The radio industry is experiencing a drop in advertising due to macroeconomic issues and uncertainty about future interest rates, said a panel of radio CEOs at the National Association of Black Owned Broadcasters. Marketing budgets are among the first things to be slashed when a company wants to cut costs, said iHeart Media CEO Robert Pittman. Radio groups need to “become more in tune with how people buy advertising now” and provide consumer data in the way digital companies do, he said. Any business that's affected by interest rates isn’t buying ads at the moment, said David Kantor, Urban One CEO-Radio Division and Reach Media. Perry Publishing and Broadcasting CEO Kevin Perry said increasing audience fragmentation and competition from other sources of audio content are exacerbating the problem. The advertising slump was the result of a “perfect storm” of circumstances, said Beasley Media CEO Caroline Beasley. When advertising budgets are limited due to “a teetering economy,” radio stations that serve minority populations have a harder time getting ad dollars, Perry said. Pittman said he believes the industry will see an improvement in Q4. Beasley, Pittman and Kantor said the radio industry should embrace AI. AI technology could eventually replace radio ad sellers and agency ad buyers, with customers using algorithms to calculate optimal ad buys, Kantor said. Companies that don’t use AI “will be left behind,” Beasley said. IHeart is unlikely to use AI to replace on-air talent but could use it to provide services that would otherwise be prohibitively expensive, such as translating podcasts into other languages, Pittman said. Perry, whose company is much smaller than the other three, said radio should instead embrace its connection to listeners and local businesses. “We’re in the people business,” he said.
Neither the retirement of Fox Corp. Chair Rupert Murdoch (see 2309210059) nor a recent administrative law judge decision in a hearing proceeding for a Tennessee radio station (see 2309150056) has much bearing on whether the FCC will take up a challenge to a Fox-owned station’s license (see 2307060065), said Public Knowledge Senior Vice President Harold Feld in a post Thursday on his blog Wet Machine. The Media and Democracy Project’s petition to deny targets Murdoch as unfit to own a license, but even after retirement he will still own enough interest in Fox to be considered to have control of the station under FCC rules, Feld said. Murdoch’s retirement announcement also said he will continue to be involved in Fox's day-to-day operations, Feld said. The recently concluded hearing proceeding on whether Joseph Armstrong was fit to hold the license of WJBE Powell, Tennessee, after being convicted of lying on a tax form doesn’t shed much light on what the FCC is likely to do with MAP's petition because they involve different processes, Feld said. Armstrong’s hearing was a revocation hearing, where the FCC bears the burden of proof, but the Fox proceeding is a license renewal, he said. “Even if the case were precisely on point, the precedential value would be somewhat weak,” Feld said. The MAP petition “is still a long shot overall,” Feld said.
A hearing over allegedly false transfers of control by the owners of several low-power radio and television stations is set for Oct. 1, 2024, said an order from FCC Administrative Law Judge Jane Halprin posted in docket 23-267 Monday (see 2308110063). The proceeding concerns allegations Antonio Guel transferred the stations to his niece, Jennifer Juarez, to avoid including the stations in a bankruptcy filing, although he remained in control of them. Since the hearing designation order's (HDO) August release, Juarez has waived her right to participate in the hearing and surrendered the licenses, and Guel has submitted documentation showing that his company targeted in the HDO, the Hispanic Christian Community Network, has been dissolved. In Monday’s order, Halprin ruled that due to those events, the hearing proceeding would continue forward on only some of the matters originally listed in the HDO, focusing on Guel’s alleged misrepresentation and fitness to hold an FCC license. In Monday’s order, Halprin also noted broadcast attorney Dan Halpert’s representation of both Juarez and Guel, along with the possibility he could be called as a witness in the proceeding, could create conflicts of interest and mean Guel would need another attorney. “Resolution of any client conflicts is primarily Mr. Alpert’s duty, but the Presiding Judge raises the issue at this early stage of the proceeding to forestall any potential future delay that conflict issues might cause,” the order said. Alpert didn’t comment.
