United States v. Capstar Broadcasting Corporation and Triathlon Broadcasting Company; Proposed Final Judgment and Competitive Impact Statement

DEPARTMENT OF JUSTICE

Antitrust Division

United States v. Capstar Broadcasting Corporation and Triathlon

Broadcasting Company; Proposed Final Judgment and Competitive Impact

Statement

Notice is hereby given pursuant to the Antitrust Procedures and

Penalties Act, 15 U.S.C. Section 16(b) through (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. Capstar Broadcasting

Corporation and Triathlon Broadcasting Company, Civil Action No. 99-

CV00993. On April 21, 1999, the United States filed a Complaint

alleging that the proposed acquisition by Capstar Broadcasting

Corporation (``Capstar'') of the radio assets of Triathlon Broadcasting

Company (``Triathlon'') in Wichita, Kansas, would violate Section 7 of

the Clayton Act, 15 U.S.C. 18. The proposed Final Judgment, filed the

same time as the Compliant, requires Capstar to divest five radio

stations in Wichita pursuant to the Final Judgment. Copies of the

Complaint, proposed Final Judgment and Competitive Impact

[[Page 31613]]

Statement are available for inspection at the Department of Justice in

Washington, DC in Room 215, 325 Seventh Street, NW, and at the Office

of the Clerk of the United States District Court for the District of

the District of Columbia.

Public comment is invited within 60 days of the date of this

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

Federal Register and filed with the Court. Comments should be directed

to Craig W. Conrath, Chief Merger Task Force, Antitrust Division,

Department of Justice, 1401 H St. NW., Suite 4000, Washington, DC 20530

(telephone: (202) 307-0001).

Constance K. Robinson,

Director of Operations & Merger Enforcement.

United States of America, United States Department of Justice,

Antitrust Division, 4000 City Center Building, Washington, DC 20530,

Plaintiff, v. Capstar Broadcasting Corporation, 600 Congress Ave.

Suite 1400, Austin, TX 78701 and Triathlon Broadcasting Company, 750

B Symphony Towers, Suite 1920, San Diego, CA 92101, Defendants.

[Civil Action No. 990993]

Stipulation

It is stipulated by and between the undersigned parties by their

respective attorneys, as follows:

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

action and the parties have agreed to waive all objections to personal

jurisdiction and venue 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. 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. 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.

5. In the event plaintiff withdraws its consent, as provided in

paragraph 2 above, or in the event 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.

6. 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: April 20, 1999.

For Plaintiff United States of America.

Karl D. Knutsen,

United States Department of Justice, Antitrust Division, Merger Task

Force, 1401 H Street, N.W., Washington, D.C. 20530, (202) 514-0976.

For Defendant Capstar Broadcasting Corporation.

Neil W. Imus,

Vinson & Elkins L.L.P., 1455 Pennsylvania Ave., N.W., Washington, D.C.

20006, (202) 639-6675.

For Defendant Triathlon Broadcasting Company.

David J. Laing,

Baker & McKenzie, 815 Connecticut Ave., NW., Washington, DC 20006,

(202) 452-7023.

United States of America, Plaintiff, v. Capstar Broadcasting

Corporation, and Triathlon Broadcasting Company, Defendants.

[Civil Action No. 99 0993]

Final Judgment

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

complaint in this action on April 21, 1999, and plaintiff and

defendants Capstar and Triathlon 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, these 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 the prompt and

certain divestiture of certain assets to assure that competition is not

substantially lessened;

And Whereas, plaintiff requires Defendants to make certain

divestitures for the purpose of remedying the loss of competition

alleged in the complaint;

And Whereas, Defendants have represented to the plaintiff that the

divestitures ordered herein can and will be made and that Defendants

will not later raise claims of hardship, contractual bar, or difficulty

as grounds for asking the Court to delay or modify the divestiture

described 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 and over

the subject matter of this action, and Defendants have agreed to waive

any objection to personal jurisdiction or venue. 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. ``Capstar'' means defendant Capstar Broadcasting Corporation, a

Delaware corporation with its headquarters in Austin, 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 Hicks, Muse, Tate,

& Furst Incorporated (``Hicks-Muse''), a Delaware corporation with its

headquarters in Dallas, Texas.

B. ``Triathlon'' means defendant Triathlon Broadcasting Company, a

Delaware corporation with its headquarters in San Diego, California,

and its successors, assigns, subsidiaries, divisions, groups,

affiliates, partnerships and joint ventures, and directors, officers,

managers, agents, and employees.

C. ``Defendants'' means Capstar and Triathlon.

D. ``Antitrust Division'' means the Antitrust Division of the

United States Department of Justice.

E. ``Radio Assets'' means all of the assets, tangible or

intangible, used in the operation of the radio stations KEYN-

[[Page 31614]]

FM, KWSJ-FM, KNSS-AM, KFH-AM, and KQAM-AM, that sell advertising time

in Wichita, Kansas, including all real property (owned or leased) used

in the operation of these stations, all broadcast equipment, office

equipment, office furniture, fixtures, materials, supplies, and other

tangible property used in the operation of these stations; all

licenses, permits, authorizations, and applications therefor issued by

the Federal Communications Commission (``FCC'') and other government

agencies related to these stations; all contracts, agreements, leases

and commitments of Defendants relating to their operations; all

trademarks, service marks, trade names, copyrights, patents, slogans,

programming materials, and promotional materials relating to these

stations; and all logs and other records maintained by the operator or

owner in connection with its business, except that in the case of KNSS-

AM, the divestiture may include only those assets necessary to continue

the transmitting, programming, and selling of that station in its

present form.

F. ``Acquirer'' means the entity to whom defendant Capstar divests

the Radio Assets.

G. ``Wichita'' means the Wichita, Kansas Metropolitan Survey Area,

which includes Sedgwick, Harvey and Butler Counties, Kansas.

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,

specifically including any trustee or trustees appointed by defendant

pursuant to an FCC Trust Agreement (as defined in Section V(A))

applicable to the Radio Assets.

B. Defendant Capstar shall require, as a condition of the sale or

other disposition of any of the Radio Assets, that the Acquirer or

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

IV. Divestiture of Radio Assets

A. Capstar is hereby ordered and directed in accordance with the

terms of this Final Judgment to divest the Radio Assets to (i) an

Acquirer acceptable to the Antitrust Division at its sole discretion or

(ii) the Trustee identified pursuant to Sec. V at the same time it

acquires Triathlon. Unless plaintiff otherwise consents in writing, the

divestiture pursuant to the section IV of this Final Judgment, or by

the Trustee appointed pursuant to Section V, shall include all the

Radio Assets and shall be accomplished in such a way as to satisfy

plaintiff, in its sole discretion, that the Radio Assets can and will

be used by an Acquirer as a viable and ongoing radio business. The

divestiture, whether pursuant to section IV or section V of this Final

Judgment, shall be made (1) to an Acquirer that, in the sole judgment

of plaintiff, has the capability and the intent of completing

effectively, and has the managerial, operational, and financial

capability to compete effective as a radio operator in the Wichita

area; and (2) pursuant to agreements the terms of which shall not, in

the sole judgment of plaintiff, interfere with the ability of the

Acquirer to compete effectively.

B. Defendant Capstar agrees to use its best efforts to divest the

Radio Assets, and to obtain all regulatory approvals necessary for such

divestiture, as expeditiously as possible.

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

defendant Capstar promptly shall make known, by usual and customary

means, the availability of the Radio Assets. Defendant Capstar shall

inform any person making an inquiry regarding a possible purchase that

the sale is being made pursuant to this Final Judgment and provide each

person with a copy of this Final Judgment. Defendant Capstar shall make

known to any person making an inquiry regarding a possible purchase of

the Radio Assets described in Section II that the Radio Assets are

being offered for sale. Capstar shall also offer to furnish all

prospective purchasers, subject to customary confidentiality

assurances, all information regarding the Radio Assets customarily

provided in a due diligence process, except such information that is

subject to attorney-client privilege or attorney-work product

privilege. Defendant Capstar shall make available such information to

plaintiff at the same time that such information is made available to

any other person.

D. In accomplishing the divestiture ordered by this Section IV,

defendant Capstar shall permit prospective purchasers of the Radio

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

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

and information, as is customary in a due diligence process.

E. Defendant Capstar shall not interfere with any efforts by any

Acquirer to employ the general manager or any other employee of the

Radio Assets.

