Media Bureau to Approve Gannett/Belo and Tribune/Local This Week, Say FCC Officials
The FCC Media Bureau will approve the proposed Tribune/Local and Gannett/Belo broadcast deals this week, said agency officials in interviews Wednesday. The $2.73 billion Tribune/Local transaction will be approved without any additional conditions or divestitures, and the bureau won’t impose additional conditions on the $2.2 billion Gannett/Belo deal beyond the single station divestiture handed down by the Department of Justice earlier this week (CD Dec 17 p6), said the officials. Both deals will be approved on the bureau’s delegated authority, the officials said. Public interest groups had argued that because both deals involve sharing arrangements between stations, they should be handled by the full commission. Bureau staff found that the deals were “within the zone of existing precedent,” and so didn’t require a vote by the full commission, said an FCC official.
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Free Press Policy Director Matt Wood and public interest attorney Andrew Schwartzman said if the deals are approved, it’s likely they would file applications for review. The goal for the appeals would be to get the full commission to rule on the transactions, said Schwartzman, who consults for Free Press. “The Media Bureau never met a TV merger they didn’t like,” he said. Since both deals involve sharing agreements, putting them before the full commission would likely lead to a ruling on that issue, which the commissioners have avoided so far, he said. If the deals are approved, public interest groups “wouldn’t feel like this is the end of the discussion,” said Wood. “They have to address these questions."
It’s possible for applications for review of bureau decisions to sit for years without being acted on, Schwartzman said, pointing to the Media Council Hawaii’s application for review of a Raycom transaction involving sharing arrangements that has sat since 2011 (CD June 21 p20). But Schwartzman said the current FCC may not treat such applications the same way: Chairman “Tom Wheeler seems committed to changing that.”
Approval of the transactions at the bureau level would indicate the FCC hasn’t undergone any substantial changes in its process for handling mergers and acquisitions under Wheeler, said Fletcher Heald broadcast attorney Frank Jazzo in an interview. Even if the commission acts on applications for review, the filings wouldn’t preclude the transactions from closing unless a stay is involved, Jazzo said. “An application for review takes a long time.” For the applications to be successful, the public interest groups would have to demonstrate that the bureau had erred in approving the transactions, Jazzo said.
The Gannett/Belo deal involves 19 stations, five of which are to be transferred to Gannett affiliates Sander Media and Tucker Media and operated under sharing agreements (CD June 14 p7). The transfers are designed to allow the deal to comply with FCC local ownership rules, by preventing market overlaps in cities where Gannett already owns stations or newspapers, such as Phoenix and Tucson. Under the terms of a DOJ consent decree issued Monday, Belo’s KMOV St. Louis is no longer part of the deal -- the decree calls for all three companies to divest all interests in the station to avoid an unfair competitive advantage in advertising negotiations.
The Tribune/Local transaction also involves 19 stations. Stations in Norfolk, Va., Portsmouth, Va., and Scranton, Pa., are to be transferred to Tribune-affiliated company Dreamcatcher and operated through sharing agreements (CD July 11 p7). The deal also includes Tribune’s spinning off all of its publishing assets into the recently created Tribune Publishing Co., while the company’s other businesses -- including 42 TV stations -- remain in Tribune Co.
Public interest groups had argued that both transactions threaten diversity within broadcast ownership, competition and journalism (CD Oct 22 p12). The American Cable Association and some multichannel video programming distributors objected to the Gannett/Belo deal because they said it would lead to coordinated retransmission consent negotiations (CD Aug 12 p9). ACA had asked the FCC to impose a condition on the merger barring such coordination, but FCC officials said no conditions were imposed on the transaction. ACA, Tribune, Gannett and the bureau declined to comment. -- Monty Tayloe (mtayloe@warren-news.com)