WASHINGTON — Evergreen Media Corp. and Chancellor Broadcasting Corp. announced Wednesday that Justice Dept. antitrust officials want more information about their plans to acquire Katz Media, an advertising sales firm that sells time for TV, radio and cable systems.
Evergreen and Chancellor plan to purchase Katz via a jointly owned subsidiary, but the two radio companies are also in the midst of a merger of their own. The merged company will be known as Chancellor Media Corp. and will control 99 radio stations. The Justice Dept. presented the request to Evergreen Media.
After announcing Wednesday that the Justice Dept. had asked for additional documents, an action formally known as a second request for information, the companies refused to comment.
One likely source of concern for Justice Dept. officials is the possibility that Chancellor could use its ownership of the rep firm to manipulate the radio ad sales market to its advantage. Katz is the exclusive sales rep for 2,000 radio stations, 340 TV stations and 1,500 cable systems. The companies said they would comply with the Justice Dept.’s request.
When Evergreen and Chancellor announced their plans to purchase Katz, they emphasized their plan to keep the media rep firm as a separate subsidiary.