A station licensee convicted of a felony campaign contribution violation was allowed to sell off a number of Oklahoma radio stations, and at the time, taking various factors into consideration, the FCC allowed the deals to go through. However, it neglected to remove the profit factor for the seller.
The licensee was Gene Stipe, who went over and above the campaign contributions in support of the failed US House of Representatives run of Walter Roberts in 1988 (in the form of actually paying for others to contribute in their own names). Stipe eventually pleaded guilty and was sentenced in January 2004.
Stipe was the seller in the deal sending KESC(FM), Wilburton OK, from Little Dixie Radio, Inc. to KESC Enterprises, LLC; in the deal sending KMCO(FM) and KNED(AM), McAlester OK from Little Dixie to Southeastern Oklahoma Radio, LLC; and the deal sending KTMC(AM) and KTMC-FM, McAlester OK, from Bottom Line Broadcasting, Inc. to Southeastern.
Among the FCC’s concerns at the time was the desirability of keeping the stations in operation and thus serving the public interest (particularly in the sparsely-served McAlester area), as well as the age and frail health of Stipe, who was 78 at the time.
Looking back with the benefit of hindsight, the FCC concluded it should have granted the deals with no profit conditions, but acknowledges that it would do more harm than good to try to unwind the deals, which totaled an aggregate $2.2M, at this late juncture.
The FCC holds that in acknowledging its error, it takes away the use of this case as a precedent and will allow it to continue to impose no profit conditions on future transactions of a similar nature.
RBR-TVBR note: Now available RBR-TVBR’s ‘2010’ new guide to help chart a course through the treacherous waters of buying, owning and selling radio or television stations.
Click to purchase: “Profitably Buying and Selling Radio Stations,” or 1-800-288-4677, ext. 5022 for $49.95, paperback, $39.95, e-book.