Expert Report and Supplemental Expert Report of Dennis W

REDACTED - FOR PUBLIC INSPECTION

Expert Report and Supplemental Expert Report of Dennis W. Carlton and Mark Israel in Re: Toys "R" Us-Delaware, Inc., and Geoffrey Inc. v. Chase Bank USA N.A. in American Arbitration Association New York, New York, Commercial Arbitrations No. 13-148-02432-08, February 27, 2009 (Expert Report), March 20, 2009 (Supplemental Expert Report).

Expert Reports of James Levinsohn and Mark Israel in Re: 2006 NPM Adjustment Proceeding pursuant to Master Settlement Agreement, October 6, 2008 (Expert Report), January 16, 2009 (Expert Report), March 10, 2009 (Expert Report).

EXPERT WORK IN REVIEW OF MERGERS/TRANSACTIONS

Successful Acquisition of Schurz Communications ' Broadcast Stations by Gray Television. 2015. Lead economic expert for Gray. Made presentations to DOJ demonstrating output expanding effects of proposed transaction in light of the scale economies in television production and advertising and the small size of the DMAs affected by the transaction.

Successful Acquisition of the Communications Business of Danaher Corporation by NetScout Systems. 2015. Lead economic expert for NetScout. Made presentations to DOJ describing proper economic framework for analysis of competition and potential merger harms, and demonstrated that the presence of multiple viable competitors and numerous other credible threats to be used by powerful buyers in a dynamic industry made theories of anti-competitive harm from the merger implausible.

Successful Acquisilion of Windmill Distribution Co. by Manhattan Beer Distributors. 2015. Lead economic expert for Manhattan Beer Distributors. Submitted White Paper to DOJ demonstrating, based on margin data, that the merger would be highly unlikely to lead to anti-competitive effects. Transaction was granted early termination from the Hart Scott Rodino process by the DOJ.

Proposed Acquisition of Time Warner Cable by Comcast Corporation. 2014-2015. Served as lead economic expert on broadband issues on behalf of Comcast Corporation. Submitted multiple Declarations and made multiple presentations to DOJ and FCC, explaining lack of horizontal, bargaining, or vertical/foreclosure concerns with regard to broadband competition as a result of the transaction.

Successful acquisition of Leap Wireless by AT&T 2014. Lead economic expert for AT&T. Submitted multiple Declarations to FCC and made presentation to DOJ, demonstrating the transaction would generate substantial consumer benefits, while generating at most minimal upward pricing pressure in a properly defined mobile wireless services market and no issues related to spectrum concentration or other competitive concerns.

Successful merger of American Airline and US Airways. 2013. Lead consulting expert, managing Compass Lexecon team of over 25 economists supporting multiple experts. Made multiple presentations to DOJ, worked on expert reports in litigation, and assisted counsel with the analysis leading to settlement of litigation, permitting transaction to close.


Successful merger ofT-Mobile USA and MetroPCS. 2013. Lead economic expert for T-Mobile USA. Conducted economic analyses of competitive effects of the transaction, as well as consumer benefits from reduced costs and increased network quality. Presented analyses to both DOJ and FCC.

FTC Investigation of Acquisition of Dollar Thrifty Automotive Group by Hertz, 2012. Served as a lead economic expert for FTC and prepared to serve as FTCs testifying expert against the merger, prior to case settlement. Conducted empirical analyses based on previous rental car mergers demonstrating likely price increases from the transaction.

Decision by Federal Communications Commission not to extend the ban on exclusive contracts for satellite-delivered, cable-affiliated networks. 2012. Lead economic expert for National Cable and Telecommunications Association. Submitted economic analysis demonstrating that the ban on exclusive distribution of satellite-delivered, cable affiliated networks is no longer warranted given increased marketplace competition. FCC made decision to allow the ban to sunset.

Successful sale of wireless spectrum by SpectrumCo and Cox ("Cable Companies") to Verizon Wireless and successful completion of related commercial agreements. 2012. On behalf of the Cable Companies, performed economic analyses demonstrating lack of competitive harm from the transaction on markets for backhaul and Wi-Fi services. Presented analyses to FCC.

Successful acquisition by LJN Media of broadcast television stations from NVTV. 2012. Lead economic expert for LIN Media. Prepared economic analysis demonstrating lack of competitive concern over potential issues related to Shared Service and Joint Sale Arrangements.

