Federal Register / Vol. 83, No. 158 / Wednesday, August 15, 2018 / Notices 40553 

4Members of the Coalition are Bulldog Rack 

Company, Weirton, West Virginia; Hannibal 

Industries, Inc., Los Angeles, California; Husky 

Rack and Wire, Denver, North Carolina; Ridg-URak, Inc., North East, Pennsylvania; SpaceRAK, A 

Division of Heartland Steel Products, Inc., 

Marysville, Michigan; Speedrack Products Group, 

Ltd., Sparta, Michigan; Steel King Industries, Inc., 

Stevens Point, Wisconsin; Tri-Boro Shelving & 

Partition Corp., Farmville, Virginia; and UNARCO 

Material Handling, Inc., Springfield, Tennessee. 

Commencement of Final Phase 

Investigations 

Pursuant to section 207.18 of the 

Commission’s rules, the Commission 

also gives notice of the commencement 

of the final phase of its investigations. 

The Commission will issue a final phase 

notice of scheduling, which will be 

published in the Federal Register as 

provided in section 207.21 of the 

Commission’s rules, upon notice from 

the U.S. Department of Commerce 

(‘‘Commerce’’) of affirmative 

preliminary determinations in the 

investigations under sections 703(b) or 

733(b) of the Act, or, if the preliminary 

determinations are negative, upon 

notice of affirmative final 

determinations in those investigations 

under sections 705(a) or 735(a) of the 

Act. Parties that filed entries of 

appearance in the preliminary phase of 

the investigations need not enter a 

separate appearance for the final phase 

of the investigations. Industrial users, 

and, if the merchandise under 

investigation is sold at the retail level, 

representative consumer organizations 

have the right to appear as parties in 

Commission antidumping and 

countervailing duty investigations. The 

Secretary will prepare a public service 

list containing the names and addresses 

of all persons, or their representatives, 

who are parties to the investigations. 

Background 

On June 20, 2018, the Coalition for 

Fair Rack Imports 4 filed petitions with 

the Commission and Commerce, 

alleging that an industry in the United 

States is materially injured or 

threatened with material injury by 

reason of subsidized imports of steel 

racks from China and LTFV imports of 

steel racks from China. Accordingly, 

effective June 20, 2018, the Commission, 

pursuant to sections 703(a) and 733(a) of 

the Act (19 U.S.C. 1671b(a) and 

1673b(a)), instituted countervailing duty 

investigation No. 701–TA–608 and 

antidumping duty investigation No. 

731–TA–1420 (Preliminary). 

Notice of the institution of the 

Commission’s investigations and of a 

public conference to be held in 

connection therewith was given by 

posting copies of the notice in the Office 

of the Secretary, U.S. International 

Trade Commission, Washington, DC, 

and by publishing the notice in the 

Federal Register of June 26, 2018 (83 FR 

29822). The conference was held in 

Washington, DC, on July 11, 2018, and 

all persons who requested the 

opportunity were permitted to appear in 

person or by counsel. 

The Commission made these 

determinations pursuant to sections 

703(a) and 733(a) of the Act (19 U.S.C. 

1671b(a) and 1673b(a)). It completed 

and filed its determinations in these 

investigations on August 6, 2018. The 

views of the Commission are contained 

in USITC Publication 4811 (August 

2018), entitled Steel Racks from China: 

Investigation Nos. 701–TA–608 and 

731–TA–1420 (Preliminary). 

By order of the Commission. 

Issued: August 9, 2018. 

Lisa Barton, 

Secretary to the Commission. 

[FR Doc. 2018–17476 Filed 8–14–18; 8:45 am] 

BILLING CODE 7020–02–P 

DEPARTMENT OF JUSTICE 

Antitrust Division 

United States v. The Walt Disney 

Company, et al.; Proposed Final 

Judgment and Competitive Impact 

Statement 

Notice is hereby given pursuant to the 

Antitrust Procedures and Penalties Act, 

15 U.S.C. § 16(b)–(h), that a proposed 

Final Judgment, Stipulation, and 

Competitive Impact Statement have 

been filed with the United States 

District Court for the Southern District 

of New York in United States of 

America v. The Walt Disney Company, 

et al., Civil Action No. 1:18–cv–05800. 

On June 27, 2018, the United States 

filed a Complaint alleging that The Walt 

Disney Company’s proposed acquisition 

of certain assets from Twenty-First 

Century Fox, Inc. would violate Section 

7 of the Clayton Act, 15 U.S.C. 18. The 

proposed Final Judgment, filed at the 

same time as the Complaint, requires 

The Walt Disney Company to divest 

Fox’s interests in the following regional 

sports networks: (i) Fox Sports Arizona; 

(ii) Fox Sports Carolinas; (iii) Fox Sports 

Detroit; (iv) Fox Sports Florida; (v) Fox 

Sports Indiana; (vi) Fox Sports Kansas 

City; (vii) Fox Sports Midwest; (viii) Fox 

Sports New Orleans; (ix) Fox Sports 

North; (x) Fox Sports Ohio; (xi) 

SportsTime Ohio; (xii) Fox Sports 

Oklahoma; (xiii) Fox Sports San Diego; 

(xiv) Fox Sports South; (xv) Fox Sports 

Southeast; (xvi) Fox Sports Southwest; 

(xvii) Fox Sports Sun; (xviii) Fox Sports 

Tennessee; (xix) Fox Sports West; (xx) 

Prime Ticket; (xxi) Fox Sports 

Wisconsin; and (xxii) the YES Network. 

Copies of the Complaint, proposed 

Final Judgment, and Competitive Impact 

Statement are available for inspection 

on the Antitrust Division’s website at 

http://www.justice.gov/atr and at the 

Office of the Clerk of the United States 

District Court for the Southern District 

of New York. Copies of these materials 

may be obtained from the Antitrust 

Division upon request and payment of 

the copying fee set by Department of 

Justice regulations. 

Public comment is invited within 60 

days of the date of this notice. Such 

comments, including the name of the 

submitter, and responses thereto, will be 

posted on the Antitrust Division’s 

website, filed with the Court, and, under 

certain circumstances, published in the 

Federal Register. Comments should be 

directed to Owen M. Kendler, Chief, 

Media, Entertainment, and Professional 

Services Section, Antitrust Division, 

Department of Justice, Washington, DC 

20530, (telephone: 202–305–8376). 

Patricia A. Brink, 

Director of Civil Enforcement. 

United States District Court for the 

Southern District of New York 

United States of America, Plaintiff, v. The 

Walt Disney Company, and Twenty-First 

Century Fox, Inc., Defendants. 

Civil Action No.: 1:18-cv-05800 (CM)(KNF) 

COMPLAINT 

The United States of America, acting 

under the direction of the Attorney 

General of the United States, brings this 

civil action to enjoin the acquisition by 

The Walt Disney Company (‘‘Disney’’) 

of certain assets and businesses of 

Twenty-First Century Fox, Inc. (‘‘Fox’’) 

and to obtain other equitable relief. 

I. NATURE OF THE ACTION 

1. Cable sports programming is one of 

the most popular forms of entertainment 

in the United States. Disney’s proposed 

acquisition of Fox’s assets would 

combine two of the country’s most 

valuable cable sports properties— 

Disney’s ESPN franchise of networks 

and Fox’s portfolio of Regional Sports 

Networks (‘‘RSNs’’)—and thereby likely 

substantially lessen competition in the 

multiple Designated Market Areas 

(‘‘DMAs’’) throughout the United States 

in which these two firms compete. 

2. Pursuant to an Agreement and Plan 

of Merger dated December 13, 2017, as 

amended on June 20, 2018, Disney 

agreed to acquire certain assets and 

businesses, including Fox’s ownership 


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of or interests in its RSNs, FX cable 

networks, National Geographic cable 

networks, television studio, Hulu, film 

studio, and international television 

businesses, (the ‘‘Sale Assets’’) from Fox 

for approximately $71.3 billion (the 

‘‘Transaction’’). Fox operates and 

proposes to sell to Disney its interests in 

the following RSNs: (i) Fox Sports 

Arizona, (ii) Fox Sports Carolinas, (iii) 

Fox Sports Detroit, (iv) Fox Sports 

Florida, (v) Fox Sports Indiana, (vi) Fox 

Sports Kansas City, (vii) Fox Sports 

Midwest, (viii) Fox Sports New Orleans, 

(ix) Fox Sports North, (x) Fox Sports 

Ohio, (xi) SportsTime Ohio, (xii) Fox 

Sports Oklahoma, (xiii) Fox Sports San 

Diego, (xiv) Fox Sports South, (xv) Fox 

Sports Southeast, (xvi) Fox Sports 

Southwest, (xvii) Fox Sports Sun, (xviii) 

Fox Sports Tennessee, (xix) Fox Sports 

West, (xx) Prime Ticket, (xxi) Fox Sports 

Wisconsin, and (xxii) the YES Network. 

3. An RSN is a cable network that 

telecasts live games of one or more local 

professional sports team—i.e., a ‘‘home’’ 

team or teams within that particular 

region. An RSN’s contract with a local 

sports team typically provides the RSN 

with the exclusive rights, within a 

team’s local region, to telecast live 

nearly all that team’s games. 

Collectively, the Fox RSNs are the 

largest group of commonly controlled 

RSNs. In the aggregate, the Fox RSNs 

have approximately 61 million 

subscribers across the country and have 

rights to telecast live games of 44 of 91 

(48%) U.S. professional sports teams in 

three of the four major sports leagues: 

Major League Baseball (‘‘MLB’’), the 

National Basketball Association 

(‘‘NBA’’) and the National Hockey 

League (‘‘NHL’’). More specifically, the 

Fox RSNs have the local rights to 15 of 

30 (50%) MLB teams, 17 of 30 (57%) 

NBA teams, and 12 of 31 (39%) NHL 

teams. 

4. Cable sports television networks— 

including RSNs—compete to be carried 

in the programming packages that 

multichannel video programming 

distributors (‘‘MVPDs’’), such as 

Comcast, Charter, DISH, and FiOS, offer 

to their subscribers. For RSNs, the 

carriage license typically is limited to 

the DMAs comprising the ‘‘home’’ 

territory of the team or teams carried on 

the RSN; whereas, licenses for national 

television networks typically comprise 

all DMAs in a MVPD’s footprint. 

Disney’s and Fox’s cable sports 

television programming compete headto-head to be carried on MVPDs in all 

the DMAs where Fox’s RSNs are 

located: Phoenix, Arizona; Detroit, 

Michigan; Milwaukee, Wisconsin; 

Cleveland, Ohio; Cincinnati, Ohio; 

Columbus, Ohio; Miami, Florida; 

Oklahoma City, Oklahoma; Tampa Bay, 

Florida; Dallas, Texas; St. Louis, 

Missouri; Atlanta, Georgia; Indianapolis, 

Indiana; Orlando, Florida; San Antonio, 

Texas; Minneapolis, Minnesota; 

Nashville, Tennessee; Memphis, 

Tennessee; San Diego, California; 

Raleigh-Durham, North Carolina; New 

Orleans, Louisiana; Kansas City, Kansas; 

Charlotte, North Carolina; Los Angeles, 

California; and New York, New York 

(collectively, the ‘‘DMA Markets’’). 

5. If consummated, the proposed 

acquisition would eliminate the 

substantial head-to-head competition 

that currently exists between Disney 

and Fox and would likely result in 

higher prices for cable sports 

programming in each of the DMA 

Markets. Consequently, Defendants’ 

proposed Transaction likely would 

substantially lessen competition in 

those markets in violation of Section 7 

of the Clayton Act, 15 U.S.C. § 18. 

II. JURISDICTION, VENUE, AND 

COMMERCE 

6. The United States brings this action 

pursuant to Section 15 of the Clayton 

Act, 15 U.S.C. § 25, to prevent and 

restrain Disney and Fox from violating 

Section 7 of the Clayton Act, 15 U.S.C. 

§ 18. 

7. The Court has subject-matter 

jurisdiction over this action pursuant to 

Section 15 of the Clayton Act, 15 U.S.C. 

§ 25, and 28 U.S.C. §§ 1331, 1337(a), and 

1345. 

8. Disney and Fox are engaged in 

interstate commerce and in activities 

substantially affecting interstate 

commerce. They each license 

programming to MVPDs located across 

the country in exchange for license, or 

‘‘affiliate,’’ fees. They each own and 

operate television networks that are 

distributed to viewers throughout the 

United States. Their television 

programming licenses have had a 

substantial effect on interstate 

commerce. 

9. Defendants have consented to 

venue and personal jurisdiction in this 


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Federal Register / Vol. 83, No. 158 / Wednesday, August 15, 2018 / Notices 40555 

District. Venue is also proper in this 

District under Section 12 of the Clayton 

Act, 15 U.S.C. § 22, and 28 U.S.C. 

