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The Honolulu Advertiser
Posted on: Tuesday, November 10, 2009

FCC requests more information about KGMB-KHNL merger

Advertiser Staff

The Federal Communications Commission is requesting more information about the newsroom merger between KGMB9, KHNL and K5.

In response the Media Council Hawaii’s complaint that the deal sets up an illegal triopoly, the FCC yesterday asked KHNL’s owner, Raycom Media Inc. of Alabama, for unredacted documents relating to the newsroom merger.
The request comes a week after the Advertiser reported that Raycom is obligated to pay $22 million to KGMB’s owner MCG Capital Corp. in seven years.
“Pursuant to authority set forth in section 1.41 of the commissions rules, we request that Raycom and HITV file complete unredacted schedules,” said Barbara Kreisman, chief of the FCC’s video division.
Paul McTear, Raycom’s CEO, could not be reached for comment.
Last month, Alabama-based Raycom merged the news operations of its local stations KHNL and K5 with those of KGMB and laid off about a third of the staff at all three stations.
The move came after the local media council filed a complaint with the FCC, seeking to put a halt to the newsroom merger.
The media council has said that the $22 million payment shows that the newsroom merger is in fact a sale and should be overturned under federal laws barring multiple ownership of television stations in a single market.
In the past, Raycom has said that it does not require FCC approval for its newsroom merger, or shared services agreement, because no ownership stake is changing hands.
In her letter, the FCC’s Kreisman asked Raycom for an unredacted copy of its asset exchange agreement with MCG and an unredacted copy its term loan agreement with MCG.
According to a filing last week with the Securities and Exchange Commission, the term loan agreement calls for a $22 million payment from Raycom in 2016.
Copies of the term loan agreement were submitted to the FCC but redacted information about the $22 million payment as well as information about quarterly interest payments and annual principal payments due under the loan.
Reach Rick Daysog at 525-8064 or rdaysog@honoluluadvertiser.com