Federal Communications Commission FCC 99-155

Before the · Federal Communications Commission Washington, D.C. 20554

In re Application of ) ) WPNT. INC. ) (Assignor) ) ) and ) File No. BALH-980915GL ) SinClair Radio of St. Louis ) Licensee, L.L.C. ) (Assignee) ) ) For Assignment of License of ) KXOK-FM. Florissant. )

MEMORANDUM OPINION AND ORDER

Adopted: June 30, 1999 Released: July 1, 1999

By the Commission: Commissioner Tristani dissenting and issuing a statement.

I. The Commission has before it: (I) the above-captioned application for assignment of the license of KXOK-FM, Florissant. Missouri from WPNT, Inc. ("WPNT'') to Sinclair Radio of St. Louis Licensee, L.L.C., a subsidiary of Sinclair Broadcast Group, Inc., ("Sinclair"); 1 and (2) a related request for a temporary, conditional waiver of 47 C.F.R. § 73.3555(c), the Commission's one-to-a-market rule, which restricts common radio and television station ownership in the same market.2 The application and waiver requests are unopposed. For the reasons set forth below, we grant the assignment application and a temporary. conditional waiver of our one-to-a-market rule. ··

2. Sinclair controls through its subsidiaries UHF television station KDNL-TV (ABC affiliate), St. Louis. Missouri: KPNT(FM), Ste. Genevieve, Missouri; WVRV(FM), East St. Louis. ; an~ "-IHT(FM), WIL-FM and WRTH(AM), all St. Louis, Missouri. In 1997, Sinclair was granted a permanent one-to-a-market waiver to acquire KDNL-TV, WVRV(FM), and K.PNT(FM). See River Ci(v License Partnership. 12 FCC Red 4993 (MMB 1997). Subsequently, in 1998, Sinclair \Vas granted a temporary, conditional waiver to add WRTH(AM), WIL-FM, KIHT(FM) to this radio/television combination. See KKSN. Inc .. 13 FCC Red 2679 (MMB 1998).

3. Grant of the instant assignment application would create a new radio-television station combination because the Grade A contour of KDNL-TV encompasses the entire community of license of KXOK-FM. in Florissant. Missouri. See 47 C.F.R. § 73.3555(c). Sinclair's proposed acquisition of

1 Sinclair also seeks assignment of KXOK-FMI, an FM booster license, associated with KXOK-FM. File . number BALFTB-98091 SEA.

~ Section 73. 3555(c) of the Commission's Rules prohibits the cbmmon ownership of radio and television stations in the same market if the 2 mV/m contour of an AM station or the I niV/m contour of an FM station encompasses the em ire community of license of a television station or, conversely; if the Grade A contour of a television station encompasses the entire community of license of an AM or FM station.

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KXOK-FM also implicates the local radio ownership rules. See 41 C.F.R. § 73.3SSS(a)( l ). Consequently, Sinclair has submitted a showing to demonstrate that its acquisition ofKXOK-FM complies with the local radio ownership rules and has requested a temporary, conditional waiver of the one-to-a-market rule to permit common ownership of one UHF-TV, one AM, and five FM stations in the St. Louis OMA. the 21st largest.

Local Radio Ownership Rule Showing

4. Sinclair has submitted a showing in order to demonstrate compliance with the Commission's local radio ownership rule. 47 C.F.R. § 73.3555(a)(l). Sinclair indicates that the principal community contour of KXOK-FM overlaps the mutually overlapping principal community contours of Sinclair's existing one AM and four FM radio stations. Sinclair also indicates that there are 48 commercial radio stations in the radio market formed by the mutually overlapping contours of its proposed commonly owned radio stations. According to Sinclair, its proposal to own one AM and five FM stations in this 48 station market is consistent with our rules, which in markets of 45 or more commercial stations. permit a party to control up to 8 radio stations, not more than five of which are in the same service (AM or FM).