§ 1391(c). 

III. THE DEFENDANTS 

10. Disney is a Delaware corporation 

headquartered in Burbank, California. It 

reported revenue of $55 billion for fiscal 

year 2017. Disney owns various 

television programming assets, 

including 80% of ESPN—a sports 

entertainment company that operates 

several domestic sports television 

networks. Disney’s other television 

programming assets include: (i) the ABC 

television network; (ii) eight ownedand-operated ABC broadcast stations; 

(iii) Disney-branded television 

networks; and (iv) Freeform, a television 

network geared toward teenagers and 

young adults. 

11. Fox is a Delaware corporation 

headquartered in New York, New York. 

It reported revenue of $28.5 billion for 

fiscal year 2017. The Fox Sale Assets, 

which include several television 

programing assets and all of the Fox 

RSNs, generated $19 billion in revenue 

for fiscal year 2017. 

IV. RELEVANT MARKETS 

12. The licensing of cable sports 

programming to MVPDs constitutes a 

relevant product market and line of 

commerce under Section 7 of the 

Clayton Act. This includes licensing to 

both MVPDs and virtual MVPDs. Cable 

sports programming includes cable 

networks that devote a substantial 

portion of programming time to airing 

live sports events, such as MLB games. 

13. The DMA Markets constitute 

geographic markets under Section 7 of 

the Clayton Act. A DMA is a 

geographical unit for which A.C. 

Nielsen Company—a firm that surveys 

television viewers—furnishes MVPDs, 

among others, with data to aid in 

evaluating audience size and 

composition in a particular area. DMAs 

are widely accepted by MVPDs as the 

standard geographic area to use in 

evaluating television audience size and 

demographic composition. The Federal 

Communications Commission also uses 

DMAs as geographic units with respect 

to its MVPD regulations. 

14. Disney and Fox license cable 

sports programming to MVPDs in each 

of the DMA Markets in which MVPDs 

provide programming to subscribers as 

part of bundled channel packages. 

Disney’s and Fox’s cable sports 

programming in each of the DMA 

Markets generates a significant amount 

of revenue through licensing fees to 

MVPDs in those markets. 

15. Sports programming is important 

to MVPDs because sports viewers 

comprise an important customer group 

for MVPDs, and MVPDs could not 

attract many of these sports viewers 

without including sports television 

programming in the MVPDs’ packages of 

available networks. 

16. For MVPDs, sports programming 

on broadcast television is unlikely a 

sufficient substitute for cable sports 

programming. MVPDs do not typically 

consider broadcast networks as 

providing the same type of content as 

cable networks like ESPN and the RSNs. 

Broadcast networks and their affiliates 

aim to have broad appeal by offering a 

variety of highly-rated programming 

content including primetime 

entertainment shows, syndicated shows, 

and local and national news and 

weather in addition to sports, with 

marquee sports events making up a 

small percentage of a broadcast 

network’s airtime. For that reason, 

MVPDs do not typically consider 

broadcast network programming as a 

replacement for cable sports 

programming. 

17. Accordingly, a hypothetical 

monopolist of all cable sports 

programming in a DMA Market likely 

would profitably increase licensing fees 

to MVPDs in that DMA Market by at 

least a small but significant amount. 

V. LIKELY ANTICOMPETITIVE 

EFFECTS 

18. The cable sports programming 

market in nearly all of the DMA Markets 

is already highly concentrated. As a 

result of the Transaction, Disney’s 

networks would account for at least 60 

percent of cable sports programming 

revenue in 19 of the DMA Markets and 

over 45 percent in the remaining six 

DMA Markets. Consequently, bringing 

Disney’s ESPN networks and Fox’s 

RSNs under common ownership would 

significantly concentrate the cable 

sports programming market in each of 

the DMA Markets. 

19. Market concentration is often a 

useful indicator of the likely 

competitive effects of a merger. The 

more concentrated a market, and the 

more a transaction would increase 

concentration in a market, the more 

likely it is that the transaction would 

result in a meaningful reduction in 

competition that harms consumers. 

20. The Herfindahl-Hirschman Index 

(‘‘HHI’’) is a standard measure of market 

concentration. Under the Horizontal 

Merger Guidelines issued by the 

Department of Justice and the Federal 

Trade Commission, mergers resulting in 

highly concentrated markets (with an 

HHI in excess of 2,500) that involve an 

increase in the HHI of more than 200 

points are presumed to be likely to 

enhance market power. 

21. Using 2017 gross cable sports 

programming revenue, in each of the 

DMA Markets, the combination of 

Disney and the Fox Sale Assets would 

result in HHIs in excess of 2,500 and 

involve an increase in the HHI of more 

than 200. Therefore, in each DMA 

Market, the HHI levels are above the 

thresholds at which a merger is 

presumed likely to enhance market 

power. 

22. For example, in the Detroit DMA 

Market, where Fox operates Fox Sports 

Detroit, the Transaction would result in 

a post-merger HHI of over 4,000 with an 

increase of over 1,400. Therefore, in this 

market, the Transaction results in a 

presumptively anticompetitive level of 

concentration. Similarly, the 

Transaction would result in 

presumptively anticompetitive levels of 

concentration in each of the other DMA 

Markets. 

23. In addition to substantially 

increasing concentration levels in each 

of the DMA Markets, the proposed 

Transaction would combine cable sports 

networks that are at least partial 

substitutes. Accordingly, the proposed 

Transaction would likely diminish 

competition in the negotiation of 

licenses for cable sports programming 

with MVPDs that have subscribers in 

the DMA Markets. Post-acquisition, 

Disney would gain the ability to 

threaten MVPDs in each of the DMA 

Markets with the simultaneous blackout 

of two of the most significant cable 

networks carrying sports programming: 

ESPN and a local RSN. ESPN and the 

local Fox RSN generate the highest and 

second-highest affiliate fees per 

subscriber in most of the 25 DMAs, and 

they are among the networks that 

generate the highest affiliate fees per 

subscriber in every one of the 25 DMAs. 

24. The threat of double blackouts in 

the DMA Markets—and the resulting 

disproportionate loss of an MVPD’s 

subscribers and profits—likely would 

significantly strengthen Disney’s 

bargaining position with MVPDs. Before 

the merger, an MVPD’s failure to reach 

an agreement with Disney could result 

in a blackout of Disney’s networks in 

the MVPD’s footprint and threaten it 

with some subscriber loss. But the 

MVPD would still be able to offer the 

sports programming on Fox’s RSNs 

during a Disney blackout, thereby 

minimizing subscription cancellations. 

After the merger, an MVPD negotiating 

with Disney would face the prospect of 

a dual blackout of ESPN and the local 

RSN in one or more DMA Markets, 

likely resulting in disproportionately 


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more subscriber loss. Because the 

leverage that a television programmer 

has in negotiations with the MVPD is 

derived at least in part from its leverage 

within each DMA Market in the MVPD’s 

footprint, the threat of a dual blackout 

would likely cause an MVPD to accede 

to a demand by Disney for higher 

license fees. For these reasons, the loss 

of competition between Disney and the 

Fox Sale Assets in each DMA Market 

would likely lead to an increase in total 

licensing fees in each DMA Market and, 

because increased licensing fees 

typically are passed on to consumers, 

would result in higher subscription fees 

for customers of MVPDs. 

VI. ABSENCE OF COUNTERVAILING 

FACTORS 

25. Entry would not be timely, likely 

or sufficient to prevent the Transaction’s 

likely anticompetitive effects. 

Professional sport teams auction the 

exclusive rights to telecast their games 

under long-term contracts. Because 

these contracts typically last many 

years, there are infrequent opportunities 

for entrants to bid for these highly 

valuable licensing rights. 

26. Defendants cannot demonstrate 

acquisition-specific and cognizable 

efficiencies that would be sufficient to 

offset the proposed acquisition’s likely 

anticompetitive effects. 

VII. VIOLATIONS ALLEGED 

27. Disney’s proposed acquisition of 

the Fox Sale Assets likely would 

substantially lessen competition in 

interstate trade and commerce, in 

violation of Section 7 of the Clayton 

Act, 15 U.S.C. § 18. The proposed 

acquisition likely would: 

a. substantially lessen competition in 

the licensing of cable sports 

programming in each of the DMA 

Markets; 

b. eliminate actual and potential 

competition among Disney and Fox 

in the licensing of cable sports 

programming in each of the DMA 

Markets; and 

c. cause prices for cable sports 

programming in each of the DMA 

Markets to increase. 

VIII. REQUEST FOR RELIEF 

28. The United States requests that 

the Court: 

a. adjudge the proposed acquisition to 

violate Section 7 of the Clayton Act, 

15 U.S.C. § 18; 

b. permanently enjoin and restrain 

Defendants from carrying out the 

Transaction, or entering into any 

other agreement, understanding, or 

plan by which Disney would 

acquire the Fox Sale Assets; 

c. award the United States the costs of 

this action; and 

d. award such other relief to the 

United States as the Court may 

deem just and proper. 

Dated: June 27, 2018 

Respectfully submitted, 

FOR PLAINTIFF UNITED STATES OF 

AMERICA 

lllllllllllllllllllll

MAKAN DELRAHIM 

Assistant Attorney General for Antitrust 

lllllllllllllllllllll

ANDREW C. FINCH 

Principal Deputy Assistant Attorney General 

lllllllllllllllllllll

PATRICIA A. BRINK 

Director of Civil Enforcement 

lllllllllllllllllllll

OWEN M. KENDLER 

Chief, Media, Entertainment & Professional 

Services Section 

lllllllllllllllllllll

YVETTE TARLOV 

Assistant Chief, Media, Entertainment & 

Professional Services Section 

lllllllllllllllllllll

CRAIG D. MINERVA 

LEE F. BERGER 

JEREMY EVANS 

RACHEL FLIPSE 

BRIAN HANNA 

MARK MERVA 

KATE RIGGS 

LAUREN RIKER 

MONSURA SIRAJEE 

ADAM C. SPEEGLE 

LOWELL STERN 

United States Department of Justice, 

Antitrust Division, Media, Entertainment & 

Professional, Services Section, 450 Fifth 

Street NW, Suite 4000, Washington, DC 

20530, Telephone: (202) 353–2384, 

Facsimile: (202) 514–730 

United States District Court for the 

Southern District of New York 

United States of America, Plaintiff, v. The 

Walt Disney Company, and Twenty-First 

Century Fox, Inc., Defendants. 

PROPOSED FINAL JUDGMENT 

WHEREAS, Plaintiff, the United 

States of America, filed its Complaint on 

June 27, 2018, and defendant The Walt 

Disney Company (‘‘Disney’’) and 

defendant Twenty-First Century Fox, 

Inc. (‘‘Fox’’), by their respective 

attorneys, have consented to the entry of 

this Final Judgment without trial or 

adjudication of any issue of fact or law, 

and without this Final Judgment 

constituting any evidence against or 

admission by any party regarding any 

issue of fact or law; 

AND WHEREAS, defendants agree to 

be bound by the provisions of this Final 

Judgment pending its approval by the 

Court; 

AND WHEREAS, the essence of this 

Final Judgment is the prompt and 

certain divestiture of certain rights or 

assets by Disney to assure that 

competition is not substantially 

lessened; 

AND WHEREAS, the United States 

requires Disney to make certain 

divestitures for the purpose of 

remedying the loss of competition 

alleged in the Complaint; 

AND WHEREAS, Disney has 

represented to the United States that the 

divestitures required below can and will 

be made and that defendants will later 

raise no claim of hardship or difficulty 

as grounds for asking the Court to 

modify any of the divestiture provisions 

contained below; 

NOW THEREFORE, before any 

testimony is taken, without trial or 

adjudication of any issue of fact or law, 

and upon consent of the parties, it is 

ORDERED, ADJUDGED, AND 

DECREED: 

I. JURISDICTION 

This Court has jurisdiction over the 

subject matter of, and each of the parties 

to, this action. The Complaint states a 

claim upon which relief may be granted 

against defendants under Section 7 of 

the Clayton Act, as amended, 15 U.S.C. 

§ 18. 

II. DEFINITIONS 

As used in this Final Judgment: 

A. ‘‘Disney’’ means defendant The 

Walt Disney Company, a Delaware 

corporation headquartered in Burbank, 

California, its successors and assigns, 

and its subsidiaries, divisions, groups, 

affiliates, partnerships, and joint 

ventures, and their directors, officers, 

managers, agents, and employees. 

B. ‘‘Fox’’ means defendant TwentyFirst Century Fox, Inc., a Delaware 

corporation headquartered in New York, 

New York, its successors and assigns, 

and its subsidiaries, divisions, groups, 

affiliates, partnerships, and joint 

ventures, and their directors, officers, 

managers, agents, and employees. 

