TheBuzz
TheBuzz
A succession of waivers allowing one company to own both KHON and KGMB television stations in Honolulu has hit a bump. Emmis’ dual ownership
waiver waversOahu television licensee Donald F. Laidlaw this month filed an objection with the Federal Communications Commission against further extensions of the waiver allowing single ownership of the two stations.
The FCC directed Indianapolis-based KHON and KGMB owner Emmis Communications Corp. to produce evidence of its efforts to sell one of its two stations in the market.
In a March 28 letter, the FCC Office of Broadcast License Policy has given Emmis until the end of April to provide "specific, thorough information regarding its attempts to comply with the divestiture requirement."
The information is to include where it has advertised a sale, documentation of advertising, details of offers received and explanations why each offer was deemed unacceptable. Emmis is also to detail the manner in which it intends to comply with the divestiture requirement "as quickly as possible."
FCC ownership rules limit the market share that can be controlled by any one company.
"Emmis says there are 24 TV stations in Hawaii and they own six, three with Fox and three with CBS. That's 25 percent of the market," Laidlaw said, referring to the main TV station in Honolulu and each of its separately licensed neighbor island satellite stations.
Fox-affiliate KHON and CBS-affiliate KGMB relay network programming and originate local broadcasts from Honolulu to what are essentially repeater stations on neighbor islands.
Multistation deal
In September 2000, when Emmis acquired the licenses of 15 television stations previously owned by Lee Enterprises Inc. -- including KGMB -- the FCC granted Emmis time to sell one of the two Honolulu stations to comply with ownership limits.The waiver has been extended several times over 18 months and Emmis has recently been granted an additional 90 days, but the company had asked for another year.
In previous waiver extension applications Emmis cited Hawaii's sluggish economy among other reasons one of the two stations has not been sold.
The March 28 letter from FCC Media Bureau Broadcast License Policy Chief Roy Stewart to Emmis legal counsel John E. Fiorini III, appears to lean toward arguments Laidlaw spelled out in letters to the FCC dated March 1 and 13.
"Based on Emmis' own representations, the Hawaiian economy was already depressed when Emmis acquired KGMB and its satellites. Emmis knew it was acquiring a station in a depressed market and that it would be required to sell a station in a market that would probably be depressed," Stewart wrote. "In these circumstances the general state of the Hawaiian economy does not provide sufficient justification by itself to support an additional extension of the temporary waiver."
Emmis Television President Randall Bongarten said in correspondence to the FCC March 18 that the company has retained California-based H.B. LaRue Media Brokers to locate find a buyer, and included an affidavit from LaRue to that effect.
Laidlaw claims Emmis never instructed LaRue what the purchase price of each station should be and says that Emmis instructed LaRue not to discuss the purchase price with interested parties. LaRue was not available for comment.
However, in his affidavit, he described his only conversation with Laidlaw on March 7 as "brief" and "nonsubstantive," but that he had had several contacts regarding KGMB with Laidlaw associate Chris Racine of Oceania Broadcasting Network. Racine last year signed a confidentiality agreement as a condition of exploring a purchase, according to LaRue.
But as of earlier this month, Oceania had not provided Emmis with financial information requested as part of the process.
Racine told LaRue that Laidlaw was also interested in acquiring KGMB and that Emmis should feel free to contact either Laidlaw or himself concerning Laidlaw's FCC filing, according to Bongarten's March 18 response letter to the FCC.
"It appears that Mr. Racine and Mr. Laidlaw are attempting to use the March 1 letter as leverage against Emmis -- an attempt that the commission should discourage," the letter said.
Separately, Waimanalo Television Partners LLC was formed in April last year by several companies, including one in which Laidlaw is a principal; it is unclear whether Racine is also involved.
Waimanalo TV Partners has been awarded an FCC construction permit to build a full-service TV station to broadcast from an antenna in Waimanalo on Channel 56 under the call letters KMGT.
The other members of the company are included as a result of an FCC settlement, Laidlaw said, adding that he has the option to buy them out and that it his intention to do so, leaving him as the sole licensee for the station.
Erika Engle is a reporter with the Star-Bulletin.
Call 529-4302, fax 529-4750 or write to Erika Engle,
Honolulu Star-Bulletin, 500 Ala Moana Blvd., No. 7-210,
Honolulu, HI 96813. She can also be reached
at: eengle@starbulletin.com