FCC Near Approving Cumulus Purchase of Citadel
The FCC likely will soon approve a $2.4 billion radio deal to form a larger No. 2 company in the industry. The Media Bureau is expected by agency and commission officials to be nearly ready to issue, as soon as this week, an order letting Cumulus Media buy Citadel Broadcasting.
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The bureau likely will approve the deal on delegated authority, meaning commissioners won’t be voting on the takeover, industry and agency officials said. They said about a dozen station divestitures will be required in about as many markets. That’s more than the three the Justice Department required the combining companies to divest in a consent decree last week (CD Sept 12 p14). The DOJ divestitures are so the markets for advertising in the Harrisburg, Pa., and Flint, Mich., area are not too concentrated, while any FCC required sales would be so that the company complies with local ownership limits.
The transaction, agreed to in March, would increase the number of Cumulus’ stations by about 60 percent to about 560, the companies have said (http://xrl.us/bmc7tt). Bureau officials continue to view the deal as relatively straightforward, because no waivers of FCC rules are involved, said agency and industry officials. The forthcoming bureau order likely will require Cumulus to put into a divestiture trust all stations that would exceed commission ownership limits, agency and industry officials said. Representatives of the bureau and Cumulus declined to comment.
Cumulus has said it will try to sell 14 stations in 11 markets, to comply with commission ownership rules (CD June 1 p4). Limits on the number of stations a company can own depend on market size, with a maximum of eight in top cities. Two stations DOJ required Cumulus to sell -- Pennsylvania FM broadcasters WWKL Palmyra and WCAT Carlisle -- also must be put into a divestiture trust under the company’s plan to the FCC. The other stations the commission will likely require Cumulus to divest so it will abide by ownership caps don’t appear to be those DOJ required the company to jettison.
No one petitioned the FCC to deny Cumulus-Citadel, agency and industry officials confirmed. Free Press and the Future of Music Coalition had expressed some concerns about the deal, without seeking outright rejection of it, according to earlier filings in docket 11-66 (http://xrl.us/bmc7ud). Cumulus CEO Lew Dickey has committed that the trust getting the 14 stations to be divested will use all “commercially reasonable efforts to sell the stations to ‘eligible entities,’ as defined in FCC rules, as well as entities otherwise controlled by minorities and women.” The properties also are in markets including Dallas, Nashville, New York and Kansas City, Mo.
It’s “encouraging” to Free Press that Cumulus will need to divest stations in areas where it would exceed radio ownership caps after buying Citadel, said Policy Counsel Corie Wright. “But no one should kid themselves into thinking that is a bona fide public interest benefit. It’s nothing more than Cumulus abiding by -- and the FCC enforcing -- existing rules.” It’s a “good intention” by Cumulus to try to sell those stations to minority buyers and members of other underrepresented groups, and Free Press hopes “it translates into a tangible action and benefits,” Wright continued.