V. Appointment of Trustee

A. In the event that Capstar has not divested the Radio Assets in

the time period specified in Sec. IV above, Henry M. Rivera shall,

subject to the prior approval of the FCC, become Trustee (the

``Trustee'') to effect the operation and sale of the Radio Assets

pursuant to an FCC Trust Agreement submitted by Capstar to the FCC, as

amended, and attached to this proposed Final Judgment as Exhibit A (the

``FCC Trust Agreement''). In the event of Mr. Rivera's resignation,

incapacity to act, death, or insolvency, the Court shall appoint, on

application of plaintiff and subject to such prior approvals as may be

required, a Trustee selected by plaintiff, to effect the divestiture of

the assets.

B. After the Trustee's appointment has become effective, only the

Trustee shall have the right to sell the Radio Assets. The Trustee

shall have the power and authority to accomplish the sale pursuant to

the conditions of the FCC Trust Agreement.

C. The Trustee shall serve at the cost and expense of defendant

Capstar, on such terms and conditions contained in the FCC Trust

Agreement or 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 pursuant to the attached FCC Trust

Agreement.

D. Defendants shall take no action to interfere with or impede the

Trustee's accomplishment of the divestiture of the Radio Assets, and

shall use their best efforts to assist the Trustee in accomplishing the

required divestiture, including its best efforts to effectuate all

necessary regulatory approvals. Subject to a customary confidentiality

agreement, the Trustee shall have full and complete access to the

personnel, books, records and facilities related to the Radio Assets,

and, at the Trustee's request, Defendants shall develop such financial

or other information as may be necessary for the divestiture of the

Radio Assets. The Trustee shall permit prospective purchasers of the

Radio Assets to have access to personnel and to make such inspection of

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

documents and information as may be relevant to the divestiture

required by this Final Judgment.

E. After his appointment becomes effective, the Trustee shall file

reports pursuant to this Final Judgment and the FCC Trust Agreement

with defendant Capstar, the plaintiff, and the Court, setting forth the

Trustee's efforts to accomplish divestiture of the Radio

[[Page 31615]]

Assets as contemplated under this Final Judgment; provided, however,

that to the extent that 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 Radio 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 the Radio Assets.

F. Within four (4) months after the date of entry of this proposed

Final Judgment, if the Trustee has not accomplished the divestiture

required by Section V of 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 at the same time shall furnish such

reports to the plaintiff and to defendant Capstar, which shall have the

right to be heard and to make additional recommendations. The Court

shall thereafter enter such orders as it deems appropriate to

accomplish the purpose of this Final Judgment, which shall, if

necessary, include extending the term of the Trustee's appointment

after all applicable government approvals are obtained.

G. Upon divestiture of the radio assets, the FCC Trust will be

deemed terminated and the Trustee discharged.

VI. Notice

Capstar shall provide advance notification of the Antitrust

Division when it directly or indirectly acquires any assets of or any

interest (including any financial, security, loan, equity or management

interest) in any broadcast radio station that sells advertising time in

Wichita, Kansas, or enters into any joint sales agreement or any

cooperative selling arrangement with any other operator of radio

stations serving listeners in Wichita, Kansas. This obligation to

provide notice is met under this section when a transaction is 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'').

Notification under this section shall be provided to the Antitrust

Division 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 the sales of radio advertising time in Wichita.

Notification shall be provided at least thirty (30) days prior to the

acquisition of 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 the Antitrust Division make a written request for

additional information, Defendant Capstar 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 uncertainty regarding the filing of notice under this Section shall

be resolved in favor of filing notice.

VII. Preservation of Assets/Hold Separate

Until the divestiture of the Radio Assets required by Sections IV

or V of the Final Judgment has been accomplished:

A. Defendants shall take all steps necessary to operate the Radio

Assets as separate, independent, ongoing, economically viable and

active competitors to the other stations in Wichita, Kansas, and shall

take all steps necessary to ensure that, except as necessary to comply

with Section IV and paragraphs B and C of this Section of the Final

Judgment, the management of said stations, including the performance of

decision-making functions regarding marketing and pricing, will be kept

separate and apart from, and not influenced by, defendant Capstar in

the case of Triathlon stations and defendant Triathlon in the case of

Capstar stations.

B. Defendants shall use all reasonable efforts to maintain and

increase sales of advertising time by the Radio Assets, and shall

maintain at 1997, 1998, or previously approved levels for 1999,

whichever are higher, promotional advertising, sales, marketing and

merchandising support for such radio stations.

C. Defendants shall take all steps necessary to ensure that the

assets used in the operation of the Radio Assets are fully maintained.

The sales and marketing employees of the Radio Assets shall not be

transferred or reassigned to any other station, except for transfer

bids initiated by employees pursuant to each defendant's regular,

established job posting policies, provided that Defendants give

plaintiff and Acquirer ten (10) days' notice of such transfer.

D. Defendant Capstar shall not, except as part of a divestiture

approved by plaintiff, sell any Radio Assets.

E. Defendants shall take no action that would jeopardize the sale

of the Radio Assets.

F. Defendant Capstar shall appoint a person or persons to oversee

the assets to be held separate who will be responsible for Defendant's

compliance with Section VI of this Final Judgment.

VIII. Financing

Defendant Capstar is ordered and directed not to finance all or any

part of any purchase by an Acquirer made pursuant to Sections IV or V

or this Final Judgment.

IX. Compliance Inspection

For purposes of determining or securing compliance with the Final

Judgment or determining whether the Final Judgment should be modified

or terminated 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.

[[Page 31616]]

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 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

Section IX or X 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 the 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

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.

X. Affidavits

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

Judgment and every thirty (30) calendar days thereafter until the

divestiture has been completed, whether pursuant to Section IV or

Section V of this Final Judgment, defendant Capstar shall deliver to

plaintiff an affidavit as to the fact and manner of defendant's

compliance with Section IV or V of 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, was contacted by defendant, or its representatives,

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

into negotiations to acquire, or made an inquiry about acquiring, any

interest in the Radio Assets, 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 defendant Capstar has taken

to solicit a buyer for the Radio Assets.

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

Judgment, defendant Capstar shall deliver to plaintiff an affidavit

which describes in reasonable detail all actions defendant Capstar has

taken and all steps defendant Triathlon has implemented on an on-going

basis to preserve the Radio Assets describing any changes to the

efforts and actions outlined in its earlier affidavit(s) filed pursuant

to this section within fifteen (15) calendar days after such change is

implemented.

C. Defendant Capstar shall preserve all records of all efforts to

preserve the Radio Assets and to divest the Radio Assets.

XI. 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.

XII. Termination

Unless this Court grants an extension, this Final Judgment will

expire upon the tenth anniversary of the date of its entry.

XIII. Public Interest

Entry of this Final Judgment is in the public interest.

Dated:---------------------------------------------------------------

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

United States District Judge

ATTACHMENT A

Wichita Stations Trust Agreement

THIS TRUST AGREEMENT (the ``Trust Agreement'') is entered into

as of April 30, 1999, and shall be effective April 30, 1999, by and

between Capstar Broadcasting Corporation, a Delaware corporation

(``Beneficiary''), and Henry M. Rivera (the ``Trustee'').

Recitals

A. Beneficiary, through subsidiaries, holds various licenses,

permits and authorizations issued by the Federal Communications

Commission (the ``FCC'') with respect to the radio station in the

Wichita, Kansas radio market (the ``Wichita Market'') listed on

Annex A hereto (the ``Capstar Wichita Station'').

B. Pursuant to the Agreement and Plan of Merger dated as of July

23, 1998 (the ``Purchase Agreement''), among Capstar Radio

Broadcasting Partners, Inc., TBC Radio Acquisition Corp., a wholly-

owned subsidiary of Capstar Radio Broadcasting Partners, Inc.

(``Merger Sub''), and Triathlon Broadcasting Company, a Delaware

corporation (``Triathlon''), Merger Sub will be merged (the

``Merger'') with and into Triathlon, with Triathlon being the

surviving corporation and an indirect wholly-owned subsidiary of

Beneficiary. Triathlon, through its subsidiaries, holds various

licenses, permits, and authorizations issued by the FCC with respect

to certain radio stations in the Wichita Market listed on Annex B

hereto (the ``Triathlon Wichita Stations''). The Merger will result

in the attribution to Beneficiary of the Triathlon Wichita Stations.

Accordingly, each reference in this Trust Agreement to Beneficiary

shall be deemed, following the consummation of the merger, to

include Triathlon, and the Capstar Wichita Station and the Triathlon

Wichita Stations shall be referred to collectively as the

``Stations.''

