The Department of Justice Antitrust Division (DOJ) announced May 15 that it is investigating the proposed acquisition of the Chicago Sun-Times newspaper by the owner of rival publication the Chicago Tribune. As a condition of proceeding with the sale, the DOJ has required that the Chicago Sun-Times advertise for an alternative buyer. The investigation demonstrates the Antitrust Division's willingness to scrutinize the acquisition of market power even within depressed industries.
In disclosing the Chicago Sun-Times investigation, the DOJ stated that the Chicago Sun-Times must run an advertisement seeking additional bidders and allow for a 15-day waiting period. If another viable buyer steps forward, a "reasonable opportunity" will exist for the buyer to conduct due diligence and negotiate purchase terms. A press release from the current owners of the Chicago Sun-Times, Wrapports, LLC, announced the proposed sale to tronc, Inc., which operates the Chicago Tribune, and acknowledged the DOJ's conditions. If an alternative buyer fails to surface, tronc will run the Chicago Sun-Times as a separate unit with an independent newsroom.
The DOJ is responsible for evaluating the competitive effects of newspaper acquisitions pursuant to a 2002 memorandum of agreement with the Federal Trade Commission. In 2016, the DOJ successfully sued to block the owners of the Los Angeles Times from acquiring two bankrupt California newspapers. In response to criticism of the DOJ's decision to sue in light of internet-based competition, then-Assistant Attorney General Bill Baer predicted that the enforcement action would "ensure that citizens and advertisers . . . continue to benefit from competition and from a diversity of views in their local news coverage." The Chicago Sun-Times investigation is a clear reminder that the DOJ remains ready and willing to enforce merger policy guidelines, despite the widespread layoffs and sustained decreases in subscriber counts that have plagued many regional and local publishers in the industry.
This article is presented for informational purposes only and is not intended to constitute legal advice.
