Talk Radio Network Sues Cumulus, Westwood One, Compass, WYD/WYM, Alleging Monopoly Of Syndication Ad Sales Market
April 11, 2016 at 1:19 PM (PT)
TALK RADIO NETWORK ENTERPRISES is suing CUMULUS MEDIA, WESTWOOD ONE, COMPASS MEDIA NETWORKS, WYD MEDIA MANAGEMENT/WYM MEDIA MANAGEMENT, LEW DICKEY, and CHARLES STEINHAUER in U.S. District Court for the MEDFORD Division of OREGON, claiming CUMULUS and WESTWOOD ONE are monopolizing or attempting to monopolize the independent national syndication advertising representation market, and that WYD and WYM are "operated in collusion" with CUMULUS and WESTWOOD ONE. TRN is seeking treble damages and permanent injunctive relief, plus exemplary and punitive damages and interest.
The suit alleges that the defendants "have taken control of, gained market power in, or benefitted from. control of [the market] for services of advertising representatives willing to provide ad rep services with respect to news radio and talk radio programming that is produced for syndication in the national radio market by companies which are not radio station owners and are not affiliates of any such station owners [and the market] for distribution of spoken word news and/or talk content by a producer or syndicator via individual terrestrial radio stations...." The suit also alleges "ongoing unlawful, improper, unfair and anticompetitive actions" by CUMULUS in use of its leverage through ownership of stations to increase its power in the ad rep market and talk intellectual property market.
WESTWOOD ONE was TRN's advertising sales representative for "AMERICA'S MORNING NEWS," and TRN alleges that the defendants breached their contractural duties, and do not tell independent programmers whose shows they sell "whose programs are included in. an. advertising bundle, what the relative share of listeners and/or listening time generated by any particular program in the bundle is... Nor do they tell Plaintiffs or other Independent Radio Syndicators whose programs are included in particular bundles what the advertiser actually paid for the bundle.... Defendants have taken advantage of their opportunity to manipulate the allocation process by enriching themselves," steering "outsized" shares of revenue to themselves.
In addition, the suit alleges that the defendants have failed to pay ad revenue owed to independent syndicators and stations and overstatement of bundled bulk advertising sales, which the suit terms "Allocation Fraud." "Defendants' conduct poses a significant risk to free speech under the First Amendment," the suit claims, "because it holds the prospect.of eliminating or substantially reducing the number of Independent Radio Syndicators, and limiting the news and talk radio broadcasts available within the UNITES (sic) STATES. As a consequence of that conduct, the diversity of voices and viewpoints produced on news and talk radio within the UNITED STATES is likely to decline."
The suit points at STEINHAUER as "the key overseer... in the formulation and implementation of Defendants' unlawful scheme to convert millions of dollars in ad revenues, collected by WESTWOOD in trust for Plaintiffs and other Independent Radio Syndicators, to the benefit of Defendants, through massive use and application of Allocation Fraud." TRN alleges a "conspiracy" to prevent expansion of "AMERICA'S MORNING NEWS" so that they could launch their own news service with CNN content in 2014.