Infinity Will Petition to Keep L.A. Radio Stations
By DARRELL SATZMAN
Infinity Broadcasting Corp., owner of seven L.A. radio stations, will try to extend a six-month waiver that has allowed the company to exceed local ownership rules in Los Angeles, according to a company executive.
In May, the Federal Communications Commission gave Infinity parent Viacom Inc. until Nov. 3 to sell one of the stations or face repercussions that could include forfeiture of one of its local broadcasting licenses.
Viacom owned the seven stations and KCBS-TV (Channel 2) when it completed its $650 million purchase of KCAL-TV (Channel 9) earlier this year from Young Broadcasting Inc. Under FCC rules, a company with two television stations in a given market can not own more than six radio stations in that market.
With no sale on the horizon, George Nicholaw, vice president and general manager of Infinity station KNX-AM (1070), said that Viacom would seek an extension of the FCC waiver.
"In no way does Infinity want to lose one of its stations in the L.A. marketplace," Nicholaw said. "Hopefully, Infinity will prevail in its request and all seven stations will remain part of the group in L.A."
But Paul Gallant, a special advisor in the FCC media bureau, said a desire not to sell is not a reasonable criterion for requesting an extension. The rationale behind the FCC's decision to grant the initial waiver was to give the company ample time to sell its asset without any financial hardship, he said.
With an extension, "the commission typically looks at whether the company has made a good faith effort to sell a station," Gallant said. "They look at the steps that were taken by the company to carry out a sale."
Petitioning the FCC
Viacom could try to extend its waiver in the hope that further FCC rules changes would allow it to hold onto all of its local stations. In September, under pressure from Congress, FCC Chairman Michael Powell agreed to begin a comprehensive review of guidelines that determine how many stations companies can own and the percentage of viewers and listeners they are permitted to reach in a given market.
As indicated by the relaxation of television duopoly rules that paved the way for Viacom to buy KCAL, the FCC has in recent years shown a willingness to change longstanding policies on local broadcast ownership. However, Viacom likely would face opposition to an extension from some on the commission.
In approving Viacom's waiver in May, FCC Commissioner Michael Copps said "I expect the company's best efforts to result in a sale well within the time period allotted. I do not expect to see, nor do I expect to support, a request for an extension of the waiver we grant today."
Catherine Bohigian, a legal advisor to Commissioner Kevin Martin, said the commissioner would have an open mind about a request for a waiver extension. "The commissioner will judge the petition on its merits," she said.
Besides television stations KCAL and KCBS, Viacom's local radio outlets are new and classic rock stations KROQ-FM (106.7) and KCBS-FM (93.1), oldies station KRTH-FM (101.1), smooth jazz station KTWV-FM (94.7), talk radio KLSX-FM (97.1) and news stations KFWB-AM (980) and KNX.
Despite Nicholaw's statement, Infinity spokesman Dana McClintock said the company would not disclose its plans until late this week or next. Infinity obtained its six-month waiver from the FCC on May 3 and would have to request an extension by the beginning of next week. As of late last week, the company had yet to file a petition for such an extension.
"All I can say right now is that we plan on coming into compliance with the FCC regulations," McClintock said.
Asked if that meant Infinity would sell a station, McClintock declined to elaborate.
Some suspect that Viacom would rather divest itself of one of its local radio stations than risk a squabble with the FCC as it considers widespread changes that could benefit the company.
"They either have to have a waiver or they have to sell a station," said Mary Beth Garber, president of the Southern California Broadcast Association. "They might be in a position where it makes more sense economically for them to sell it."
Infinity's FM stations could sell for up to $400 million, while the AM stations might go for between $75 million and around $300 million, Garber said.
"There's no doubt that all seven (Infinity) stations are stations that other groups would be interested in buying," Nicholaw said.
If Viacom elects or is forced by the FCC to sell one of its local stations, the question becomes which one.
KROQ, KRTH and KTWV are all top-rated stations in their formats and Viacom is unlikely to sell them. Past speculation has focused on KFWB, Infinity's lowest rated local station and the one with the weakest signal.
Now, some speculate the company's other news station, KNX, might be on the block because KFWB has signed on to carry Los Angeles Dodgers broadcasts next year a programming switch with the potential to substantially lift ratings.
Nicholaw said he had no knowledge of a potential KNX sale.
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