Request for Waiver of the One-to-a-Market Rule

5. Sinclair bases its request for a one-to-a-market rule waiver on the standards adopted in the Second Report and Order in MM Docket 87-7, 4 FCC Red 1741 (1989) ("Second Report and Order"). rec:cm. granted in part and denied in part. 4 FCC Red 6489 ( 1989) ("Second Report and Order Recon. "). Under these criteria. the Commission presumptively favors waiver requests involving station combinations serving the top 25 markets where there are at least 30 separately owned, operated, and controlled broadcast licenses or "voices" after the proposed combination ("top 25 market/30 voice standard").3 The Commission also favors requests involving "failed" broadcast stations, that is, stations that have not been operating for a substantial period of time or are involved in bankruptcy proceedings. Id. Otherwise, the request must be evaluated under the case-by-case approach. See 41 C.F.R. § 73.3555, note 7.

6. Although the St. Louis OMA is the 21st largest in the country, we will consider the subject waiver request under the case-by-case standard because the proposed transaction involves the common ownership of more than one same-service radio station with a television station. See Memorandum Opinion and Order in MM Docket 91-140, 7 FCC Red 6387, 6394 n.40 (1992): see also Moosey Communications. Inc., 8 FCC Red 5247 (1993) (consideration of one-to-a-market waivers under the case­ by-case standard still appropriate where new radio-TV combinations are created. pending the possible revision of the one-to-a-market rule in the outstanding TV ownership proceeding in MM Docket No. 91- 221 ). Under the case-by-case standard, the Commission makes a public interest determination based upon the following five criteria: I) the potential public service benefits of joint operation of the facilities, such as economies of scale. cost savings, and programming and service benefits~ 2) the types of facilities involved: 3) the number of media outlets owned by the applicant in the relevant market: 4) the financial difficulties of the stations involved; and 5) the nature of the relevant market in light of the level of competition and diversity after the joint operation is implemented. Second Report a11d Order. 4 FCC Red · at 1753-54. In enunciating the five factors to be considered under tfie case-by-case standard, the Commission noted that not all five factors must be satisfied in each case. but rather the overall

Pursuant to a provision o.f the Telecommunications Act of 1996, Pub. L. No. 104-104, § 202(d), 110 Stat. 56 (1996), "to extend its [one-to-a-market] waiver policy to any of the top SO markets, consistent with the public interest, convenience and necessity," the Commission is considering a proposal to implement such an extension·of the waiver policy. Second Further NPRM. 11 FCC Red at 21685.

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consideration of these factors must weigh in favor of granting the waiver request. Second Report and Order Recon .• 4 FCC Red at 6491. In support of its waiver request, Sinclair submits a showing which addresses each of the five factors.

7. Benefits of Joint Operation. Sinclair asserts that common ownership of its proposed radio­ television combination in the St. Louis market will result in substantial cost savings that will. in turn, result in increased local programming in the market through the use of shared resources and cross­ promotions. In addition, Sinclair states that joint ownership of its existing radio-television combination in St. Louis has already achieved significant cost savings, and estimates that its acquisition.of KXOK-FM will result in additional total annual cost savings of approximately $125,000, consisting of approximately $75.000 in saved promotional expenses and approximately $50,000 in purchasing efficiencies. With these anticipated cost savings, Sinclair states that it will be able to expand local news programming through joint operation of the TV and radio stations. Specifically, Sinclair states that KXOK-FM will have access to audio feeds of KDNL-TV's news and weather bulletins, as well as access to KDNL-TV's news programming which will be made available to KXOK-FM for simulcasting or rebroadcast. Similarly, KXOK-FM will provide KDNL-TV with access to excerpts from its local news, commentary programs, and public service campaigns, including the station's anti-drug abuse and stay in school campaigns, according to Sinclair. Additionally, Sinclair states that charity drives and fund raising events sponsored by KXOK-FM will be cross promoted on KXOK-FM and KDNL-TV and that there are plans for the two stations to co-sponsor a job fair that will also be cross promoted. Sinclair also plans to use a portion of the cost savings derived from the joint operation of KDNL-TV and KXOK-FM to explore with city officials the feasibility of implementing Internet partnerships between KDNL-TV and city schools in the St. Louis area. The Internet partnerships will be based on Sinclair's established Internet partnerships in Baltimqre, Maryland, where Sinclair's owned TV stations have worked in partnership with local school -boards to provide educational content over the Internet that complements and enhances the approved core curricula of Baltimore County schools.