C. The Communications Act of 1934, as amended, and the rules,

regulations, and policies of the FCC (collectively, the

``Communications Act'') do not permit Beneficiary to own and operate

all of the Stations. Beneficiary desires to enter into this Trust

Agreement to facilitate consummation of the Merger by assuring that

such consummation will not result in the attribution to Beneficiary

of radio stations with overlapping signal contours in the Wichita

Market in contravention of the Communications Act.

D. Interim acquisition by the Trustee of the Station Assets (as

hereinafter defined) for the purpose of holding and operating the

same for productive business use and selling the Station Assets to a

government-approved buyer or buyers pursuant to the Final Judgment

in United States v. Capstar Broadcasting Corporation and Triathlon

Broadcasting Company, C.A. No. __________ (D.D.C. Apr. ____, 1999)

as proposed, entered or modified (the ``Final Judgment'') (proposed

Final Judgment attached hereto), provided that the Trustee continues

to operate the Stations until such a sale can be consummated, would

provide an appropriate mechanism to facilitate consummation of the

Merger while complying with the laws and regulations relating to

transactions of this type, and accordingly the Trustee and

Beneficiary desire to associate together for the joint conduct of

the business of holding and operating such Station Assets.

Now, Therefore, in consideration of the recitals and of the

respective agreements and covenants contained herein, and other good

and valuable consideration, the receipt and sufficiency of which are

hereby acknowledged, the parties, intending to be legally bound

hereby, agree as follows:

Agreements

1. Creation and Purpose of The Wichita Stations Trust. Subject

to the terms and conditions hereof, a trust in respect of the

Stations is hereby created and established, to be known as the

``Wichita Stations Trust,'' and the Trustee hereby accepts the trust

created hereby and agrees to serve as trustee hereunder. The trust

created hereby shall be irrevocable until such time as the Trustee

sells the Station Assets to a government-approved buyer or buyers.

2. Assets to be Conveyed; Assumption of Obligations.

[[Page 31617]]

(a) From time to time on or before consummation of the Merger,

Beneficiary shall convey, transfer, assign, and deliver to Trustee,

and Trustee shall acquire and assume from Beneficiary, all of

Beneficiary's right, title, interest, and obligations in and to all

of the assets, properties, contracts, leases, and agreements that

are used, held for use, useful or necessary in the conduct of the

business and operation of each Station as of the date of this Trust

Agreement, including the following assets:

(i) All of Beneficiary's right, title and interest in and to the

licenses, permits and other authorizations issued by any

governmental authority and used, held for use, useful or necessary

in the conduct of the business and operation of any Station,

including the call letters of each Station and any applications for

such licenses, permits and authorizations;

(ii) All of Beneficiary's right, title and interest in and all

to all real property, including leasehold interests and easements,

used, held for use, useful or necessary in the conduct of the

business and operation of any Station;

(iii) All equipment, office furniture and fixtures, office

materials and supplies, inventory, spare parts, motor vehicles and

other tangible personal property of every kind and description,

owned, leased or held by Beneficiary and used, held for use, useful

or necessary in the conduct of the business and operation of the

Stations;

(iv) All cash in each Station's operating bank accounts;

(v) All accounts receivable arising out of the operation of each

Station;

(vi) All of Beneficiary's rights under and interest in all

contracts relating to the conduct of the business of any Station

(the ``Assumed Contracts''), and any contract for the sale of the

Stations as contemplated by Section 3;

(vii) All programs and programming materials of whatever form or

nature owned by Beneficiary and used or held for use on or by any

Station;

(viii) All of Beneficiary's rights, title and interest in and to

the trademarks, trade names, service marks, franchises, copyrights,

including registrations and applications for registration of any of

them and good will related thereto, jingles, logos, slogans,

licenses, permits and privileges owned or held by Beneficiary and

used, held for use, useful or necessary in the conduct of the

business and operation of any Station;

(ix) All files, records, books of account, computer programs and

software and logs relating to the operation of any Station,

including payable records, receivable records, invoices, statements,

traffic material, programming information and studies, technical

information and engineering data, news and advertising studies and

consultants' reports, ratings reports, marketing and demographic

data, sales correspondence, lists of advertisers, promotional

materials, credit and sales reports, budgets, financial reports and

projections, sales, operating and business plans, filings with the

FCC and original executed copies of all written contracts to be

assigned hereunder.

(x) All of Beneficiary's rights under manufacturers' and

vendors' warranties relating to items included in the Station Assets

and all similar rights against third parties relating to items

included in the Station Assets to the extent contractually

assignable; and

(xi) All intangible assets of Beneficiary relating to any

Station or the business and operation of any Station not

specifically described above, including goodwill, and all other

assets used or held for use in connection with any Station.

The assets to be transferred to the Trustee hereunder are

hereinafter collectively referred to as the ``Station Assets.''

Notwithstanding this Section 2(a), beneficiary and Trustee

acknowledge that the Station Assets shall include only those assets

that Beneficiary would have sold to a third party in an arms-length

transaction involving the Stations consistent with the Final

Judgment. The Trustee shall retain and hold the Station Assets only

in accordance with the terms and conditions set forth in this Trust

Agreement.

(b) The Trustee shall assume and be solely responsible for the

payment, performance and discharge of all of Beneficiary's

liabilities, obligations, and duties under or in respect of the

Assumed Contracts that relate to and accrue in the period after

transfer of the Station Assets. Except as specifically provided in

this Trust Agreement, the Trustee shall not be liable for and shall

not assume any liabilities, obligations, or duties of Beneficiary

(whether known or unknown, matured or unmatured, or fixed or

contingent).

(c) Prior to the date hereof, Beneficiary shall have obtained

policies of insurance, or procured the amendment of or riders to

existing policies of insurance, to provide insurance coverage

related to the Station Assets under the umbrella policies currently

held by Beneficiary. All such policies shall name the Trustee as the

insured or an additional insured and shall not be canceled or

amended without thirty (30) days prior written notice to the

Trustee. The Trustee is hereby authorized to make payment of all

premiums, and all deductibles and excesses, related to such policies

of insurance in the same manner as any other expense in the ordinary

course of business of the Stations.

3. Management and Other Actions by Trustee.

(A) The Wichita Stations Trust is authorized to carry on

business. During the term of this Trust Agreement, the right to

manage and direct the management of the business of the Stations

shall be solely vested in the Trustee, subject to the following:

(i) The Trustee shall have the obligation to consummate the sale

of the Station Assets within four (4) months from the date of the

entry of the Final Judgment, pursuant to the conditions contained

herein and at a price that renders to Beneficiary the maximum cash

present value for the Station Assets. The Trustee has read that

certain Stipulation and Order and the proposed Final Judgment

attached thereto which Beneficiary executed on April ____, 1999, in

the Civil Action styled ``United States v. ____________,'' which

Final Judgment shall apply to the Trustee under Section III(A)

thereof effective this date, consistent with the obligations assumed

by Beneficiary under the Stipulation and Order (attached hereto).

Without limiting the generality of the foregoing, the Trustee shall

have the power and authority to hire at the cost and expense of

Beneficiary any investment bankers, attorneys or other agents

reasonably necessary, in the judgment of the Trustee, to assist in

the sale of the Station Assets, and such professionals or agents

shall be solely accountable to the Trustee. The Trustee shall have

the power and authority to accomplish the sale of the Station Assets

at the earliest possible time to any purchaser approved by the

Department of Justice (``DOJ'') who the DOJ determines has the

intent and managerial, operational and financial capability to

compete effectively as a radio station operator in the Wichita

Market. Beneficiary shall not take any action to jeopardize the

Trustee's sale of the Station Assets, but shall use its best efforts

to assist the Trustee in accomplishing the required sale, including

its best efforts to effect all regulatory approvals. The Trustee and

Beneficiary shall permit prospective purchasers of the Stations to

have access to personnel and to make such inspection of physical

facilities and any and all financial, operational and other

documents and information as may be relevant to the sale of the

Station Assets. To facilitate the sale of the Station Assets, the

Trustee may request in writing from Beneficiary such representations

and warranties, consents, information, covenants and indemnities

(which may be directly provided by Beneficiary to a buyer, as

negotiated and determined by the Trustee, so long as notice and

copies of any such communications are given by Beneficiary to the

Trustee) regarding such sale, and such request shall not be

unreasonably denied.