Proposed acquisition of T-Mobile USA by AT & T. 2011. Served as one of the lead economists, initially for T-Mobile (along with Michael Katz) and ultimately for both parties (along with Michael Katz and Dennis Carlton). Made multiple presentations to DOJ and FCC. Appeared in FCC Workshop, ex parte meeting.

Successful application/or antitrust immunity by Delta and Virgin Blue. 2010. Together with Robert Willig, Bryan Keating, and Jon Orszag, prepared economic analyses demonstrating substantial net consumer benefits from antitrust immunity. Submitted results in expert reports to Department of Transportation.

Successful joint venture between Comcast and NBC Universal (and ultimate full acquisition of NBC Universal by Comcast). 2010. Served as one of the lead economists (along with Michael Katz) on behalf of the merging parties. Wrote multiple reports submitted to FCC (with Michael Katz) demonstrating lack of significant competitive concerns from the transaction. Made multiple presentations to DOJ and FCC. Appeared in FCC Workshop of economists, ex parte meeting.

Successful application for antitrust immunity for oneworld alliance and associated joint venture of American Airlines, British Airways, and Iberia Airlines. 2009-2010. Together with Robert Willig and Bryan Keating, prepared economic analyses demonstrating substantial


net consumer benefits associated with antitrust immunity for the joint venture. Submitted results in expert reports to Department of Transportation.

Successful acquisition by PepsiCo of bottlers, PBG and PAS. 2009. Performed econometric and simulation analyses demonstrating pro-competitive effect of merger on PepsiCo' s own brands, other brands distributed by PBG and PAS, and overall marketplace. Presented results to FTC (together with Dennis Carlton).

Successful merger of Delta Airlines and Northwest Airlines. 2008. In support of Dennis Carlton, developed empirical and theoretical analyses to demonstrate merger's pro-competitive nature. Work focused on (ultimately settled) private litigation opposing the merger.

Successful acquisition of Harcourt Education by Houghton Mifflin. 2007. Along with Daniel Rubinfeld and Frederick Flyer, developed econometric analyses demonstrating lack of competitive harm from proposed merger. Presented results to DOJ.

Successful acquisition of Chicago Board ofTrade by Chicago Mercantile Exchange. 2007. Along with Robert Willig and Hal Sider, developed and presented multiple empirical analyses demonstrating lack of competitive harm from merger. Submitted multiple white papers and made multiple presentations to DOJ.

SELECTED OTHER EXPERT/CONSULTING WORK

Led team supporting Dennis Carlton's testimony in Toshiba/Hannstar TFT-LCD Antitrust litigation vs. Plaintiff Best Buy, 2013.

Led team supporting Dennis Carlton's testimony in Toshiba's TFT-LCD Class Action Antitrust litigation. Named Litigation Matter of the Year for 20 12 by Global Competition Review, 2012.

As economic expert for US Airways, developed econometric analysis of air traffic at major US airports, presented to Philadelphia Airport management team, 2011.

Prepared analysis of the competitive impact of low-cost-carrier competition in Washington, DC and New York airports. Filed with DOT, 20 11 .

On behalf of major pharmaceutical firm, developed econometric model to forecast pharmaceutical expenditures, 2009.

Developed econometric model to measure of the importance of network effects in credit cards in the context of measuring damages incurred by a major credit card issuer, 2007-2008.

SELECTED RECENT PRESENTATIONS

American Bar Association Section of Antitrust Law, "Economic Issues Raised In The Comcast -Time Warner Cable Merger," Panelist, February 2016.


Fordham Competition Law Institute, 42"d Annual Conference on International Antitrust Law and Policy, Panel: Antitrust in a Mobile World, Panelist, October 2015.

American Bar Association Section of Antitrust Law, "Merger Practice Workshop," Faculty Member, October 2015.

Searle Center Conference on Antitrust Economics and Competition Policy, Panel on Recent Transactions in the Telecom Industry, Panelist, September 2015.

National Bureau of Economic Research, Summer Institute 2015, Industrial Organization Meetings, "Panel Discussion of the Comcast-Time Warner Merger," Panelist, July 2015.

Federal Communications Bar Association, "How the Antitrust Agencies and the FCC are Likely to Analyze Vertical Mergers," Panelist, November 2014.

