Federal Communications Commission FCC 07-24 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) Shareholders of Univision Communications ) BTCCT-20060718AGO et al. Inc. ) (Transferor) ) ) and ) ) Broadcasting Media Partners, Inc. ) (Transferee) ) ) For Transfer of Control of Univision ) Communications, Inc., and Certain Subsidiaries, ) Licensees of KUVE-TV, Green Valley, Arizona et ) al. ) ) In the Matter of ) ) Univision Cleveland, LLC ) NAL/Acct. No. 0741420022 ) FRN No. 0005794177 ) For Renewal of License of Station WQHS-TV, ) File No. BRCT - 20050601BER Cleveland, Ohio. ) Facility ID No. 60556 ) In the Matter of ) ) KDTV License Partnership, G.P. ) ) For Renewal of License of Station KDTV(TV), ) File No. BRCT-20060803APD San Francisco, California ) Facility ID No. 33778 MEMORANDUM OPINION AND ORDER Adopted: March 16, 2007 Released: March 27, 2007 By the Commission: Chairman Martin and Commissioner Tate issuing separate statements; Commissioner Copps and Adelstein approving in part, concurring in part, and issuing separate statements. I. INTRODUCTION 1. The Commission has under consideration applications listed in the attached Appendices that seek consent to transfer control of licensee subsidiaries of Univision Communications Inc. (“Univision”), that hold 41 full-power, 14 class A, five low-power, and five television translator licenses, as well as 73 full-power radio licenses (55 FM and 18 AM) and nine FM translator licenses, from Univision’s current Federal Communications Commission FCC 07-24 shareholders to Broadcasting Media Partners, Inc. (“BMPI”).1 In connection with the merger, BMPI has requested six months from the date of consummation to bring certain of its investors into compliance with Section 73.3555(d) (the “newspaper/broadcast cross-ownership rule”) in five markets; six months from the date of consummation to bring certain of its investors into compliance with Section 73.3555(c) (the “radio/television cross-ownership rule”) and Section 73.3555(a) (the “local radio ownership rule”) in three markets; and six months from the date of consummation to come into compliance with the local radio ownership rule in the Albuquerque, New Mexico radio market.2 Finally, BMPI has requested two continuing satellite exceptions to Section 73.3555(b) of the Commission’s rules (the “local television ownership rule”), pursuant to Note 5 of Section 73.3555.3 2. On August 23, 2006, Theodore M. White filed a letter complaining of Univision’s actions during an ownership dispute involving Station WFDC-TV (previously WTMW(TV)), Arlington, Virginia,4 to which Univision responded on September 6, 2006.5 On September 5, 2006, Rincon and Associates, Edward Rincon, and Conrad E. Gomez (collectively “Rincon”), residents of Dallas, Texas, and Albuquerque, New Mexico, filed a Petition to Deny opposing the transfer of control of certain Univision television and radio stations in the Dallas, Texas, and Albuquerque, New Mexico, markets.6 Univision and BMPI filed separate responses to the Rincon petition on September 20, 2006,7 and Rincon filed a reply on September 29, 2006.8 For the reasons set forth below, we deny Mr. White’s August 23, 2006, letter to the extent it opposes the Station WFDC-TV transfer of control application, deny Rincon’s September 5, 2006, petition, and grant the applications for transfer of control referenced in the Appendices, subject to the conditions set forth below. 3. On August 31, 2005, the Office of Communication of the United Church of Christ, Inc. (“UCC”), filed a Petition to Deny opposing the license renewal application of Station WQHS-TV, Cleveland, Ohio, licensed to Univision Cleveland LLC (“Univision Cleveland”).9 Univision Cleveland is 1 The Commission has granted applications to assign one full-power television license and one television translator license to Univision subsidiaries, but the parties have yet to consummate the transactions. See File Nos. BALCT- 20060411ACB and BALTTL-20060411ACC. Applications have been filed to transfer control of these two stations to post-merger Univision, and are included in Appendix A. See File No BTCCT-20060718AGO (seeking consent to transfer control of Univision Television Group, Inc., licensee of stations KUTF(TV) and K45GX). The parties are also seeking consent to transfer 12 microwave and 12 earth station licenses, the applications for which are listed in Appendix B and C, respectively. 2 47 C.F.R. §§ 73.3555(a), (c), and (d) (2002). 3 47 C.F.R. §73.3555(b) (2002). 4 Letter from Bruce A. Eisen to Marlene H. Dortch, Secretary, Federal Communications Commission (August 23, 2006) (“White Letter”). 5 Letter from Scott Flick, Esq., to Marlene Dortch, Secretary, Federal Communications Commission (September 6, 2006). 