(ii) In fulfilling its obligations to effectuate the sale of the

Station Assets, the Trustee shall take all actions necessary or

appropriate to effectuate the transfer of title to the Station

Assets held by the Trustee pursuant to this Trust Agreement to (and

assumption of the liabilities, obligations and commitments of the

Station Assets by) an unaffiliated third party. In this regard, the

Trustee shall enter into appropriate agreements and submit and fully

prosecute appropriate applications to the FCC requesting approval to

assign the Station Assets. The Trustee also shall seek and obtain

the prior approval of the DOJ for the sale of the Station Assets.

Beneficiary shall have the right to request the Trustee to sell the

Station Assets to an unaffiliated third party it a binding contract

(an ``Existing Sale Agreement'') has been entered into, but not

consummated, prior to the effective date of this Trust Agreement. If

the DOJ concurs with such sale, the Trustee shall take all necessary

and appropriate actions to effectuate the sale as provided herein

and therein, including without limitation by accepting the

assignment of the Existing Sale Agreement.

(iii) The Trustee shall file monthly reports with Beneficiary

and the DOJ setting forth the Trustee's efforts to sell the Station

Assets as contemplated by this Trust Agreement. Such

[[Page 31618]]

reports shall be designated confidential and 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 Station Assets,

and shall describe in detail each contact with any such person

during that period. The Trustee shall maintain full records of all

efforts undertaken to sell the Station Assets. If the Trustee has

failed to consummate the sale of the Station Assets within four (4)

months from the date of the entry of the Final Judgment, the Trustee

shall promptly produce a report stamped confidential to Beneficiary,

the DOJ and the Court setting forth (1) the Trustee's efforts to

sell the Station Assets; (2) the reasons, in the Trustee's judgment,

why the required sale has not been consummated; and (3) the

Trustee's recommendations.

(iv) Within five (5) business days following execution of a

binding agreement for the sale of the Station Assets, including all

contemplated ancillary agreements (e.g., financing agreements), to

effect, in whole or in part, the sale of the Station Assets, the

Trustee shall notify Beneficiary and the DOJ of the proposed sale.

The notice (as provided for herein) 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 desire to, acquire any ownership

interest in the Station Assets, together with the full details of

same. Within fifteen (15) calendar days of receipt by the DOJ, the

DOJ may request from Beneficiary, the proposed purchaser, any other

third party, or the Trustee, additional information concerning the

proposed sale, the proposed purchaser and any other potential

purchaser. Beneficiary and the Trustee shall furnish the requested

information within fifteen (15) calendar days of receipt of the

request. Within thirty (30) calendar days after receipt of the

notice or within twenty (20) calendar days after the DOJ has been

provided the additional information, whichever is later, the DOJ

shall provide written notice to Beneficiary and the Trustee, stating

whether or not it objects to the proposed sale. If the DOJ fails to

object within the period specified, or if the DOJ provides written

notice that it does not object, then the DOJ will be deemed to have

approved the sale pursuant to the trust agreement. Beneficiary may

only object to the sale where the Trustee has acted with

malfeasance.

(v) The Trustee shall have absolute and complete control over

the operations of the Station Assets pending their sale. The Trustee

shall operate the Stations as separate, independent, ongoing,

economically viable and active competitors to Beneficiary, and the

Trustee shall ensure that the management of the Stations is kept

separate and apart from, and not influenced by, Beneficiary. The

Trustee shall use all reasonable efforts to maintain and increase

sales of advertising time, and to maintain promotional advertising,

sales, marketing and merchandising support for the Stations at 1998

levels or greater.

(vi) The Trustee shall conduct the operations of the Stations in

accordance with its duties as a licensee of the FCC. In addition,

the Trustee shall, within fifteen (15) days of the end of each

calendar month, provide to Beneficiary's Chief Financial Officer

such monthly financial reports consisting of unaudited balance

sheets of the Stations and related statements of operations and cash

flows for the month and three-month period then ended as shall be

necessary for Beneficiary to meet its financial reporting

requirements to its accountants, lenders, the Securities and

Exchange Commission and any other governmental authorities of

competent jurisdiction. In no case shall such information be

provided to Beneficiary's employees who are involved in the

management or operation of Beneficiary's radio stations in the

Wichita Market.

(vii) Any employee hired by the Trustee who is not employed at

the Stations as of the effective date of this Trust Agreement shall

not be a 1% or greater shareholder, director, officer, or employee

of Beneficiary or its affiliates, and may not have any business and

familial relationship (as defined in the FCC Policy Statement in MM

Docket No. 85-218, FCC 86-67 (March 17, 1986)) with Beneficiary or

with any 1% or greater shareholder, director, officer, or employee

of Beneficiary or its affiliates.

(b) The trustee shall cause any employee hired by him pursuant

to Section 3(a)(vii) and any person previously employed by

Beneficiary whom the Trustee elects to retain, to execute and

deliver to the Trustee an agreement, in form and substance

acceptable to the Trustee, pursuant to which such employee agrees to

comply with the rules, regulations and policies of the FCC,

including without limitation all rules, regulations and policies

governing communications among such employee and Beneficiary or its

officers, directors, employees, and affiliates, regarding the

Stations and their management and operations.

(c) Effective as of the effective date of this Trust Agreement,

the Trustee will hire on behalf of the Wichita Stations Trust those

current employees of the Stations on the same terms and conditions

as such employees were employed by Beneficiary, provided that the

Trustee is not required to provide such employees with any medical,

pension, insurance or other employee benefit plans, programs or

arrangements. To the extent that Beneficiary provides such employees

of the Wichita Stations Trust with group medical, group insurance

and/or pension plan benefits on or after the date of this Trust

Agreement through plans maintained by Beneficiary for its employees,

the Trustee shall within such reasonable time as deemed necessary or

appropriate by Beneficiary provide to Beneficiary or its designee

such reports, data or other information as Beneficiary or its

designee shall Beneficiary for purposes of administering such plans

or satisfying any reporting or other requirements as may be required

by law or any governmental agency. In no event shall the Trustee or

the Wichita Stations Trust be responsible for any liabilities or

obligations relating to or arising under any of Beneficiary's

employee benefit plans, programs or arrangements, whether such

liabilities or obligations arise, or relate to a period, prior or

subsequent to the effective date of this Trust Agreement, except for

liabilities or obligations caused by Trustee's own gross negligence

or willful misconduct. All liabilities or obligations that relate to

or arise under any of Beneficiary's employee benefit plans, programs

or arrangements, except for liabilities or obligations caused by

Trustee's own gross negligence or willful misconduct, shall remain

the sole and complete responsibility of Beneficiary and shall be

subject to the indemnification provided in Section 4(c) of this

Trust Agreement.

(d) To the extent that the Trustee determines in his discretion

that management and operation of the Stations consistent with past

practice or that payment of the charges and other expenses set forth

in Section 4(c) requires funds in excess of the ordinary cash flow

of the Stations (as diminished by any prior remittances of cash

accumulations from operations in excess of the actual and projected

expenses as determined by the Trustee in his sole discretion

(``Excess Cash Flow''), Beneficiary agrees to provide a line of

credit to Trustee in the amount of $250,000. Beneficiary shall not

communicate directly or indirectly with the Trustee about, or

participate with the Trustee in making, any decision to draw on the

line of credit or as to when or how the funds will be used. The

Trustee may draw on the line of credit by making a written draft on

Beneficiary for a specific amount of funds. Beneficiary shall,

within ten days of receipt of such draft, provide such funds to

Trustee in the amount requested, up to the limit of the line of

credit. The outstanding principal balance under the line of credit

shall bear interest at a rate equal to the rate in effect under

Beneficiary's credit facility at the time the Trustee draws on such

line of credit. The principal amount of any drawings on the line of

credit, together with accrued and unpaid interest thereon, shall be

paid from (i) Excess Cash Flow and (ii) if any balance is

outstanding upon completion of any sale of the Station Assets

pursuant to Section 3, then prior to any distribution contemplated

by Section 5(b), from the proceeds of any such sale. All amounts

paid under this Section 3(d) shall be applied first to all interest

then accrued and unpaid hereunder, and the balance, if any, to

principal.

(e) To the extent that the Stations' operations generate Excess

Cash Flow, such Excess Cash Flow shall first be applied to repay

amounts due to Beneficiary under the line of credit provided for in

Section 3(d), and thereafter shall be remitted to Beneficiary from

time to time as the trustee shall determine.

(f) No person other than the Trustee or managers designated by

the Trustee shall have any authority with respect to the management

of the Stations or Station Assets for so long as this Trust

Agreement is in effect. The Trustee shall have no beneficial

interest in the Station Assets.

