On May 1, in a novel transaction only made possible by the now-concluded FCC Spectrum Auction, a fast-growing Southern California media player — The Meruelo Group — agreed to pay just $10 million for assets tied to a station within the Los Angeles DMA.
The seller, Hero Licenseco, a few weeks earlier pocketed exactly $146,627,980 for giving up KBEH-63, which broadcasts on digital Channel 24, in Oxnard, Calif. However, it had a channel-sharing deal allowing KBEH’s programming to continue on a DT signal tied to another broadcast TV station in the Los Angeles DMA, Meruelo-owned KWHY-22. Hero decided to sell the channel-sharing agreement to Meruelo.
Now, Hero is backing out of the deal.
An official request for withdrawal of its FCC assignment application was sent Wednesday (5/31) to the Commission from Hero’s legal counsel, Fletcher Heald & Hildreth attorney Daniel Kirpatrick.
With no explanation in its request, Kirpatrick simply requests for the withdrawal of application file No. BALCDT-20170428AAS. This shows the application was filed roughly one month ago; it was accepted for filing on May 3.
Why Hero, a Miami Lakes, Fla.-based company led by Bob Behar, pulled the plug on the agreement is likely the result of an FCC Public Notice on May 8 that sought comment on the arrangement with Hero. Petitions to deny are due Friday, June 2.
Now, the matter is moot. And, speculation is mounting as to whether a flurry of petitions to deny from such companies as Univision, NBCUniversal, LBI Media (owner of Estrella TV), and others active in Southern California media sought to squash the deal.
A representative for Behar did not immediately respond to RBR + TVBR’s request for comment.
Hero’s application is the first to have proposed the sale of a winning relinquishment bidder in conjunction with the implementation of a Channel Sharing Agreement. That’s what triggered the Public Notice.
But, the FCC has now revealed the likely reason for why Hero and Meruelo nixed the deal.
According to media reports, a May 17 meeting with FCC representatives yielded the following admission: Hero and Meruelo sketched out a plan for the FCC’s grant of the application and closing on the sale of KBEH before the channel-sharing agreement could be implemented.
“Therefore the parties had requested consent to assignment of the license of KBEH rather than for consent to channel share,” an FCC public notice states.
That’s the issue in this case.
Meanwhile, the right for a party to sell what some refer to as a “zombie station” — one that is without spectrum and solely reliant on a channel-sharing arrangement — hangs in the balance.
A decision from the FCC on the issue is of high importance to Boston’s main PBS member station, WGBH. On Wednesday (5/31) WGBH was joined by CNZ Communications, Commonwealth Public Broadcasting Corp., Latina Broadcasters of Daytona Beach, London Broadcasting Co., OTA Broadcasting, Rancho Palos Verdes Broadcasters and WRNN License Company in notifying the FCC that it was interfering with the “free transferability” of licenses for stations that submitted winning bids in the Spectrum Auction.
WGBH auctioned off its spectrum for $161,723,929 and is moving to a low-VHF channel.
Meruelo Group’s Meruelo Media on May 9 agreed to acquire Emmis Communications’ heritage CHR/Rhythmic KPWR-FM “Power 106” in Los Angeles for nearly $83 million. The transaction is expected to close in the second half of 2017.
Meruelo Media started acquiring media properties in 2011 when it obtained the oldest unaffiliated Spanish-language television station in the U.S, KWHY-22, from NBCUniversal.
It added radio stations KDAY-FM in Redondo Beach, Calif., and KDEY-FM in Ontario, Calif., in May 2014, acquiring them from Don McCoy’s Magic Broadcasting.