Cases & Deals

Clear Channel obtains DOJ clearance for acquisition of Westwood One's Metro Traffic division

Clients Clear Channel Communications, Inc.

Jones Day advised Clear Channel Communications, Inc. on the antitrust aspects of its acquisition of Metro Networks, a producer and distributor of traffic and other local information reports (e.g., news, sports, weather) to radio and television stations nationwide, from Westwood One, Inc. Clear Channel's subsidiary, Total Traffic Network, delivers traffic data and reporting services to broadcast media, wireless and Internet-based services, and navigation systems.

Although the transaction was not HSR-reportable, one month after it closed the U.S. Department of Justice (DOJ) opened an investigation into whether the combination of Metro Traffic and Total Traffic Network would lead to a substantial lessening of competition in the provision of traffic reports to local radio stations by reducing the number of national traffic report providers from three to two. After negotiating a hold separate agreement with the DOJ, the Jones Day team responded to the DOJ's extensive CID and prepared for and defended two depositions of Metro Traffic and Clear Channel executives.

Despite the government's fixation on the few instances of head-to-head competition between Metro Traffic and Total Traffic Network for radio affiliates, the Jones Day team asserted that the transaction would not substantially lessen competition, primarily because entry into the provision of traffic reporting services was increasingly easy due to the wide availability of traffic data. The Jones Day team convinced the DOJ that radio stations themselves have the tools and incentive to begin providing their own traffic reporting services and have consistently done so in recent years. The team also argued that repositioning by companies that provide traffic data for non-broadcast purposes or that provide traffic reports to television stations or radio stations outside the U.S. was also likely. In addition, notwithstanding the transaction, radio stations that do not wish to take their traffic reporting business in-house would continue to have numerous alternatives post-transaction, including obtaining traffic reports from other national or regional providers or dropping traffic reports altogether in favor of other content. The DOJ ultimately accepted these arguments and closed its investigation.