FCC looks down on perpetual affiliation contract


When the Steckline family sold off its Lesso Inc. radio stations, it got the buyer to agree to extremely lengthy affiliation agreements with the Steckline family’s agricultural networks. The ability to break off the affiliations was also one-sided in the networks favor. In a declaratory ruling requested by a down-the-line owner who inherited the arrangement, the FCC found it inconsistent with a licensee’s obligation to program the station in the public interest.

The tale begins with Lesso Inc. and Mid-America Ag Network and Mid-America News Network. Both were owned by Lawrence Steckline. The stations were sold to Great Empire, and eventually the networks ownership passed to Gregory Steckline.

Also eventually, Rocking M Radio Inc. came to own the stations. It wished to convert KSMM AM and FM in Liberal KS to Hispanic formats. The network objected, saying they must continue to air Mid-America content and advertisements. The matter wound up in the courts, with Mid-America, under the blanket of Gregory Steckline’s company SCI, demanding restitution from Rocking M.

Rocking M was not allowed to break off its affiliations with SCI, even with notice. The FCC found that this was amounted to a second party telling a licensee how to program its station, which is a form of unauthorized transfer of control. Not that all network affiliation agreements are illegal – if they last for a reasonable duration.

But this affiliation agreement, affective for 40 years, was considered akin to being effective in perpetuity. The FCC declared that Rocking M had to be free to go Hispanic, and since SCI’s programming did not fit that move, Rocking M had to be free to drop it.

As to whether or not SCI was entitled to any redress, the FCC said that was a matter for the courts.

The entire FCC ruling is attached to the right.