ does not object to

the proposed Acquirer (or Acquirers) or upon objection by DOJ, a

divestiture proposed under Section IV or Section V may not be

consummated. Upon objection by Chancellor and Kunz under the provision

in Section V(B), a divestiture proposed under Section V shall not be

consummated unless approved by the Court.

VIII. Affidavits

A. Within twenty (20) calendar days of the filing of the Complaint

in this matter and every thirty (30) calendar days thereafter until the

divestitures have been completed whether pursuant to Section IV or

Section V of this Final Judgment, Chancellor and Kunz shall deliver to

DOJ and affidavit as to the fact and manner of compliance with this

Final Judgment. Each such affidavit shall include, inter alia, 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

interest in the businesses to be divested, and shall describe in detail

each contact with any such person during that period. Each such

affidavit shall also include a description of the efforts that

Chancellor and Kunz have taken to solicit a buyer for the Advertising

Assets and to provide required information to prospective Acquirers.

B. Within twenty (20) calendar days of the filing of the Complaint

in this matter, Chancellor and Kunz shall deliver to DOJ an affidavit

that describes in detail all actions they have taken and all steps they

have implemented on an on-going basis to preserve the Advertising

Assets pursuant to Section IX of this Final Judgment. The affidavit

also shall describe, nut not be limited to, the efforts of Chancellor

and Kunz to maintain and operate the Advertising Assets as active

competitors, maintain the management, staffing, sales, and marketing of

the Advertising Assets, and maintain the Advertising Assets in operable

condition at current capacity configurations. Chancellor and Kunz shall

deliver to DOJ an affidavit describing any changes to the efforts and

actions outlined in their earlier affidavit(s) filed pursuant to this

Section within fifteen (15) calendar days after the change is

implemented.

C. Until one year after such divestiture has been completed,

Chancellor and Kunz shall preserve all records of all efforts made to

preserve the business to be divested and effect the divestitures.

IX. Preservation of Assets

Until the divestitures required by the Final Judgment have been

accomplished, Chancellor and Kunz shall take all steps necessary to

maintain and operate the Advertising Assets as active competitors;

maintain the management, staffing, sales and marketing of the

Advertising Assets; and maintain the Adverting Assets in operable

condition at current capacity configurations. Defendants shall take no

action that would jeopardize the divestitures described in this Final

Judgment. Kunz agrees to abide by the above requirements only to the

extent that its contractual rights and obligations pertaining to the

Advertising Assets to be divested permit it to.

X. Financing

The defendants are ordered and directed not to finance all or any

part of any purchase by an Acquirer (or Acquirers) made pursuant to

Section IV or V of this Final Judgment.

XI. Compliance Inspection

For purposes of determining or securing compliance with the Final

Judgment and subject to any legally recognized privilege, from time to

time:

A. Duly authorized representatives of the plaintiff, upon the

written request of the Assistant Attorney General in charge of the

Antitrust Division, and on reasonable notice to the defendants made to

their principal offices, shall be permitted:

(1) Access during office hours of the defendants to inspect and

copy all books, ledgers, accounts, correspondence, memoranda, and

other records and documents in the possession or under the control

of the defendants, who may have counsel present, relating to the

matters contained in this Final Judgment; and

(2) Subject to the reasonable convenience of the defendants and

without restraint or interference from any of them, to interview,

either informally or on the record, their officers, employees, and

agents, 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 the defendants' principal

offices, the defendants shall submit such written reports, under oath

if requested, with respect to any matter contained in the Final

Judgment.

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

Sections VII or XI of this Final Judgment shall be divulged by a

representative of the plaintiff to any person other than a duly

authorized representative of the Executive Branch of this United

States, except in the course of legal proceedings to which the

plaintiff 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 the

defendants to the plaintiff, the defendants represent and identify in

[[Page 66825]]

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 Procedure, and the defendants mark each pertinent page

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

of the Federal Rules of Civil Procedure,'' then ten (10) calendar days

notice shall be given by the plaintiff to the defendants prior to

divulging such material in any legal proceeding (other than a grand

jury proceeding) to which the defendants are not a party.