The Coca Cola Company Global Antitrust Forum, "Round Table Discussion on Use of Economics and Economists," Panel Chair, November 2014.

Compass Lexecon Competition Policy Forum, Lake Como Italy, "Consolidation of the Telecoms Industry in the EU and the US," Panelist, October 2014.

The IA TA Legal Symposium 2014, Aviation Law: Upfront and Center, "Merger Analysis - A sudden shift in approach by DOJ in the American Airlines and US Airways merger," Panelist, February 2014.

Georgetown Law ih Annual Global Antitrust Enforcement Symposium, "Merger Enforcement and Policy," Panelist, September 2013.

American Bar Association Section of Antitrust Law, "Airline Mergers: First Class Results or Middle-Seat Misery?" Panelist, May 2013.

American Bar Association Section of Antitrust Law, "Go Low or Go Home! Monopsony a Problem?" Panelist, March 2012.

Federal Communications Bar Association Transactional Committee CLE Seminar, "The FCC's Approach to Analyzing Vertical Mergers," Panelist, October 2011.

The Technology Policy Institute Aspen Forum, "Watching the Future: The Economic Implications of Online Video," Panelist, August 2011 .

American Bar Association Forum on Air & Space Law, 201 1 Update Conference, "Antitrust Issues: What' s on the Horizon for the Industry," Panelist, February 2011.

American Bar Association Section of Antitrust Law, "Antitrust in the Airline Industry," Panelist, September 20 I 0.

PUBLICATIONS

"Buyer Power in Merger Review," (with Dennis W. Carlton and Mary Coleman), Chapter 22 of The Oxford Handbook of International Antitrust Economics, Volume 1, Roger D. Blair and D. Daniel Sokol, eds, Oxford University Press, 2015.


"The Evolution oflntemet Interconnection from Hierarchy to 'Mesh ': Implications for Government Regulation," (with Stanley M. Besen), Information Economics and Policy, December 2013.

"Airline Network Effects and Consumer Welfare," (with Bryan Keating, Dan Rubinfeld, and Robert Willig), Review of Network Economics, November 2013.

"The Delta-Northwest Merger: Consumer Benefits from Airline Network Effects (2008)," (with Bryan Keating, Daniel L. Rubinfeld, and Robert D. Willig), The Antitrust Revolution, Sixth Edition, Edited by John E. K woka, Jr. and Lawrence J. White, Oxford University Press, New York, July 2013.

"Proper Treatment of Buyer Power in Merger Review," (with Dennis W. Carlton), Review of Industrial Organization, July 2011.

"Response to Gopal Das Varma's Market Definition, Upward Pricing Pressure, and the Role of the Courts: A Response to Carlton and Israel," (with Dennis W. Carlton), The Antitrust Source, December 2010.

"Will the New Guidelines Clarify or Obscure Antitrust Policy?" (with Dennis W. Carlton), The Antitrust Source, October 2010.

"Should Competition Policy Prohibit Price Discrimination?" (with Dennis W. Carlton), Global Competition Review, 2009.

"The Empirical Effects of Collegiate Athletics: An Update Based on 2004-2007 Data," (with Jonathan Orszag), Paper commissioned by National Collegiate Athletic Association, available athttp://www.epi.soe.vt.edu/perspectives/policy news/pdf/NCAASpending.pdf. February 2009.

"Services as Experience Goods: An Empirical Examination of Consumer Learning in Automobile Insurance," The American Economic Review, December 2005.

"Tenure Dependence in Consumer-Firm Relationships: An Empirical Analysis of Consumer Departures from Automobile Insurance Firms," The Rand Journal of Economics, Spring 2005.

"The Impact of Youth Characteristics and Experiences on Transitions Out of Poverty," (with Michael Seeborg), The Journal of Socio-Economics, J 998.

"Racial Differences in Adult Labor Force Transition Trends," (with Michael Seeborg), The Journal of Economics, 1994.

FORTHCOMING AND UNDER-REVIEW PUBLICATIONS

"The Economics of Cartel Cases and Use of Experts," (with Gustavo Bamberger and Dennis W. Carlton), forthcoming in Manual on Cartel Eriforcement, November 2015.


Update to ABA Treatise, Proving Antitrust Damages: Legal and Economic Issues, Chapter 6: "Econometrics and Regression Analysis," (with Chris Cavanagh and Bryan Keating), July 2015.