6 Rincon & Associates Petition to Deny, filed September 5, 2006. Rincon’s petition is late-filed and, therefore, will be considered as an informal objection pursuant to section 73.3587 of the Commission’s rules. 47 C.F.R. §73.3587. Rincon filed a “corrected version” of the petition on September 11, 2006. Rincon & Associates Corrected Petition to Deny, filed September 11, 2006, (original and corrected version collectively referred to herein as “Rincon Informal Objection”). 7 Univision Communications, Inc. Opposition to Petition to Deny, filed on September 20, 2006; Letter from Mace Rosenstein, Esq., to Marlene H. Dortch, Secretary, Federal Communications Commission (September 20, 2006) (“BMPI Opposition”). 8 Rincon & Associates Reply to Opposition to Petition to Deny, filed on September 29, 2006 (“Rincon Reply”). 9 UCC Petition to Deny License Renewal Application of Station WQHS-TV, Cleveland, Ohio, filed August 31, 2005. 2 Federal Communications Commission FCC 07-24 a wholly owned subsidiary of Univision that airs programming provided by the Univision programming service. UCC, which claims to represent parents and children who regularly view television within the service area of Station WQHS-TV, argues that the Spanish-language telenovela Complices Al Rescate does not qualify as core children’s programming because it is a general audience program that does not have serving the educational and informational needs of children as a significant purpose.10 According to the FCC Form 398 Children’s Television Programming Reports filed with the Commission for the period June 31, 2004, until March 30, 2005, Univision Cleveland, along with other stations employing the Univision programming service, identified the program Complices Al Rescate as the core children’s program that satisfied the obligation to serve the educational and informational needs of children. Both Univision Cleveland and UCC have filed responsive pleadings. 4. On November 1, 2006, the National Hispanic Media Coalition (“NHMC”) filed a Petition to Deny opposing the license renewal application of Station KDTV(TV), San Francisco, California, licensed to KDTV License Partnership, G.P. (“KDTV”).11 KDTV is also a wholly owned subsidiary of Univision that airs programming provided by the Univision programming service. NHMC, which claims to be a non-profit coalition of American Latino organizations, raises many of the same issues with respect to the the Spanish-language telenovelas Vivan Los Ninos and Amy, La Nina De La Mochila Azul as UCC has raised with respect to Complices Al Rescate, namely, that KDTV has failed to comply with the Commission’s Children’s Television processing guidelines because Vivan Los Ninos and Amy, La Nina De La Mochila Azul are directed at the general audience, are not specifically created for children, and do not have education as a significant purpose.12 Both KDTV and NHMC have filed responsive pleadings. II. BACKGROUND 5. Pursuant to the merger agreement, at consummation each share of Univision stock, with certain limited exceptions, will be converted into the right to receive cash consideration. An acquisition subsidiary of BMPI will then merge into Univision, after which the separate existence of the acquisition subsidiary will cease. Each outstanding share of the acquisition subsidiary’s stock will be converted into one share of Univision common stock, with the result that Univision will become a wholly owned subsidiary of BMPI.13 Total consideration for the merger is approximately $13.7 billion. 6. The following five entities will make up BMPI: Madison Dearborn Partners, LLC (“MDP”); Providence Equity Partners, Inc. (“PEP”); Saban Capital Group (“Saban”); Texas Pacific Group (“TPG”); and Thomas H. Lee Partners, L.P. (“THLP”). With the exception of Saban, each entity will hold 23.314% of the votes and equity stock of BMPI and designate two members of the BMPI Board of Directors. Saban will hold a 6.744% voting and equity interest and designate one director. Each entity will also 10 On January 9, 2006, Univision Cleveland filed a Motion to Strike UCC’s Reply to Opposition to Petition to Deny, arguing that UCC’s reply was not limited to matters raised in Univision’s Opposition to Petition to Deny. We will consider the entire record in this proceeding. The reply and attached declaration from Dr. Frederic Subervi does, however, question for the first time whether a separate program, Vivan Los Ninos, qualifies as core programming. We need not determine whether this program, within the context of the Station WQHS-TV license renewal proceeding, meets the definition of “core programming,” as this issue is squarely addressed in the KDTV petition. 11 NHMC Petition to Deny License Renewal Application of Station KDTV(TV), San Francisco, California,