Consent Decree Clears Path For Dickey Deal

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The Atlanta-area AMs owned by the late Lew Dickey Sr. were all set to be transferred to an “irrevocable children’s trust” following his passing.


The FCC’s Media Bureau had some issues, and on Wednesday they were resolved thanks to a Consent Decree agreed upon by the trust administrators. But, a retroactive license transfer is not to be had.

Dickey Broadcasting Company operates three Atlanta-area radio stations: Class C WIFN-AM 1340 in Atlanta; Class B WCNN-AM 680 in North Atlanta; and Class C WFOM-AM 1230 in Marrieta, Ga.

The trio of AMs air respective Sports formats, with WIFN using W279CZ at 103.7 MHz as an FM translator and WCNN using translator W229AG at 93.7 MHz.

Dickey acquired WCNN in August 2000 from Ring Radio; that same month WIFN and WFOM were purchased from Midwestern Broadcasting Co.

On March 5, a Form 315 filing was made with the Commission that sought the approval of the three stations’ transfer from Dickey Broadcasting to the Lewis W. Dickey Sr. Irrevocable Children’s Trust. David W. Dickey administered the license transfer, noting that it was a non-cash license assignment within his family. Thus, there is no “agreement” for the transfer of control.

A two-page declaration from David Dickey, he notes that he has been a DBC officer since 2000. “Until recently, it was my understanding that my father owned 99% of the DBC,” Dickey writes.

Lew Dickey Sr. passed away on Nov. 28, 2013. Starting shortly after his death, David Dickey “learned that the ownership of DBC was not what I understood it to be.”

In fact, the younger Dickey believes that the ownership of DBC was not what his father understood it to be.

“It turned out that his estate matters were ridiculously complicated, likely put in place by his lawyer,” he notes. “My family removed my father’s estate matters from the law firm that he had relied upon and we engaged a new law firm which, to a large extent, has unwound many of the complications that had been in put in place for the handling of his estate.”

Here’s the fly in the ointment: The lawyer who previously advised Lew Dickey Sr. and who was most involved in DBC also has passed away.

This led David Dickey to play the role of sleuth, piecing together as much information deemed factual as he could.

As he understands it, on August 30, 2000, Lew Dickey Sr. transferred 90% of his non-voting interests in DBC to trust.

According to the Trust Agreement, the initial trustees were former Cumulus Media head Lew Dickey Jr. and David Dickey. On August 29, 2010, the Trust was to divide into separate sub-trusts for David and his five siblings, with each family member serving as Trustee of their own separate sub-trust.

However, David’s siblings “did not understand” that all had been named in those roles and were not asked to take any action as Trustees until shortly before their father’s death.

It turns out this was a “grantor trust,” absolving the Dickey children of any tax payments.

On November 9, 2013, the Trust’s stock in DBC was converted to voting stock and all
other shares of stock of DBC were cancelled and became authorized but unissued shares.

“This was the first time my siblings and I were required to take any action as Trustees of the Trust, and since my father was then in the last stages of his illness, we did not fully understand all of the foregoing until after his death when it was explained to us in more detail during the course of administering my father’s estate,” David Dickey says.

As a result, since Lew Dickey Sr.’s death, the Trust is overseen by six offspring.

Fast forward to Wednesday (8/15), when FCC Media Bureau Chief Michelle Carey was asked to approve or deny the transfer of WCNN, WIFN and WFOM to the Trust.

That’s going to happen. But, it won’t be a nunc pro tunc transfer, meaning it won’t be retroactive to March.

Why? A resubmission of Form 315 forms is to come, following the payment of a $8,000 civil penalty to the U.S. Treasury as part of the Consent Decree the trustees have agreed to with the Commission. A three-year compliance plan will be undertaken to prevent future similar violations of the FCC’s rules.

In particular, DBC and the Trust violated Section 310 of the Act and Section 73.3540 of the Rules.

In plain English, DBC transferred control of the license ahead of FCC authorization, and sought retroactive approval.

As seen recently with Beasley Broadcast Groupthat’s not permissible.