GRANTS AND HONORS

Searle Fund for Policy Research Grant, 2004-2006, for "An Empirical Examination of Asymmetric Information in Insurance Markets."

Kellogg School of Management Chairs' Core Course Teaching Award, 2003 & 2005.

Bradley Dissertation Fellowship, Stanford University, 1999-2000.

Stanford University, Outstanding Second Year Paper Prize, 1997.

SELECTED ACADEMIC SEMINARS

Yale University University of Arizona Washington University, St. Louis University of Pennsylvania University of Toronto UCLA University of Wisconsin-Madison Massachusetts Institute of Technology Harvard University University of Chicago Columbia University University of Texas Carnegie Mellon University University of California, Irvine University of California, San Diego

REFEREE FOR ACADEMIC JOURNALS

American Economic Review The Journal of Industrial Economics The Rand Journal of Economics Journal of the European Economic Association The Review of Economic Studies The Review of Economics and Statistics Journal of Risk and Insurance


APPENDIX2


{

1


}

2


APPENDIX3


l. In this appendix I present details of the statistical test of whether Estrella TV and

Telemundo or EstrellaTV and NBC Universo compete for viewers, as summarized in Section IV

above. This test makes use of standard econometrics tools and monthly Nielsen ratings data to

determine whether the discontinuation of Comcast's carriage of EstrellaTV has resulted in a

statistically detectable increase in Telemundo' s or NBC Universo's viewership by households

that are Comcast' s subscribers in the three affected DMAs.

2. Because a household's viewing decision can change over time due to factors

umelated to whether EstrellaTV is available, simply comparing Telemundo' s or NBC Universo's

viewership by Comcast' s subscribers before and after the discontinuation of Comcast's carriage

of EstrellaTV can be misleading. For example, the viewership of Telemundo might have

increased due to the increase in the quality ofTelemundo' s content over time.

3. To control for these factors umelated to whether EstrellaTV is available to

Comcast' s subscribers, I use a standard econometric technique known as "difference-in

differences" to estimate the effect of Comcast' s discontinuation of EstrellaTV carriage on

Telemundo's and NBC Universo's viewership in the affected DMAs.1 A difference-in

differences analysis compares the changes in viewership for households that have been affected

by Comcast's non-carriage of EstrellaTV - the treatment group - to the changes in viewership

for households that have not been affected by the non-carriage of Estrella TV - the control group.

By comparing the changes in viewership between the treatment and control groups, common

factors that affect viewership for both groups but are unrelated to non-carriage of Estrella TV can

be controlled for, allowing the effects of non-carriage of EstrellaTV on Telemundo's and NBC

Universo's viewership to be estimated.

1 See supra note 40.

1


4. I performed this test using Nielsen ratings data, which provide a monthly measure

of Telemundo and NBC Universe viewership in each of the affected DMAs for the period from

January 2013 through March 2016. The data include TV households that are Comcast

subscribers (who stopped receiving EstrellaTV through Comcast on February 19, 2015) as well

as those that are not Comcast subscribers (who continued to receiving EstrellaTV through other

MVPDs). In what follows, I will refer to the twenty-five months from January 2013 through

January 2015 as the "pre-period" and the thirteen months from March 2015 through March 2016

as the "post-period". 2

5. To implement the difference-in-differences analysis, I estimated the following

regression model using the Nielsen ratings for Telemundo and NBC Universo, separately, in the

three affected DMAs:

Log(Ratingimt) = /30 + /31 · Postt x Comcasti +Year-Month Fixed Effects

+DMA-MVPD Fixed Effects+ Eimt

where i is the index for MVPD, m is the index for DMA, and I is the index for calendar month. 3

6. The inclusion of year-month fixed effects in the regression model controls for

factors that affect Telemundo's or NBC Universo's ratings for both treatment and control groups

over time. The inclusion of DMA-MVPD fixed effects controls for DMA and MVPD-specific

factors affecting Telemundo's or NBC Universo's ratings that are time-invariant. Postt is a

2 Because Estrella TV pulled its signals from Comcast systems in the middle of February 2015 and the data are only available on a monthly basis, I excluded the month of February 2015 from my analysis.