C. ‘‘Acquirer’’ means an entity to 

which defendants divest any of the 

Divestiture Assets. 

D. ‘‘Fox RSNs’’ means all of Fox’s 

interests in the following video 

networks or programming assets: 

(1) Fox Sports Arizona; 

(2) Fox Sports Carolinas; 

(3) Fox Sports Detroit; 

(4) Fox Sports Florida; 

(5) Fox Sports Indiana; 

(6) Fox Sports Kansas City; 

(7) Fox Sports Midwest; 

(8) Fox Sports New Orleans; 

(9) Fox Sports North; 

(10) Fox Sports Ohio; 


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(11) SportsTime Ohio; 

(12) Fox Sports Oklahoma; 

(13) Fox Sports San Diego; 

(14) Fox Sports South; 

(15) Fox Sports Southeast; 

(16) Fox Sports Southwest; 

(17) Fox Sports Sun; 

(18) Fox Sports Tennessee; 

(19) Fox Sports West; 

(20) Prime Ticket; 

(21) Fox Sports Wisconsin; and 

(22) the YES Network. 

E. ‘‘Divestiture Assets’’ means all of 

Fox’s interests in the Fox RSNs, 

including all of the assets, tangible or 

intangible, necessary for the operations 

of the Fox RSNs as viable, ongoing 

video networks or programming assets, 

including, but not limited to, all real 

property (owned or leased), all 

broadcast equipment, office furniture, 

fixtures, materials, supplies, and other 

tangible property; all licenses, permits 

and authorizations issued by any 

governmental organization relating to 

the operation of the asset; all contracts 

(including content, programming and 

distribution contracts and rights), 

agreements (including transition 

services agreements), leases, and 

commitments and understanding of 

defendants; all trademarks, service 

marks, trade names, copyrights, patents, 

slogans, programming materials, and 

promotional materials relating to each 

video network; all customer lists, 

contracts, accounts, credit records, and 

all logs and other records maintained by 

Fox in connection with each video 

network. Except as set forth in 

Paragraph IV(H) of this Final Judgment, 

Divestiture Assets do not include 

trademarks, trade names, service marks, 

or service names containing the name 

‘‘Fox.’’ 

F. The term ‘‘Transaction’’ means the 

transaction that is the subject of the 

Agreement and Plan of Merger among 

Twenty-First Century Fox, Inc., The 

Walt Disney Company, TWDC Holdco 

613 corp., WDC Merger Enterprises II 

Corp., and WDC Merger Enterprises I, 

LLC, dated June 20, 2018. 

III. APPLICABILITY 

A. This Final Judgment applies to 

Disney and Fox, as defined above, and 

all other persons in active concert or 

participation with any of them who 

receive actual notice of this Final 

Judgment by personal service or 

otherwise. 

B. If, after the closing and prior to 

complying with Section IV and Section 

V of this Final Judgment, Disney sells or 

otherwise disposes of all or 

substantially all of the assets or lesser 

business units that include the 

Divestiture Assets, it shall require the 

purchaser to be bound by the provisions 

of this Final Judgment. Disney need not 

obtain such an agreement from the 

Acquirer(s) of the assets divested 

pursuant to this Final Judgment. 

IV. DIVESTITURES 

A. Disney is ordered and directed, 

within ninety (90) calendar days after 

the closing of the Transaction, or five (5) 

calendar days after notice of entry of 

this Final Judgment by the Court, 

whichever is later, to divest the 

Divestiture Assets in a manner 

consistent with this Final Judgment to 

one or more Acquirers acceptable to the 

United States, in its sole discretion. The 

United States, in its sole discretion, may 

agree to one or more extensions of this 

time period not to exceed ninety (90) 

calendar days in total, and shall notify 

the Court in such circumstances. With 

respect to divestiture of the Divestiture 

Assets by Disney or a trustee appointed 

pursuant to Section V of this Final 

Judgment, Disney agrees to use its best 

efforts to divest the Divestiture Assets as 

expeditiously as possible after the 

closing of the Transaction. For the 

avoidance of doubt, nothing in this 

Final Judgment shall require Fox to 

divest any of the Divestiture Assets 

prior to the closing of the Transaction. 

B. In accomplishing the divestiture 

ordered by this Final Judgment, Disney 

promptly shall make known, by usual 

and customary means, the availability of 

the Divestiture Assets. Disney shall 

inform any person making an inquiry 

regarding a possible purchase of the 

Divestiture Assets that they are being 

divested pursuant to this Final 

Judgment and provide that person with 

a copy of this Final Judgment. 

Defendants shall offer to furnish to all 

prospective Acquirers, subject to 

customary confidentiality assurances, 

all information and documents relating 

to the Divestiture Assets customarily 

provided in a due diligence process, 

except such information or documents 

subject to the attorney-client privilege or 

work-product doctrine. Defendants shall 

make available such information to the 

United States at the same time that such 

information is made available to any 

other person. 

C. Defendants shall provide the 

Acquirer(s) and the United States 

information relating to the personnel 

involved in the production and 

operation of the Divestiture Assets to 

enable the Acquirer(s) to make offers of 

employment. Defendants will not 

interfere with any negotiations by the 

Acquirer(s) to employ upon closing of 

the sale of each of the Divestiture Assets 

any defendant employee whose primary 

responsibility is the production and 

operation of the Divestiture Assets. 

D. Defendants shall permit the 

prospective Acquirer(s) of the 

Divestiture Assets to have reasonable 

access to personnel and to make 

inspections of the Divestiture Assets; 

access to any and all environmental, 

zoning, and other permit documents 

and information; and access to any and 

all financial, operational, or other 

documents and information customarily 

provided as part of a due diligence 

process. 

E. Disney shall warrant to the 

Acquirer(s) that each Divestiture Asset 

will be operational on the date of sale. 

F. Defendants shall not take any 

action that will impede in any way the 

permitting, operation, or divestiture of 

the Divestiture Assets. 

G. Disney shall warrant to the 

Acquirer(s) (1) that there are no material 

defects in the environmental, zoning, or 

other permits pertaining to the 

operation of each Divestiture Asset, and 

(2) that following the sale of the 

Divestiture Assets, Disney will not 

undertake, directly or indirectly, any 

challenges to the environmental, zoning, 

or other permits relating to the 

operation of the Divestiture Assets. 

H. Notwithstanding Paragraph II(E), 

that the Divestiture Assets do not 

include trademarks, trade names, 

service marks, or service names 

containing the name ‘‘Fox,’’ the 

defendants shall offer any Acquirer(s) of 

a Fox RSN a non-exclusive royalty-free 

license for use of the ‘‘Fox’’ trademark 

consistent with that RSN’s current usage 

of that trademark for a time period of at 

least eighteen (18) months. 

I. At the option of Acquirer(s), on or 

before the closing date of any 

divestiture, Disney shall enter into one 

or more transition services agreements, 

approved in advance by the United 

States in its sole discretion, to provide 

any transition services reasonably 

necessary to operate any Divestiture 

Assets as viable, ongoing video 

networks or programming assets. 

J. Unless the United States otherwise 

consents in writing, the divestitures 

pursuant to Section IV, or by trustee 

appointed pursuant to Section V of this 

Final Judgment, shall include the entire 

Divestiture Assets and be accomplished 

in such a way as to satisfy the United 

States, in its sole discretion, that the 

Divestiture Assets can and will be used 

by the Acquirer(s) as part of a viable, 

ongoing business of selling, supplying, 

or licensing video programming. 

Divestiture of the Divestiture Assets 

may be made to one or more Acquirers, 

provided that in each instance it is 

demonstrated to the sole satisfaction of 


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the United States that the Divestiture 

Assets will remain viable, and the 

divestiture of such assets will achieve 

the purposes of this Final Judgment and 

remedy the competitive harm alleged in 

the Complaint. The divestitures, 

whether pursuant to Section IV or 

Section V of this Final Judgment: 

(1) shall be made to an Acquirer(s) that, 

in the United States’ sole judgment, 

has the intent and capability 

(including the necessary 

managerial, operational, technical, 

and financial capability) of 

competing effectively in the 

business of selling, supplying, and 

licensing video programming; and 

(2) shall be accomplished so as to satisfy 

the United States, in its sole 

discretion, that none of the terms of 

any agreement between the 

Acquirer(s) and defendants gives 

defendants the ability unreasonably 

to raise the costs of the Acquirer(s), 

to lower the efficiency of the 

Acquirer(s), or otherwise to 

interfere in the ability of the 

Acquirer(s) to compete effectively. 

V. APPOINTMENT OF TRUSTEE 

A. If Disney has not divested the 

Divestiture Assets within the time 

period specified in Section IV(A), 

Disney shall notify the United States of 

that fact in writing, specifically 

identifying the Divestiture Assets that 

have not been divested (the ‘‘relevant 

Divestiture Assets’’). Upon application 

of the United States, the Court shall 

appoint a trustee selected by the United 

States and approved by the Court to 

effect the divestiture of the relevant 

Divestiture Assets. 

B. After the appointment of a trustee 

becomes effective, only the trustee shall 

have the right to sell the relevant 

Divestiture Assets. The trustee shall 

have the power and authority to 

accomplish the divestiture to an 

Acquirer acceptable to the United States 

at such price and on such terms as are 

then obtainable upon reasonable effort 

by the trustee, subject to the provisions 

of Sections IV, V, and VI of this Final 

Judgment, and shall have such other 

powers as this Court deems appropriate. 

Subject to Section V(D) of this Final 

Judgment, the trustee may hire at the 

cost and expense of Disney any 

investment bankers, attorneys, or other 

agents, who shall be solely accountable 

to the trustee, reasonably necessary in 

the trustee’s judgment to assist in the 

divestiture. Any such investment 

bankers, attorneys, or other agents shall 

serve on such terms and conditions as 

the United States approves, including 

confidentiality requirements and 

conflict of interest certifications. 

C. Defendants shall not object to a sale 

by the trustee on any ground other than 

the trustee’s malfeasance. Any such 

objections by defendants must be 

conveyed in writing to the United States 

and the trustee within ten (10) calendar 

days after the trustee has provided the 

notice required under Section VI. 

D. The trustee shall serve at the cost 

and expense of Disney pursuant to a 

written agreement, on such terms and 

conditions as the United States 

approves, including confidentiality 

requirements and conflict of interest 

certifications. The trustee shall account 

for all monies derived from the sale of 

the relevant Divestiture Assets and all 

costs and expenses so incurred. After 

approval by the Court of the trustee’s 

accounting, including fees for its 

services yet unpaid and those of any 

professionals and agents retained by the 

trustee, all remaining money shall be 

paid to Disney and the trust shall then 

be terminated. The compensation of the 

trustee and any professionals and agents 

retained by the trustee shall be 

reasonable in light of the value of the 

relevant Divestiture Assets and based on 

a fee arrangement providing the trustee 

with an incentive based on the price 

and terms of the divestiture and the 

speed with which it is accomplished, 

but timeliness is paramount. If the 

trustee and Disney are unable to reach 

agreement on the trustee’s or any agents’ 

or consultants’ compensation or other 

terms and conditions of engagement 

within 14 calendar days of appointment 

of the trustee, the United States may, in 

its sole discretion, take appropriate 

action, including making a 

recommendation to the Court. The 

trustee shall, within three (3) business 

days of hiring any other professionals or 

agents, provide written notice of such 

hiring and the rate of compensation to 

defendants and the United States. 

E. Disney shall use its best efforts to 

assist the trustee in accomplishing the 

required divestiture. The trustee and 

any consultants, accountants, attorneys, 

and other agents retained by the trustee 

shall have full and complete access to 

the personnel, books, records, and 

facilities of the business to be divested, 

and Disney shall develop financial and 

other information relevant to such 

business as the trustee may reasonably 

request, subject to reasonable protection 

for trade secret or other confidential 

research, development, or commercial 

information or any applicable 

privileges. Defendants shall take no 

action to interfere with or to impede the 

trustee’s accomplishment of the 

divestiture. 

F. After its appointment, the trustee 

shall file monthly reports with the 

United States and, as appropriate, the 

Court setting forth the trustee’s efforts to 

accomplish the divestitures ordered 

under this Final Judgment. To the extent 

such reports contain information that 

the trustee deems confidential, such 

reports shall not be filed in the public 

docket of the Court. The trustee’s 

reports shall include the name, address, 

and telephone number of each person 

who, during the preceding month, made 

an offer to acquire, expressed an interest 

in acquiring, entered into negotiations 

to acquire, or was contacted or made an 

inquiry about acquiring, any interest in 

the Divestiture Assets, and shall 

describe in detail each contact with any 

such person. The trustee shall maintain 

full records of all efforts made to divest 

the relevant Divestiture Assets. 

