9 FCC Red No. 6 Federal Communications Commission Record FCC 94-55

tively favors waiver requests involving station combinations Before the serving the top 25 markets where there are at least 30 Federal Communications Commission separately owned, operated and controlled broadcast li Washington, D.C. 20554 censes or "voices" after the proposed combination ("top 25 market/30 voice standard"). It also favors requests involving "failed" broadcast stations, that is, stations that have not In re Applications of been operating for a substantial period of time, e.g., four months, or that are involved in bankruptcy proceedings. BREM Broadcasting File Nos. BAL-930107EA, See 47 C.F.R. Sec. 73.3555. n.7. Because the waiver re quested by WKRG does not meet the top 25 market/30 (Assignor) BALH-930107EB voice or the failed-station standard, WKRG seeks review of its waiver request under the case-by-case standard also out and lined in the Second Report and Order.4 Under this standard, the Commission makes a public interest determination WKRG-TV, Inc. based upon the following criteria: (1) the potential public (Assignee) service benefits of joint operation of the facilities: (2) the types of facilities involved; (3) the number of media outlets For Assignment of the Licenses of owned by the applicant in the relevant market: (4) the financial difficulties of the stations involved; and (5) the WCOA(AM) and WJLQ-FM, nature of the relevant market in light of the level of Pensacola, Florida competition and diversity after the joint operation is imple mented. 3. In support of its waiver request. WKRG submits a MEMORANDUM OPINION AND ORDER detailed showing which addresses each of the five case- by-case factors. WKRG first contends that although the two Adopted: March 8, 1994; Released: March 15, 1994 AM/FM radio combinations involved are licensed to dif ferent communities in different states, the stations will still By the Commission: Commissioner Barrett concurring be able to create cost savings by consolidating sales offices, and issuing a statement. sharing equipment, and securing volume discounts on pur chases of supplies. WKRG asserts that it expects to realize 1. The Commission has before it the above-captioned significant economic efficiencies in the sharing of per applications for assignment of the licenses of WCOA(AM) sonnel, particularly in the engineering, administrative and and WJLQ-FM, Pensacola. Florida, from BREM Broadcast accounting areas. WKRG also maintains that programming ing ("BREM") to WKRG-TV, Inc. ("WKRG") and a related and sales personnel will be shared among the stations, as request for waiver of 47 C.F.R. Sec. 73.3555(c). the Com will the professional services provided by attorneys, mission©s one-to-a-market rule. 1 WKRG-TV is the licensee accountants, financial institutions and insurance carriers. of WKRG(AM), WKRG-FM and VHP television "station WKRG further indicates that the five-station combination WKRG-TV, Mobile, Alabama.2 The Grade A contour of will "cross-promote" itself and that certain marketing and WKRG-TV encompasses all of Pensacola, WCOA(AM) and research functions will be combined. WKRG also contends WJLQ-FM©s community of license. The applications are that WCOA(AM) and WJLQ-FM will have access to the unopposed. extensive news gathering facilities of WKRG-TV. which 2. WKRG bases its request on the Commission©s one- employs over forty people, as well as access to WKRG-TV©s to-a-market waiver standards adopted in Second Report and extensive public affairs programming expertise. In total. Order in MM Docket No. 87-7 ("Second Report and Or WKRG estimates projected savings of over $200.000 an- der"), 4 FCC Red 1741. recon. granted in pan and denied in pan, ("Second Report and Order Recon."). 4 FCC Red 6489 (1989).3 Under these criteria, the Commission presump

