The buyer and seller of WIAC-FM in San Juan PR have both been found liable for a $3K FCC fine for failure to disclose all the pertinent details in an application and contract filed back in 2007. The parties, Luis A. Mejia (seller) and MSG Radio Inc. (buyer), agreed to transfer WIAC for $4M, but were soon flagged by petitioners who felt the transaction should be denied due to lack of candor. That was because they failed to disclose another transaction in which tangible assets of the same station were going from Mejia’s Bestov Broadcasting to Madifide Inc. for $12.5M, and also failed to disclose a shared services agreement between Madifide and MSG. The FCC noted that absent an FCC waiver, local ownership caps prevented Madifide from owning WIAC-FM outright.
Mejia and MSG had deliberately omitted this information as proprietary and not germane to FCC consideration of the $4M license/asset transfer, but the FCC said otherwise, that the information was indeed critical to a full understanding of the transaction. So both Mejia and MSG have been instructed to make out a check for $3K apiece.
RBR/TVBR observation: This case involved omission of details of a pertinent agreement related to the main transaction at hand. We occasionally see applications where the entire sales contract is withheld as proprietary. It isn’t. If you’re cutting a deal, save yourself some trouble and put the facts, including the price, on the record.