G. If the trustee has not accomplished 

the divestitures ordered under this Final 

Judgment within six (6) months after its 

appointment, the trustee shall promptly 

file with the Court a report setting forth 

(1) the trustee’s efforts to accomplish the 

required divestiture, (2) the reasons, in 

the trustee’s judgment, why the required 

divestiture has not been accomplished, 

and (3) the trustee’s recommendations. 

To the extent such report contains 

information that the trustee deems 

confidential, such report shall not be 

filed in the public docket of the Court. 

The trustee shall at the same time 

furnish such report to the United States 

which shall have the right to make 

additional recommendations consistent 

with the purpose of the trust. The Court 

thereafter shall enter such orders as it 

shall deem appropriate to carry out the 

purpose of the Final Judgment, which 

may, if necessary, include extending the 

trust and the term of the trustee’s 

appointment by a period requested by 

the United States. 

H. If the United States determines that 

the trustee has ceased to act or failed to 

act diligently or in a reasonably costeffective manner, it may recommend the 

Court appoint a substitute trustee. 

VI. NOTICE OF PROPOSED 

DIVESTITURE 

A. Within two (2) business days 

following execution of a definitive 

divestiture agreement, Disney or the 

trustee, whichever is then responsible 

for effecting the divestitures required 

herein, shall notify the United States of 

any proposed divestiture required by 

Section IV or Section V of this Final 

Judgment. If the trustee is responsible, 

it shall similarly notify defendants. The 

notice shall set forth the details of the 

proposed divestiture and list the name, 

address, and telephone number of each 

person not previously identified who 

offered or expressed an interest in or 


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desire to acquire any ownership interest 

in the Divestiture Assets, together with 

full details of the same. 

B. Within fifteen (15) calendar days of 

receipt by the United States of such 

notice, the United States may request 

from defendants, the proposed Acquirer, 

any other third party, or the trustee, if 

applicable, additional information 

concerning the proposed divestiture, the 

proposed Acquirer, and any other 

potential Acquirers. Defendants and the 

trustee shall furnish any additional 

information requested within fifteen 

(15) calendar days of the receipt of the 

request, unless the parties shall 

otherwise agree. 

C. Within thirty (30) calendar days 

after receipt of the notice or within 

twenty (20) calendar days after the 

United States has been provided the 

additional information requested from 

defendants, the proposed Acquirer(s), 

any third party, and the trustee, 

whichever is later, the United States 

shall provide written notice to 

defendants and the trustee, if there is 

one, stating whether or not it objects to 

the proposed divestiture. If the United 

States provides written notice that it 

does not object, the divestiture may be 

consummated, subject only to 

defendants’ limited right to object to the 

sale under Paragraph V(C) of this Final 

Judgment. Absent written notice that the 

United States does not object to the 

proposed Acquirer(s) or upon objection 

by the United States, a divestiture 

proposed under Section IV or Section V 

shall not be consummated. Upon 

objection by defendants under 

Paragraph V(C), a divestiture proposed 

under Section V shall not be 

consummated unless approved by the 

Court. 

VII. FINANCING 

Disney shall not finance all or any 

part of any purchase made pursuant to 

Section IV or Section V of this Final 

Judgment. 

VIII. HOLD SEPARATE 

Until the divestitures required by this 

Final Judgment have been 

accomplished, defendants shall take all 

steps necessary to comply with the Hold 

Separate Stipulation and Order entered 

by this Court. After the Transaction has 

been consummated or closed, 

defendants shall take no action that 

would jeopardize the divestiture 

ordered by this Court. 

IX. AFFIDAVITS 

A. Within twenty (20) calendar days 

of the filing of the Complaint in this 

matter, and every thirty (30) calendar 

days thereafter until the divestiture has 

been completed under Section IV or 

Section V of this Final Judgment, 

defendants shall deliver to the United 

States an affidavit, signed by each 

defendant’s Chief Financial Officer and 

General Counsel, which shall describe 

the fact and manner of defendant’s 

compliance with Section IV or Section 

V of this Final Judgment. Each such 

affidavit shall include the name, 

address, and telephone number of each 

person who, during the preceding thirty 

(30) calendar days, made an offer to 

acquire, expressed an interest in 

acquiring, entered into negotiations to 

acquire, or was contacted or made an 

inquiry about acquiring, any interest in 

the Divestiture Assets, and shall 

describe in detail each contact with any 

such person during that period. Each 

such affidavit shall also include a 

description of the efforts defendants 

have taken to solicit buyers for and 

complete the sale of the Divestiture 

Assets, including efforts to secure 

regulatory approvals, and to provide 

required information to prospective 

Acquirers, including the limitations, if 

any, on such information. 

Assuming the information set forth in 

the affidavit is true and complete, any 

objection by the United States to 

information provided by defendants, 

including limitations on information, 

shall be made within fourteen (14) 

calendar days of receipt of such 

affidavit. 

B. Within twenty (20) calendar days 

of the filing of the Complaint in this 

matter, defendants shall deliver to the 

United States an affidavit that describes 

in reasonable detail all actions 

defendants have taken and all steps 

defendants have implemented on an 

ongoing basis to comply with Section 

VIII of this Final Judgment. Defendants 

shall deliver to the United States an 

affidavit describing any changes to the 

efforts and actions outlined in 

defendant’s earlier affidavits filed 

pursuant to this section within fifteen 

(15) calendar days after the change is 

implemented. 

C. Defendants shall keep all records of 

all efforts made to preserve and divest 

the Divestiture Assets until one year 

after such divestiture has been 

completed. 

X. COMPLIANCE INSPECTION 

A. For the purposes of determining or 

securing compliance with this Final 

Judgment, or of any related orders such 

as any Hold Separate Stipulation and 

Order, or of determining whether the 

Final Judgment should be modified or 

vacated, and subject to any legally 

recognized privilege, from time to time 

authorized representatives of the United 

States Department of Justice, including 

consultants and other persons retained 

by the United States, shall, upon written 

request of an authorized representative 

of the Assistant Attorney General in 

charge of the Antitrust Division, and on 

reasonable notice to defendants, be 

permitted: 

(1) access during defendants’ office 

hours to inspect and copy, or at the 

option of the United States, to 

require defendants to provide hard 

copies or electronic copies of, all 

books, ledgers, accounts, records, 

data, and documents in the 

possession, custody, or control of 

defendants, relating to any matters 

contained in this Final Judgment; 

and 

(2) to interview, either informally or on 

the record, defendants’ officers, 

employees, or agents, who may 

have their individual counsel 

present, regarding such matters. 

The interviews shall be subject to 

the reasonable convenience of the 

interviewee and without restraint or 

interference by defendants. 

B. Upon the written request of an 

authorized representative of the 

Assistant Attorney General in charge of 

the Antitrust Division, defendants shall 

submit written reports or responses to 

written interrogatories, under oath if 

requested, relating to any of the matters 

contained in this Final Judgment as may 

be requested. 

C. No information or documents 

obtained by the means provided in this 

section shall be divulged by the United 

States to any person other than an 

authorized representative of the 

executive branch of the United States, 

except in the course of legal proceedings 

to which the United States is a party 

(including grand jury proceedings), or 

for the purpose of securing compliance 

with this Final Judgment, or as 

otherwise required by law. 

D. If at the time information or 

documents are furnished by defendants 

to the United States, defendants 

represent and identify in writing the 

material in any such information or 

documents to which a claim of 

protection may be asserted under Rule 

26(c)(1)(G) of the Federal Rules of Civil 

Procedure, and defendants mark each 

pertinent page of such material, 

‘‘Subject to claim of protection under 

Rule 26(c)(1)(G) of the Federal Rules of 

Civil Procedure,’’ then the United States 

shall give defendants ten (10) calendar 

days’ notice prior to divulging such 

material in any legal proceeding (other 

than a grand jury proceeding). 


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XI. NO REACQUISITION 

Disney may not reacquire any of the 

Divestiture Assets during the term of 

this Final Judgment without prior 

written approval of the United States. 

XII. RETENTION OF JURISDICTION 

This Court retains jurisdiction to 

enable any party to this Final Judgment 

to apply to this Court at any time for 

further orders and directions as may be 

necessary or appropriate to carry out or 

construe this Final Judgment, to modify 

any of its provisions, to enforce 

compliance, and to punish violations of 

its provisions. 

XIII. ENFORCEMENT OF FINAL 

JUDGMENT 

A. The United States retains and 

reserves all rights to enforce the 

provisions of this Final Judgment, 

including its right to seek an order of 

contempt from this Court. Defendants 

agree that in any civil contempt action, 

any motion to show cause, or any 

similar action brought by the United 

States regarding an alleged violation of 

this Final Judgment, the United States 

may establish a violation of the decree 

and the appropriateness of any remedy 

therefor by a preponderance of the 

evidence, and they waive any argument 

that a different standard of proof should 

apply. 

B. The Final Judgment should be 

interpreted to give full effect to the 

procompetitive purposes of the antitrust 

laws and to restore all competition 

harmed by the challenged conduct. 

Defendants agree that they may be held 

in contempt of, and that the Court may 

enforce, any provision of this Final 

Judgment that, as interpreted by the 

Court in light of these procompetitive 

principles and applying ordinary tools 

of interpretation, is stated specifically 

and in reasonable detail, whether or not 

it is clear and unambiguous on its face. 

In any such interpretation, the terms of 

this Final Judgment should not be 

construed against either party as the 

drafter. 

C. In any enforcement proceeding in 

which the Court finds that the 

defendants have violated this Final 

Judgment, the United States may apply 

to the Court for a one-time extension of 

this Final Judgment, together with such 

other relief as may be appropriate. In 

connection with any successful effort by 

the United States to enforce this Final 

Judgement against a Defendant, whether 

litigated or resolved prior to litigation, 

that Defendant agrees to reimburse the 

United States for any attorneys’ fees, 

experts’ fees, and costs incurred in 

connection with that enforcement effort, 

including the investigation of the 

potential violation. 

XIV. EXPIRATION OF FINAL 

JUDGMENT 

Unless this Court grants an extension, 

this Final Judgment shall expire seven 

(7) years from the date of its entry, 

except that this Final Judgment may be 

terminated upon notice by the United 

States to the Court and the defendants 

that the divestitures have been 

completed and that the continuation of 

the Final Judgment no longer is 

necessary. 

XV. PUBLIC INTEREST 

DETERMINATION 

Entry of this Final Judgment is in the 

public interest. The parties have 

complied with the requirements of the 

Antitrust Procedures and Penalties Act, 

15 U.S.C. § 16, including making copies 

available to the public of this Final 

Judgment, the Competitive Impact 

Statement, and any comments thereon, 

and the United States’ responses to 

comments. Based upon the record 

before the Court, which includes the 

Competitive Impact Statement and any 

comments and responses to comments 

filed with the Court, entry of this Final 

Judgment is in the public interest. 

Date: llllllllllllllllll

Court approval subject to procedures of 

Antitrust Procedures and Penalties Act, 15 

U.S.C. § 16 

lllllllllllllllllllll

United States District Judge 

United States District Court for the 

Southern District of New York 

United States of America, Plantiff, v. The 

Walt Disney Company, and Twenty-First 

Century Fox, Inc., Defendants. 

Civil Action No. 1:18–cv–05800 (CM) (KNF) 

HOLD SEPARATE STIPULATION AND 

ORDER 

It is hereby stipulated and agreed by 

and between the undersigned parties, 

subject to approval and entry by the 

Court, that: 

I. Definitions 

As used in this Hold Separate 

Stipulation and Order: 

A. ‘‘Acquirer’’ or ‘‘Acquirers’’ means 

the entity or entities to which 

defendants divest any of the Divestiture 

Assets. 

B. ‘‘Disney’’ means defendant The 

Walt Disney Company, a Delaware 

corporation headquartered in Burbank, 

California, its successors and assigns, 

and its subsidiaries, divisions, groups, 

affiliates, partnerships, and joint 

ventures, and their directors, officers, 

managers, agents, and employees. 

C. ‘‘Fox’’ means defendant TwentyFirst Century Fox, Inc., a Delaware 

corporation headquartered in New York, 

New York, its successors and assigns, 

and its subsidiaries, divisions, groups, 

affiliates, partnerships, and joint 

ventures, and their directors, officers, 

managers, agents, and employees. 