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

Unless this court grants an extension, this Final Judgment will

expire upon the tenth anniversary of the date of its entry; however,

all of Kunz's obligations under the terms of this Decree cease once

Kunz irrevocably conveys the Advertising Assets (owned by Kunz) to be

divested to Chancellor.

XIV. Public Interest

Entry of this Final Judgment is in the public interest.

Dated------------------------------------------------------------------

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United States District Judge

[Civil Action No. 1:98CV02763 (Judge Kollar-Kotelly)]

Competitive Impact Statement

Plaintiff, the United States of America, pursuant to Section 2(b)

of the Antitrust Procedures and Penalties Act (``APPA''), 15 U.S.C.

16(b)-(h), files this Competitive Impact Statement relating to the

proposed Final Judgment submitted for entry in this civil antitrust

proceeding.

I. Nature and Purpose of the Proceeding

Plaintiff filed a civil antitrust Complaint on November 12, 1998,

alleging that a proposed acquisition of Kunz & Company (``Kunz'') by

Chancellor media Corporation (``Chancellor'') would violate Section 7

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

and Kunz compete head-to-head to sell outdoor advertising in four

counties: (1) Kern County, California; (2) Kings County, California;

(3) Inyo County, California; and (4) Mojave County, Arizona

(collectively ``the Four Counties''). Outdoor advertising companies

sell advertising space, such as on billboards, to local and national

customers. The outdoor advertising business in the four Counties is

highly concentrated. Chancellor and Kunz have a combined share of

revenue ranging from about 60 percent to a virtual monopoly in the Four

Counties. Unless the acquisition is blocked, competition would be

substantially lessened in the Four Counties, and advertisers would pay

higher prices.

The prayer for relief seeks: (a) an adjudication that the proposed

transaction described in the Complaint would violate Section 7 of the

Clayton Act; (b) preliminary and permanent injunctive relief preventing

the consummation of the transaction; (c) an award to the United States

of the costs of this action; and (d) such other relief as is proper.

Shortly before this suit was filed, a proposed settlement was

reached that permits Chancellor to complete its acquisition of Kunz,

yet preserves competition in the Four Counties where the transaction

raises significant competitive concerns. A Stipulation and proposed

Final Judgment embodying the settlement were filed at the same time the

Complaint was filed.

The proposed Final Judgment orders Chancellor to divest all of the

outdoor advertising assets of:

(1) Kunz in Kern county and Inyo County, California; and in

Mojave County, Arizona; and

(2) Chancellor in Kings County, California

Unless the plaintiff grants a time extension, Chancellor must divest

these outdoor advertising assets within four (4) months after the

filing of the Complaint in this action. Finally, in the event that the

Court does not, for any reason, enter the Final Judgment within that

four-month period, the divestitures are to occur within five (5)

business days after notice of entry of the Final Judgment.

If Chancellor does not divest the advertising assets in the

specified counties within the divestiture period, the Court, upon

plaintiff's application, is to appoint a trustee to sell the assets.

The proposed Final Judgment also requires that, until the divestitures

mandated by the Final Judgment have been accomplished, Chancellor shall

take all steps necessary to maintain and operate the advertising assets

as active competitors; maintain the management, staffing, sales and

marketing of the advertising assets; and maintain the advertising

assets in operable condition at current capacity configurations.

Further, the proposed Final Judgment requires Chancellor to give the

United States prior notice regarding certain future outdoor advertising

acquisitions or agreements pertaining to the sale of outdoor

advertising in the Four Counties.

The plaintiff and the defendants have stipulated that the proposed

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

the proposed Final Judgment would terminate this action, except that

the Court would retain jurisdiction to construe, modify, or enforce the

provisions of the proposed Final Judgment and to punish violations

thereof.