8. Other Media Outlets/Types of Facilities. In the St. Louis market, Sinclair. through its subsidiaries, already controls the combination of KDNL-TV, St. Louis, Missouri: KPNT(FM), Ste. Genevieve. Missouri: WVRV(FM), East St. Louis, Illinois; KIHT(FM),St. Louis, Missouri; WIL-FM, St. Louis. Missouri: and WRTH(AM), St. Louis, Missouri. Sinclair states that KDNL-TV is an ABC­ affiliated UHF station operating on Channel 30 with an ("ERP") of 2.190 kW from an antenna height above average terrain ("HAAT") of 335 meters. Based on the 1998 BIA 's Television Yearbook, Sinclair also states that the St. Louis OMA includes four network-affiliated commercial VHF stations (NBC, CBS, Warner Brothers, and Fox), two commercial UHF stations. and one noncommercial VHF station and that KDNL-TV trails the NBC-, CBS-, Warner Brothers and Fox­ atliliated stations in average total day audience share. Sinclair also states that KPNT(FM) and WIL-FM are Class C FM stations. KPNT operates on 105.7 MHz with an ERP of 100 kW from an antenna HAAT of 419 meters and WIL-FM operates on 92.3 MHz with an ERP of 99 kW from an antenna HAA T of 300 meters. KIHT(FM) is a Class Cl station and operates on 96.3 MHz with an ERP of iOO kW from an antenna HAA T of 168 meters. KXOK-FM, the station Sinclair proposed to acquire, is also a Class C 1 FM station and operates on 97.1 MHz with an ERP of 100 kW from an antenna HAAT of 171 meters. WVRV is a Class C2 FM station and operates on 101.1 MHz with an ERP of 44 kW from an antenna HAAT of 158 meters. WRTH is a Class B AM station and operates on 1430 kHz with power of 5 kW day and nighttime.

9. Financial Condition. Sinclair States that none of the broadcast stations at issue is in financial distress.

I 0. Competition and Diversity. Sinclair argues that its proposed ownership of the St. Louis radio-

11293 Federal Communications Commission FCC 99-155 television combination will have no significant effect in this highly competitive market. Sinclair states that the St. Louis DMA is the 21st largest market in the country and includes eight television stations. It also states that the St. Louis television metro market is served by 61 radio stations representing 41 separate "voices." According to Sinclair, following the proposed transaction there will be a total of 69 broadcast stations in the relevant market representing 48 separate broadcast "voices." Additionally, Sinclair states that the market is served by other mass media outlets and lists eight daily and 109 weekly newspapers, as well.as 142 cable systems.

Discussion

11. Local Radio Ownership Rules. We first examine Sinclair's compliance with our local radio ownership rules. 47 C.F.R. §73.3555(a)(l). Our analysis of the data Sinclair has submitted indicates that the radio market formed by the mutually overlapping contours of its proposed commonly owned radio stations consists of 48 commercial radio stations. Under our rules, in a radio market with 45 or more commercial radio stations, a party may own, operate, or control up to eight commercial radio stations, not more than five of which are in the same service (AM or FM). Sinclair's proposed ownership of six commercial radio stations, one AM and five FM in the St. Louis area complies with the numerical local ownership cap for radio stations both as to overall ownership and as to same-service ownership. Moreover, our review of the record in this case reveals no other circumstances tl1at would preclude grant of the application under the radio ownership rules. Thus, with respect to local radio ownership, Sinclair's acquisition of KXOK-FM, coupled with its ownership of KPNT(FM), WVRV(FM), KIHT(FM), WIL-FM and WRTH(AM), would be consistent with our rules. See, e.g., S.E. Licensee G.P., 11 FCC Red 16727 (1996); Shareholders ofCiticasters, Inc. 11 FCC Red 19135 (1996).

