Hal W. Brown Jr., chairman of the board and chief executive officer of Hollywood Park Realty Enterprises, has been found guilty in a federal court of committing an antitrust violation while acting as an executive of an outdoor advertising company.
Brown and Michael Tobey, also an advertising executive, were convicted after a three-week trial that ended June 19 in Los Angeles of conspiring to suppress competition for the renewal of billboard locations in Southern California, and with reducing rents paid by billboard companies to property owners.
Attorneys for both Brown and Tobey have indicated that they will appeal the verdicts. Sentencing is scheduled for Aug. 21. A spokeswoman for the Justice Department said the maximum penalties for the felonies are three years in prison and $250,000 for each defendant.
Brown is a senior vice president for the Gannett Outdoor Group. When the charges were brought against Tobey, he was executive vice president for Foster and Kleisser, a division of Metromedia Inc.
According to authorities, Gannett and Metromedia, which were also defendants in the case, were allowed to plead, over objections by the prosecution, no contest to antitrust violations.
Hollywood Park Realty, which has been headed by Brown since 1982, is the parent company of the Hollywood Park Operating Co., which runs Hollywood Park in Inglewood and Los Alamitos Race Course in Cypress.
Primarily because of large interest payments on bank loans, Hollywood Park is more than $100 million in debt and reportedly lost $10 million last year. The realty company and the operating company have told shareholders that they showed a loss of more than $6 million for the first quarter of 1989.
This year, Hollywood Park hired G. Michael Finnigan as an executive vice president and chief financial officer. Previously, Finnigan was senior vice president of finance and administration for Gannett Outdoor.
Marje Everett, Hollywood Park's chief executive officer, could not be reached for comment. Finnigan declined comment on whether the verdict would affect Brown's role with the track.
A spokeswoman at Gannett referred questions about the case to Richard Favretto, Brown's attorney.
"We were extremely disappointed over the verdict," Favretto said. "We are reviewing the case in preparing for a post-trial motion. We are hoping to get a new trial and have the verdict overturned.
"I don't know how this will affect Mr. Brown's activities at Hollywood Park. That's an open question. This case, of course, has nothing to do with his business at the track. As far as Hollywood Park is concerned, I don't think he is contemplating a resignation. We've got a couple of months yet, before we even get to sentencing."
Brown, 56, is also a member of the board of the Hollywood Park Operating Co. He owns about 3,200 shares in the track, fewer than 1% of the total.