D. ‘‘Fox RSNs’’ means all of Fox’s 

interests in the following video 

networks or programming assets: 

(1) Fox Sports Arizona; 

(2) Fox Sports Carolinas; 

(3) Fox Sports Detroit; 

(4) Fox Sports Florida; 

(5) Fox Sports Indiana; 

(6) Fox Sports Kansas City; 

(7) Fox Sports Midwest; 

(8) Fox Sports New Orleans; 

(9) Fox Sports North; 

(10) Fox Sports Ohio; 

(11) SportsTime Ohio; 

(12) Fox Sports Oklahoma; 

(13) Fox Sports San Diego; 

(14) Fox Sports South; 

(15) Fox Sports Southeast; 

(16) Fox Sports Southwest; 

(17) Fox Sports Sun; 

(18) Fox Sports Tennessee; 

(19) Fox Sports West; 

(20) Prime Ticket; 

(21) Fox Sports Wisconsin; and 

(22) the YES Network. 

E. ‘‘Divestiture Assets’’ means all of 

Fox’s interests in the Fox RSNs, 

including, all of the assets, tangible or 

intangible, necessary for the operations 

of the Fox RSNs as viable, ongoing 

video networks or programming assets, 

including, but not limited to, all real 

property (owned or leased), all 

broadcast equipment, office furniture, 

fixtures, materials, supplies, and other 

tangible property; all licenses, permits 

and authorizations issued by any 

governmental organization relating to 

the operation of the asset; all contracts 

(including content, programming and 

distribution contracts and rights), 

agreements (including transition 

services agreements), leases, and 

commitments and understanding of 

defendants; all trademarks, service 

marks, trade names, copyrights, patents, 

slogans, programming materials, and 

promotional materials relating to each 

video network; all customer lists, 

contracts, accounts, credit records, and 

all logs and other records maintained by 

Fox in connection with each video 

network. Except as provided in the 

Final Judgment, Divestiture Assets does 

not include trademarks, trade names, 

service marks, or service names 

containing the name ‘‘Fox.’’ 

F. The term ‘‘Transaction’’ means the 

transaction that is the subject of the 

Agreement and Plan of Merger among 

Twenty-First Century Fox, Inc., The 


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Walt Disney Company, TWDC Holdco 

613 corp., WDC Merger Enterprises II 

Corp., and WDC Merger Enterprises I, 

LLC, dated June 20, 2018. 

II. Objectives 

The Final Judgment filed in this case 

is meant to ensure defendants’ prompt 

divestiture of the Divestiture Assets for 

the purpose of establishing one or more 

viable competitors in the sale, supply, 

or licensing of video programming in 

the United States in order to remedy the 

effects that the United States alleges 

would otherwise result from the 

Transaction. This Hold Separate 

Stipulation and Order ensures, prior to 

such divestitures, that the Divestiture 

Assets will remain economically viable, 

and ongoing business concerns that will 

remain independent and uninfluenced 

by Disney or, after the Transaction has 

been consummated, by Fox, and that 

competition is maintained during the 

pendency of the ordered divestitures. 

III. Jurisdiction and Venue 

The Court has jurisdiction over the 

subject matter of this action and over 

each of the parties hereto, and venue of 

this action is proper in the United States 

District Court for the Southern District 

of New York. 

IV. Compliance with and Entry of the 

Proposed Final Judgment 

A. The parties stipulate that a Final 

Judgment in the form attached hereto as 

Exhibit A may be filed with and entered 

by the Court, upon the motion of any 

party or upon the Court’s own motion, 

at any time after compliance with the 

requirements of the Antitrust 

Procedures and Penalties Act (‘‘APPA’’), 

15 U.S.C. § 16, and without further 

notice to any party or other proceedings, 

provided that the United States has not 

withdrawn its consent, which it may do 

at any time before the entry of the 

proposed Final Judgment by serving 

notice thereof on the defendants and by 

filing that notice with the Court. Disney 

agrees to arrange, at its expense, 

publication as quickly as possible of the 

newspaper notice required by the 

APPA, which shall be drafted by the 

United States, in its sole discretion. The 

publication shall be arranged no later 

than three business days after 

defendants’ receipt from the United 

States of the text of the notice and the 

identity of the newspaper within which 

the publication shall be made. Disney 

shall promptly send to the United States 

(1) confirmation that publication of the 

newspaper notice has been arranged, 

and (2) the certification of the 

publication prepared by the newspaper 

within which the notice was published. 

B. Defendants shall abide by and 

comply with the provisions of the 

proposed Final Judgment pending the 

Final Judgment’s entry by the Court, or 

until expiration of time for all appeals 

of any Court ruling declining entry of 

the proposed Final Judgment and shall, 

from the date of the signing of this 

Stipulation by the parties, comply with 

all the terms and provisions of the 

proposed Final Judgment. The United 

States shall have the full rights and 

enforcement powers in the proposed 

Final Judgment as though the same were 

in full force and effect as the Final 

Order of the Court. 

C. Defendants shall not consummate 

the Transaction sought to be enjoined by 

the Complaint herein before the Court 

has signed this Hold Separate 

Stipulation. 

D. This Hold Separate Stipulation and 

Order shall apply with equal force and 

effect to any amended proposed Final 

Judgment agreed upon in writing by the 

parties and submitted to the Court. 

E. In the event (1) the United States 

has withdrawn its consent, as provided 

in Paragraph IV(A) above, or (2) the 

proposed Final Judgment is not entered 

pursuant to this Hold Separate 

Stipulation and Order, the time has 

expired for all appeals of any court 

ruling declining entry of the proposed 

Final Judgment, and the Court has not 

otherwise ordered continued 

compliance with the terms and 

provisions of the proposed Final 

Judgment, then the parties are released 

from all further obligations under this 

Hold Separate Stipulation and Order, 

and the making of this Hold Separate 

Stipulation and Order shall be without 

prejudice to any party in this or any 

other proceeding. 

F. Disney represents that the 

divestitures ordered in the proposed 

Final Judgment can and will be made, 

and that defendants will later raise no 

claim of mistake, hardship or difficulty 

of compliance as grounds for asking the 

Court to modify any of the provisions 

contained therein. 

V. Notice of Compliance 

. Within twenty (20) days after the 

entry of the Hold Separate Stipulation 

and Order, and every thirty (30) 

calendar days thereafter (1) Fox shall 

deliver to the United States an affidavit, 

signed by Fox’s Chief Financial Officer 

and General Counsel, which shall 

describe the fact and manner of Fox’s 

compliance with Section VI until 

defendants consummate the 

Transaction; and 

(2) Disney shall deliver to the United 

States an affidavit, signed by Disney’s 

Chief Financial Officer and General 

Counsel, which shall describe the fact 

and manner of Disney’s compliance 

with Section VII until the divestitures 

required by the Final Judgment have 

been accomplished. 

VI. Pre-Closing Asset Preservation 

Provisions 

Until defendants consummate the 

Transaction: 

A. Fox shall preserve, maintain, and 

continue to operate each Divestiture 

Asset as an ongoing, economically 

viable, competitive video network or 

programming asset. 

B. Fox shall take all steps reasonably 

necessary to ensure that the Divestiture 

Assets will be maintained and operated 

as ongoing, economically viable and 

active competitors in the video network 

or programming business. 

C. Fox shall use all reasonable efforts, 

consistent with past practices, to 

maintain and increase the sales and 

revenues associated with each of the 

Divestiture Assets. 

D. Fox, consistent with past practices, 

shall provide sufficient working capital 

and lines and sources of credit to 

continue to maintain each Divestiture 

Asset as an ongoing, economically 

viable, and competitive video network 

or programming asset. 

E. Fox shall maintain, in accordance 

with sound accounting principles, 

separate, accurate and complete 

financial ledgers, books, and records 

that report on a periodic basis, such as 

the last business day of every month, 

consistent with past practices, the 

assets, liabilities, expenses, revenues 

and income of each of the Divestiture 

Assets. 

F. Fox shall preserve the existing 

relationships between the Divestiture 

Assets and with each customer that 

advertises on or licenses content to a 

Divestiture Asset, each distributor that 

licenses content from a Divestiture 

Asset, and with others having business 

relations with any of the Divestiture 

Assets, in accordance with the ordinary 

course of business. 

VII. Post-Closing Hold Separate and 

Asset Preservation Provisions 

Once the Transaction has been 

consummated and until the divestitures 

required by the Final Judgment have 

been accomplished: 

A. Disney shall preserve, maintain, 

and continue to operate each Divestiture 

Asset as an independent, ongoing, 

economically viable, competitive video 

network or programming asset, 

management, programming, 

distribution, sales and operations of 

such assets held entirely separate, 

distinct and apart from those of Disney’s 


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other operations. Disney shall not 

coordinate its programming, production, 

distribution, marketing, content 

purchases, or terms of sale of any 

products with those of any of the 

Divestiture Assets. 

B. Disney shall take all steps 

necessary to ensure that (1) the 

Divestiture Assets will be maintained 

and operated as independent, ongoing, 

economically viable and active 

competitors in the video network or 

programming business; (2) management 

of the Divestiture Assets will not be 

influenced by Disney; and (3) the books, 

records, competitively sensitive 

production, programming, distribution, 

sales, content purchases, marketing and 

pricing information, and decision 

making concerning production, 

programming, distribution, sales, 

content purchases, pricing and 

marketing by or under any of the 

Divestiture Assets will be kept separate 

and apart from Disney’s other 

operations. 

C. Disney shall use all reasonable 

efforts to maintain and increase the 

sales and revenues associated with each 

of the Divestiture Assets, and shall 

maintain at 2018 or previously 

approved levels for 2017, whichever is 

higher, all promotional, advertising, 

sales, technical assistance, marketing 

and other support for each of the 

Divestiture Assets. 

D. Disney shall provide sufficient 

working capital and lines and sources of 

credit to continue to maintain each 

Divestiture Asset as an ongoing, 

economically viable, and competitive 

video network or programming asset. 

E. Disney shall not, except as part of 

a divestiture approved by the United 

States in accordance with the proposed 

Final Judgment, remove, sell, lease, 

assign, transfer, destroy, pledge, or 

otherwise dispose of any of the 

Divestiture Assets. 

F. Disney shall maintain, in 

accordance with sound accounting 

principles, separate, accurate and 

complete financial ledgers, books, and 

records that report on a periodic basis, 

such as the last business day of every 

month, consistent with past practices, 

the assets, liabilities, expenses, revenues 

and income of each of the Divestiture 

Assets. 

G. Disney shall preserve the existing 

relationships between the Divestiture 

Assets and with each customer that 

advertises on or licenses content to a 

Divestiture Asset, each distributor that 

licenses content from a Divestiture 

Asset, and with others having business 

relations with any of the Divestiture 

Assets, in accordance with the ordinary 

course of business. 

H. Defendants shall take no action 

that would jeopardize, delay, or impede 

the sale of the Divestiture Assets. 

I. Defendants shall take no action that 

would interfere with the ability of any 

trustee appointed pursuant to the 

proposed Final Judgment to fulfill its 

obligations. 

J. Disney shall appoint a person or 

persons to oversee the Divestiture 

Assets, who also will be responsible for 

defendants’ compliance with this 

section. Such person or persons shall 

have complete managerial responsibility 

for the Divestiture Assets, subject to the 

provisions of this Final Judgment. In the 

event such person is unable to perform 

such duties, Disney shall appoint, 

subject to the approval of the United 

States, a replacement within ten (10) 

working days. Should Disney fail to 

appoint a replacement acceptable to the 

United States within this time period, 

the United States shall appoint a 

replacement. 

VIII. Duration of Hold Separate 

Obligations 

Defendants’ obligations under Section 

VI and VII of this Hold Separate 

Stipulation and Order shall remain in 

effect until (1) consummation of the 

divestitures required by the proposed 

Final Judgment or (2) until further order 

of the Court. If the United States 

voluntarily dismisses the Complaint in 

this matter, defendants are released 

from all further obligations under this 

Hold Separate Stipulation and Order. 

Dated: June 27, 2018 

Respectfully submitted, 

FOR PLAINTIFF UNITED STATES OF 

AMERICA 

lllllllllllllllllllll

Craig Minerva 

United States Department of Justice, 

Antitrust Division, Media, Entertainment & 

Professional Services Section, 450 Fifth 

Street N.W., Suite 4000, Washington, DC 

20530, Telephone: (202) 353–2384, 

Facsimile: (202) 514–730 

FOR DEFENDANT THE WALT DISNEY 

COMPANY 

COVINGTON & BURLING LLP 

lllllllllllllllllllll

Andrew A. Ruffino 

(aruffino@cov.com) 

The New York Times Building, 620 Eighth 

Avenue, New York, New York 10018, (212) 

841–1097 

Thomas 0. Barnett 

(tbarnett@cov.com) 

(pro hac vice application forthcoming) 

Anne Y. Lee 

(alee@cov.com) 

James Dean 

(jdean@cov.com) 

Megan Gerking (mgerking@cov.com) 

One CityCenter, 850 10th Street NW, 

Washington, DC 20001, (202) 662–6000 

Kenneth Newman 

(Ken.Newman@disney.com) 

Associate General Counsel and Assistant 

Secretary, The Walt Disney Company, 77 

West 66th Street, 15th Floor, New York, NY 

10023, (212) 456–6080 

FOR DEFENDANT 

TWENTY-FIRST CENTURY FOX, INC. 

