There has been renewed interest in the acquisition of Class A and low power television stations this year in advance of possible incentive spectrum auctions to clear room for mobile broadband. But that is not the reason a trio of low powers in Virginia’s Tidewater area are being transferred.
The deal is for WYSJ-CA Yorktown, WVBN-LP Virginia Beach & WJHJ-LP Newport News, all in the Norfolk-Portsmouth-Newport News VA DMA. They are and will remain licensed to JBS Inc. if the FCC approves the transfer.
It involves the 70% interest held by Samuel Jacobs. He would like to send it to partner and 30% stakeholder Neal A. Rosembaum for no consideration, making Rosenbaum the sole stakeholder.
The reason for the transfer is unusually compelling. As stated in a document filed with the FCC explaining the transaction, “On April 13, 2012, Jacobs was convicted of having committed felonies by a federal jury following a trial in the United States District Court for the Eastern District of Virginia. More specifically, Jacobs was convicted of 27 counts of mail fraud, money laundering, engaging in transactions using proceeds from the mail fraud, and forgery. Jacobs is scheduled to be sentenced on September 6, 2012. However, Jacobs plans to file an appeal with the United States Court of Appeals for the Fourth Circuit. Thus, the Order of the United States District Court is not final, and it will not become final until after the conclusion of the appeals process.”
The statement underscored the fact that Jacobs would receive no financial benefit from the transaction and would no longer have any connection to the licenses.
It noted that it would be in the public interest insofar as it would “…protect the interests of JBS’s innocent creditors, of whom there are many.” He stated that only Rosenbaum is in a position to keep the business in operation and maintain the flow of payments to creditors.
Finally, the documented attested to the fact that Rosenbaum “had no role in Jacobs’ criminal misconduct” and furthermore had invested more than $1.3M into the business, and investment that would be a total loss should he be brought down alongside Jacobs.
RBR-TVBR observation: Interesting case – assuming the statements provided with the transfer are on the up-and-up, and there is certainly no face-value reason to believe otherwise, we would hope that the FCC will heed the old dictum that the needs of the many outweigh the needs of the few.
If indeed there is one partner and a number of creditors all relying on the continuation of these stations as going concerns, that must outweigh the inclination to punish a felon (if the conviction stands), particularly since the individual in question is voluntarily abandoning the stations without compensation.
And certainly, this should not be seen as an opportunity to swiftly clear out some television spectrum for auction. Just sayin’.