1 Section 73.3555(c) of the Commission©s Rules prohibits the market, as defined by Arbitron, Inc., WKRG supplies audience common ownership of radio and television stations in the same share data from the most recent Arbitron survey available from market if the 2 mV/m contour of an AM station or the 1 mV/m that market at the time the instant applications were filed. See contour of an FM station encompasses the entire community of 47 C.F.R. Sec. 73.3555(a)(3)(iii). Those data show that the com license of a television station or, conversely, if the Grade A bined audience share of WKRG(AM), WKRG-FM, WCOA(AM) contour of a television station encompasses the entire commu and WJLQ-FM in the metro-market is 14.6 percent. WKRG has nity of license of an AM or FM station. also demonstrated that the combined audience share figure for 2 WKRG©s ownership of these three stations predates the Com the four radio stations in Pensacola, Florida, is also below the 25 mission©s adoption of the "one-to-a-market" provision of the percent audience share limit set forth in the rules. We note that multiple ownership rules, and is therefore "grandfathered." See there is no overlap between the principal community contours 47 C.F.R. Sec. 73.3555(b). of the two AM stations, WKRG(AM) and WCOA(AM). 3 Since the principal community contours of WKRG-FM and 4 In any event, because WKRG©s acquisition of WCOA(AM) WJLQ-FM overlap, WKRG must meet the requirements of the and WJLQ-FM invokes the local ownership limits of the radio ownership rule found in Section 73.3555(a) of the Com amended radio multiple ownership rule, found at Section mission©s Rules. WKRG certifies that there are at least 15 radio 73.3555(a) of the Commission©s Rules (47 C.F.R. Sec. stations whose contours overlap the contours of the proposed 73.3555(a)), we would evaluate its waiver request under the commonly-owned stations. Because over 50 percent of principal case-by-case standard, regardless of the size of the market in community contour overlap of same service stations WKRG-FM volved. See In re Revision of Radio Rules and Policies, 1 FCC and WJLQ-FM occurs within the Mobile, Alabama radio metro- Red 6387, 6394 n.40 (1992).

1333 FCC 94-55 Federal Communications Commission Record 9 FCC Red No. 6

nually from this proposed media combination as well as December 31, 1991 and the ten months ending October 31, increased public service benefits and programming 1992. According to these reports, WCOA(AM) and WJLQ- benefits.5 FM sustained a net operating loss of $538,793.59 in 1991. 4. Second, regarding the technical facilities involved, In 1992, the two stations sustained a net operating loss of WKRG-TV, Mobile©s CBS-affiliate, is a full power VHP $402,998.75. WKRG asserts that the stations have been able television station operating on Channel 5. WKRG-FM and to maintain operations only because of loans of $ WJLQ-FM are both Class C FM stations. WKRG-FM op 525,122.54 made to BREM by Phase II Broadcasting, Inc. erates on Channel 260C (99.9 MHz) with an effective radi ("Phase II"), which is owned by Edmond J. Muniz, a ated power ("ERP") of 94 kW and an antenna height of partner in BREM.7 Without these regular contributions by 535 meters above average terrain ("HAAT") while WJLQ- Phase II, WKRG argues, BREM may be forced to dis FM operates on Channel 264C (100.7 MHz) with an ERP continue operation of the two stations. WKRG also notes of 100 kW and an antenna height of 474 meters HAAT. that, despite two years of listing WCOA(AM) and WKLQ- WKRG(AM) operates on 710 kHz with a daytime power of FM with media brokers, WKRG is the only bona fide 1000 watts and a nighttime power of 500 watts using a purchaser BREM has been able to identify for the two directional antenna during nighttime hours only. stations.8 WCOA(AM) operates on 1370 kHz with a daytime power 7. The fifth factor relates to the nature of the relevant of 5000 watts and a nighttime power of 5000 watts using a market in light of the Commission©s concerns about diver directional antenna during nighttime hours only. WKRG sity and competition. Relevant indicia include the number contends that the most salient fact about these facilities is of broadcast outlets, the number of separately-owned and that WCOA(AM) and WJLQ-FM are licensed to different operated "voices" in the market, and the presence of cable communities in different states from the stations which and non-broadcast media. As to the number of broadcast WKRG already owns. WKRG notes that Pensacola. Florida stations, the Commission has held that, in the context of a is a distinct and separate radio metro market from Mobile, one-to-a-market waiver, it will consider the "relevant TV Alabama, as designated by Arbitron, Inc. WKRG further metro market for radio stations and the relevant ADI TV notes that local issues of importance are covered by market for TV stations." Second Report and Order, 4 FCC WKRG(AM)/WKRG-FM and WCOA(AM)/WJLQ-FM in Red at 1760, n.101. WKRG represents that the Mobile- their respective communities. Pensacola ADI is ranked 61st and contains 11 TV stations. 5. Third, with respect to the number of other media WKRG also states that there are 21 AM stations and 20 FM outlets the applicant already owns in the relevant market, stations currently licensed to communities in the Mobile- WKRG affirms that, other than WKRG-TV. WKRG-FM Pensacola TV metro market. WKRG further indicates that and WKRG(AM), it does not own any broadcast stations in if the proposed combination is approved, the 52 broadcast the Mobile-Pensacola market.6 As previously noted, WKRG stations in the Mobile-Pensacola ADI will be owned and demonstrates that, for the purposes of our local radio operated by 40 different "voices." Additionally, WKRG ownership rule, found in Section 73.3555(a)(l)(ii) of the asserts that the Mobile-Pensacola area is served by three Commission©s Rules (47 C.F.R. Sec. 73.3555(a)( l)(ii)), daily newspapers, 10 weekly newspapers and has "at least a there are at least 16 radio stations whose contours overlap dozen separately owned cable system operators, with an the contours of the proposed commonly-owned radio sta aggregate cable penetration of 64 percent." Finally, WKRG tions and that the combined audience share of notes that the "rich diversity" of the Mobile-Pensacola WKRG(AM), WKRG-FM, WCOA(AM) and WJLQ-FM in market approximates that of a top-25 market in terms of the relevant radio metro-market is 14.6 percent. competition. In prior rulings, WKRG argues, the Commis 6. Fourth, with regard to the economic status of the sion has granted waivers under the case-by-case standard to stations involved in the proposed combination, WKRG AM/FM/TV licensees where the level of diversity and com contends that since BREM acquired WCOA(AM) and petition, and the comparable operating efficiencies realized WJLQ-FM on February 28, 1991, the stations have sus by the stations in question, were similar to those in a tained continuous revenue losses and "can only be clas top-25 market. See Great American Television and Radio sified as failing stations." As proof, WKRG offers the Co., Inc., 4 FCC Red 6350 (1989).9 WKRG also notes that financial statements for the two stations for the year ending the waiver sought in Great American was granted despite