CLEARY GOTTLIEB STEEN & HAMILTON 

LLP 

lllllllllllllllllllll

George S. Cary 

(pro hac vice application forthcoming) 

Kenneth S. Reinker 

Tara Lynn Tavernia 

(pro hac vice application forthcoming) 

2000 Pennsylvania Avenue NW, Washington, 

DC 20006, Phone: (202) 974–1743, Fax: (202) 

974–1999, gcary@cgsh.com, kreinker@

cgsh.com, ttavernia@cgsh.com 

ORDER 

IT IS SO ORDERED by the Court, this 

ll day of ll, 2018. lllllllllllllllllllll

United States District Judge 

United States District Court for the 

Southern District of New York 

United States of America, Plaintiff, v. The 

Walt Disney Company, and Twenty-First 

Century Fox, Inc., Defendants. 

Civil Action No. 

18–CV–5800 (CM) (KNF) 

COMPETITIVE IMPACT STATEMENT 

Plaintiff United States of America 

(‘‘United States’’), pursuant to Section 

2(b) of the Antitrust Procedures and 

Penalties Act (‘‘APPA’’ or ‘‘Tunney 

Act’’), 15 U.S.C. § 16(b)–(h), files this 

Competitive Impact Statement relating 

to the proposed Final Judgment 

submitted for entry in this civil antitrust 

proceeding. 

I. NATURE AND PURPOSE OF THE 

PROCEEDING 

Defendants The Walt Disney 

Company (‘‘Disney’’) and Twenty-First 

Century Fox, Inc. (‘‘Fox’’) (collectively, 

‘‘Defendants’’) entered into an 

Agreement and Plan of Merger dated 

December 13, 2017, amended on June 

20, 2018, pursuant to which Disney 

agreed to acquire certain assets, 

including Fox’s ownership of, or 

interests in, twenty-two regional sports 

networks (‘‘RSNs’’), the FX cable 

networks, the National Geographic cable 

networks, television and film studios, 

Hulu, and international television 

businesses (the ‘‘Fox Sale Assets’’) from 

Fox for approximately $71.3 billion (the 

‘‘Transaction’’). 

Specifically, Fox proposes to sell to 

Disney its interests in the following 

RSNs: (i) Fox Sports Arizona; (ii) Fox 

Sports Carolinas; (iii) Fox Sports 

Detroit; (iv) Fox Sports Florida; (v) Fox 


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Sports Indiana; (vi) Fox Sports Kansas 

City; (vii) Fox Sports Midwest; (viii) Fox 

Sports New Orleans; (ix) Fox Sports 

North; (x) Fox Sports Ohio; (xi) 

SportsTime Ohio; (xii) Fox Sports 

Oklahoma; (xiii) Fox Sports San Diego; 

(xiv) Fox Sports South; (xv) Fox Sports 

Southeast; (xvi) Fox Sports Southwest; 

(xvii) Fox Sports Sun; (xviii) Fox Sports 

Tennessee; (xix) Fox Sports West; (xx) 

Prime Ticket; (xxi) Fox Sports 

Wisconsin; and (xxii) the YES Network. 

The proposed acquisition would 

combine two of the country’s most 

valuable cable sports properties— 

Disney’s ESPN franchise of networks 

and Fox’s portfolio of twenty-two RSNs. 

Cable sports television networks 

compete to be carried in the 

programming packages that distributors, 

such as cable companies (e.g., Charter 

Communications and Comcast), direct 

broadcast satellite services (e.g., DISH 

Network and DirecTV), fiber optic 

networks services (e.g., Verizon’s Fios 

and CenturyLink’s Prism TV), and 

online distributors of linear cable 

programming (e.g., Hulu Live and 

DISH’s Sling TV) (hereinafter, 

collectively referred to as ‘‘MVPDs’’) 

offer to their subscribers. Consequently, 

Disney’s proposed acquisition of Fox’s 

portfolio of RSNs would end the headto-head competition between them and 

likely would result in higher prices for 

cable sports programming in each of the 

Designated Market Areas (‘‘DMAs’’) in 

which Disney and Fox compete. 

The United States filed a civil 

antitrust Complaint on June 27, 2018, 

seeking to enjoin the proposed 

Transaction. The Complaint alleges that 

the likely effect of this acquisition 

would be to lessen competition 

substantially for the licensing of cable 

sports programming to MVPDs in 

violation of Section 7 of the Clayton 

Act, 15 U.S.C. § 18, in each of the 

following twenty-five DMAs: Phoenix, 

Arizona; Detroit, Michigan; Milwaukee, 

Wisconsin; Cleveland, Ohio; Cincinnati, 

Ohio; Columbus, Ohio; Miami, Florida; 

Oklahoma City, Oklahoma; Tampa Bay, 

Florida; Dallas, Texas; St. Louis, 

Missouri; Atlanta, Georgia; Indianapolis, 

Indiana; Orlando, Florida; San Antonio, 

Texas; Minneapolis, Minnesota; 

Nashville, Tennessee; Memphis, 

Tennessee; San Diego, California; 

Raleigh-Durham, North Carolina; New 

Orleans, Louisiana; Kansas City, Kansas; 

Charlotte, North Carolina; Los Angeles, 

California; and New York, New York 

(collectively, the ‘‘DMA Markets’’). This 

loss of competition likely would result 

in increased MVPD licensing fees in 

each DMA Market and because licensing 

fees typically are passed onto 

consumers, higher subscription fees for 

MVPD customers. 

At the same time the Complaint was 

filed, the United States also filed a Hold 

Separate Stipulation and Order (‘‘Hold 

Separate’’) and proposed Final 

Judgment, which are designed to 

eliminate the likely anticompetitive 

effects of the Transaction. Under the 

proposed Final Judgment, which is 

explained more fully below, Disney is 

required to divest all of Fox’s interests 

in the Fox RSNs, including all assets 

necessary for the operation of each Fox 

RSN as a viable, ongoing cable sports 

programming network, to one or more 

buyers acceptable to the United States, 

in its sole discretion. Under the terms of 

the Hold Separate Stipulation and 

Order, Disney and Fox will take certain 

steps to ensure that each Fox RSN 

continues to operate as an ongoing, 

economically viable, competitive cable 

sports programming network that will 

remain independent and uninfluenced 

by the consummation of the 

Transaction, and that competition is 

maintained during the pendency of the 

ordered divestiture. 

The United States and Defendants 

have stipulated that the proposed Final 

Judgment may be entered after 

compliance with the APPA. Entry of the 

proposed Final Judgment would 

terminate this action, except that the 

Court would retain jurisdiction to 

construe, modify, or enforce the 

provisions of the proposed Final 

Judgment and to punish violations 

thereof. 

II. DESCRIPTION OF THE EVENTS 

GIVING RISE TO THE ALLEGED 

VIOLATION 

A. The Defendants and the Proposed 

Transaction 

Disney is a Delaware corporation 

headquartered in Burbank, California. It 

reported revenue of $55 billion for fiscal 

year 2017. Disney owns various 

television programming assets, 

including 80% of ESPN—a sports 

entertainment company that operates 

several national cable sports 

programming networks. Disney’s other 

programming assets include: (i) the ABC 

television network; (ii) eight ownedand-operated ABC broadcast stations; 

(iii) Disney-branded cable television 

networks; and (iv) Freeform, a cable 

television network geared toward 

teenagers and young adults. Disney 

licenses its cable programming networks 

to MVPDs throughout the United States. 

Fox is a Delaware corporation 

headquartered in New York, New York. 

It reported revenue of $28.5 billion for 

fiscal year 2017. The Fox Sale Assets, 

which include several cable television 

programing networks and all of the Fox 

RSNs, generated $19 billion in revenue 

in fiscal year 2017. Fox licenses its cable 

programming networks to MVPDs 

throughout the United States. The Fox 

Sale Assets do not include Fox Business 

Network, Fox Broadcasting Company, 

Fox Sports, Fox Television Stations 

Group, FS1, FS2, Fox Deportes, or the 

Big Ten Network. 

Collectively, the twenty-two Fox 

RSNs serve approximately 61 million 

subscribers in twenty-five separate DMA 

Markets and license local and regional 

rights to telecast live games of 44 of 91 

(48%) U.S. professional sports teams in 

three of the four major sports leagues: 

Major League Baseball (‘‘MLB’’), the 

National Basketball Association 

(‘‘NBA’’), and the National Hockey 

League (‘‘NHL’’). More specifically, the 

Fox RSNs have the local or regional 

broadcast rights to 15 of 30 (50%) MLB 

teams, 17 of 30 (57%) NBA teams, and 

12 of 31 (39%) NHL teams. 

The proposed Transaction would 

likely lessen competition substantially 

in each of the DMA Markets as a result 

of Disney’s acquisition of Fox’s RSNs. 

This Transaction is the subject of the 

Complaint and proposed Final 

Judgment filed by the United States on 

June 27, 2018. 

B. The Transaction’s Likely 

Anticompetitive Effects 

1. Relevant Markets 

The Complaint alleges that licensing 

of cable sports programming to MVPDs 

in each DMA Market constitutes a 

relevant market under Section 7 of the 

Clayton Act. 

Cable sports programming includes 

cable television networks that devote a 

substantial portion of their 

programming time to airing live sporting 

events, including MLB, NBA, and NHL 

games. Consumers that view live 

sporting events are an important 

customer group for MVPDs. MVPDs 

could not attract or retain those 

consumers as subscribers without 

including cable sports programming in 

the packages of cable programming 

networks they offer their subscribers. 

ESPN and the local Fox RSN generate 

the highest and second-highest affiliate 

fees per subscriber of all networks 

carried by an MVPD in most of the 25 

DMAs and they are among the networks 

that generate the highest affiliate fees 

per subscriber in every one of the 25 

DMAs. The high per-subscriber fees that 

MVPDs pay to license these networks 

reflects the importance of these 

networks to MVPDs and their 

subscribers. 


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For MVPDs, sports programming on 

broadcast television is unlikely a 

sufficient substitute for cable sports 

programming. MVPDs do not typically 

consider broadcast networks as 

providing the same type of content as 

cable sports networks like ESPN and the 

RSNs. Broadcast networks and their 

affiliates aim to have broad appeal by 

offering a variety of highly-rated 

programming content including 

primetime entertainment shows, 

syndicated shows, and local and 

national news and weather, with live 

sports events making up a small 

percentage of a broadcast network’s 

airtime. Many MVPD customers demand 

programming focused on, if not 

dedicated to, live sporting events, and a 

broadcast network’s occasional 

programming of live sporting events 

does not suffice for many customers. For 

that reason, MVPDs do not typically 

consider broadcast network 

programming as a replacement for cable 

sports programming. 

With respect to the licensing of cable 

sports programming to MVPDs, each 

DMA Market constitutes a separate 

relevant geographic market under 

Section 7 of the Clayton Act. A DMA is 

a geographic unit for which A.C. 

Nielsen Company—a firm that surveys 

television viewers—furnishes MVPDs, 

among others, with data to aid in 

evaluating audience size and 

composition in a particular area. DMAs 

are widely accepted by MVPDs as the 

standard geographic area to use in 

evaluating television audience size and 

demographic composition. The Federal 

Communications Commission also uses 

DMAs as geographic units with respect 

to its MVPD regulations. 

2. Harm to Competition in Each of the 

DMA Markets 

The Complaint alleges that the 

proposed Transaction likely would 

substantially lessen competition in 

interstate trade and commerce, in 

violation of Section 7 of the Clayton 

Act, 15 U.S.C. § 18, and have the 

following effects, among others: 

a. substantially lessen competition in 

the licensing of cable sports 

programming to MVPDs in each of the 

DMA Markets; 

b. eliminate actual and potential 

competition among Disney and Fox in 

the licensing of cable sports 

programming to MVPDs in each of the 

DMA Markets; and 

c. cause prices for cable sports 

programming to MVPDs in each of the 

DMA Markets to increase. 

The Transaction, by eliminating the 

Fox RSNs as separate competitors and 

combining their operations under 

common ownership and control with 

ESPN, would allow Disney to increase 

its market share of cable sports 

programming in each DMA Market and 

likely increase licensing fees to MVPDs 

for ESPN and/or the Fox RSNs. As a 

result of the Transaction, Disney’s 

networks would account for at least 60 

percent of cable sports programming in 

19 of the DMA Markets and over 45 

percent in the remaining six DMA 

Markets. 

As alleged in the Complaint, Disney’s 

acquisition of the Fox RSNs would 

further concentrate already highly 

concentrated cable sports programming 

markets in each of the DMA Markets. 

