ASCAP Files Petition To Deny Pandora Purchase Of KXMZ
July 29, 2013 at 4:10 AM (PT)
ASCAP has filed a Petition to Deny the purchase of Hot AC KXMZ (HITS 102.7)/BOX ELDER-RAPID CITY, SD by PANDORA MEDIA from CONNOISSEUR MEDIA.
ASCAP's challenge alleges that "PANDORA is buying KXMZ for one reason – to argue that it is entitled to pay lower music performance royalties to composers, songwriters and lyricists for its billions of online-only internet music streams. In its rush to implement its scheme, PANDORA has overlooked certain basic Commission requirements. In
the application to assign KXMZ’s license, PANDORA has failed to fully disclose
its ownership, and to adequately demonstrate that it complies with the Commission’s foreign ownership rules.... PANDORA’s public statements lay bare its plot: to use KXMZ as a bargaining chip in PANDORA’s quest to obtain lower royalty rates for its online music streams. Given these brazen proclamations, there can be no doubt PANDORA’s interests do not lie in providing service to BOX ELDER and the greater RAPID CITY area."
The ownership disclosure allegations evolve around PANDORA shareholders WELLINGTON MANAGEMENT COMPANY, LLP and WILLIAM BLAIR AND CO., LLC, which ASCAP alleges do not qualify as "investment companies" subject to a higher threshold for ownership disclosure but are, rather, "investment advisers" subject to the 5% threshold.
ASCAP also alleges that information filed about attributable shareholders CROSSLINK CAPITAL is incomplete, and that the structure of WELLINGTON and WILLIAM BLAIR's holdings might violate foreign ownership restrictions.