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Join us as we present John Pelkey’s wide-ranging look at the broadcasting environment from his Washington communications lawyer perspective. Among many other things, Pelkey discusses the odd and still-disappointing transaction financing environment, the disparity between television and radio deals, and the chances of the Fairness Doctrine being exhumed. Enjoy!
FCC Chairman Ajit Pai has looked under a Black Rock to find his Press Secretary at the Commission. This PR pro has previously worked for the likes of Sen. John Cornyn and in Brussels for Weber Shandwick.
The sale of a normal business, say a convenience store, is straight-forward. The buyer pays up, signs all the necessary documents and moves in. But a broadcast transaction must await FCC approval, which usually takes about 90 days or more during which the station must be kept in good operating order. Communications contract expert John Pelkey explains the four key considerations for the seller during this time of limbo.
Broadcast transactions can in some ways conform to the tried-and-true good news, bad news joke format, and then some. For example, the bad news is that time expires between signing an agreement and getting approval for it. The good news is that it allows for the resolution of certain problems. But the bad news is on many occasions, the extra time is needed. Communications transaction expert John Pelkey explains, with a focus on the often slippery aspects of the real estate portion of a deal.
The old cliché is that it’s the waiting that’s hardest, but some waiting periods can be harder than others, such as the time between the FCC grant of a broadcast transaction and the FCC final order. In particular, it can be excruciatingly difficult if something major goes wrong with the station. Broadcast transaction expert John Pelkey guides us through the ins and outs of this difficult question.
Your broadcast transaction is well struck – the FCC approves and it’s going, going, going – then it is not gone, for reasons unknown. Although the last thing a party committed to the deal wants is for a trading partner to drop dead, the party may well want “drop dead” to be part of the contract. Communications transaction expert John Pelkey explains.
To a certain extent, the art of buying and selling broadcast stations involves the ability to haggle– but according to transaction expert John Pelkey, there is a time for haggling and a time for compromising, and to a large extent, it pivots on the value of the deal, the amount tied to the haggle, and even the associated amount the attorneys stand to collect. Click through for this essential deal-making advice.
The licensee of a station brokered to a second party is required to maintain two permanent staffers at all times, a critical piece of evidence demonstrating that there has not been a premature transfer of control. But how should these people while away the hours? Communications law expert John Pelkey has some ideas.
The individual on the licensee side of an LMA had best be prepared to get with the program, and by that we mean the FCC’s program of responsibilities that are retained by the licensee despite the fact that certain station operations have been turned over to a second party. As communications law expert John Pelkey explains, that specifically includes the exercise of control over what goes out over the air. Click through for the full story.
A very common element of a modern broadcast station transaction is an arrangement, often called a local marketing agreement or LMA, that allows the buyer to have a hand in the station’s operation prior to FCC approval. There is nothing at all wrong with this, says communications law expert John Pelkey, as long as the parties proceed with caution. And here’s step-by-step advice on what precautions to take.
By paying due attention to those items that require a long lead time, the parties to a transaction can help ensure that the closing takes place on the appointed date. That's a key takeaway in this classic Media Information Bureau column from attorney John M. Pelkey, which is still relevant today.
Once the FCC has granted its consent to the sale of a station, the parties’ focus naturally turns to the closing. There always is an inordinate amount of paperwork that must be produced by the attorneys and signed by the parties to memorialize the transaction. Given the volume of paper, it is not surprising that small hiccups occur. Usually, however, the parties can work together to remedy such problems without delaying the closing. There are certain matters, however, that can seriously delay the closing or even result in the transaction falling through. The key to preventing such potentially deal-breaking problems from arising is to begin preparing for the closing as soon after the execution of the purchase agreement as possible. Five of these potential problem areas require particular attention.
According to Henry Gola’s post on Wiley Rein, LLP’s “Wiley on Media” blog, radio stations streamed over
The situation has become an all too familiar one. The station has been on the market for the last five years. Few offers have come in and none of those could be thought of as being remotely attractive or credible. In some cases, the proposed purchase price was laughably low. In other cases, the purchase price was attractive, but the buyer’s financing was suspect. The buyer even wanted the seller to finance a large portion of the deal by issuing seller paper. Finally, however, the seller receives an attractive offer. The proposed purchase price is a good one. The buyer supposedly has its financing in place. Nevertheless, the seller has a lingering doubt about the buyer. The buyer has no track record of closing broadcast deals. In fact, the buyer – having made most of its money in real estate transactions – is new to the broadcast industry. Given the length of time that the station has been on the market and the attractiveness of the proposed purchase price, however, the seller wants to explore the opportunity and see if the buyer’s proposal is for real.
The indemnification portion of a broadcast transaction contract may well be a low point in what can be a boring document. However, its ultimate importance cannot be understated if problems come up that require one party or the other to spend more money. Communications transaction expert Erwin Krasnow walks us through the indemnification process. It is must reading for prospective buyers and sellers of broadcast stations.