3 The regressions are weighted by " intab", which represents the sample size used by Nielsen to construct the corresponding rating observation, giving more weight to ratings that are more accurately measured. I excluded from my estimation sample outlier observations that can potentially bias the results. Outliers are identified as rating observations that are smaller than the 5th_ percentile, greater than the 95th_ percentile, or more than 5 times larger than the median rating of the network in the particular DMA-MVPD combination.

2


variable that equals 1 for months in the post-period and 0 otherwise; Comcasti is a variable that

equals 1 if the MVPD is Comcast and 0 otherwise. The coefficient {31 therefore measures the

effect of Comcast's discontinuation ofEstrellaTV carriage on Telemundo's and NBC Universo's

viewership for Comcast' s subscriber households. {

4 To ensure the robustness of my regression analysis, I repeated the same difference-in-differences analysis but with also including ratings data from other DMAs, applying alternative methodologies for outlier observations, and applying alternative weighting methodologies. The robustness checks of my regression results confirm my finding of no statistically significant effects ofComcast's discontinuation ofEstrellaTV carriage in the affected DMAs on Telemundo's or NBC Universo's viewership.

3


Before the FEDERAL COMMUNICATIONS COMMISSION

Washington, D.C. 20554

In the Matter of

LIBERMAN BROADCASTING, INC. and LBI MEDIA, INC.,

Complainants,

V.

) ) ) ) ) ) ) ) )

COMCAST CORPORATION ) and ) COMCAST CABLE COMMUNICATIONS, ) LLC, )

