Product market competition, regulation, and financial contracts

Restrictions that seek to limit the control of assets by a single entity are prevalent in the United States and many other countries. Typically, these laws and regulations focus on the ownership of common stock with voting rights as the litmus test for ownership or control of assets. We use two case studies from the broadcasting industry to illustrate the use of other types of financial contracts to contract around such laws and regulations. In doing so, we provide insights into the use of financial contracting to assign control rights and to avoid regulation.