Berkshire Hathaway agreed with Graham Holdings to buy a wholly owned subsidiary of Graham that includes WPLG Miami, Berkshire shares held by Graham, and cash, in exchange for 1.6 million shares of Graham stock currently owned by Berkshire, said the media company in a news release Wednesday (http://tinyurl.com/lp9c95b). Berkshire CEO Warren Buffett said the deal would be mutually beneficial and “greatly reduce” Berkshire’s position in Graham. That company now owns cable systems, Web and other assets, after selling the Washington Post to Amazon.com CEO Jeff Bezos.
Despite incursions made by music-streaming services iTunes, iHeartRadio, Pandora and Spotify, the streaming market is still in its “MySpace phase” and it’s “too early to declare a winner,” Cumulus Media CEO Lew Dickey said Wednesday during a panel discussion at the Piper Jaffray investor conference in New York. Traditional radio remains “wide open,” Dickey said, despite Pandora’s increasing its share of U.S. listening to 8.91 percent in February from 8.6 percent the previous month and 8.1 percent in October. Cumulus bought a stake in online music service Rdio last year and is planning to sell advertising for a free, ad-supported U.S. version of the service that’s expected to debut later this year, Dickey said. Rdio typically carries a $5-$10 monthly fee in 31 global markets. Cumulus is creating a custom playlist of its syndicated services for Rdio subscribers. While Dickey argued that the streaming music field remains open, it’s “undeniable” that Pandora’s increased market share is “coming from broadcasters,” Pandora Vice President Dominic Paschel said. While 81 percent of Pandora’s 75.3 million active listeners in February -- those that use the service for 15 or more minutes in a given month -- come from mobile devices, the music service is expanding its foothold in the automotive market, Paschel said. It had 4 million active users in motor vehicles in December, up from 1 million at the start of 2013, he said. Pandora is available in 135 models of motor vehicle, up from 100 in December, Peschel said. The automotive market remains the main place consumers listen to broadcast radio, industry analysts have said. “We are moving much more into the digital area, but terrestrial broadcasting is still a great delivery system and people are still listening to it,” said Alpha Broadcasting CEO Larry Wilson, whose company operates 49 radio stations. With broadcast radio having withstood Sirius XM, Dickey was confident the industry would withstand a challenge from Pandora and its rivals and remain a profitable business. “It’s all based on content what people are looking for and it’s back to the $6 million hour of broadcast television versus the $200,000 of production on cable. Listeners and consumers understand the difference and ultimately gravitate toward quality. You can’t substitute a playlist which is static and punctuated by commercial announcements with the full production of a radio station that engages and entertains people.”
FCC Chairman Tom Wheeler’s plans to increase regulation of joint services agreements are inconsistent with the section of the 1996 Telecom Act that requires quadrennial review of ownership rules, said NAB General Counsel Jane Mago in a post on the association’s blog Tuesday (http://bit.ly/1fSkTHB). The section was adopted as part of a “deregulatory framework,” Mago said. “I find it very hard to understand how one could conclude that reaching back to a docket from 2004 to increase regulation of joint sales agreements (JSAs) without any consideration of the larger picture or change in the marketplace is consistent with the directive.” Mago also found fault with Wheeler’s reasoning that since parent companies claim sidecar companies’ profits in their SEC filings, the sidecar stations should be attributable. “Those filings respond to rules and goals established by the SEC for a very different purpose than FCC licensing. SEC filings are not a part of FCC precedent or law,” Mago said. FCC decisions on attribution should be based on “decision-making authority over programming, personnel and financing,” Mago said. “The FCC is not free to ignore precedent.” The FCC should look at local TV ownership rules “in light of current competitive conditions,” Mago said. “That cannot mean starting another never-ending quadrennial review while tightening restrictions on local broadcast stations alone."
A Free Press study criticizing TV joint sales agreements (CD March 11 p11) relies on “irrelevant facts, misleading or partial citations” and “outright false statements,” said Nexstar in an ex parte response to the FCC filed Tuesday (http://bit.ly/1iad6nz). “Nexstar and its relationship partners are far from absentee owners who operate to evade the commission’s rules for the sole purpose of maximizing profit at the expense of their stations’ local communities.” The study doesn’t provide “one single fact” supporting Free Press’s claims that sharing agreements are used to exercise “de facto control” over TV stations in markets where outright purchase of the stations wouldn’t be allowed by the FCC, Nexstar said. The broadcaster said it doesn’t enter into network affiliation agreements or syndication contracts on behalf of its affiliated company Mission Broadcasting. Nexstar also disputed Free Press contentions that because the SEC treats Nexstar as owning Mission, the FCC should as well. The two agencies are “examining different things,” Nexstar said. The broadcaster also took aim at a letter criticizing sharing arrangements submitted to the FCC by several multichannel video programming distributors, including DirecTV and Time Warner Cable. If the FCC bans joint negotiation in retransmission consent deals, Mission will have to hire its own staff for such negotiations, the cost of which will be passed on to MVPDs, Nexstar said.