II. The Alleged Violations

A. The Defendants

Chancellor, a large nationwide operator of media businesses,

including outdoor advertising, is a Delaware corporation headquartered

in Dallas, Texas. Chancellor conducts some outdoor advertising business

through its subsidiary, Martin MacFarlane, Inc. (``Martin''), a

California corporation also headquartered in Dallas, Texas. Martin

sells outdoor advertising in many states throughout the United States,

including in each of the Four Counties. In 1997 Chancellor's total

revenues from outdoor advertising were approximately $78 million.

Kunz is a California corporation headquartered in Larkspur,

California. Kunz sells outdoor advertising in Arizona and California,

including in each of the Four Counties. In 1997, its revenues from

outdoor advertising were approximately $6.9 million.

B. Description of the Events Giving Rise to the Alleged Violations

On September 30, 1998, Chancellor entered into an Asset Purchase

Agreement with Kunz. Chancellor agreed to purchase certain assets of

Kunz used or useful in the outdoor advertising business of Kunz in the

United States. The transaction is valued at approximately $39.5

million.

Chancellor and Kunz compete for the business of advertisers seeking

to obtain outdoor advertising space in the Four Counties. The proposed

acquisition of Kunz by Chancellor would eliminate that competition in

violation of Section 7 of the Clayton Act

[[Page 66826]]

C. Anticompetitive Consequences of the Proposed Transaction

The Complaint alleges that the sale of outdoor advertising in the

Four Counties constitutes a relevant product market and a line of

commerce, and that each county constitutes a relevant geographic market

and section of the country for antitrust purposes. Advertisers select

outdoor advertising based upon a number of factors including, inter

alia, the size of the target audience (individuals most likely to

purchase the advertiser's products or services), the traffic patterns

of the audience, and other audience characteristics. Many advertisers

seek to reach a large percentage of their target audience by selecting

outdoor advertising on highways and roads where vehicle traffic is

high, so that the advertising will be frequently viewed by the target

audience, or where the vehicle traffic is close to the advertiser's

location. If outdoor advertising spaces owned by different firms would

efficiently reach that target audience, advertisers benefit from the

competition among outdoor advertising providers to offer better prices

or services. Many local and/or national advertisers purchase outdoor

advertising because outdoor advertising space is less expensive and

more cost-efficient than other media at reaching the advertiser's

target audience with the type of advertising message that the

advertiser prefers to deliver.

Outdoor advertising has prices and characteristics that are

distinct from other advertising media. An advertiser's evaluation of

the importance of these characteristics depends on the type of

advertising message the advertiser wishes to convey and the price the

advertiser is willing to pay to deliver that message. Many advertisers

who use outdoor advertising also advertise in other media, including

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. Because each exposure is brief, outdoor

advertising is most suitable for highly visual, limited information

advertising.

For many advertising customers, outdoor advertising's particular

combination of characteristics makes it an advertising medium for which

there are no close substitutes. Such customers who want or need to use

outdoor advertising would not switch to another advertising medium if

outdoor advertising prices increased by a small but significant amount.

Although some local and national advertisers may switch some of their

advertising to other media, rather than absorb a price increase in

outdoor advertising space, the existence of such advertisers would not

prevent outdoor advertising companies in the Four Counties from

profitably raising their prices a small but significant amount. At a

minimum, outdoor advertising companies could profitably raise prices to

those advertisers who view outdoor advertising as a necessary

advertising medium for them, or as a necessary advertising complement

to other media. Outdoor advertising companies negotiate prices

individually with advertisers. During individual price negotiations

between advertisers and outdoor advertising companies, advertisers

provide the outdoor advertising companies with information about their

advertising needs, including their target audience and the desired

exposure. Outdoor advertising companies thus have the ability to charge

advertisers differing rates based in part on the number and

attractiveness of competitive outdoor advertising companies that can

meet a particular advertiser's specific target needs. Because of this

ability to price discriminate among customers, outdoor advertising

companies may charge higher prices to advertisers that view outdoor

advertising as particularly effective for their needs, while

maintaining lower prices for other advertisers.

