FCC Approval of Gray/Raycom Expected Soon
FCC approval of Gray’s buy of Raycom is likely around the corner, said attorneys and industry watchers. OK is presaged by DOJ’s support last week (see 1812140019) and by FCC Monday rejection (see 1812170044) of a 7-year-old appeal of an even older Raycom transaction in Hawaii. “It sure looks like they’re clearing the decks to approve the deal,” said Garvey Schubert's Lawrence Miller.
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It’s typical for the FCC to wait until Justice has acted on a deal, said Pillsbury Winthrop's Scott Flick. Since DOJ accepted all divestitures Gray offered and didn’t request additional conditions, it’s likely that the FCC will do the same, lawyers said. Tuesday, the FCC didn't comment.
Gray structured the deal to have minimal hitches for regulatory approval. Chief Legal and Development Officer Kevin Latek told us the approval process has taken longer than Gray anticipated. DOJ review took “twice as long” as expected, he said. Lawyers have said DOJ is considered more inscrutable on transactions than in the past. One broadcast executive suggested station deals could be experiencing additional scrutiny because of the controversy about the failed Sinclair/Tribune purchase (see 1812180040).
If the FCC does ask for additional concessions, it’s likely to be on an existing top-four duopoly included in the deal in Amarillo, Texas, attorneys said. They said any agency asks probably won't be onerous. Gray is seen likely to act quickly to comply with any FCC requests. Gray/Raycom isn’t included on FCC.gov’s mergers webpage, an indication it’s not considered controversial. Latek and other broadcast attorneys said it’s not clear if the full commission will vote or if it will be approved at the bureau level.
When Gray/Raycom was put out for public comment, it received no petitions to deny, though NCTA, the American Cable Association and Dish Network asked for conditions. ACA Monday praised DOJ’s divestiture requirements, though they were the same stations proffered by Gray. “ACA agrees with DOJ’s assessment that absent the divestitures in the nine markets, the Gray-Raycom merger would cause serious harm to pay-TV subscribers and small businesses."
The deal includes another existing top-four duopoly in Honolulu. The full commission appeared to endorse that combination with Monday’s rejection of Media Alliance Hawaii’s 2011 appeal of that combination. Monday’s order said sharing arrangements in Raycom’s Honolulu group are within rules. Since the Sinclair HDO, there has been industry uncertainty about the agency’s view of sharing arrangements, and Gray made a point of not divesting to sidecar companies when it applied for clearance on Raycom.
Monday’s appeal rejection is a sign the agency doesn’t have a problem with shared service agreements and sidecar relationships, said professor Danilo Yanich of the University of Delaware’s Biden School of Public Policy and Administration. Yanich studied Raycom’s Honolulu combination for Media Council Hawaii, finding a decline in local news as a result. The FCC’s continued approval of the combination is a “white flag” showing the Sinclair deal’s fate doesn’t indicate a sea change at the agency, Yanich said. Much of the public interest in Sinclair/Tribune was based on Sinclair’s ideology, Yanich said. Deals like Nexstar/Tribune or Gray/Raycom won’t be as much in the public eye, and are likely to be approved by this FCC, he said.