5 WKRG estimates that the consolidation of sales offices of five one-to-a-market waiver to Great American Television and Ra stations will save $20,000, that sharing programming and sale dio Co., Inc. ("Great American") after the company had ac personnel will save $75,000, that combining marketing and re quired Taft Broadcasting Company ("Taft"), licensee of search functions should save $50,000. and that sales efficiencies WKRC-TV, WKRC(AM) and WKRQ-FM, Cincinnati, Ohio and realized through the co-ownership of the four radio stations WDAF-TV, WDAF(AM) and KYYS-FM, Kansas City. Missouri. should save $75,000. Taft©s common ownership of co-located television and radio 6 WKRG further states that it does not own any other broad stations in Cincinnati and Kansas City was authorized pursuant cast stations or media interests in the United States. to the grandfathering provisions of the Commission©s multiple 7 WKRG notes that Phase II is the licensee of WLTS-FM, ownership rules. Because the grandfathered status of prohibited Slidell, Louisiana, and WYAT(AM), New Orleans, Louisiana, combinations does not survive a transfer of control. Great and concludes that the losses sustained by BREM and American was obliged to resolve the cross-ownership violations underwritten by Phase 11 jeopardizes the existing operations of its acquisition of Taft would create. Great American was grant these two stations. ed a waiver under the Commission©s case-by-case standard after 8 WKRG also states that prior to BREM©s purchase agreement the Commission determined that Great American had shown with WKRG, BREM had been unsuccessful in its efforts to that a "robust level of voice diversity and economic competition enter into a local marketing agreement ("LMA") with other [existed] among media outlets in both Cincinnati and Kansas local stations. We note that BREM currently has an LMA with City. . . ." by documenting "fully 35 separately owned broadcast WKRG for WCOA(AM) and WJLQ-FM. voices in Cincinnati and 33 such voices in Kansas City." 4 FCC 9 In Great American, the Commission granted a permanent Red at 6350.