(g) Except as expressly provided in this Trust Agreement, the

Trustee shall not: (1) incur any debt or guaranty obligation in

favor

[[Page 31619]]

of any other person; (2) engage in any business other than as

necessary in Trustee's reasonable opinion to meet his fiduciary

duties with respect to the operation of the Stations as a broadcast

license serving the Wichita Market; (3) sell or otherwise transfer,

assign or encumber the Station Assets, or (4) enter into any

agreement to do so, or enter into any merger, consolidation, or

similar transaction or engage in any reclassification or similar

transaction.

(h) The Trustee shall have full authority and power over the

operation and management of the Stations, shall conduct the

operations of the Stations in the ordinary course of business

consistent with past operations of the Stations, and, to the extent

possible, shall maintain the status quo of such operations as

currently conducted with a view to maximizing the value to be

received by Beneficiary consistent with the Trustee's duties as a

licensee of the FCC and as a fiduciary of Beneficiary. Without

limiting the generality of the foregoing, during the term of this

Trust Agreement, except as contemplated by this Trust Agreement, the

Trustee shall not:

(i) Fail to use all commercially reasonable efforts to preserve

intact Beneficiary's present business organization of the Stations

and preserve each Station's relationships with customers, suppliers

and other having business dealings with it;

(ii) Fail to use commercially reasonable efforts to maintain the

Station Assets in their current condition, except for ordinary wear

and tear;

(iii) Fail to use all commercially reasonable efforts to

maintain the present format of the Stations;

(iv) Except for amendments of employment agreements in the

ordinary course of business and consistent with past operations of

the Stations, materially amend any material contract or default in

any material respect (or take or omit to take any action that, with

or without the giving of notice or passage of time, would constitute

a material default) under any material contract or, except in the

ordinary course of business and consistent with past operations of

the Stations, enter into any new material contract;

(v) Sell (Whether by merger, consolidation, or the sale of an

equity interest or assets), lease, or dispose of any Station Assets

except pursuant to an agreement to sell the Station Assets, which is

permitted under this Trust Agreement, or in the ordinary course of

business and consistent with past practice or, even if in the

ordinary course of business and consistent with past practices

(other than sales of surplus or obsolete equipment), whether in one

or more transactions, in no event involving a Station Asset or

Station Assets having an aggregate fair market value in excess of

$75,000'

(vi) (A) Mortgage, (B) pledge, or (C) subject to any material

lien, pledge, claim, security interest, restriction, mortgage,

tenancy and other possessory interest, conditional sale or other

title retention agreement, assessment, easement, right of way,

covenant, restriction, right of first refusal, defect in title,

encroachment or other burden, option or encumbrance of any kind, any

Station Assets;

(vii) Enter into, or enter into negotiations or discussions with

any person other than a purchaser under an agreement to sell the

Station Assets, which is permitted under this Trust Agreement, with

respect to, any local marketing agreement, time brokerage agreement,

join sales agreement, or any other similar agreement;

(viii) Fail to use commercially reasonable efforts to maintain

the ability of each Station to operate at a maximum power and full

coverage at all times; or

(ix) Agree to or make any commitment, orally or in writing any

actions prohibited the this Trust Agreement or the Final judgment.

Notwithstand this Section 3(h), Beneficiary acknowledges that

the business organization and operator of the Station Assets of

station KNSS(AM)--as they exist on the date of this Trust Agreement

will change as the station is incorporated in the operation and

business organization of the Triathlon Wichita Stations.

(i) The Trustee shall have any and all such further powers and

shall take such further actions (including, but not limited to,

taking legal action) as may be necessary to fulfill the Trustee's

obligations under this Trust Agreement.

(j) If as of the date hereof any of the Stations are not subject

to a binding Existing Sale Agreement for a Sale (or Sales) (as

defined below) of the Station Assets, or if any Existing Sale

Agreement terminates or expires during the term of this Agreement,

the Trustee shall promptly take such actions and execute such

documents in order to effect a disposition of the Station Assets

which renders to Beneficiary the maximum cash present value for the

Station Assets. The Trustee may negotiate the terms and conditions

of a binding agreement for the sale of the Station Assets (a ``Sale

Agreement'') in his sole and absolute discretion. Trustee shall

submit and fully prosecute appropriate applications to such

governmental authorities as such Sale Agreement requires, requesting

approval to assign such Station Assets, and, upon satisfaction of

all closing conditions under such agreements (unless waived, in

whole or in part, by the Trustee), transfer title to the Station

Assets to the third party (or parties).

4. Concerning the Trustee.

(a) The Trustee shall be entitled to receive as a trustee fee

(the ``Wichita Trustee Fee'') for his services hereunder a fee of

$2,500 per month for each Station that is in the Wichita Stations

Trust (which amount shall be prorated for each Station for partial

months based on a 30-day month), provided, however, that the Wichita

Trustee Fee plus any Capstar II Trustee Fee to which the Trustee may

be entitled under the Capstar Trust II Agreement entered into as of

April 30, 1999, by and between the Beneficiary and the Trustee (the

``Capstar Trust II Agreement'') shall not exceed a total of $15,000

per month. The fee (the ``Engagement Fee'') received by the Trustee

pursuant to the Engagement and Assignment Agreement entered into as

of February 3, 1999, by and between the Beneficiary and the Trustee

(the ``Engagement and Assignment Agreement'') shall be credited

toward any amounts otherwise due as a Wichita Trustee Fee and a

Capstar II Trustee Fee. In the event that the Wichita Trustee Fees

and the Capstar II Trustee Fees paid to the Trustee, in the

aggregate, do not exceed the Engagement Fee, nothing in this

Agreement shall restrict the Trustee's entitlement to the entire

Engagement Fee. The Trustee agrees that in return for the Wichita

Trustee Fees, he will devote such time to the Wichita Stations Trust

as is necessary, appropriate, or advisable in the proper exercise of

his fiduciary duties hereunder. Payment of Trustee's monthly

compensation shall be made by Beneficiary within 20 days after the

end of each calendar month during the term of this Trust Agreement.

(b) The Trustee is expressly authorized to incur and pay from

the Station Assets held in trust all reasonable expenses,

disbursements, and advances incurred or made by the Trustee in the

performance of his duties hereunder (including reasonable fees,

expenses and disbursements of his counsel), which the Trustee in

good faith deems necessary, proper, or advisable in the performance

of his duties under this Trust Agreement; provided, however, that

the Trustee may pay legal fees attributable to legal services that

he personally performs for the Wichita Stations Trust in his

capacity as an attorney if, and only if, at any time during the

calendar month in which such services are performed the combined

number of stations in the Wichita Stations Trust and the Capstar

Trust II is five or fewer.

(c) The Trustee shall not be liable, except for his own gross

negligence or willful misconduct and, except with respect to claims

based upon such gross negligence or willful misconduct that are

successfully asserted against the Trustee, Beneficiary shall

indemnify and hold harmless the Trustee (and any successor trustee)

from and against any and all losses, liabilities, claims, actions,

damages and expenses, including reasonable attorneys' fees and

disbursements, arising out of and in connection with (i) the

Trustee's performance of his duties under this Trust Agreement and/

or any Sale Agreement, (ii) Beneficiary's failure to perform its

obligations under the Trust Agreement, (iii) any liability arising

out of or related to the Station Assets that accrued or arose prior

to the date of transfer to the Trustee, including without limitation

with respect to the Assumed Contracts, (iv) losses arising out of or

related to the Station Assets, and the operation thereof on a going

concern basis, that are not recovered from the proceeds of a Sale,

or otherwise under the Trust Agreement, (v) fines and penalties

levied by the FCC or any other governmental authority, and costs

related thereto, which may be caused or incurred by the transactions

contemplated by the Trust Agreement, any Sale or any other action,

error or omission of any person other than the Trustee, (vi) taxes

that may be levied upon or payable by the Trustee, in his personal

capacity, arising out of or related to the Trust and (vii) the

Trustee's obligation, if any, under the employment laws, including

without limitation the Employee Retirement Security Act of 1974, as

amended. Payments to the Trustee pursuant to this Section 4(c) shall

be made within 20 days of Trustee's submission to Beneficiary of an

invoice or bill therefor,

[[Page 31620]]

plus appropriate supporting documentation. The obligations of

Beneficiary to the Trustee under this Section 4(c) shall survive the

resignation, incapacity to act, death or insolvency of the Trustee

and the termination of this Trust Agreement.