Defendants. )

~~~~~~~~~~~~~~-)

MB Docket No. 16-121

File No. CSR-8922-P

Ace•pt•d I Flied

JUN - 7 2016 Federal Communications Commission

Office of the Secre_tary

EXPERT DECLARATION OF ROBIN FLYNN

I. INTRODUCTION

1. I am Director of Research for SNL Kagan, a leading source of media &

telecommunications data and :financial analysis. SNL Kagan (''Kagan"), an offering of S&P

Global Market Intelligence, otrers an online interactive database and market intelligence tooi

which provides data and intelligence in the areas of cable television, broadcast 1V, broadcast and

online radio, cable and broadcast 1V networks, DBS, online video, Internet media, rmtion

picture and wireless/rmbile media and telecommunications in the United States and

internationally. In addition to the online database, with thousands of articles and interactive data

sets, Kagan publishes five newsletters and over three dozen annual reports. Additionally,

Kagan' s senior analysts bring together key players in the media and communications sectors in

1


industry seminars. Kagan senior analysts also provide strategic corporate consulting, fair-market

value appraisals and other consulting services in all the media areas in which we operate. Our

perspective and historical databases are regularly used by senior executives in the fields of media

operations and finance to plan and execute their businesses.

2. I have been retained by counsel for Comcast Corporation to compare the

programming on the EstrellaTV and Telemundo stations in Denver, Houston and Salt Lake City,

and also to compare the programming on those EstrellaTV stations with that of the cable network

NBC Universo.

II. QUALIFICATIONS

3. I graduated from Duke University with a Bachelor's degree in 1983. I

hold an MBA from the Monterey Institute of International Studies. I joined Kagan in 1988.

4. I have more than 28 years of experience in the cable television and

broadcasting fields, not only as an analyst but also as an appraiser of media properties. As

Director of Research, I head up a team that is responsible for the company's monthly newsletters,

annual reports, and online articles devoted to covering the cable television and broadcast

industries, as well as overseeing other media teams. This research is largely dedicated to

analyzing the economics of cable television, TV and radio stations and providing timely and

data-rich reports on trends in these industries. In addition, I am responsible for the company's

appraisal and databook publishing activities in the area of cable television and broadcast stations,

and have personally appraised and/or determined the value of more than $20 billion of cable and

broadcast properties under contract assignment over the last 10 years.

5. In addition, Kagan's senior analysts bring together key players in the

media and communications sectors for annual seminars. As a senior analyst, I also provide

strategic corporate consulting, appraisals and expert opinions in all media areas in which Kagan

2


operates. I have been retained and testified as an expert in matters concerning the broadcast,

cable television and DBS (direct broadcast satellite) industries. My CV, including past expert

assignments, can be found in Exhibit A. The hourly rate charged by SNL Kagan for my work on

this matter is - } per hour. I have no financial interest in the outcome of this case.

Ill. SCOPE OF ASSIGNMENT AND SUMMARY OF CONCLUSIONS

6. Counsel for Comcast Corporation retained me to provide a comparison

between the programming aired by EstrellaTV and Telemundo stations in Denver, Houston and

Salt Lake City, as well as to compare the programming broadcast on those EstreHaTV stations

with that of the cable network, NBC Universo. 1 I have done so over the period July 1, 2014 to

March 31, 2016, both because it encompasses what I understand to be the relevant time period

for the events underlying this dispute (which generally runs from late 2014, when EstrellaTV

sought to elect retransmission consent, to late 2015 when Estrella TV and Comcast ended

negotiations), and because it provides me with a slightly larger sample size in which to do a

quantitative comparison of the programming on EstrellaTV, Telemundo and NBC Universo.

7. I performed my analysis utilizing data provided by Gracenote (formerly

known as Tribune Media Services), the leading supplier of TV programming data for broadcast

stations, broadcast and cable networks and MVPDs. The Gracenote data encompasses TV

schedules and synopses for practically every TV program and channel transmitted in the United

States. Most importantly for my work, Gracenote classifies television programming into specific

categories and genres that are utilized by television viewers to help them select the programming

The EstrellaTV stations in my analysis are KETO in Denver, Colorado; KZJL in Houston, Texas; and KPNZ in Salt Lake City, Utah. The Telemundo stations in my analysis are KOEN in Denver, Colorado; KTMD in Houston, Texas; KULX-CD in Salt Lake City, Utah.

3


they intend to watch.2 The Gracenote data includes daily programming schedules, show titles,

title descriptions, duration (in minutes), source, type and genre classifications.3

8. In all, the data I examined for the period July 1, 2014 to March 31, 2016

covers 640 days or 15,360 hours of programming made up of 1,267 unique titles and divided into

50 genres across the EstrellaTV, Telemundo and NBC Universo schedules. I analyzed that

programming over the well-accepted prime-time period (Eastern/Pacific 8PM-l 1PM;

Central/Mountain 7PM-l OPM) in which broadcasters and cable networks generally air their most