1334 9 FCC Red No. 6 Federal Communications Commission Record FCC 94-55 the fact that "substantial stations" were involved and there assignment of the licenses of WCOA(AM) and WJLQ-FM, was no showing that any of the stations were in financial Pensacola, Florida, from BREM Broadcasting to WKRG- distress. WKRG concludes that the combination at issue in TV, Inc. ARE HEREBY GRANTED. the instant applications supports a more compelling case for waiver than those involved in Great American because FEDERAL COMMUNICATIONS COMMISSION the Mobile-Pensacola market is more diverse than the mar kets involved therein, the stations being acquired have endured financial hardships, and substantial economic effi ciencies would be realized by the proposed consolidation. 8. In evaluating a request for a waiver of the one- William F. Caton to-a-market rule, the Commission©s goal "is to permit the Acting Secretary public to benefit from such efficiencies of operation as may be achieved through the use of common facilities and staff, consistent with the maintenance of diversity and vigorous competition within the market areas involved." Second Report and Order Recon., 4 FCC Red at 6491."© We con clude that WKRG©s showing in support of a waiver of the one-to-a-market rules meets our case-by-case criteria, and that a waiver in this instance is consistent with the public interest and would not have an adverse effect on diversity and competition in the Mobile-Pensacola market." 9. WKRG has shown that joint operation of the stations will result in significant cost savings as well as the potential for enhanced programming and service benefits. It has been further established that WCOA(AM) and WJLQ-FM have consistently lost money and have shown a negative cash flow since their present owner acquired the stations two years ago. Furthermore. WKRG has demonstrated that the proposed combination will not create any undue con centration of ownership or control of the broadcast media in the Mobile-Pensacola market. The Mobile-Pensacola TV metro market will be served by 41 radio stations and the Mobile-Pensacola ADI will be served by 11 television sta tions. Those 52 stations will be owned and operated by 40 separate entities. In addition, the other "voices" in the Mobile-Pensacola market include three daily newspapers, more than twelve weekly newspapers and cable television, which has a penetration of 64 percent. WKRG owns no other media in the market or in the country. With respect to the technical facilities involved, we note that the pro posed combination does not present issues of market domi nance inconsistent with the public interest. 12 Thus, we are persuaded that the public benefits of common ownership and joint operation of WKRG-TV, WKRG(AM). WKRG- FM, WCOA(AM) and WJLQ-FM outweigh any negative effect on diversity and competition in the Mobile-Pensacola market that the combination might engender. The Com mission, in the past, has granted waivers of the one-to- a-market rule under similar circumstances. See, e.g., Great American Radio and Television Co., Inc., supra; Moosey Communications, Inc., 8 FCC Red 5247 (1993). 10. Accordingly, IT IS ORDERED. That the request for a waiver of the Commission©s one-to-a-market rule. 47 C.F.R. Sec. 73.3555(c), IS HEREBY GRANTED. Further, upon finding the applicants otherwise qualified, the ap plications (File Nos. BAL-930107EA. BALH-930107EB) for

10 It should also be noted that "(n|ot all of the factors men 12 While the instant application proposes the common tioned will be relevant in every case." Second Report and Order ownership of significant stations, we note that there is substan Recon., 4 FCC Red at 6491. tial competition in the particular market. Two AM/FM com 11 See Moosey Communications, Inc., 8 FCC Red 5247 (1W3) binations, WKSJ(AM)-FM and WBLX(AM)-FM. each had (consideration of one-to-a-market waivers under the case-by- higher combined audience shares than the proposed four-station case standard still appropriate where new radio-TV combina combination in the Mobile metro-market while a stand-alone tions are created, pending the possible revision of the FM station, WXBM-FM, had a higher audience share than the one-to-a-market rule in the outstanding TV ownership proceed four-station combination in the Pensacola metro-market. See ing under MM Docket No. 91-221). United Radio Group, Inc., 1 FCC Red 2207, 220" (1W2).

1335 FCC 94-55 Federal Communications Commission Record 9 FCC Red NO. 6

CONCURRING STATEMENT OF COMMISSIONER ANDREW C. BARRETT

RE: In re Applications of BREM Broadcasting and WKRG-TV, Inc. for Assignment of the Licenses of WCOA(AM) and WJLQ-FM, Pensacola, Florida This Memorandum Opinion and Order grants an assignment of license and request for waiver of the Commission©s television one-to-a-market rule to WKRG-TV, Inc., the licensee of WKRG(AM) and WKRG-FM as well as WKRG-TV in Mobile, Alabama permitting the licensee to purchase WCOA(AM) and WJLQ-FM which are both licensed in Pensacola, Florida. I renew my concern that, in effect, the Commission is revising its multiple ownership rules through the waiver process. 1 Thus, I concur in today©s decision and restate my belief that the pending rulemaking proceeding, not the continued grant of waiver requests, presents the more appropriate forum for the Commission to render modifications to its multiple ownership policies.

1See Pegasus Broadcasting. 7 FCC Red 8625 (1992) (Dissenting Statement of Commissioner Andrew C. Barrett). See also In re: Act III Broadcasting of Buffalo. 8 Fee Red 885 (1993) (Dissenting Statement of Commissioner Andrew C. Barrett); Sunshine Television. Inc.. 8 FCC Red 4428 (1993) (Statement of Commissioner Andrew C. Barrett- Concurring in Part); H & C Communications. Inc.. 73 RR2d 1108 (1993) (Concurring Statement of Commissioner Andrew C. Barrett) and WQI-TV, 9 FCC Red 481 (1993) (Concurring Statement of Commissioner Andrew C. Barrett).

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