(d) The Trustee shall be entitled to rely in good faith upon any

order, judgment, certification, demand, notice, instrument or other

writing delivered to him hereunder without being required to

determine the authenticity or the correctness of any fact stated

therein or the propriety or validity or the service thereof. The

Trustee may act in reliance upon any instrument or signature

believed by him in good faith to be genuine and may assume that any

person purporting to give receipt or advice or make any statement or

execute any document in connection with the provisions hereof has

been duly authorized to do so. The Trustee may act pursuant to the

advice of counsel with respect to any matter relating to this Trust

Agreement and shall not be liable for any action taken or omitted in

good faith in accordance with such advice. The Trustee's counsel and

advisors shall be independent of, and have no relationship with,

Beneficiary.

(e) Subject to Section 4(c), the rights and duties of the

Trustee hereunder shall terminate upon the Trustee's incapacity to

act, death or insolvency, and no interest in the Sale Agreement or

the Station Assets directly or indirectly held by the Trustee nor

any of the rights and duties of a deceased or insolvent Trustee may

be transferred by will, devise, succession or in any manner except

as provided in this Trust Agreement. The heirs, administrators,

executors or other representatives of an incapacitated, deceased or

insolvent Trustee shall, however, have the right and duty to convey

the Sale Agreement and the Station Assets held by the Trustee to one

or more successor trustees designated by Beneficiary pursuant to

Section 4(g).

(f) The Trustee (and any successor trustee) may resign by giving

not less than 60 days prior written notice of resignation to

Beneficiary, provided that a successor trustee has been appointed,

such appointment has received all necessary approval from the FCC,

and any order granting such approval has become a final order with

respect to which no action, request for stay, petition for hearing

or reconsideration, or appeal has expired. Beneficiary shall

cooperate fully in the prompt appointment of a successor trustee and

shall not unreasonably interfere with or delay the effectiveness of

such resignation.

(g) In the event of such resignation, incapacity to act, death

or insolvency of the Trustee, the Court shall appoint, on

application of the DOJ, a Trustee selected by the DOJ, subject to

such prior approval of the FCC as may be required, to effect the

divestiture of the Station Assets. Any successor trustee shall

succeed to all of the rights and obligations of the Trustee replaced

hereunder and shall be deemed the Trustee for purposes of this Trust

Agreement, upon execution of such successor trustee of a counterpart

of this Trust Agreement.

(h) The Trustee and any successor trustee designated pursuant to

Sections 4(f) and (g) shall not be 1% or greater stockholder,

officer, employee, director, or affiliate of Beneficiary, and may

not have any business or familial relationship (as defined in the

FCC Policy Statement in MM Docket No. 85-218, FCC 86-67 (March 17,

1986)) with any officer, employee, director, or 1% of greater

stockholder or affiliate of Beneficiary. Neither the Trustee nor any

successor trustee will serve as an officer, employee, or director of

Beneficiary, its affiliates, or its successor companies.

(i) The Trustee agrees to resign as Trustee if requested to do

so by the DOJ in order for Defendants (as defined in the Final

Judgment) to meet their obligations under the Final Judgment. Such

resignations will not be effective until a successor trustee has

been appointed pursuant to the provisions of the Trust Agreement.

5. Termination: Distribution of Station Assets or Proceeds from

Sale of Station Assets.

(a) Subject to such FCC and DOJ approval as may be required, and

following the receipt of such approval, this Trust Agreement and the

Wichita Stations Trust created hereby shall terminate if such

termination would not cause Beneficiary to be in violation of the

Communications Act or the Final Judgment.

(b) Upon the termination of this Trust Agreement under Section

5(a) or pursuant to a Sale (or Sales) of all or substantially all of

the Station Assets to an unaffiliated third party (or parties)

pursuant to Section 3, the Trustee shall receive the money,

securities, rights or property which are distributed or are

distributable in respect of the Station Assets, and, after paying

(or reserving for payment thereof) any reasonable expenses or

liabilities incurred pursuant to this Trust Agreement, shall

promptly distribute or cause the distribution of such money,

securities, rights or property to Beneficiary or its designee.

6. Communications.

(a) The Trustee may communicate with and provide reports to

Beneficiary concerning the implementation of the Wichita Station

Trust, but not concerning the management and operations of the

Stations except as provided in Section 3(a)(vi).

(b) The Trustee may engage in the communications contemplated by

Section 3 hereof to facilitate a Sale (or Sales) of the Station

Assets to an unaffiliated third party (or parties).

(c) During the term of this Trust Agreement, neither Beneficiary

nor any of its officers, directors, employees, stockholders, or

affiliates shall communicate with the Trustee regarding the

operation or management of the Stations; provided, however, that

Beneficiary may communicate with the Trustee as provided in Section

3, and concerning the mechanics of implementing any Sale of the

Station Assets to an unaffiliated third party.

(d) Any communications permitted by Section 6(a), (b), or (c)

shall be evidenced in writing, and shall be retained the Trustee for

inspection upon request by the FCC.

(e) All notices, requests, consents, waivers, and other

communications required or permitted to be given hereunder shall be

in writing and shall be deemed to have been duly given (a) if

transmitted by facsimile, upon acknowledgement of receipt thereof in

writing by facsimile or otherwise, (b) if personally delivered, upon

delivery or refusal of delivery, or (c) if mailed by registered or

certified United States mail, return receipt requested, postage

prepaid, upon delivery or refusal of delivery. All notices,

consents, waivers, or other communications required or permitted to

be given hereunder shall be addressed to the respective party to

whom such notice, consent, waiver, or other communication relates at

the following addresses:

If to Beneficiary: Capstar Broadcasting Corporation, 600

Congress Avenue, Suite 1400, Austin, Texas 78701, Attention: William

S. Banowsky, Jr., Facsimile: (512) 340-7890.

With copies to:

Vinson & Elkins L.L.P., 3700 Trammell Crow Center, 2001 Ross Avenue,

Dallas, Texas 75201, Attention: Michael D. Wortley, Rodney L. Moore,

Facsimile: (214) 999-7732.

Wiley, Rein & Fielding, 1776 K Street, N.W., Washington, D.C. 20006,

Attention: Nathaniel F. Emmons, Facsimile: (202) 719-7049

If to the Trustee: Henry M. Rivera, Shook Hardy & Bacon L.L.P.,

Hamilton Square, Suite 800, 600 14th Street, NW, Washington, D.C.

20005-2004, Facsimile: (202) 783-4211.

Any party by written notice to the other parties pursuant to

this Section 6(e) may change the address or the persons to whom

notices or copies thereof shall be directed.

7. Miscellaneous.

(a) This Trust Agreement (which term shall be deemed to include

the annexes, exhibits, and schedules hereto and the other

certificates, documents, and instruments delivered hereunder),

constitutes the entire agreement between the parties hereto and

supersedes all prior agreements, commitments, or understandings with

respect to the subject matter hereof. This Trust Agreement shall not

be amended, altered or modified except by an instrument in writing

duly executed by each of the parties hereto. Substantial changes in

this Trust Agreement may be made only as approved by the FCC and the

DOJ, pursuant to and consistent with the Final Judgment. A copy of

any substantial change shall be filed by the Trustee with the FCC

and the DOJ within ten days following the execution thereof, with

copies to the appropriate divisions and bureaus of the FCC and the

DOJ.

(b) This Trust Agreement shall be binding upon and shall inure

to the benefit of the parties hereto and their respective permitted

successors and permitted assigns, and nothing in this Trust

Agreement, express or implied, is intended to confer upon any other

person any rights or remedies of any nature whatsoever under or by

reason of this Trust Agreement. Subject to Section 4(g), this Trust

Agreement shall not be assignable by any of the parties hereto.

(c) If any term or other provision of this Trust Agreement is

invalid, illegal, or incapable of being enforced by any rule of

applicable law, or public policy, all other conditions and

provisions of this Trust

[[Page 31621]]

Agreement shall nevertheless remain in full force and effect so long

as the economic or legal substance of the transactions contemplated

herein are not affected in any manner materially adverse to any

party. Upon such determination that any term or other provision is

invalid, illegal, or incapable of being enforced, the parties hereto

shall negotiate in good faith to modify this Trust Agreement so as

to effect the original intent of the parties as closely as possible

in a mutually acceptable manner in order that the transactions

contemplated herein are consummated as originally contemplated to

the fullest extent possible.

