Watchdog Groups File Opposition To Tribune License Transfer
June 15, 2010 at 11:49 AM (PT)
FREE PRESS, the MEDIA ALLIANCE, NABET/CWA, the NATIONAL HISPANIC MEDIA COALITION, the OFFICE OF COMMUNICATION OF THE UNITED CHURCH OF CHRIST, INC., and CHARLES BENTON have filed a Petition to Deny the assignment of TRIBUNE's broadcasting licenses from debtor-in-possession status back to the company.
"Many of the same creditors that contributed to the ill-advised transaction that buried the TRIBUNE COMPANY in debt now seek unprecedented waivers to allow them to complete their looting of the assets of one of the nation’s major media companies," charged the organizations. "Their applications should be dismissed or denied. They subordinate the interests of the public to the private interests of the creditors, and do not come close to meeting the evidentiary standards required for waivers of the Commission’s ownership rules."
In the filing, the groups charge that "the circumstances leading to the proposed transaction are self-inflicted wounds. TRIBUNE went bankrupt because of unwise financial decisions. The properties involved are profitable on an operating basis, and salable as free-standing entities."
The challenge also noted that "as of this time, the ownership interests of the various TRIBUNE creditors in the newly reorganized company have yet to be determined. Although TRIBUNE maintains that changes in the exact identity of the future owners are 'immaterial,' the Commission cannot now make the necessary determinations as to how to apply its ownership rules."
On the company's CHICAGO newspaper-radio-television situation, the parties said that "TRIBUNE’s application does not meet the FCC’s criteria for presuming that the cross-ownership is in the public interest..... None of the properties are 'failed' or 'failing' within the meaning of Commission policy. The broadcast stations remain on the air and the CHICAGO TRIBUNE is still in circulation. Tribune’s bankruptcy was voluntary, not involuntary. Moreover, WGN-TV’s audience share exceeds 4%, and TRIBUNE does not even attempt to claim that the station has ever had a negative cash flow, much less that it has been negative for three years. Finally, and importantly, TRIBUNE has made no attempt to sell its properties to other buyers; it simply asks the Commission 'to assume' that the properties cannot be sold except at an artificially depressed price. While the stations may not be salable at the unreasonably high price that the prior ownership team unwisely agreed to pay, the test is not whether the sale is at a loss, but whether the price would be artificially depressed."
Bondholders Oppose Transfer, Too
Bondholders of the company have also filed a Petition to Deny the transfer. WILMINGTON TRUST CO., representing the dissident bondholders, said that the transfer "is a sham. The warrants (being given lenders in the reorganization) will be worthless to the prospective holders, who will, by definition, be non-U.S. citizens."