The trials and tribulations of the Tribune reorganization inspired Rep. Maxine Waters (D-CA) to look into breaking up the company’s cross-owned print/broadcast properties, among other things. She penned a letter to FCC Chairman Julius Genachowski on the topic.
“As a Member of the U.S. House of Representatives Committee on the Judiciary, I write to express my growing concerns with the extent to which the Commission monitors and holds investment banks and private equity firms accountable to public interest and disclosure obligations governing FCC license holders once a media company is liquidated in bankruptcy and media properties are transferred to creditor-firms,” she wrote in a 4/17/12 letter. She asked for an assessment an report on the matter.
She said the FCC has not been able to keep up with the entry of private equity into the broadcast business.
She cited a dispute over retransmission consent between Tribune and DirecTV in which Tribune’s creditors blocked a completed deal. (That claim is in dispute. DirecTV announced that a deal had been completed, but Tribune said only parts of the total package were complete and that it was not ready to sign on the dotted line until all issues were resolved.)
Waters stated her belief that the FCC should look at denying waivers requested to continue common same-market ownership of broadcast and newspaper assets.
Genachowski, who generally plays his cards close to his chest when answering congressional letters, told Waters that she raised important issues and stated that the FCC was looking into just such matter. He said her letter would be made part of the record.
RBR-TVBR observation: Is it wise to take a tough situation and make it even tougher by imposing fire sale conditions on a company trying to dig out of a hole? We understand the impulse to punish those whose top-level business decisions led to a melt-down – but forcing properties to be spun off will also likely cost the jobs of employees who had no say in those decisions.
From what we’re seeing, many of the Tribune properties will be going on the market soon enough and it does look like there is a very good chance that many of the cross-owned print and broadcast properties may be split apart.
