FCC approves disputed Cumulus deals in Mobile and Pensacola


FCCFor television stations operating under Nielsen definitions, there is one market called Mobile-Pensacola, but for radio stations operating under Arbitron definitions, there are two, Mobile AL and Pensacola FL. And recent Cumulus deals fit into each, says the FCC.

Here are the steps Cumulus is taking in the market:

It moved WADB-FM from Atmore AL to Saraland AL, making it part of the Mobile market.
That cleared cap room for the $6.5M acquisition of WMEZ-FM Pensacola and WXBM-FM Milton FL from a subsidiary of Pamal Broadcasting, putting them into a cluster with WCOA AM-FM and WRRX-FM.

Then Cumulus worked a swap valued at $3.1M with Educational Media Foundation, trading WRQQ-FM Belle Meade TN (Nashville) to EMF in exchange for WLVM-FM Mobile. Simultaneously, Cumulus sold WDLT-FM Chickasaw AL (Mobile) to EMF for $1.6M – essentially keeping the size of its Mobile cluster constant. In addition to WLVM it included WXQW-AM, WBLX-FM, WGOK-AM, WLVM-FM & WABD-FM.

Cumulus also kept the WDLT call letters, just as EMF held on to the WLVM calls.

All of this was protested by ADX Communications.

ADX charged that the move of WADB was a calculated ploy to avoid having to submit a local cluster for approval under the contour overlap rules; additionally, it argued that the Pensacola and Mobile markets are adjacent and really should be considered as one large market; and that even if they are considered separately, Cumulus needed to observe a two year waiting period before it could benefit by the move of WADB.

The FCC was unconvinced by any of ADX’s arguments, writing, “ADX has failed to allege specific facts to indicate that, despite Cumulus’ facial compliance with the Commission’s rules, the Applications pose a risk of harm to competition within the Pensacola or Mobile markets.”

The FCC noted that the market-based ownership rules were put into place in 2003 with full knowledge that many Arbitron markets include overlapping stations, and that many deals have been approved applying market-based analysis. It emphasized that this even includes markets that are embedded into a larger nearby market. That fact, along with the fact that both markets retain a substantial number of competitive owners, gave it no reason to consider Mobile and Pensacola as one market.

It added that in the case of Mobile, EMF and Cumulus were in effect exchanging one FM for another, not implicating the local caps in any way at all.

As for a two year waiting period, Cumulus argued that the FCC agreed that it had nothing to do with a station changing a city of license and ending up in a new market, and everything to do with redrawing the boundaries of a market. Since that was not done in this case, there was no need for a waiting period.

The FCC noted that despite ADX’s allegations as to the motivation for the WADB city of license change, the fact remains that the FCC analyzed the proposal, including the market implications, found it to be in the public interest and granted it. It said ADX should have raised its objections back when that was taking place – the current objection is untimely.

In the end, the ADX petitions to deny were themselves denied and both deals were approved.