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TV stations' share deal allows an option to buy


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POSTED: Friday, October 09, 2009

Alabama-based Raycom Media Inc. has secured an option to buy KGMB-TV, owned by Virginia-based MCG Capital Corp., according to an e-mail the companies sent to the Federal Communications Commission last month.

The shared services agreement planned by KGMB-TV and Raycom-owned KHNL/KFVE-TV includes language “;whereby Raycom would have an option right to acquire the MCG station at a later date subject to prior FCC approval,”; the e-mail says.

It was addressed to Barbara Kreisman, video division chief of the FCC's Media Bureau. She had received a call from representatives of the stations' owners in which they detailed plans to merge operations and facilities. She requested a detailed, follow-up e-mail and received it Sept. 16.

Other details in the e-mail are familiar to those following the story, but it states the companies' positions as fact that the FCC would have no interest in or need to look into further.

“;The arrangement does not involve any change in ownership or control of the stations or their FCC licenses,”; the e-mail said. “;MCG will continue to exercise control over its station and that station's programming. Raycom will continue to control its stations and their programming.”;

The e-mail continued, “;Raycom will provide limited services to the MCG station in accordance with principles repeatedly accepted by the Commission.”;

It further said, “;Raycom, at the request of MCG, may provide up to 15 percent of the programming schedule of the MCG station in the form of local news. (This level of programming services would not trigger the FCC's attribution rules.)”;

The FCC considers a party that provides more than 15 percent of another broadcaster's programming to have an attributable, or ownership, interest in the other broadcaster.

Separately, two letters sent to the FCC last month could cost KGMB, KHNL and KFVE as much as $10,000 each for violations of FCC regulations governing public inspection files.

They are included in Media Council Hawaii's complaint filed with the FCC.

The figure is the base amount the FCC charges for such violations and is the amount sought by the FCC this week from four radio stations whose public files were found to be missing some required elements.

Any station can request a reduction of the penalty, as in two other recent cases where the FCC granted reductions to $4,000.

The letters were sent by media watcher Larry Geller to the FCC's Investigations and Hearings Division after he visited the stations to see their public files.

KGMB presented its file to Geller, who found it to be in disarray, while KHNL/KFVE officials could not find the files for more than two hours.

Attorneys from the Institute for Public Representation, representing MCH in the case against the stations' agreement, conferred with the U.S. Justice Department yesterday, but it is too early to know whether the department will investigate, said Director Angela Campbell.

“;They seemed very interested, but they're not allowed to comment,”; said Adrienne Biddings, IPR staff attorney.

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Erika Engle is a reporter with the Star-Bulletin. Reach her by e-mail at .(JavaScript must be enabled to view this email address).