Using the Herfindahl-Hirschman Index 

(‘‘HHI’’), a standard measure of market 

concentration, the post-acquisition HHI 

in each of the DMA Markets would 

exceed 2,500 and the Transaction would 

increase each DMA Market’s HHI by 

over 200 points. As a result, the 

proposed Transaction is presumed to 

likely enhance market power under the 

Horizontal Merger Guidelines issued by 

the Department of Justice and the 

Federal Trade Commission. 

Moreover, the Transaction combines 

networks that are at least partial 

substitutes and therefore competitors in 

a product market with limited 

alternatives. The Transaction would 

provide Disney with the ability to 

threaten MVPDs in each of the DMA 

Markets with the simultaneous blackout 

of at least two major cable sports 

programming networks: the ESPN 

networks and the local Fox RSN, 

thereby diminishing competition in the 

negotiation of licensing agreements with 

MVPDs in each of the DMA markets. 

The threatened loss of cable sports 

programming, and the resulting 

diminution of an MVPD’s subscribers 

and profits, would significantly 

strengthen Disney’s bargaining position. 

Prior to the Transaction, an MVPD’s 

failure to reach a licensing agreement 

with Disney would result in the 

blackout of Disney’s networks, 

including ESPN, and threaten some 

subscriber loss for the MVPD, including 

those subscribers that value ESPN’s 

content. But because the MVPD still 

would be able to offer its subscribers the 

local Fox RSN, many MVPD subscribers 

simply would watch the local RSN 

instead of cancelling their MVPD 

subscriptions. In the event of a Fox RSN 

blackout, many subscribers likely would 

switch to watching ESPN. After the 

Transaction, an MVPD negotiating with 

Disney would be faced with the 

prospect of a dual blackout of 

significant cable sports programming, a 

result more likely to cause the MVPD to 

lose incremental subscribers (that it 

would not have lost in a pre-transaction 

blackout of only ESPN or the Fox RSN) 

and therefore accede to Disney’s 

demand for higher licensing fees. For 

these reasons, the loss of competition 

between ESPN and the Fox RSN in each 

DMA Market would likely lead to an 

increase in MVPD licensing fees in 

those markets. Some of these increased 

programming costs likely would be 

passed onto consumers, resulting in 

higher MVPD subscription fees for 

millions of U.S. households. 

3. Entry 

The Complaint alleges that entry or 

expansion into cable sports 

programming would not be timely, 

likely, or sufficient to prevent the 

Transaction’s anticompetitive effects. 

With respect to RSN sports 

programming, there are a limited 

number of professional sports teams in 

a given DMA, and these teams auction 

the exclusive local rights to telecast 

their games under long-term contracts. 

Because these contracts typically last 

many years, there are infrequent 

opportunities to bid for these licensing 

rights to expand an existing RSN or 

create a new RSN. Moreover, non-local 

RSNs cannot enter because their 

licenses typically are limited to the 

DMAs that comprise the ‘‘home’’ 

territory of the team or teams that the 

RSN carries; and local MVPD 

subscribers would not generally have 

demand for extensive coverage of 

another DMA’s home team. Thus, an 

MVPD cannot substitute an RSN from 

another DMA for the local RSN in 

response to an anticompetitive price 

increase. 

Entry or expansion into national cable 

sports programming also is difficult. For 

a national sports network to compete 

effectively, it needs to obtain the 

national broadcast rights from 

professional sports leagues (i.e., MLB, 

NBA, and NHL), which are expensive 

and infrequently available. Although 

both Fox and NBCUniversal have 

national cable sports programming 

networks (FS1 and NBC Sports, 

respectively), neither company has been 

able to replicate ESPN’s competitive 

position (as evidenced by their lower 

MVPD licensing fees and viewership 

ratings). 

III. EXPLANATION OF THE 

PROPOSED FINAL JUDGMENT 

The divestiture requirement of the 

proposed Final Judgment will eliminate 

the likely anticompetitive effects of the 

Transaction in each DMA Market by 

establishing an independent and 

economically viable competitor. The 

proposed Final Judgment requires 


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Disney, within 90 days after the closing 

of the Transaction, or five days after 

notice of the entry of the Final Judgment 

by the Court, whichever is later, to 

divest all of Fox’s interests in the Fox 

RSNs, including all assets necessary for 

the operation of the Fox RSNs as viable, 

ongoing video networks or programming 

assets. The assets must be divested in 

such a way as to satisfy the United 

States in its sole discretion that the 

operations can and will be operated by 

the purchaser as viable, ongoing 

businesses that can compete effectively 

in the relevant markets. Disney must use 

its best efforts to divest the Fox RSNs as 

expeditiously as possible and shall 

cooperate with prospective purchasers. 

In the event that Disney does not 

accomplish the divestiture within the 

period prescribed in the proposed Final 

Judgment, the Final Judgment provides 

that the Court will appoint a trustee 

selected by the United States to effect 

the divestiture. If a trustee is appointed, 

the proposed Final Judgment provides 

that Disney will pay all costs and 

expenses of the trustee. The trustee’s 

commission will be structured so as to 

provide an incentive for the trustee 

based on the price obtained and the 

speed with which the divestiture is 

accomplished. After his or her 

appointment becomes effective, the 

trustee will file monthly reports with 

the Court and the United States setting 

forth his or her efforts to accomplish the 

divestiture. At the end of six months, if 

the divestiture has not been 

accomplished, the trustee and the 

United States will make 

recommendations to the Court, which 

shall enter such orders as appropriate, 

in order to carry out the purpose of the 

trust, including extending the trust or 

the term of the trustee’s appointment. 

The proposed Final Judgment also 

contains provisions designed to promote 

compliance and make the enforcement 

of Division consent decrees as effective 

as possible. Paragraph XIII(A) provides 

that the United States retains and 

reserves all rights to enforce the 

provisions of the proposed Final 

Judgment, including its rights to seek an 

order of contempt from the Court. Under 

the terms of this paragraph, Defendants 

have agreed that in any civil contempt 

action, any motion to show cause, or 

any similar action brought by the United 

States regarding an alleged violation of 

the Final Judgment, the United States 

may establish the violation and the 

appropriateness of any remedy by a 

preponderance of the evidence, and 

Defendants have waived any argument 

that a different standard of proof should 

apply. This provision aligns the 

standard for compliance obligations 

with the standard of proof that applies 

to the underlying offense that the 

compliance commitments address. 

Paragraph XIII(B) provides additional 

clarification regarding the interpretation 

of the provisions of the proposed Final 

Judgment. The proposed Final Judgment 

was drafted to restore all competition 

that would otherwise be harmed by the 

merger. Defendants agree that they will 

abide by the proposed Final Judgment, 

and that they may be held in contempt 

of this Court for failing to comply with 

any provision of the proposed Final 

Judgment that is stated specifically and 

in reasonable detail, as interpreted in 

light of this procompetitive purpose. 

Paragraph XIII(C) of the proposed 

Final Judgment further provides that, 

should the Court find in an enforcement 

proceeding that Defendants have 

violated the Final Judgment, the United 

States may apply to the Court for a onetime extension of the Final Judgment, 

together with such other relief as may be 

appropriate. In addition, in order to 

compensate American taxpayers for any 

costs associated with the investigation 

and enforcement of violations of the 

proposed Final Judgment, Paragraph 

XIII(C) provides that in any successful 

effort by the United States to enforce the 

Final Judgment against a Defendant, 

whether litigated or resolved prior to 

litigation, that Defendant agrees to 

reimburse the United States for 

attorneys’ fees, experts’ fees, and costs 

incurred in connection with any 

enforcement effort, including the 

investigation of the potential violation. 

Finally, Section XIV of the proposed 

Final Judgment provides that the Final 

Judgment shall expire seven years from 

the date of its entry, except that the 

Final Judgment may be terminated upon 

notice by the United States to the Court 

and Defendants that the divestitures 

have been completed and that the 

continuation of the Final Judgment is no 

longer necessary. 

The divestiture provisions of the 

proposed Final Judgment will eliminate 

the likely anticompetitive effects of the 

acquisition in the provision of cable 

sports programming in the DMA 

Markets. 

IV. REMEDIES AVAILABLE TO 

POTENTIAL PRIVATE LITIGANTS 

Section 4 of the Clayton Act, 15 

U.S.C. § 15, provides that any person 

who has been injured as a result of 

conduct prohibited by the antitrust laws 

may bring suit in federal court to 

recover three times the damages the 

person has suffered, as well as costs and 

reasonable attorneys’ fees. Entry of the 

proposed Final Judgment will neither 

impair nor assist the bringing of any 

private antitrust damage action. Under 

the provisions of Section 5(a) of the 

Clayton Act, 15 U.S.C. § 16(a), the 

proposed Final Judgment has no prima 

facie effect in any subsequent private 

lawsuit that may be brought against 

Defendants. 

V. PROCEDURES AVAILABLE FOR 

MODIFICATION OF THE PROPOSED 

FINAL JUDGMENT 

The United States and Defendants 

have stipulated that the proposed Final 

Judgment may be entered by the Court 

after compliance with the provisions of 

the APPA, provided that the United 

States has not withdrawn its consent. 

The APPA conditions entry upon the 

Court’s determination that the proposed 

Final Judgment is in the public interest. 

The APPA provides a period of at 

least sixty (60) days preceding the 

effective date of the proposed Final 

Judgment within which any person may 

submit to the United States written 

comments regarding the proposed Final 

Judgment. Any person who wishes to 

comment should do so within sixty (60) 

days of the date of publication of this 

Competitive Impact Statement in the 

Federal Register, or the last date of 

publication in a newspaper of the 

summary of this Competitive Impact 

Statement, whichever is later. All 

comments received during this period 

will be considered by the United States 

Department of Justice, which remains 

free to withdraw its consent to the 

proposed Final Judgment at any time 

prior to the Court’s entry of judgment. 

The comments and the response of the 

United States will be filed with the 

Court. In addition, comments will be 

posted on the U.S. Department of 

Justice, Antitrust Division’s internet 

website and, under certain 

circumstances, published in the Federal 

Register. 

Written comments should be 

submitted to: 

Owen M. Kendler, Chief, Media, 

Entertainment & Professional Services 

Section Antitrust Division, United 

States Department of Justice, 450 Fifth 

Street, N.W., Suite 4000, Washington, 

DC 20530 

The proposed Final Judgment provides 

that the Court retains jurisdiction over 

this action, and the parties may apply to 

the Court for any order necessary or 

appropriate for the modification, 

interpretation, or enforcement of the 

Final Judgment. 

VI. ALTERNATIVES TO THE 

PROPOSED FINAL JUDGMENT 

The United States considered, as an 

alternative to the proposed Final 


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40566 Federal Register / Vol. 83, No. 158 / Wednesday, August 15, 2018 / Notices 

1See also United States v. Bechtel Corp., 648 F.2d 

660, 666 (9th Cir. 1981) (‘‘The balancing of 

competing social and political interests affected by 

a proposed antitrust consent decree must be left, in 

the first instance, to the discretion of the Attorney 

General.’’); see generally Microsoft, 56 F.3d at 1461 

(discussing whether ‘‘the remedies [obtained in the 

decree are] so inconsonant with the allegations 

charged as to fall outside of the ‘reaches of the 

public interest’’’). 

2See Microsoft, 56 F.3d at 1461 (noting the need 

for courts to be ‘‘deferential to the government’s 

predictions as to the effect of the proposed 

remedies’’); United States v. Archer-DanielsMidland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) 

(noting that the court should grant due respect to 

the United States’ prediction as to the effect of 

proposed remedies, its perception of the market 

structure, and its views of the nature of the case). 

Judgment, a full trial on the merits 

against Defendants. The United States 

could have continued the litigation and 

sought preliminary and permanent 

injunctions against Disney’s acquisition 

of the Fox RSNs. The United States is 

satisfied, however, that the divestiture 

of assets described in the proposed 

Final Judgment will preserve 

competition for the provision of cable 

sports programming in the DMA 

Markets identified by the United States. 

Thus, the proposed Final Judgment 

would achieve all or substantially all of 

the relief the United States would have 

obtained through litigation, but avoids 

the time, expense, and uncertainty of a 

full trial on the merits of the Complaint. 

VII. STANDARD OF REVIEW UNDER 

THE APPA FOR THE PROPOSED 

FINAL JUDGMENT 

The Clayton Act, as amended by the 

APPA, requires that proposed consent 

judgments in antitrust cases brought by 

the United States be subject to a sixtyday comment period, after which the 

court shall determine whether entry of 

the proposed Final Judgment ‘‘is in the 

public interest.’’ 15 U.S.C. § 16(e)(1); see 

also United States v. Int’l Bus. Mach. 

