An Economics Perspective Ten Years After the NAB Case

Abstract

The U.S. Justice Department brought suit against the National Association of Broadcasters in 1979, charging that the NAB Television Code restricted the supply of advertising. This paper examines implications of a collusive code, concluding that the code did not successfully serve this purpose. Television station sale prices were no higher in markets with a high proportion of code subscriber stations. Stations in single station markets were no less likely to subscribe to the code. Finally, rates of return on broadcast firm and network stocks did not change when the antitrust case was settled.