12. One-to-a-Market Waiver. We now turn to consideration of Sinclair's one-to-a-market waiver request. Sinclair's acquisition of station combinations in the St. Louis market requires reliance on the statutory radio ownership limitations adopted in the Telecommunications Act of 1996 and incorporated into our rules. The Commission has concluded that approval of permanent waivers is generally inappropriate for combinations exceeding one television, two AM stations and two FM stations pending resolution of the television ownership proceeding. See Shareholders ofCiticasters, Inc., 11 FCC Red 19135, 19143 (1996). Issues related to radio/television cross-ownership remain pending in the television ownership proceeding, in which the Commission is considering eliminating or modifying the one-to-a-market rule. Second Further NPRM, 11 FCC Red at 21685. The Commission has concluded that, pending the resolution of the television ownership proceeding, permanent waivers will not be granted for combinations exceeding one television station, two AM stations, and two FM stations. Instead, such combinations will be considered, based on a case-by-case showing, for temporary one-to-a-market waivers conditioned on the resolution of the issues raised concerning the one-to-a-market rule in the television ownership proceeding. Applying these principles, we ·have reviewed Sinclair's showing and conclude that Sinclair has justified grant of a temporary, conditional one-to-a-market waiver in the St. Louis market.

13. Under the first waiver criterion, the potential public service benefits of joint ownership, the Commission considers the public service benefits that could result from the proposed radh-television combination, such as projected economies of scale, cost savings and program and service benefits. Second Report and Order, 4 FCC Red at 1753. Sinclair has shown that there will be significant economies of scale· that will be achieved from the addition of KXOK-FM to its existing radio-television combination. In particular, Sinclair estimates that its acquisition of KXOK-FM will result in additional total annual cost savings of approximately $125,000 that will be derived from saved promotional expenses and purchasing efficiencies. Sinclair has stated· that these cost savings will result in significant programming benefits, through shared resources, that will enhance local news programming. Specifically, KXOK-FM will have access to the audio feeds of KDNL-TV's news and weather bulletins, and news programming, while KDNL-

11294 FCC 99-155

TV will have access t0 e~,~~:erpu i':om IC(OI<_-Fl\ll's local news, commentary programs, and public service campaigns such as the anti-drug al;t;s•o and stay in school carnpa;g:1s. Sinclair also plans to use a portion of the cost savings derived from ·d1':: joini. operFtion of KDNL-TV and IOCOK-FM to develop Internet partnerships between KDNL-TV and city schools in the St. Louis area to provide educational content over the Internet. In addition, Sinclair states that the stations' sponsorship of charity drives, fund raising events, and job fairs will be cross promoted.

14. Turning to the second criterion, the Commission's "concern with the types of facilities merging under the authority of a one-to-a-market waiver reflects our interest in assessing the potential impact of a proposed combination of stations in a given marki~t in nrder thm w"° might pri.~dict and avoid any significant adverse effect on diversity or competition from too powerfui a combination." Great American Television and Radio Co., Inc., 4 FCC Red 6347, 6349-50 (1989). ln this regard, we must "consider such factors as whether the proposed radio-television combination involves a UHF or VHF TV station or an AM or FM radio station, as well as the size or class of the stations involved. Second Report and Order, 4 FCC Red at 1753. Sinclair's proposed combination in the St. Louis market involves an ABC-affiliated UHF station, KDNL-TV. We have independently confirmed that KDNL-TV competes in the St. Louis DMA with four network-affiliated VHF-TV stations. In addition, KDNL-TV competes with two other UHF-TV stations, one of which has comparable technical facilities.4 There is also one noncommercial VHF-TV (PBS affiliate) station in the St. Louis DMA. Among the radio stations in Sinclair's proposed combination, KPNT(FM) and WIL-FM are both Class C FM stations, but there are 4 other Class C FM stations in the St. Louis Market with comparable facilities. KlHT(FM) and IOCOK-FM, the station Sinclair proposes to acquire, are both Class Cl FM stations, and there are 4 other Class Cl FMs in the market, two of which have superior facilities and two of which have comparable facilities. Although WVRV(FM), a Class C2 FM has facilities superior to two other Class C2 FMs in the market, it is the least powerful of Sinclair's FM stations and there are more powerful Class C and Cl stations in the market. WRTH(AM), a Class BAM, competes with 20 other Class B AMs, 4 of which have similar day and nighttime technical facilities.

15. We conclude that Sinclair's proposed combination will compete with numerous stations that have comparable or superior technical facilities. We also find that Sinclair has demonstrated that due to the number of "voices" in the St. Louis market, the level of competition and diversity will remain high. Thus, although the technical facilities -of some of the stations involved are significant, given the substantial competing facilities in each market we find that the proposed combination does not present an issue of market dominance inconsistent with the public interest. Regarding the third criterion, Sinclair does not own any media outlets in the St. Louis market other than those involved in this waiver request.