Corp., 163 F.3d 737, 740 (2d Cir. 1998). 

In making that determination, the court, 

in accordance with the statute as 

amended in 2004, is required to 

consider: 

(A) the competitive impact of such 

judgment, including termination of 

alleged violations, provisions for 

enforcement and modification, 

duration of relief sought, 

anticipated effects of alternative 

remedies actually considered, 

whether its terms are ambiguous, 

and any other competitive 

considerations bearing upon the 

adequacy of such judgment that the 

court deems necessary to a 

determination of whether the 

consent judgment is in the public 

interest; and 

(B) the impact of entry of such 

judgment upon competition in the 

relevant market or markets, upon 

the public generally and 

individuals alleging specific injury 

from the violations set forth in the 

complaint including consideration 

of the public benefit, if any, to be 

derived from a determination of the 

issues at trial. 

15 U.S.C. § 16(e)(1)(A) & (B); see 

generally United States v. Keyspan, 763 

F. Supp. 2d 633, 637–38 (S.D.N.Y. 2011) 

(discussing Tunney Act standards); 

United States v. Morgan Stanley, 881 F. 

Supp. 2d 563, 567 (S.D.N.Y. 2012) 

(similar). In considering these statutory 

factors, the court’s inquiry is necessarily 

a limited one as the government is 

entitled to ‘‘broad discretion to settle 

with the defendant within the reaches of 

the public interest.’’ United States v. 

Microsoft Corp., 56 F.3d 1448, 1461 

(D.C. Cir. 1995); accord United States v. 

Alex. Brown & Sons, Inc., 963 F. Supp. 

235, 238 (S.D.N.Y. 1997) (quoting 

Microsoft, 56 F.3d at 1460, aff’d sub 

nom. United States v. Bleznak, 153 F.3d 

16 (2d Cir. 1998)); Keyspan, 763 F. 

Supp. 2d at 637 (same). 

Under the APPA a court considers, 

among other things, the relationship 

between the remedy secured and the 

specific allegations set forth in the 

government’s complaint, whether the 

decree is sufficiently clear, whether 

enforcement mechanisms are sufficient, 

and whether the decree may positively 

harm third parties. See Microsoft, 56 

F.3d at 1458–62. With respect to the 

adequacy of the relief secured by the 

decree, ‘‘[t]he Court’s function is not to 

determine whether the proposed 

[d]ecree results in the balance of rights 

and liabilities that is the one that will 

best serve society, but only to ensure 

that the resulting settlement is within 

the reaches of the public interest.’’ 

Morgan Stanley, 881 F. Supp. 2d at 567 

(quoting Alex. Brown & Sons, 963 F. 

Supp. at 238) (internal quotations 

omitted) (emphasis in original). In 

making this determination, ‘‘[t]he 

[c]ourt is not permitted to reject the 

proposed remedies merely because the 

court believes other remedies are 

preferable. [Rather], the relevant inquiry 

is whether there is a factual foundation 

for the government’s decision such that 

its conclusions regarding the proposed 

settlement are reasonable.’’ Morgan 

Stanley, 881 F. Supp. 2d at 563 (quoting 

United States v. Abitibi-Consolidated 

Inc., 584 F. Supp. 2d 162, 165 (D.D.C. 

2008)); see also United States v. Apple, 

Inc., 889 F. Supp. 2d 623, 631 (S.D.N.Y. 

2012); Alex. Brown & Sons, 963 F. Supp. 

at 238.1 The government’s predictions 

about the efficacy of its remedies are 

entitled to deference. Apple, 889 F. 

Supp. 2d at 631 (citation omitted).2

Courts have greater flexibility in 

approving proposed consent decrees 

than in crafting their own decrees 

following a finding of liability in a 

litigated matter. ‘‘[A] proposed decree 

must be approved even if it falls short 

of the remedy the court would impose 

on its own, as long as it falls within the 

range of acceptability or is ‘within the 

reaches of public interest.’ ’’ United 

States v. Am. Tel. & Tel. Co., 552 F. 

Supp. 131, 151 (D.D.C. 1982) (citation 

omitted) (quoting United States v. 

Gillette Co., 406 F. Supp. 713, 716 (D. 

Mass. 1975)), aff’d sub nom. Maryland 

v. United States, 460 U.S. 1001 (1983); 

see also United States v. US Airways 

Grp., Inc., 38 F. Supp. 3d 69, 74 (D.D.C. 

2014) (noting that room must be made 

for the government to grant concessions 

in the negotiation process for 

settlements) (citing Microsoft, 56 F.3d at 

1461); Morgan Stanley, 881 F. Supp. 2d 

at 568 (approving the consent decree 

even though the court would have 

imposed a greater remedy). To meet this 

standard, the United States ‘‘need only 

provide a factual basis for concluding 

that the settlements are reasonably 

adequate remedies for the alleged 

harms.’’ United States v. SBC 

Commc’ns, Inc., 489 F. Supp. 2d 1, 17 

(D.D.C. 2007). 

Moreover, the court’s role under the 

APPA is limited to reviewing the 

remedy in relationship to the violations 

that the United States has alleged in its 

Complaint, and does not authorize the 

court to ‘‘construct [its] own 

hypothetical case and then evaluate the 

decree against that case.’’ Microsoft, 56 

F.3d at 1459; see also Morgan Stanley, 

881 F. Supp. 2d at 567 (‘‘A court must 

limit its review to the issues in the 

complaint and ‘give due respect to the 

[Government’s] perception of . . . its 

case.’’’) (quoting Microsoft, 56 F.3d at 

1461); United States v. InBev N.V./S.A., 

No. 08–1965 (JR), 2009–2 Trade Cas. 

(CCH) ¶ 76,736, 2009 U.S. Dist. LEXIS 

84787, at *20, (D.D.C. Aug. 11, 2009) 

(‘‘the ‘public interest’ is not to be 

measured by comparing the violations 

alleged in the complaint against those 

the court believes could have, or even 

should have, been alleged.’’). Because 

the ‘‘court’s authority to review the 

decree depends entirely on the 

government’s exercising its 

prosecutorial discretion by bringing a 

case in the first place,’’ it follows that 

‘‘the court is only authorized to review 

the decree itself,’’ and not to ‘‘effectively 

redraft the complaint’’ to inquire into 

other matters that the United States did 

not pursue. Microsoft, 56 F.3d at 1459– 


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3See United States v. Enova Corp., 107 F. Supp. 

2d 10, 17 (D.D.C. 2000) (noting that the ‘‘Tunney 

Act expressly allows the court to make its public 

interest determination on the basis of the 

competitive impact statement and response to 

comments alone’’); United States v. Mid-Am. 

Dairymen, Inc., No. 73–CV–681–W–1, 1977–1 Trade 

Cas. (CCH) ¶ 61,508, at 71,980, *22 (W.D. Mo. 1977) 

(‘‘Absent a showing of corrupt failure of the 

government to discharge its duty, the Court, in 

making its public interest finding, should . . . 

carefully consider the explanations of the 

government in the competitive impact statement 

and its responses to comments in order to 

determine whether those explanations are 

reasonable under the circumstances.’’); S. Rep. No. 

93–298, at 6 (1973) (‘‘Where the public interest can 

be meaningfully evaluated simply on the basis of 

briefs and oral arguments, that is the approach that 

should be utilized.’’). 

60. Courts cannot look beyond the 

complaint in making the public interest 

determination ‘‘unless the complaint 

underlying the decree is drafted so 

narrowly such that its entry would 

appear ‘to make a mockery of judicial 

power.’’’ Apple, 889 F. Supp. 2d at 631 

(S.D.N.Y. 2012) (citing SBC Commc’ns, 

489 F. Supp. 2d at 15). 

In its 2004 amendments, Congress 

made clear its intent to preserve the 

practical benefits of utilizing consent 

decrees in antitrust enforcement, adding 

the unambiguous instruction that 

‘‘[n]othing in this section shall be 

construed to require the court to 

conduct an evidentiary hearing or to 

require the court to permit anyone to 

intervene.’’ 15 U.S.C. § 16(e)(2); see also 

U.S. Airways, 38 F. Supp. 3d at 75 

(indicating that a court is not required 

to hold an evidentiary hearing or to 

permit intervenors as part of its review 

under the Tunney Act). The language 

wrote into the statute what Congress 

intended when it enacted the Tunney 

Act in 1974, as Senator Tunney 

explained: ‘‘[t]he court is nowhere 

compelled to go to trial or to engage in 

extended proceedings which might have 

the effect of vitiating the benefits of 

prompt and less costly settlement 

through the consent decree process.’’ 

119 Cong. Rec. 24, 598 (1973) (statement 

of Sen. Tunney). Rather, the procedure 

for the public interest determination is 

left to the discretion of the court, with 

the recognition that the court’s ‘‘scope 

of review remains sharply proscribed by 

precedent and the nature of Tunney Act 

proceedings.’’ SBC Commc’ns, 489 F. 

Supp. 2d at 11; see also Apple, 889 F. 

Supp. 2d at 632 (‘‘[P]rosecutorial 

functions vested solely in the executive 

branch could be undermined by the 

improper use of the APPA as an 

antitrust oversight provision.’’) (citation 

omitted). A court can make its public 

interest determination based on the 

competitive impact statement and 

response to public comments alone. 

U.S. Airways, 38 F. Supp. 3d at 75.3

VIII. DETERMINATIVE DOCUMENTS 

There are no determinative materials 

or documents within the meaning of the 

APPA that were considered by the 

United States in formulating the 

proposed Final Judgment. 

Dated: August 7, 2018 

Respectfully submitted, 

lllllllllllllllllllll

Lowell R. Stern 

United States Department of Justice, 

Antitrust Division, Media, Entertainment & 

Professional Services Section, 450 Fifth 

Street, N.W., Suite 4000, Washington, DC 

20530, Telephone: (202) 514–3676, 

Facsimile: (202) 514–7308, E-mail: 

lowell.stern@usdoj.gov 

Attorney for Plaintiff United States 

[FR Doc. 2018–17521 Filed 8–14–18; 8:45 am] 

BILLING CODE 4410–11–P 

DEPARTMENT OF JUSTICE 

Drug Enforcement Administration 

[Docket No. DEA–392] 

Bulk Manufacturer of Controlled 

Substances Application: Rhodes 

Technologies 

ACTION: Notice of application. 

DATES: Registered bulk manufacturers of 

the affected basic classes, and 

applicants therefore, may file written 

comments on or objections to the 

issuance of the proposed registration on 

or before October 15, 2018. 

ADDRESSES: Written comments should 

be sent to: Drug Enforcement 

Administration, Attention: DEA Federal 

Register Representative/DRW, 8701 

Morrissette Drive, Springfield, Virginia 

22152. 

SUPPLEMENTARY INFORMATION: 

The Attorney General has delegated 

his authority under the Controlled 

Substances Act to the Administrator of 

the Drug Enforcement Administration 

(DEA), 28 CFR 0.100(b). Authority to 

exercise all necessary functions with 

respect to the promulgation and 

implementation of 21 CFR part 1301, 

incident to the registration of 

manufacturers, distributors, dispensers, 

importers, and exporters of controlled 

substances (other than final orders in 

connection with suspension, denial, or 

revocation of registration) has been 

delegated to the Assistant Administrator 

of the DEA Diversion Control Division 

(‘‘Assistant Administrator’’) pursuant to 

section 7 of 28 CFR part 0, appendix to 

subpart R. 

In accordance with 21 CFR 

1301.33(a), this is notice that on June 

28th, 2018, Rhodes Technologies, 498 

Washington Street, Coventry, Rhode 

Island 02816 applied to be registered as 

a bulk manufacturer of the following 

basic classes of controlled substances: 

Controlled substance Drug code Schedule 

Marihuana ...................................................................................................................................................................... 7360 I 

Tetrahydrocannabinols .................................................................................................................................................. 7370 I 

Dihydromorphine ............................................................................................................................................................ 9145 I 

Methylphenidate ............................................................................................................................................................. 1724 II 

Codeine .......................................................................................................................................................................... 9050 II 

Dihydrocodeine .............................................................................................................................................................. 9120 II 

Oxycodone ..................................................................................................................................................................... 9143 II 

Hydromorphone ............................................................................................................................................................. 9150 II 

Hydrocodone .................................................................................................................................................................. 9193 II 

Levorphanol ................................................................................................................................................................... 9220 II 

Morphine ........................................................................................................................................................................ 9300 II 

Oripavine ........................................................................................................................................................................ 9330 II 

Thebaine ........................................................................................................................................................................ 9333 II 

Oxymorphone ................................................................................................................................................................ 9652 II 

Noroxymorpohone ......................................................................................................................................................... 9668 II 

Tapentadol ..................................................................................................................................................................... 9780 II 


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