Would you believe that Centennial Broadcasting’s win in court was a direct cause of its loss at the FCC? Not only did it lose its battle with Gary Burns and his 3 Daughters Media over certain terms in a non-compete, it was fined $8K. But Burns didn’t get everything he wanted: he was asking for $325K and dissolution of a station acquisition between Centennial and a third party. Here are the gory details:
Centennial bought WLNI-FM in the Roanoke-Lynchburg market from Burns in 2005. A non-compete which included covenants banning Burns from using certain competing formats, should he return to the local radio scene, was part of the deal. Burns later bought WBLT-AM in the market, and broke the programming ban. Centennial was able to get a court injunction prohibiting Burns from using the format he wished.
The FCC said that by imposing restrictions on Burn’s ability to freely program the station. even court-sanctioned restrictions, Centennial was exercising unauthorized control over the station. The FCC said it does not go over sales transactions with a fine-tooth comb, but in general any covenant including programming restrictions is not allowable.
Burns wanted $325K because the court injunction, and hence the unauthorized control, is ongoing, but the FCC said a base forfeiture of $8K was warranted because Centennial did not take over WBLT’s programming, but merely imposed restrictions on it. And the acquisition of stations from Mid-Atlantic Broadcasting will be allowed as soon as Centennial dissolves the injunction against WBLT.
RBR/TVBR observation: So there you have it – even when both parties agree, there is no possibility of making programming a legal part of a non-compete in the eyes of the FCC. And here’s something to ponder: Can this be extended to on-air talent? If Group X has a non-compete with a recently-departed DJ or news anchor, Group Z puts the DJ or news anchor on anyway, and Group X tries to enforce the non-compete, wouldn’t that also constitute tampering with Group Z’s programming ability?
