WASHINGTON - The Federal Communications Commission has approved the $1.3 billion sale of 35 television stations owned by Clear Channel Communication Inc. to Newport Television LLC, a private equity group, subject to certain conditions.
Newport is an investment group controlled by Providence Equity Partners. The sale will result in a violation of FCC ownership rules in nine markets and will require the divestiture of several stations. The agency announced the decision Thursday night.
The sale was conducted within the context of a much larger plan to take Clear Channel private. The San Antonio, Texas-based company is the nation's largest operator of radio stations. Last month, shareholders approved the $19.5 billion sale of the company to a private equity group led by Thomas H. Lee Partners LP and Bain Capital Partners LLC for $39.20 per share.
The sale of the 35 television stations will mean the new owner will be out of compliance with FCC rules that limit the number of stations one company may own in a single market. The market areas include Bakersfield, San Francisco, Santa Barbara, Fresno and Monterey in California; Salt Lake City; Albany, New York; Jacksonville, Fla., and San Antonio, Texas.
The companies asked the FCC for waivers to operate the stations for six months until it comes into compliance with the rules. The FCC granted waivers in eight of the nine markets, denying the request for Albany.
Providence also owns a stake in Spanish language network Univision Communications Inc. and Freedom Communications Holdings Inc. and is in violation of the newspaper-broadcast station cross-ownership rule in five markets. Providence has said it would divest properties in those markets but has yet to do so, blaming 'volatile conditions' in the credit markets.
The FCC denied Providence the waiver for Albany because it had not yet come into compliance with conditions attached to the purchase of its stake in Univision. The agency is requiring the Providence to do so before it allows the television station sale to be consummated.
As part of its reasoning for granting the waivers, the agency in its decision noted the larger sale, which will result in Clear Channel spinning off a number of radio stations. When Clear Channel announced the buyout in November of 2006, it said it would sell 448 of its 1,150 radio stations, all located in smaller markets, in deals separate from the larger transaction.
Democratic FCC commissioner Michael Copps, an outspoken opponent of the consolidation of ownership in the media, filed the lone dissent to the transaction.
'No one should be under any illusion that Clear Channel's sale of its 35 full-power stations strikes a blow for de-consolidation,' he wrote. After the deal closes, Providence will have 'attributable interests in a whopping 86 television stations and 99 radio stations in the United States' as well as interests in a number of other media companies including MGM Studios, the Hallmark Channel and Warner Music Group.
Copps questioned the recent trend of public media companies being taken private, and asked whether the FCC has enough information about the ownership and control of such groups to determine whether such transactions are in the public interest.