(d) The headings of the sections of this Trust Agreement are

solely for convenience of reference and shall not be given any

effect in the construction or interpretation of this Trust

Agreement. Unless otherwise stated, references in this Trust

Agreement to Sections, subsections, Annexes, Exhibits, Schedules,

and other subdivisions refer to the corresponding Sections,

subsections, Annexes, Exhibits, Schedules, and other subdivisions of

this Trust Agreement. The words ``this Trust Agreement,''

``herein,'' ``hereby,'' ``hereunder,'' ``hereof,'' and words of

similar import, refer to this Trust Agreement as a whole and not to

any particular subdivision unless expressly so limited. The word

``or'' is not exclusive, and the word ``including'' (in its various

forms) means ``including without limitation.'' Pronouns in the

masculine, feminine, or neuter genders shall be construed to state

and include any other gender.

(e) This Trust Agreement shall be governed by and construed in

accordance with the laws of the State of Texas without regard to

conflicts of law principles.

(f) This Trust Agreement may be executed and delivered

(including by facsimile transmission) in one or more counterparts,

each of which shall be deemed an original and all of which together

shall constitute a single instrument, and shall become effective

when one or more counterparts have been signed and delivered by each

of the parties hereto, it being understood that all parties need not

sign the same counterpart.

8. Relationship to Final Judgment.

The Trustee hereby agrees to be bound by the applicable

provisions of the Final Judgment, and to the extent that any

provision contained in this Trust Agreement is inconsistent with the

Final Judgment, the provisions of the Final Judgment shall govern.

[Remainder of page intentionally left blank]

In witness whereof, the parties hereto have executed this Trust

Agreement or caused this Trust Agreement to be duly executed on their

behalf as of the date first written above.

Beneficiary: Capstar Broadcasting Corporation

By:--------------------------------------------------------------------

William S. Banowsky, Jr.,

Executive Vice President

Trustee: Wichita Stations Trust

By:--------------------------------------------------------------------

Henry M. Rivera

Trustee

Annex A

KNSS(AM), Wichita, Kansas

Annex B

KFH(AM), Wichita, Kansas

KQAM(AM), Wichita, Kansas

KEYN(FM), Wichita, Kansas

KWSJ(FM), Haysville, Kansas

United States of America, Plaintiff, v. Capstar Broadcasting

Corporation, and Triathlon Broadcasting, Company, Defendants.

[Civil Action No. 99-CV-00993]

(Judge Oberdorfer)

Competitive Impact Statement

The United States, 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

The plaintiff filed a civil antitrust Complaint on April 21, 1999,

alleging that Capstar Broadcasting Corporation's (``Capstar'') proposed

acquisition of Triathlon Broadcasting Company (``Triathlon'') would

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

Complaint alleges that Capstar and Triathlon both own and operate radio

stations throughout the United States, and that they each own and

operate radio stations in the Wichita, Kansas, metropolitan area.

Specifically, the complaint alleges that Capstar owns KKRD-FM, KRZZ-FM,

and KNSS-AM in Wichita and that Capstar controls approximately 20

percent of the Wichita radio advertising market. The complaint also

alleges that Triathlon owns KZSN-FM, KRBB-FM, KEYN-FM, KWSY-FM, KFH-AM,

and KQAM-FM in Wichita and controls approximately 33 percent of the

radio advertising revenues in the Wichita radio advertising market. The

proposed acquisition would give Capstar a significant share of the

radio advertising market in Wichita and control over stations that are

close substitutes for each other based upon their specific audience

characteristics. According to industry estminates, the proposed

acquisition would give Capstar control of over 45 percent of the radio

advertising revenue--even after Capstar divests the two lowest ranked

FM radio stations pursuant to Federal Communications Commission

(``FCC'') regulations. As a result, the combination would substantially

lessen competition in the sale of radio advertising time in the Wichita

metropolitan area.

The prayer for relief seeks: (a) adjudication that Capstar's

proposed acquisition of Triathlon described in the Complaint would

violate Section 7 of the Clayton Act, as amended, 15 U.S.C. 18; (b)

preliminary and permanent injunctive relief preventing the consummation

of the proposed acquisition; (c) an award to the United States of the

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

Before this suit was filed, the United States reached a proposed

settlement with Capstar and Triathlon which is memorialized in the

Stipulation and proposed Final Judgment which have been filed with the

Court. Under the terms of the proposed Final Judgment, Capstar must

divest five stations--KEYN-FM, KWSJ-FM, KFH-AM, KNSS-AM and KQAM-AM--to

another radio operator approved by plaintiff at the time it acquires

Triathlon. If Capstar does not divest these stations to an approved

buyer at the time it acquires Triathlon, Capstar must place the

stations in an FCC Trust. The FCC Trust Agreement was filed with the

Court as an attachment to the proposed Final Judgment. Unless the

Antitrust Division of the United States Department of Justice (the

``Antitrust Division'') grants an extension, the Trustee must divest

the stations to a buyer approved by the Antitrust Division at its sole

discretion within four (4) months of the date of entry of the Final

Judgment.

The proposed Final Judgment also requires both Capstar and

Triathlon to ensure, to the extent they are able under the proposed

Final Judgment, that these stations will be operated independently as

viable ongoing businesses while Capstar and Triathlon continue to

operate them. If the stations are transferred to the Trustee, the

Trustee has agreed that he will operate the stations independently as

viable ongoing businesses. Further, the proposed Final Judgment

requires Capstar to give plaintiff prior notice regarding future radio

station acquisitions or certain agreements pertaining to the sale of

broadcast radio advertising time in Wichita.

The plaintiff and defendants have stipulated that the proposed

Final Judgment may be entered after compliance with 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 Violation

A. The Defendants

Capstar is a Delaware corporation with its headquarters in Austin,

Texas.

[[Page 31622]]

Capstar owns approximately 309 radio stations in 76 U.S. markets. In

1997, Capstar had total revenue of approximately $350 million,

approximately $4.9 million of which was derived from its Wichita

stations.

Triathlon is a Delaware corporation headquartered in San Diego,

California. Triathlon currently owns 31 radio stations in six U.S.

markets. In 1997, Triathlon had total revenue of approximately $33.6

million, approximately $8 million of which was derived from its Wichita

stations.

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

On July 23, 1998, Capstar and Triathlon entered into an Agreement

and Plan of Merger (``Agreement''). Under the terms of the Agreement,

Triathlon agreed to transfer its licensee companies, including

Triathlon Broadcasting of Wichita Licensee, Inc., to Capstar. Also

under the terms of the Agreement, Triathlon agreed to sell Triathlon

Broadcasting Company to Capstar.

Capstar and Triathlon compete for the business of local and

national companies seeking to advertise in the Wichita radio market.

The proposed acquisition of Triathlon by Capstar, and the threatened

loss of competition that would be caused thereby, precipitated the

government suit.

C. Anticompetitive Consequences of the Proposed Acquisition

1. The Sale of Radio Advertising Time in Wichita

The Complaint alleges that the provision of advertising time on

radio stations serving the Wichita, Kansas Metropolitan Survey Area

(``MSA'') constitutes a line of commerce and a section of the country,

or a relevant market, for antitrust purposes. The Wichita MSA is the

geographical unit for which Arbitron furnishes radio stations,

advertising agencies, and advertisers with data to aid in evaluating

radio audience size and composition. Advertisers use this data in

making decisions about which radio station or combination of radio

stations can deliver their target audiences in the most efficient and

cost-effective way. The Wichita MSA includes Butler, Harvey, and

Sedgwick Counties. Radio stations earn their revenues from the sale of

advertising time to local and national advertisers. Many local and

national advertisers purchase radio advertising time in Wichita because

they find such advertising preferable to advertising in other media for

their specific needs. For such advertisers, radio time (a) may be less

expensive and more cost-efficient than other media at reaching the

advertiser's target audience (individuals most likely to purchase the

advertiser's products or services); (b) may reach certain target

audiences that cannot be reached as effectively through other media; or

(c) may render certain services or offer promotional opportunities to

advertisers that they cannot exploit as effectively using other media.

For these and other reasons, many local and national advertisers in

Wichita who purchase radio advertising time view radio either as a

necessary advertising medium for them or as a necessary advertising

complement to other media.