16. Although Sinclair states that, under the fourth criterion, none of the broadcast stations at issue is in financial distress, we have previously indicated that not all five factors need be present to justify grant of a waiver. See Second Report and Order Recon. 4 FCC Red at 6491; Great American Television and Radio Co., Inc., 4 FCC Red at 6349. We have also granted a number of one-to-a-market waivers where there was no finding that any of the stations 'vere in financial distress. See, e.g., Louis C. DeArias, 11 FCC Red 3662, 3667, (1996); Alta GulfFlvf, Inc., 10 FCC Red 7750, 7751 (1995); Secret Communications, L.P., 10 FCC Red 6874, 6877 (1995).

17. The final factor in our analysis relates to the levei of diversity and competition in the relevant

4 KDNL-TV was granted a constrnction pennit to modify its facilities to operate at 5000 kW ERP from an antenna HAAT of 336 meters, (File No. BPCT-960621 IO). The technical comparisons are based on KDNL-TV's granted construction permit.

11295 Fedlen1E Comlti.nmicafam:§ Commission FCC 99-155 markets.5 Indicia of the level of diversity include the number of broadcast outlets, the number of separately-owned and operated "voices" in the market, and the presence of cable and non-broadcast media. St. Louis is ranked as the 21st largest television market. We have independently verified that following the proposed transaction, there will be a total of at least 60 radio and television stations in the market representing at least 40 separate broadcast "voices." The number of broadcast stations and "voices" in the market are consistent with the levels of diversity approved in prior waiver requests. See, e.g., Shareholders of American Radio Systems Corp., 13 FCC Red 12430 (MMB 1998) (temporary, conditional one-to-a­ market waivers granted in 23rd ranked market with 46 broadcast stations representing 27 separate voices and in 19th ranked market with 60 broadcast stations representing 40 separate voices); Shareholders of Citicasters, Inc., 11 FCC Red 19135 (1996) (temporary, conditional one-to-a-market waivers granted in 15th ranked market with 58 broadcast stations representing 45 separate voices). A wide variety of other media are also available, including eight daiJy6 and 109 weekly newspapers and 142 cable systems that aggregately reach 53% of television households in the market.

18. With respect to economic concentration and competition, our independent research indicates that KDNL-TV garners 12.8 percent of the television advertising revenue in the St. Louis DMA and that four other television stations in the DMA have equal or higher advertising revenue shares. Sinclair's proposed radio combination garners 22.9 percent of radio advertising revenue in the St. Louis television metro market.7 Together, the stations in Sinclair's proposed combination will have a combined television and radio advertising revenue share of 16.3 percent in St. Louis, the 21st largest television market.8 These advertising revenue shares are consistent with levels approved in other temporary, conditional one-to-a­ market waivers. See, e.g., Keymarket of South Carolina, Inc., 13 FCC Red 17212 (MMB 1998) (21.1 percent of combined television and radio advertising revenue in 35th television market); Butler Broadcasting Co., Ltd, 13 FCC Red 12410 (MMB 1998) (23.7 percent of radio advertising revenue and 24.3 percent of combined television and radio advertising revenue in 60th television market).

5 In order to determine the number of radio and television broadcast stations in the context of a one-to-a-market waiver, the Commission considers "the relevant TV metro market for radio stations and the relevant ADI [Arbitron Area of Dominant Influence] TV market for TV stations.,. Second Report and Order, 4 FCC Red at 1760 n. 101. However, because Arbitron no longer compiles ADI data, we now accept showings using the Nielsen OMA. See Media/Communications Partners L.P., 10 FCC Red 8116 n. 3 (1995); see also Further Notice of Proposed Rulemaking in MM Docket Nos. 91-221 and 87-8, 10 FCC Red 3524, 3539 n. 59 (1995).