popular programming, and over the networks' respective 24-hour schedules (both inclusive and

exclusive of the "Shopping" genre comprising paid programming and infomercials). Gracenote

has complete information for the EstrellaTV, Telemundo and NBC Universo programming in the

relevant time period.

9. I relied on Gracenote for program categories and genres both because it is

widely used in the television industry and because its preexisting system of categorization has

been developed for purposes entirely unrelated to this litigation. My opinion draws entirely on

the Gracenote data. I have not independently verified the genre for each program. I understand

that counsel for Comcast has asked another expert to draw programming comparisons based on

viewing the programming on EstrellaTV, Telemundo and NBC Universo; I have not engaged in

that analysis.

I 0. My analysis of the Gracenote data for the July 2014 through March 2016

time period shows significant differences in the mix of predominant programming on the

2 For further infonnation on Gracenote, see http://www.gracenote.com/on-entertainment-tv-listings-productpage/. For purposes of this analysis, r used the "Genre l" programming categories identified by Gracenote. I understand that Gracenote considers Genre 1 to best reflect the proper classification of any one television program. Gracenote also may identify subsidiary Genre 2 or Genre 3 classifications in some cases where a program has attributes that also place it within another category. Because Genre I represents the most relevant classification according to Gracenote, I have limited my analysis to that level.

4


Estrella TV stations in Houston, Denver and Salt Lake City as compared to the mix of

predominant programming aired on Telemundo stations in those cities or to that of NBC

Universo. The differences between EstrellaTV on the one hand, and Telemundo and NBC

Universo on the other, are also striking when I examine the prime-time schedule of the networks,

particularly as a result ofTelemundo's emphasis on telenovela programming, which is absent

from EstrellaTV during this time frame. I also see consistently pronounced differences when I

examine the broader 24-hour schedule of the networks, both with and exclusive of

"Shopping"/infomercial programming. In the balance of this declaration, I spell out these

differences in more detail.

ANALYSIS

A. Summary of Conclusions

11. My analyses of the Gracenote data show that EstrellaTV's programming

mix and predominant programming aired in Houston, Denver and Salt Lake City is not similar in

type or genre to the programming mix or predominant programming on either Telemundo (in the

same three cities) or NBC Universo. The predominant categories of programming aired by

Estrella TV during prime time are "Talk" (32% ), "Entertainment" (15% ), "News" (12% ),

"Newsmagazine" (12%) and "Spanish" (7%) (including movies).4 The overwhelmingly

predominant category on Telemundo in prime time is "Soaps" (54%) (which in Spanish-

language television are " telenovelas"), followed by "Spanish" (10-11 %)s, "Sports Non-Event"

(7- 8%), "News" (1- 13%) and "Entertainment" (3-6%). NBC Universo' s predominant prime-

4 I understand from Gracenote that the "Spanish" category encompasses any and all movies that are shown in the Spanish language. Whenever a percentage range is shown, it reflects the differences among the three stations. The bar charts included herein reflect the average of any range, where appropriate.

5


time programming included "Reality" (47%), "Sports Event" (15%), "Sports Non-Event" (11%),

"Drama" (8%) and "Spanish" (5%).

12. These category differences are graphically represented in the following

bar chart:

Prime-time Program Mix: Top Five Genres

60

/ /

50

41 en / IO , ..,

40 c f---------·-41 v .... &

30

/ ,,

20

10

0 Estrella TV Telemundo NBC Universo

Talk •Entertainment •News • Newsmaaazlne Spanish

•Soaps •Sports Non-Event •Reality Sports Event •Drama

13. The differences in prime-time programming are particularly striking

because both broadcast and cable networks transmit their signature programming in that time

period, which typically attracts the most viewers and advertisers. Telemundo devotes more than

half of its prime-time schedule to telenovelas; Estrella TV, by contrast, airs no telenovelas in

prime time. Estrella TV, in turn, devotes almost half of its prime-time programming to "Talk"

and "Entertainment" shows, which comprised only 4-13% ofTelemundo's programming in the

same time block. NBC Universo showed entirely different programming, broadcasting "Reality"

6


and Sports-related programming for about 72% of its prime-time schedule. Indeed, both

Telemundo (approximately 12%) and NBC Universo (25%) rely on "Sports Event" and "Sports

Non-Event" programming to a significant degree in prime time, while EstrellaTV shows only

about 2% of these categories in prime time.

14. Assessed on a 24-hour basis, the predominant categories of programming

on the EstrellaTV stations are "Shopping" (29-31%), "Spanish" (16%), "Entertainment" (15%),

"Variety" (8%) and "News" (6%). In contrast, the predominant categories of programming on

the Telemundo stations are "Soaps" (22%), "Spanish" (15-16%), "Shopping" (12-13%), "Talk"

(12- 13%) and ''News" (2- 8%). The predominant categories on NBC Universo are "Reality"

(38%), "Sports Event" (10%), "Entertainment" (9%), "Educational" (8%) and "Game Show"

(8%).

7



bar chart:

24-hour Program Mix: Top Five Genres

•S

"° 35

~ ~ 30 c: Cll ~ & 25

20

15

10

5

0

Estrella TV Telemundo NBC Universo

• Shoppin1 Spain!"' a Entertainment • Variety • News • Soaps

