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The Honolulu Advertiser
Posted on: Wednesday, October 7, 2009

Media council fights TV merger


BY Rick Daysog
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser

KGMB9, KHNL and K5 announced in August that they plan to merge newsrooms later this month, simulcast some news programs and cut about a third of their staff.

ADVERTISER LIBRARY PHOTO | August 2009

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Lawyers for the U.S. Justice Department's antitrust division will meet this week with a local consumer group opposing the merger of news and business operations at KGMB9, KHNL and K5 television stations.

The meeting comes as the group, Media Council Hawaii, is filing a complaint today asking the Federal Communications Commission to put an immediate halt to the merger, which will go into effect later this month.

"We are going to be challenging this at both the FCC and the Justice Department," said Chris Conybeare, the council's president.

KGMB, KHNL and K5 announced in August that they plan to merge newsrooms, simulcast some news programs and cut about a third of their staff.

The so-called shared services agreement will result in the terminations of all but four of KHNL's on-air staff as well as a number of KGMB's technical and newsroom employees.

Raycom Media of Alabama, which owns KHNL and K5, has said that the deal doesn't require regulatory approval because there's no change of ownership and the licenses of the stations aren't being transferred.

Such deals have been implemented in 20 other markets around the country with little controversy, Raycom has said.

KGMB is the local CBS affiliate and KHNL is Hawai'i's NBC affiliate.

In a 26-page complaint with the FCC, the council plans to argue that the deal in essence transfers control of KGMB from its current owner MCG Capital Corp. of Virginia to Raycom.

Such a transfer requires FCC approval, the council has said.

The council's lawyer, Angela Campbell of The Institute for Public Representation at Georgetown Law in Washington, D.C., will ask the FCC to put a temporary hold on the agreement and will request an investigation into whether the deal violates federal laws barring joint ownership of television stations in a single market.

Campbell, formerly an attorney with the Justice Department's antitrust division, also will allege that the deal is anticompetitive since it gives Raycom a 44 percent share of all television advertising revenues in the Honolulu market, based on figures from the Television Bureau of Advertising.

Local Fox affiliate KHON, the state's largest television, has about 27 percent of the local television advertising market while KITV, the local ABC affiliate, has a 20 percent marketshare, according to figures provided by the media council.

The deal will allow Raycom to increase ad rates and exercise editorial control over three stations, the council has said.

Raycom CEO Paul McTear previously said that KHNL, KGMB and K5's combined share of the local ad market will be less than 40 percent.

Conybeare said Campbell will meet this week with the Justice Department's attorneys to discuss the potential antitrust implications of the shared services agreement.

Conybeare said the meeting does not mean that the Justice Department has agreed to investigate the deal. A spokesman for the Justice Department could not be reached for comment.