Although some local and national advertisers may switch some of

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

radio advertising time in Wichita, the existence of such advertisers

would not prevent radio stations from raising their prices a small but

significant amount. At a minimum, stations could raise prices

profitably to those advertisers who view radio either as a necessary

advertising medium for them, or as a necessary advertising complement

to other media. Radio stations, which negotiate prices individually

with advertisers, can identify those advertisers with strong radio

preferences. Consequently, radio stations can charge different

advertisers different rates. Because of this ability to price

discriminate among different customers, radio stations may charge

higher rates to advertisers that view radio as particularly effective

for their needs, while maintaining lower rates for other advertisers.

2. Harm to Competition

The Complaint alleges that Capstar's proposed acquisition of

Triathlon would lessen competition substantially in the provision of

radio advertising time in the Wichita MSA. The proposed transaction

would create further market concentration in an already concentrated

market. Using a measure of market concentration called the Herfindahl-

Hirschman Index (``HHI''), explained in Appendix A of the Complaint, a

combination of Capstar and Triathlon would substantially increase the

concentration in the Wichita radio advertising markets. The HHI

currently is 3040. If Capstar divests only the two least significant FM

stations, Capstar's share of the Wichita radio market, based on

advertising revenue, would increase from approximately 20 percent to

approximately 45 percent. The approximate post-merger HHI would be

3680, representing an increase of about 640 points. This substantial

increase in concentration is likely to give Capstar unilateral power to

raise advertising rates and reduce the level of service provided to

advertisers in Wichita.

Today, several Capstar and Triathlon stations in Wichita compete

head-to-head to reach the same audiences and, for many local and

national advertisers buying time in Wichita, they are close substitutes

for each other based on their specific audience characteristics. The

proposed merger would eliminate this competition.

During individual price negotiations between advertisers and radio

stations, advertisers provide the stations with information about their

advertising needs, including their target audience and the desired

frequency and timing of ads. Radio stations thus have the ability to

charge advertisers differing rates based in part on the number and

attractiveness of competitive radio stations that can meet a particular

advertiser's specific target needs.

During individualized rate negotiations, advertisers that desire to

reach certain listeners can help ensure competitive rates by ``playing

off'' Capstar stations against Triathlon stations. Capstar's

acquisition of Triathlon will end this competition. After the

acquisition, such advertisers will be unable to reach their desired

audiences with equivalent efficiency without using Capstar stations.

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 Capstar the ability to raise

prices and reduce the quality of its service to some advertisers on its

stations in Wichita.

b. Advertisers could not turn to other Wichita radio stations to

prevent Capstar from imposing an anticompetitive price increase.

If Capstar raised prices or lowered services to those advertisers

who buy advertising time on Capstar and Triathlon stations in Wichita

because of their strength in delivering access to certain audiences,

non-Capstar radio stations in Wichita would not be induced to change

their formats to attract those audiences in sufficiently large numbers

to defeat a price increase. Successful radio stations are unlikely to

undertake a format change solely in response to small but significantly

increases in price being charged to advertisers by a multi-station firm

such as Capstar because they would likely lose a substantial portion of

their existing audiences. Even if less successful stations did change

format, they would still be unlikely to attract

[[Page 31623]]

enough listeners to provide suitable alternatives to the merged entity.

In addition, new entry into the Wichita radio advertising market would

not be timely, likely or sufficient to deter the exercise of market

power. For all these reasons, plaintiff concludes that the proposed

transaction would lessen competition substantially in the sale of radio

advertising time on radio stations serving the Wichita MSA in violation

of Section 7 of the Clayton Act.

III. Explanation of the Proposed Final Judgment

The proposed Final Judgment would preserve competition in the sale

of radio advertising time in Wichita. It requires Capstar to divest

five stations: KEYN-FM, KWSJ-FM, KFH-AM, KNSS-AM and KQAM-AM. The

relief will reduce the share in advertising revenues Capstar would have

achieved in the transaction from 45 percent to less than 40 percent.

The divestitures will preserve choices for advertisers and will ensure

that radio advertising prices do not increase and services do not

decline as a result of the transaction.

Capstar must divest the KEYN-FM, KWSJ-FM, KFH-AM, KNSS-AM and KQAM-

AM assets to either another buyer or a Trustee at the time it acquires

Triathlon. The divestitures must be to a purchaser or purchasers

acceptable to the plaintiff in its sole discretion. Except in the case

of KNSS-AM, the divestitures shall include all the assets of the

stations being divested. The divestitures 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 radio businesses. If

defendants fail to divest these stations within the time periods

specified in the Final Judgment, a Trustee agreed upon by plaintiff and

Defendants and identified in the Final Judgment will be entrusted to

effect the divestitures. If the Trustee is appointed, the proposed

Final Judgment provides that Capstar will pay all costs and expenses of

the Trustee and any professionals and agents retained by the Trustee.

After appointment, the Trustee will file monthly reports with the

plaintiff, Capstar 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

four (4) months after the date of the Order's entry, 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 requires that prior to the consummation

of the transaction, defendants will maintain the independence of their

respective radio stations in Wichita until the closing of the merger

and the transfer of KEYN-FM, KWSJ-FM, KFH-AM, KNSS-AM and KQAM-AM to

either a buyer approved by the plaintiff or to the Trustee.

The proposed Final Judgment also prohibits Capstar from entering

into certain agreements with other Wichita radio stations without

providing at least thirty (30) days' notice to the plaintiff.

Specifically, Capstar must notify the plaintiff before acquiring any

interest in another Wichita radio station. Such acquisitions could

raise competitive concerns but might be too small to be reported

otherwise under the Hart-Scott-Rodino Antitrust Improvements Act of

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

may not agree to sell radio advertising time for any other Wichita

radio station, or to have another radio station that also sells radio

advertising time in Wichita sell its radio advertising time, without

providing plaintiff with notice. In particular, the provision requires

Capstar to notify the plaintiff before it enters into any Joint Sales

Agreements (``JSAs'') in Wichita. Under a JSA, one station sells

another station's advertising time. Despite their clear competitive

significance, JSAs may not all be reportable to the Department under

the HSR Act. Thus, this provision in the proposed Final Judgment

ensures that the plaintiff will receive notice of and be able to act,

if appropriate, to stop any agreements that might have anticompetitive

effects in the Wichita radio advertising market.

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

likely anitcompetitive effects of Capstar's proposed transaction with

Triathlon in Wichita. Nothing in this Final Judgment is intended to

limit the plaintiffs ability to investigate or to bring actions, where

appropriate, challenging other past or future activities of defendants

in Wichita, or any other markets.

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

attorney's 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 Proposed Final

Judgment

The plaintiff and the defendants have stipulated that the proposed

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

provision of the APPA, provided that the United States 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 at least sixty (60) days preceding

the effective date of the proposed Final Judgment within which any

person may submit to the United States 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 its entry. The comments and the response of the United States will

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

Any such 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 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

The plaintiff considered, as an alternative to the proposed Final

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

defendants. The plaintiff is satisfied, however, that the divestiture

of KEYN-FM, KWSJ-FM, KFH-AM, KNSS-AM, and KQAM-AM,

[[Page 31624]]

and other relief contained in the proposed Final Judgment will preserve

viable competition in the sale of radio advertising time in the Wichita

radio advertising markets. Thus, the proposed Final Judgment would

achieve the relief the plaintiff would have obtained through

litigation, but avoids the time, expense and uncertainty of a full

trial on the merits of the Complaint.

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 trail.

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

As the United States Court of Appeals for the District of Columbia

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 plaintiff'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 Corp., 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

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 adequacy 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. 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 Broad.

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).

The proposed Final Judgment therefore should not be reviewed under a

standard of whether it is certain to eliminate very 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\

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

\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 Co., 406 F. Supp. at 716

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

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

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

This 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: May 12, 1999.

Respectfully submitted,

Karl D. Knutsen,

Attorney, Merger Task Force.

U.S. Department of Justice

Antitrust Division, 1401 H Street, N.W., Washington, D.C. 20530, (202)

514-0976.

Certificate of Service

I, Karl D. Knutsen, of the Antitrust Division of the United States

Department of Justice, do hereby certify that true copies of the

foregoing Competitive Impact Statement were served this 12th day of

May, 1999, by United States mail, to the following:

David J. Laing, Baker & McKenzie, 815 Connecticut Ave. N.W.,

Washington, D.C. 20006, Counsel for Triathlon Broadcasting Company.

Neil W. Imus, Vinson & Elkins, 1455 Pennsylvania Avenue, N.W.,

Washington, D.C. 20006, Counsel for Capstar Broadcasting Corporation

Karl D. Knutsen.

[FR Doc. 99-14896 Filed 6-10-99; 8:45 am]

BILLING CODE 4410-11-M