FCC Releases Order Approving Clear Channel Deal
January 24, 2008 at 10:56 AM (PT)
The FCC has released the Memorandum Opinion and Order approving the CLEAR CHANNEL buyout by BAIN CAPITAL and THOMAS H. LEE PARTNERS. The Commission approved the deal in a 5-0 vote on JANUARY 8th, and released the order TODAY (1/24). The deal was approved provided that the stations spun into the ALOHA STATION TRUST be divested within six months, and that LEE's interest in CUMULUS MEDIA PARTNERS be divested or converted into non-attributable interests.
The Commission rejected challenges to the deal filed by GEOFFREY M. YOUNG, MOUNT WILSON FM BROADCASTERS, LEONARD KAHN and, objecting to the transfer of control of WMHG-A/MUSKEGON, MI, GOODRICH RADIO. YOUNG filed a complaint alleging that the private ownership would result in a "level of secrecy (that) is not in the public interest," and objected to what he called CLEAR CHANNEL's "spew(ing) forth (of) an unrelievedly [sic] and uniformly right-wing ideology;" MOUNT WILSON alleged that CLEAR CHANNEL's LOS ANGELES cluster engaged in unfair competitive practices; KAHN alleged antitrust violations over the company's "boycott" of his digital radio system that competes with the iBIQUITY HD RADIO system; and GOODRICH raised unresolved issues regarding the operation of WMHG, which a previous owner operated and sold separately from an expanded band twin in apparent violation of FCC rules.
In his concurring opinion, Commissioner MICHAEL COPPS again raised his concern over the potential impact of private equity ownership of broadcast licenses, charging that "we once again close our eyes and pretend that nothing has changed -- as if these new entities are no different than our traditional broadcast licensees. And there are those who accuse me of living in the past!" He noted that STANDARD AND POOR'S has announced that it will cut CLEAR CHANNEL's bond ratings when the deal closes and said, "I hope that the market’s concerns about CLEAR CHANNEL's financial condition prove misplaced. The broader point, however, remains. We must ask the hard questions now, before we dig ourselves in even deeper. If I had the ability to launch an FCC inquiry by dissenting to this transaction, I would. But I do not. Given the potential for some measure of de-consolidation, I reluctantly concur."
Concurring as well, Commissioner JONATHAN ADELSTEIN added that while MOUNT WILSON's allegations did not establish a prima facie case for anti-competitive practices, the Commission should look deeper into the issue of larger groups using their size to dominate the ad sales market. He wrote, "The claims alleged by MT. WILSON, coupled with the state of the industry, raise broader issues regarding the health of the radio industry as whole, and the Commission should show greater concern."
Localism Report Released
The Commission also released its report on broadcast localism, which was announced on DECEMBER 18. Comments on the docket are due 30 days after publication in the FEDERAL REGISTER, with replies due 60 days after publication.