The Complaint alleges that Chancellor's proposed acquisition of

Kunz would lessen competition substantially in the sale of outdoor

advertising in each of the Four Counties. The proposed transaction

would create further market concentration in already highly

concentrated markets, and Chancellor would control a substantial share

of the outdoor advertising revenues in these markets. Using a measure

of market concentration called the Herfindahl-Hirschman Index

(``HHI''), explained in Appendix A annexed hereto, post acquisition:

a. In Kern County, California, Chancellor's share of the outdoor

advertising market, based on advertising revenues, would increase to

about 83 percent. The approximate post-merger HHI would be 7046,

representing an increase of about 1820.

b. In Kings County, California, Chancellor's share of the

outdoor advertising market, based on advertising revenues, would

increase to about 58 percent. The approximate post-merger HHI would

be 4205, representing an increase of about 714.

c. In Inyo County, California, Chancellor's share of the outdoor

advertising market, based on advertising revenues, would increase to

about 96 percent. The approximate post-merger HHI would be 9232,

representing an increase of about 4030.

d. In Mojave County, Arizona, Chancellor's share of the outdoor

advertising market, based on advertising revenues, would increase to

about 62 percent. The approximate post-merger HHI would be 4340,

representing an increase of about 770.

In each of the Four Counties, Chancellor and Kunz compete head-to-

head and, for many local and/or national advertisers buying space, they

are close substitutes for each other. During individual price

negotiations, advertisers that desire to reach a certain audience can

help ensure competitive prices by ``playing off'' Kunz against

Chancellor. Chancellor's acquisition of Kunz will end this competition.

After the acquisition, such advertisers will be unable to reach their

desired audiences with equivalent efficiency without using Chancellor's

outdoor advertising. Because advertisers seeking to reach these

audiences would have inferior alternatives to the merged entity as a

result of the acquisition, the acquisition would give Chancellor the

ability to raise prices and reduce the quality of its service to some

of its advertisers in each of the Four Counties.

New entry into the advertising market in response to a small but

significant price increase by the merged parties in any of these

markets is unlikely to be timely and sufficient to render the price

increase unprofitable.

For all of these reasons, plaintiff concludes that the proposed

transaction would lessen competition substantially in the sale of

outdoor advertising in the Four Counties, eliminate actual and

potential competition between Chancellor and Kunz, and result in

increased prices and/or reduced quality of services for outdoor

advertisers in each of the Four Counties, all in violation of Section 7

of the Clayton Act.

III. Explanation of the Proposed Final Judgment

The proposed Final Judgment would preserve existing competition in

the sale of outdoor advertising space in the Four Counties. It requires

the divestiture of either all Kunz or all Chancellor advertising assets

in each of the Four Counties; thus maintaining the level of competition

that existed premerger, and ensuring that the affected markets will

suffer no reduction in competition as a result of the merger.

Advertisers will continue to have alternatives to the merged firm in

purchasing outdoor advertising. Finally, the ownership structure is

maintained in that the number of competitors who may compete for

advertisers' business will remain unchanged.

[[Page 66827]]

Unless plaintiff grants an extension of time, the divestitures must

be completed within four (4) months after the filing of the Complaint

in this matter or within five (5) business days after notice of entry

of this Final Judgment by the Court, whichever is later. Until the

divestitures take place, Chancellor must maintain and operate the

advertising assets as active competitors; maintain the management,

staffing, sales, and marketing of the advertising assets; and maintain

the advertising assets in operable condition at current capacity

configuration.