6 Our independent analysis confirms that the following dailies serve the St. Louis area: (1) The Telegraph with coverage of Madison, Jersey and Macoupin Counties and morning circulation of 31,568 and Sunday circulation of 32,857; (2) Belleville News-Democrat with coverage of St. Clair and Madison Counties and morning circulation of 50,704 and Sunday circulation of 62,319; (3) Centralia Sentinel with coverage of Marion and Clinton Counties and evening circulation of 14,919 and Sunday circulation of 15,703; (4) Edwardsville Intelligencer with coverage of Madison County and evening circulation of 6,838; (5) Litchfield News-Herald with coverage of Montgomery County and evening circulation of 5,800; (6) The Daily Journal with coverage of St. Francois County and evening/Sunday circulation of 9,260; (7) St. Louis Post-Dispatch with coverage of Eastern Missouri and Southwestern Illinois and morning circulation of 323,374 and Sunday circulation of 539,421; and (8) Daily Press Leader with coverage of St. Francois County and morning circulation of 4,500. See Bacon's Newspaper Directory 1998.

7 Sinclair's proposed radio combination would compete with Infinity Broadcasting Corporation's group of three owned commercial radio stations which garner a 34.1 percent advertising revenue share. Radio advertising revenue data for 1998 is obtained from BIA Publications, Inc.'s Radio Master Access data base.

8 Sinclair's combined TV and radio advertising share is based on 1998 TV and radio advertising revenue data from BIA Publications,.Inc.'s TV and Radio Master Access data bases.

11296 Federal Communications Commission FCC 99-155

19. We conclude, based on the record, that grant of a temporary, conditional one-to-a-market waiver in the St. Louis market is appropriate in this case. The St. Louis market is both diverse and highly competitive. Although some of Sinclair's commonly-owned facilities in this market are technically significant, a number of competing facilities do exist. Moreover, grant of the waiver will result in economic efficiencies and facilitate enhanced local programming by the stations in question. On balance, we are persuaded that the public benefits to be derived from Sinclair's joint ownership of the radio and television station combination in the St. Louis market would outweigh any negative effect on competition and diversity and, therefore, that a waiver of the one-to-a-market rule is justified. In addition, we find that the parties are fully qualified to be Commission licensees, and that grant of Sinclair's proposed acquisition of the KXOK-FM from WPNT is in the public interest.

20. Accordingly, IT IS ORDERED, that a temporary, conditional waiver of the Commission's one­ to-a-market rule, 47 C.F.R. § 73.3555(c), to permit common ownership ofKDNL-TV, St. Louis, Missouri; KXOK-FM, Florissant, Missouri; KPNT(FM), Ste. Genevieve, Missouri; WVRV(FM), -East St. Louis, Illinois; and KIHT(FM), WIL-FM and WRTH(AM), all St. Louis, Missouri, IS HEREBY GRANTED, subject to the outcome in the pending television ownership rulemaking proceeding, Review of the Commission's Regulations Governing Television Broadcast Ownership, Second Further Notice ofProposed Rulemaking, MM Docket Nos. 91-221 and 87-8, 11 FCC Red 21655 (1996). Should divestiture be required as a result of that proceeding, Sinclair is directed to file an application for Commission consent to sell the necessary station(s) within six months from the release of the final Order in that proceeding. Should Sinclair find it necessary to request an extension for any reason, it must make any such request no less than 45 days before the end of the divestiture period.

21. IT IS FURTHER ORDERED, that, having found the applicants fully qualified and that grant of the application would serve the public interest, the application to assign the license of KXOK-FM, Florissant, Missouri, (File No. BALH-980915GL) from WPNT, Inc. to Sinclair Radio of St. Louis Licensee, L.L.C., a subsidiary of Sinclair Broadcast Group, Inc., IS HEREBY GRANTED.

FEDERAL COMMUNICATIONS COMMISSION

Magalie Roman Salas Secretary

11297 DISSENTING STATEMENT OF COMMISSIONER GLORIA TRISTAN!

In re Application ofWPNT, Inc. and Sinclair Radio ofSt. Louis for Assignment ofLicense ofKXOK-FM, Florissant, Missouri File No. BALH-9809J 5GL

In October 1998, I expressed concern that our one-to-a-market waiver standard was not being applied in a thorough and rigorous manner and had become, in practice, a rubber stamp. See In Re Applications of United Broadcasting Company, Inc, et al., 13 FCC Red 21563 (1998) (dissenting statement). At the time, I noted that the Commission had decided well over a hundred one-to-a-market waiver cases in recent years and had granted a waiver in all but two cases. The count remains at two today. I respectfully dissent for the reasons set forth in my prior statement.

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