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TheBuzz Erika Engle |
FCC freeze brings
cold days to Hawaii
radio businessTransactions involving more than a dozen Hawaii radio stations are twisting in the wind as the Federal Communications Commission again halted ownership transfer applications.
The Friday freeze followed a Wednesday ruling by the U.S. Court of Appeals for the Third Circuit, which delayed implementation of the FCC's new ownership rules for a year.
"In light of the court's decision, the commission has established a freeze, effective immediately and until further notice, on the filing of all applications using FCC Form 301, 314 or 315 that involve commercial stations," the bureau said in a statement.
The most recently frozen deal is the $550,000 purchase of New Wave Broadcasting Inc.'s KORL-AM 690 by H. Hawaii Media, which filed its application within two weeks of the freeze.
Kauai-based H. Hawaii Media, owned by George Hochman, operates KITH-FM 98.9 and KTOH-FM 99.9, as well as Maui's KONI-FM 104.7.
It also owns distribution rights for real estate and visitor-geared publications.
Hochman calls the new freeze frustrating.
"We can't close until we get FCC approval, probably at the end of the year," he said.
Maverick stuck in mud
The purchase of Maverick Media LLC's four Big Island radio stations by Maui's Pacific Radio Group had been scheduled to receive FCC approval in early June, but the FCC froze all transfers June 2, when the commission released its proposed changes to ownership rules. That left KHLO-AM 850, KKBG-GM 97.9, KLEO-FM 106.1 and KKOA-FM 107.7 waiting beyond the customary 60- to 90-day approval period."I can't see them stopping the economy because they're squabbling over rules. Hopefully cooler heads will prevail," said Glenn Yee, chief executive officer of Big Island Radio and chief financial officer of Persis.
"There's a lot of disappointed people out there."
In mid-August, the FCC approved an ownership change for Korean-language KHRA-AM 1460 in Honolulu, offering a glimmer of hope for Pacific's purchase of Maverick's stations as well as a new deal for eight stations owned by Big Island Radio. The stations include KIPA-AM 620, KPVS-FM 95.9, KAPA-FM 100.3 and KHWI-FM 92.7 in Hilo; KLUA-FM 93.9 in Kailua-Kona;, KAGB-FM 99.1 in Waimea; and KKON-AM 790 and KAOY-FM 101.5 in Kealakekua. Pacific Radio must sell three stations on the Big Island to comply with FCC regulations. Chuck Bergson, president and chief operating officer of Pacific Radio Group, is in talks with parties interested in the three stations, but as there is no signed contract, he is uncertain if one company will buy all three or if the three will be broken up between buyers.
The freeze "does slow things down, screws up the planning process and makes it difficult," Bergson said.
It is also costing the company money, though Bergson did not divulge an amount. "We've already hired employees."
"We'd much prefer they were working on the job and not just still planning," he said. Nevertheless, he believes the freeze is difficult for station employees and harder on sellers than buyers.
The companies are looking at the possibility of a time brokerage agreement where Pacific Radio would begin operating the stations before taking possession of them, pending final FCC approval. Such arrangements are not the norm. Earlier this year a similar agreement between Maverick Media and Georgia-based Real Radio of America LLC ended when the purchase of Maverick's Honolulu stations failed to close and Real Radio executives were sent packing.
The Mouse is out
KORL currently airs Radio Disney programming from the mainland aimed at kids and "tweens" with local inserts from New Wave promotion staffer Catherine "Cat" Delapena. She will remain with New Wave following the transition, according to General Manager Dan Manella. Proceeds from the sale will be poured back into New Wave's four core FM stations, 93.1 KQMQ, 97.5 KPOI, 99.5 KHUI and 102.7 KDDB.Hochman will retain KORL's call letters but plans to change its programming. "Our goal in Honolulu is strictly foreign language," he said.
His entry into the Honolulu market dates to January when he put KJPN's programming on the air on 1370 AM, a facility he leased with an option to buy, from Utah-based Diamond Broadcasting Corp. The Japanese programming will eventually move to 690 AM and 1370 will become multi-ethnic, perhaps predominantly Filipino, Hochman said. Air talent may be hired and Hochman also may sell blocks of time to those wanting to put their own shows on the air.
Hochman cited recent reports indicating that 40 percent of Oahu's population speaks or understands a foreign language and believes that population may be underserved. Five Oahu radio stations carry ethnic programming, including KZOO-AM 1210, KNDI-AM 1270, KJPN, KHRA, and KREA-AM 1540.
Hochman is not in the running for any of the Big Island's stations although his ultimate goal is to have a statewide presence.
See the Columnists section for some past articles.
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