The divestitures must be to a purchaser or purchasers acceptable to

the plaintiff in its sole discretion. Unless plaintiff otherwise

consents in writing, the divestitures shall include all the assets of

the outdoor advertising business being divested, and shall be

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

discretion, that such assets can and will be used as viable, ongoing

commercial outdoors/advertising businesses. In addition, the purchaser

or purchasers must intend in good faith to continue the operations of

the outdoor advertising businesses as were in effect in the period

immediately prior to the filing of the Complaint, unless any

significant change in the operations planned by a purchaser is accepted

by the plaintiff in its sole discretion. This provision is intended to

ensure that the outdoor advertising businesses to be divested remain

competitive with Chancellor's other outdoor advertising businesses in

the Four Counties.

If Chancellor fails to divest these outdoor advertising assets

within the time periods specified in the Final Judgment, the Court,

upon plaintiff's application, is to appoint a trustee nominated by

plaintiff to effect the divestitures. If a trustee is appointed, the

proposed Final Judgment provides that Chancellor will pay all costs and

expenses of the trustee and any professionals and agents retained by

the trustee. The compensation paid to the trustee and any persons

retained by the trustee shall be both reasonable in light of the value

of the advertising assets, and based on a fee arrangement providing the

trustee with an incentive based on the price and terms of the

divestitures and the speed with which they are accomplished. After

appointment, the trustee will file monthly reports with the plaintiff,

defendants and the Court, setting forth the trustee's efforts to

accomplish the divestitures ordered under the proposed Final Judgment.

If the trustee has not accomplished the divestitures within six (6)

months after its appointment, the trustee shall promptly file with the

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

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

why the required divestitures have not been accomplished and (3) the

trustee's recommendations. At the same time the trustee will furnish

such report to the plaintiff and defendants, who will each have the

right to be heard and to make additional recommendations.

The proposed Final Judgment contains provisions to ensure that

these outdoor advertising assets will be preserved, so that the

advertising assets remain viable competitors after divestiture.

The proposed Final Judgment requires Chancellor to provide at least

thirty (30) days notice to the Department of Justice before acquiring

more than a de minimis interest in any assets of, or any interest in,

another outdoor advertising company in the Four Counties. Such

acquisitions could raise competitive concerns but might be too small to

be reported otherwise under the Hart-Scott-Rodino (``HSR'') premerger

notification statute. Moreover, Chancellor may not agree to sell

outdoor advertising space for any other outdoor advertising company in

the Four Counties without providing plaintiff with notice. Thus, the

provision in the proposed Final Judgment ensures that the Department

will receive notice of and be able to act, if appropriate, to stop any

agreements that might have anticompetitive effects in the Four

Counties.

The relief in the proposed Final Judgment is intended to remedy the

likely anticompetitive effects of Chancellor's proposed transaction

with Kunz in the Four Counties. Nothing in this Final Judgment is

intended to limit the plaintiff's ability to investigate or to bring

actions, where appropriate, challenging other past or future activities

of defendants in the Four Counties.

IV. Remedies Available to Potential Private Litigants

Section 4 of the Clayton Act, 15 U.S.C. 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 nor assist the bringing of any private antitrust damage action.

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

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

subsequent private lawsuit that may be brought against defendants.

V. Procedures Available for Modification of the Propose Final

Judgment

The plaintiff and the defendants have stipulated that the proposed

Final Judgment may be entered by the Court after compliance with the

provisions of the APPA, provided that the plaintiff has not withdrawn

its consent. The APPA conditions entry upon the Court's determination

that the proposed Final Judgment is in the public interest.

The APPA provides a period of a least sixty (60) days preceding the

effective date of the proposed Final Judgment within which any person

may submit to the plaintiff written comments regarding the proposed

Final Judgment. Any person who wishes to comment should do so within

sixty (60) days of the date of publication of this Competitive Impact

Statement in the Federal Register. The plaintiff will evaluate and

respond to the comments. All comments will be given due consideration

by the Department of Justice, which remains free to withdraw its

consent to the proposed Final judgment at any time prior to entry. The

comments and the response of the plaintiff will be filed with the Court

and published in the Federal Register.

Written comments should be submitted to: Craig W. Conrath, Chief,

Merger Task Force, Antitrust Division, United States Department of

Justice, 1401 H Street, NW; Suite 4000, Washington, DC 20530.

