The Gannett Co. can go forward with its acquisition of Belo Corp., the Justice Department said Monday. There is, however, a string attached.
The department is requiring Gannett, Belo and Sander Media to divest their interests in St. Louis CBS affiliate KMOV-TV in order to go forward with both Gannett’s acquisition of Belo and Sander’s acquisition of six Belo television stations. (Sander is acquiring a handful of stations because Gannett is not allowed to acquire them due to FCC rules.)
The divestiture of KMOV is required because otherwise Gannett would gain a dominant position in the St. Louis area, which would result in higher prices for advertisers. (Gannett already owns NBC affiliate KSDK-TV in that market.)
“Gannett’s KSDK-TV and Belo’s KMOV-TV compete head-to-head in the sale of broadcast television spot advertising in the St. Louis area, and this rivalry constrains advertising rates,” assistant attorney general Bill Baer said. “The full divestiture required by the department will ensure that KMOV-TV will remain a vigorous competitor in St. Louis.”
Gannett’s acquisition of Belo, which owns and operates 20 broadcast television stations nationwide, is valued at approximately $2.2 billion, the Justice Department said.