The Media Bureau says that the 2009 deal that resulted in Raycom running three stations in Honolulu, including the NBC and CBS affiliates, did not violate the law or commission precedent as a local opposition group had contended. However, the bureau is concerned about such arrangements and said it would look into them in the context of its ongoing review of the broadcast ownership rules. It also fined MCG Capital, Raycom’s partner in the deal, $10,000 for violating public file rules.
Rejecting the complaint of a local group opposed to media consolidation, the FCC Mass Media has decided — somewhat grudgingly — not to undo a deal that has resulted in Raycom Media’s controlling three TV stations in Honolulu (DMA 71), including the CBS and NBC affiliates.
However, in the 16-page ruling released last Friday, the bureau fined Raycom’s partner in the deal, MCG Capital, $10,000 for failing to maintain and provide access to public inspection files at one of the stations.
And the bureau cautioned that it shares concerns about local broadcast concentration and will address them in its ongoing review of broadcast ownership rules.
“Moreover, … our decision here does not preclude us from considering whether this or similar transactions are consistent with the public interest within the context of individual licensing proceedings,” it said.
In August 2009, Raycom, owner of KHNL (NBC) and KFVE (MNT), announced that it had reached a two-part agreement with MCG Capital Corp., owner of KGMB (CBS), under which KFVE and KGMB would swap affiliations and call letters.
Raycom’s KFVE would become CBS affiliate KGMB and MCG Capital’s KGMB would become MNT affiliate KFVE.
At the same time, under shared services and other agreements, Raycom effectively took over the day-to-day-operations of MCG Capital’s KFVE, assuming some back-office duties, producing newscasts from its own studios and selling ad time.
In consideration for agreeing to the swap, Raycom agreed to pay MCG Capital $22 million over seven years ending in 2016. Meanwhile, MCG Capital would pay Raycom $208,333 a month for running KFVE.