The proposed Final Judgment provides that the Court retains

jurisdiction over this action, and that the parties may apply to the

Court for any order necessary or appropriate for the modification,

interpretation or enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

Plaintiff considered, as an alternative to the proposed Final

Judgment, a full trial on the merits of its Complaint against

defendants. Plaintiff is satisfied, however, that the divestiture and

other relief contained in the proposed Final Judgment will preserve

viable competition in the sale of outdoor advertising space in the Four

Counties. Thus, the proposed Final Judgment would achieve the relief

the government would have obtained through litigation, but avoids the

time, expense and uncertainty of a full trial on the merits of the

Complaint.

[[Page 66828]]

VII. Standard of Review Under the APPA for Proposed Final Judgment

The APPA requires that proposed consent judgments in antitrust

cases brought by the United States be subject to a sixty (60) day

comment period, after which the Court shall determine whether entry of

the proposed Final Judgment ``is in the public interest.'' In making

that determination, the Court may consider--

(1) The competitive impact of such judgment, including

termination of alleged violations, provisions for enforcement and

modification, duration or relief sought, anticipated effects of

alternative remedies actually considered and any other

considerations bearing upon the adequacy of such judgment;

(2) The impact of entry of such judgment upon the public

generally and individuals alleging specific injury from the

violations set forth in the complaint including consideration of the

public benefit, if any, to be derived from a determination of the

issues at trial.

15 U.S.C. 16(e).

As the United States Court of Appeals for the D.C. Circuit held,

this statute permits a court to consider, among other things, the

relationship between the remedy secured and the specific allegations

set forth in the government's complaint, whether the decree is

sufficiently clear, whether enforcement mechanisms are sufficient and

whether the decree may positively harm third parties. See United States

v. Microsoft, 56 F.3d 1448, 1461-62 (D.C. Cir. 1995).

In conducting this inquiry, ``[t]he Court is nowhere compelled to

go to trial or to engage in extended proceedings which might have the

effect of vitiating the benefits of prompt and less costly settlement

through the consent decree process.'' \1\ Rather,

\1\ 119 Cong. Rec. 24598 (1973). See United States v. Gillette

Co., 406 F. Supp. 713, 715 (D. Mass. 1975). A ``public interest''

determination can be made properly on the basis of the Competitive

Impact Statement and Response to Comments filed pursuant to the

APPA. Although the APPA authorizes the use of additional procedures,

15 U.S.C. 16(f), those procedures are discretionary. A court need

not invoke any of them unless it believes that the comments have

raised significant issues and that further proceedings would aid the

court in resolving those issues. See H.R. Rep. 93-1463, 93rd Cong.

2d Sess. 8-9 (1974), reprinted in U.S.C.C.A.N. 6535, 6538.

[a]bsent a showing of corrupt failure of the government to discharge

its duty, the Court, in making its public interest finding, should *

* * carefully consider the explanations of the government in the

competitive impact statement and its responses to comments in order

to determine whether those explanations are reasonable under the

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circumstances.

United States v. Mid-America Dairymen, Inc., 1977-1 Trade Cas. para.

61,508, at 71,980 (W.D. Mo. 1977).

Accordingly, with respect to the adequency of the relief secured by

the decree, a court may not ``engage in an unrestricted evaluation of

what relief would best serve the public.'' United States v. BNS, Inc.,

858 F.2d 456, 462 (9th Cir. 1988), citing United States v. Bechtel

Corp., 648 F.2d 660, 666 (9th Cir.) cert. denied, 454 U.S. 1083 (1981);