Tak a Reality Sports Evt>n t l'l Educational • Game Show

16. The predominant categories of programming on the Estrella TV stations,

when assessed on a 24-hour basis and excluding the "Shopping" (infomercials and paid

programming) category are "Spanish" (22-23% ), "Entertainment" (21- 22% ), "Variety" (11-

12%), "News" (8-9%) and "Talk" (7%). In contrast, the predominant categories of

programming on the Telemundo stations are "Soaps" (25- 26%), "Spanish" (17- 18%), "Talk"

(13- 15%), "News" (8-10%) and "Newsmagazine" (5- 7%). The predominant categories on

NBC Universo are "Reality" (39%), "Sports Event" (10%), "Entertainment" (9%), "Educational"

(8%) and "Game Show" (8%).

8



bar chart:

24-hour Program Mix, without Shopping: Top Five Genres

/ 45

40

,,/ / - -·-- _._ __ -·-·--35

Qj / on '° / >J 30 ~ / / ~ & 25

20

15

10

5

0 Estrella TV Telemundo NBC Universo

Spanish • Entertainment • Variety • News Talk • Soaps

• Newsma gaz ine • Reality Sports Event ,. Educational • Game Show

18. In short, I compared the categories of programming across these three

bases (prime time, 24-hour and 24-hour exclusive of "Shopping"/infomercials), and conclude

that there are substantial differences in the programming mix aired by these three networks

during the time period examined. I detail my analysis below.

B. Prime-time Analysis

19. The contrast in prime-time programming for EstrellaTV, Telemundo and

NBC Universo is stark. The predominant type of prime-time programming on Estrella TV is

"Talk," malcing up approximately 32% of the prime-time hours. Second is "Entertainment" at

approximately 15%, followed by "News" and "Newsmagazine" programming (the latter of

9


which includes such shows as "Alanna TV" and "Noticiero Con Enrique Gratas"), both of which

register just under 12% each ofEstrellaTV's prime-time programming hours. The fifth category

is "Spanish," comprising approximately 7% of Estrella TV's prime-time programming. In all,

these top five categories of programming make up approximately 78% of the prime-time

programming on the EstrellaTV stations over the relevant time period. The prime-time program

analysis of the EstrellaTV stations in Denver, Houston and Salt Lake City; the Telemundo

stations in the same market; and the NBC Universo network is shown in Table 1 in Appendix B.

20. Telemundo's prime-time lineup mix is entirely different. Approximately

54.5% of the prime-time programming on the Telemundo stations falls into the category of

"Soaps," which includes telenovelas; EstrellaTV, by contrast, broadcasted no such programming

in prime time. Turning to the leading EstrellaTV categories, Telemundo stations devoted

between 3% and 6% of their prime-time hours to the "Entertainment" category featured on

Estrella TV and only 1- 8% of their prime-time hours to the leading category of Estrella TV

programming, "Talk." The three Telemundo stations devoted varying prime-time hours to the

next most popular Estrella TV category, "News," ranging between 1 % in Salt Lake City and 13%

in Houston. None of the Telemundo stations broadcasted any programming in prime time in the

"N ewsmagazine" category. And T elem undo broad casted about 10-11 % of its prime-time

programming in the "Spanish" category that is the fifth most prevalent on EstrellaTV. In a11,

Telemundo devoted Jess than half as much time (38% vs. 78%) to the five most popular

categories of prime-time programming on Estrella TV.

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21. These distinctions between EstrellaTV and Telemundo are graphically

represented in the following bar charts:

• Soap

Spanish

Prime-time Program Mix: EstrellaTV v. Telemundo

Estrella TV

Talk

• Hewsmagazine

• Reality

Sports event

Telemundo

• Entertainment • News

• Sports non-eYent • Drama

22. The prime-time comparison between NBC Universo and EstrellaTV tells a

similar story. NBC Universo transmitted no programming in the leading EstrellaTV category of

"Talk." Less than 0.5% ofNBC Universo' s hours were devoted to "Entertainment" (as opposed

to 15% on EstrellaTV). NBC Universo had no "News" or "Newsmagazine" programming in the

relevant time period. And NBC Universo only had approximately 5% of its prime-time

programming in the "Spanish" category. Conversely, the dominant category of NBC Universo

prime-time programming, "Reality"-making up over 47% of NBC Universo's prime-time

hours- was not a category of programming reflected for Estrella TV.

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23. These distinctions between EstrellaTV and NBC Universo are graphically

represented in the fo llowing bar chart:

Prime-time Program Mix: EstrellaTV v. NBC Universo

• Soap

SpM!iSh

Estrella TV

Talk

• Newsmagazine

• Reality

Sports event

C. 24-hour Programming Analysis

NBC Universo

• Entertainment • News

•Sports non-event • Drama

24. The complete analysis of the 24-hour programming days is set out in

Table 2 of Exhibit B. It shows that, for Estrella TV, the top 5 categories are: (1) "Shopping"

(including infomercials), which comprises between 29% and 31 % of the programming hours on

the three Estrella TV stations; (2) "Spanish," which makes up approximately 16% of the

EstrellaTV programming day; (3) "Entertainment," including shows such as "Don Cheto" and

"Retofamosos," which comprises another 15%; (4) "Variety," including such shows as "A Que

No Puedes VIP" and "Lagrimita y Costel," which is approximately 8% of the programming day;

and (5) "News," which comprises 6% of programming. In all, for the three Estrella TV stations

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Documents

Expert Report and Supplemental Expert Report of Dennis W