The FCC denied two applications for review that sought to overturn license renewals for several Emmis stations in Indiana and Illinois, the agency said in an order Friday (http://bit.ly/1kHUXAu). The applications were filed by David Smith, the Illinois Family Institute and Illinois chapter of Concerned Women for America in 2009 and 2010, and are related to indecency complaints filed against the Mancow’s Morning Madhouse radio show in 2002. Those indecency matters were settled with a 2006 consent decree, said the order. “Upon review of the AFRs and the entire record, and finding no basis in the Applications for Review to modify any of the Bureau’s decisions, we conclude that Smith and Petitioners have failed to demonstrate that the Bureau erred,” said the order. The applications for review concerned WFNI(AM) Indianapolis, WLHK(FM) Shelbyville, WYXB(FM) Indianapolis, WWVR(FM) West Terre Haute, Ind., WTHI-FM, Terre Haute and WKQX(FM) Chicago.
Claims that joint sales agreements create jobs are “absurd” and “not supported by any data,” said Free Press’s Derek Turner in a meeting with FCC Chairman’s Office Special Counsel for External Affairs Gigi Sohn, according to an ex parte filing Monday (http://bit.ly/1fkCcuS). “Because the entire purpose of the use of these agreements is to eliminate independent outlets, they not only result in fewer independent voices, but also reduce the number of broadcast employees that would have otherwise existed absent these arrangements,” Turner said. Sinclair “has a long track record of laying off workers and reducing the number of staff at each of its stations,” said the filing. The commission should “reject these farcical and self-serving attempts to paint the use of outsourcing by the industry’s leading companies as pro-jobs, and move forward to close the outsourcing loopholes.” Armstrong Williams, owner of Howard Stirk Holdings (HSH), expressed opposite views on JSAs in a meeting with Commissioner Mignon Clyburn and her staff, according to an ex parte filing (http://bit.ly/1fkYqBA). “Mr. Williams emphasized that without the ability to enter into JSAs and SSAs, as an African American, he would not have been able to fulfill his lifelong dream of being a TV station owner,” the filing said. Howard Stirk Holdings is involved in sharing deals with Sinclair. Sharing arrangements help HSH in retrans negotiations, to provide local programming and “to survive the competitive marketplace,” the filing said. “Singleton buyers of a TV station, especially in small and medium size markets, simply cannot get financing without these types of shared services agreements,” the filing said.
The FCC ordered amateur radio operator Brian Ragan to pay $13,600 for operating a radio transmitter on 104.9 MHz in the San Francisco area without a license. He acknowledged he violated the Communications Act but asked for a lower fine because he had no malicious intent, the Enforcement Bureau said (http://bit.ly/1geMEIZ). Ragan had refused to allow FCC agents to inspect his station. “Under the applicable statute, the Commission need not demonstrate an intent to violate a rule to make a finding that a licensee engaged in willful misconduct,” the bureau said. “The proposed penalty is consistent with those assessed against other operators who engaged in unlicensed operations and failed to allow inspection by FCC agents. As a licensed amateur radio operator, Mr. Ragan is expected to comply with the Rules."
Maine Public Broadcasting Network will deploy a public safety broadcasting service based on Triveni Digital’s SkyScraper DTV content distribution system. MPBN plans to use the system to deliver real-time emergency alert system messages, Triveni said in a news release Monday. The messages will include audio and video originating from the Maine Emergency Management Agency headquarters to every broadcast operation center in Maine, “providing TV and radio stations with immediate information to relay to their viewers and listeners,” Triveni said. SkyScraper offers a highly scalable end-to-end environment “that supports point-to-multipoint digital media content distribution, with targeted point-to-point delivery,” it said.
NHK will use next month’s NAB Show in Las Vegas to demonstrate a closed-circuit over-the-air transmission of 8K Super Hi-Vision content in a single 6 MHz UHF TV channel, NAB said Monday. It will be the first time outside Japan that wireless transmission of Super Hi-Vision is demonstrated over a single 6 MHz TV channel, NAB said. NHK will also present detailed results of a long-distance, single-channel, over-the-air 8K test broadcast recently conducted in Japan, it said. NHK’s booth also will feature a presentation theater with a 350-inch screen for viewing newly shot Super Hi-Vision content, including highlights from the Sochi Winter Olympic Games, it said. NHK has said it’s targeting the launch of Super Hi-Vision to coincide with the 2020 Summer Olympic Games in Tokyo.
The full FCC should review the sharing agreements involved in the Tribune/Local transaction, said Free Press in reply comments on its application for review of the deal (http://bit.ly/1kD0JmP). In approving the transaction, the Media Bureau failed to consider the deal’s cumulative effects on the public interest, Free Press said, citing a recent Department of Justice filing on sharing agreements as additional evidence. The Justice filing “focuses, case-by-case, on the function of SSAs over their form -- asking whether their collective effect harms the public interest rather than whether specific contract provisions independently satisfy the attribution standards,” Free Press said. “Failing to account for such effects would otherwise create opportunities to circumvent the Commission’s rules and their underlying goals."