see also Microsoft, 56 F.3d at 1460-62. Precedent requires that

the balancing of competing social and political interests affected

by a proposed antitrust consent decree must be left, in the first

instance, to the discretion of the Attorney General. The court's

role in protecting the public interest is one of insuring that the

government has not breached its duty to the public in consenting to

the decree. The court is required to determine not whether a

particular decree is the one that will best serve society, but

whether the settlement is ``within the reaches of the public

interest.'' More elaborate requirements might undermine the

effectiveness of antitrust enforcement by consent decree.\2\

\2\ Bechtel, 648 F.2d at 666 (citations omitted) (emphasis

added); see BNS, 858 F.2d at 463; United States v. National

Broadcasting Co., 449 F. Supp. 1127, 1143 (C.D. Cal. 1978); Gillette

406 F. Supp. at 716. See also Microsoft, 56 F.3d at 1461 (whether

``the remedies [obtained in the decree are] so inconsonant with the

allegations charged as to fall outside of the `reaches of the public

interest' '') (citations omitted).

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The proposed Final Judgment, therefore, should not be reviewed

under a standard of whether it is certain to eliminate every

anticompetitive effect of a particular practice or whether it mandates

certainty of free competition in the future. Court approval of a final

judgment requires a standard more flexible and less strict than the

standard required for a finding of liability. ``[A] proposed decree

must be approved even if it falls short of the remedy the court would

impose on its own, as long as it falls within the range of

acceptability or is `within the reaches of public interest.' '' \3\

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\3\ United States v. American Tel. and Tel. Co., 552 F. Supp.

131, 151 (D.D.C. 1982), aff'd. sub nom. Maryland v. United States,

460 U.S. 1001 (1983), quoting Gillette, 406 F. Supp. at 716

(citations omitted); United States v. Alcan Aluminum, Ltd., 605 F.

Supp. 619, 622 (W.D. Ky. 1985).

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The relief obtained in this case is strong and effective relief

that should fully address the competitive harm posed by the proposed

transaction.

VIII. Determinative Documents

There are no determinative materials or documents within the

meaning of the APPA that were considered by the plaintiff in

formulating the proposed Final Judgment.

Dated: November 17, 1998.

Respectfully submitted,

Barry L. Creech,

D.C. Bar No.--421070, Merger Task Force, U.S. Department of Justice,

Antitrust Division, 1401 H Street, NW.; Suite 4000, Washington, DC

20530, (202) 307-0001.

Exhibit A Definition of HHI and Calculations for Market

``HHI'' means the Herfindahl-Hirschman Index, a commonly accepted

measure of market concentration. It is calculated by squaring the

market share of each firm competing in the market and then summing the

resulting numbers. For example, for a market consisting of four firms

with shares of thirty, thirty, twenty and twenty percent, the HHI is

2600

(302+302+202+202=2600). The

HHI takes into account the relative size and distribution of the firms

in a market and approaches zero when a market consists of a large

number of firms of relatively equal size. The HHI increases both as the

number of firms in the market decreases and as the disparity in size

between those firms increases.

Markets in which the HHI is between 1000 and 1800 points are

considered to be moderately concentrated, and those in which the HHI is

in excess of 1800 points are considered to be concentrated.

Transactions that increase the HHI by more than 100 points in

concentrated markets presumptively raise antitrust concerns under the

Merger Guidelines. See Merger Guidelines Sec. 1.51.

Certificate of Service

I, Barry L. Creech, hereby certify that, on November 16, 1998, I

caused the foregoing documents to be served on defendants Kunz &

Company and Chancellor Media Corporation by having a copy mailed,

first-class, postage prepaid, to:

Steven H. Schulman, Bruce J. Prager, Latham & Watkins, 1001

Pennsylvania Ave., NW., Suite 1300, Washington, DC 20004, Counsel for

Chancellor Media Corporation

Riccarda Heising, Powell, Goldstein, Frazer & Murphy LLP, 191 Peachtree

Street, NE., 16th Floor, Atlanta, GA 30603, Counsel for Kunz & Company

Barry L. Creech,

D.C. Bar No.--421070.

[FR Doc. 98-32148 Filed 12-2-98; 8:45 am]

BILLING CODE 4410-11-M