CBS/Entercom deal finally waved through


A double deal sending stations in Memphis TN, Cincinati OH, Austin TX and Rochester NY for a grand total of 262M has finally been cleared for takeoff by the FCC, over a year after the transactions were officially filed at the Commission. The holdup has been a petition to deny filed by Ed Stolz’s Royce International, which has been involved in a long-term dispute with Entercom over KWOD-FM Sacramento CA.

The FCC first denied Royce standing to make the filing, since its complaint was based on private rather than public interest. But it did consider it as an informal objection and rejected it anyway. Royce mainly argued that the transaction would overleverage Entercom, saying that the company has failed to demonstrate its financial qualifications to consummate the agreement. Entercom said to the contrary that they are no more leveraged than many similar companies and will have no trouble closing the transaction.

Wrapping it up, the FCC wrote, "Royce’s financial objection is grounded on its private contractual dispute with Entercom concerning  Entercom’s payment to Royce of the purchase price for Royce’s Station KWOD-FM Sacramento CA. The Commission is not the proper forum for the resolution of this matter."
A 220M application for the stations in Memphis, Cincinnati and Austin was filed 8/28/06. The 42M Rochester portion was filed separately on 9/6/06, keeping it clear of the other stations since Entercom will need to spin off stations there to remain in compliance with local ownership caps.