Spanish Broadcasting Sues Clear Channel & Hispanic Broadcasting.

Spanish Broadcasting System, Inc., sued Clear Channel Communications CCU and Hispanic Broadcasting Corporation HSP alleging antitrust and other claims. Clear Channel, the largest radio company in the United States, is the largest shareholder in HBC.

According to the suit, Clear Channel and HBC have adversely affected SBS’s ability to raise capital, depressed SBS’s share price, impugned the reputation of SBS, made station acquisitions more difficult and interfered with SBS’s business opportunities and contractual arrangements. Clear Channel and HBC allegedly took these steps to facilitate their ultimate objective of acquiring SBS and eliminating it as a competitive threat to HBC’s attempted dominance of the top 10 Spanish-language radio markets.

The lawsuit, filed by David Boies of the law firm of Boies, Schiller & Flexner LLP in the United States District Court for the Southern District of Florida, asserts federal and state antitrust law violations and other state law claims as a result of alleged actions that include the following:

— In the summer of 1999, when SBS’s initial public offering was being readied for market, Randall Mays, Clear Channel’s Chief Financial Officer, called two of SBS’s lead underwriters to attempt to get them to withdraw from the offering.

— After the initial public offering, Clear Channel and HBC sought to depress the SBS stock price by limiting or eliminating coverage by leading securities analysts through similar, continuing threats to withhold Clear Channel and/or HBC business from the analysts’ employers.

— Clear Channel and HBC improperly induced significant institutional investors to divest their positions in SBS, depressing SBS’s stock price.

— Clear Channel and HBC attempted to keep SBS from acquiring radio stations, engaged in bidding wars solely for the purpose of increasing SBS’s costs in acquiring those stations and tortiously interfered with transactions under contract.

— Clear Channel and HBC attempted to injure SBS by inducing employees under contract to SBS to breach their contracts and work for Clear Channel and/or HBC.

— Clear Channel injured SBS by inducing Katz Hispanic Media to breach its long-term contract as SBS’s national sales representative in order to become HBC’s national sales representative.

— Clear Channel has “parked” stations that it owns with other companies in order to circumvent Federal Communications Commission ownership limitations. This practice recently lead Congressman Howard Berman to seek Department of Justice and FCC investigations and House Judiciary Committee hearings on this subject.

— The involvement of Clear Channel in the foregoing demonstrates that it has acted and continues to act for, and has controlled and is controlling, HBC in a manner that is inconsistent with representations made by it to the FCC concerning its ownership interest in HBC.

— Clear Channel has leveraged its market power in radio and other areas of commerce (including venue promotion, advertising and outdoor displays) to benefit Clear Channel and HBC and to harm SBS.