The FCC Media Bureau granted Alpha Media’s request for a declaratory ruling allowing it to have up to 100% aggregate foreign investment, said an order in Thursday’s Daily Digest. The Media Bureau in 2021 approved Alpha’s chapter 11 bankruptcy reorganization with a waiver that the company must petition for foreign ownership declaratory ruling once it emerged from the bankruptcy. With Thursday’s ruling, the Media Bureau approved the final step of the company’s bankruptcy plan, after which it will be owned by several funds and equity groups, including the Cayman Islands-based ICG North America Holdings and the British Virgin Islands-based BigSur Capital Partners Three. Several entities based in the U.K. and Jersey are also affiliated with ICG, the ruling said. Alpha’s request drew no objections or comments, and the Committee for the Assessment of Foreign Participation in the U.S. Telecommunications Services Sector found no security concerns, the ruling said. “We find that the public interest would be served by permitting foreign ownership of New Alpha in excess of the 25% benchmarks,” said the ruling.
Apple City Broadcasting will pay a $1,000 fine for failure to get FCC approval for a non pro forma transfer of control after three of its shareholders died between late 2020 and early 2022, the Media Bureau ordered Monday. Apple City is licensee of WACB-AM and WTLK-AM, both Taylorsville, North Carolina.
Starting Oct. 2, the FCC Media Bureau will discontinue issuing the daily lists of filings submitted or actions taken using the consolidated database system, and all remaining filings that were still being submitted through CDBS must instead be submitted through the licensing and management system (LMS), said a public notice in Wednesday’s Daily Digest. The Media Bureau completed the transition from CDBS to the LMS in July. If there are future filings or actions involving pending applications that were submitted using "CDBS, the Media Bureau will announce those matters in the relevant LMS ‘Applications’, ‘Actions’ or ‘Pleadings’ Public Notices,” the bureau said Wednesday.
An FCC rule change updating rules for low-power TV stations and translators took effect Tuesday, said a public notice in docket 03-185. Approved in April, the order updated the language of FCC rules for clarification and to reflect the digital transition. Portions of the rules took effect June 12, but others required Paperwork Reduction Act approval from the Office of Management and Budget, which was handed down Tuesday.
Tennessee radio station WJBE(AM) Powell -- the only black-owned station in its area -- won’t lose its license over a 2016 felony tax fraud conviction by owner Joseph Armstrong, ruled FCC Administrative Law Judge Jane Halprin Thursday. “The station has an overall positive record of public service and the evidence suggests a sincere commitment to its listeners,” wrote Halprin. “As a result, the Presiding Judge finds that Mr. Armstrong’s felony conviction does not warrant revocation of Arm & Rage’s license for WJBE.” said the decision. Armstrong -- a former Tennessee state legislator -- was convicted over failing to include $300,000 in profits on a tax form. The profits came from Armstrong buying and then flipping cigarette tax stamps as the legislature increased the state’s cigarette tax. Armstrong committed the crime in 2007, bought the station in 2013, and was convicted in 2016, which he reported to the FCC 14 days later than required. The FCC granted WJBE’s renewal in 2020, and only designated the matter for hearing in 2022. In her decision, Halprin rejected Enforcement Bureau arguments that the EB should have been permitted to investigate other possible tax issues involving Armstrong. “In pursuing wide-ranging discovery regarding other tax issues, the Enforcement Bureau essentially asked Arm & Rage to perform a self-audit to identify other potential federal income tax violations,” wrote Halprin “This proceeding is not intended to relitigate the crime or second-guess the trial court’s findings.” Halprin also pushed back on EB arguments that minor violations of FCC procedural rules by the station showed a pattern of dishonest behavior, and denied what she called “overly broad” discovery requests about possible rule violations. The station’s FCC compliance is relevant to the case but “it does not follow” that “virtually unlimited discovery regarding other potential violations of the Commission’s rules was warranted.” The EB should have presented additional evidence to justify forays into Armstrong’s tax history and FCC compliance, she said. “Absent Mr. Armstrong’s felony conviction, it is doubtful that this matter would have been designated for hearing,” Halprin wrote.
The FCC’s authority over broadcast license transfers doesn’t apply to Gray Television’s 2020 purchase of another broadcaster’s CBS network affiliation because no licenses were transferred, said Gray's reply brief late Wednesday (docket 22-14274) at the 11th U.S. Circuit Court of Appeals. The FCC’s rule barring affiliation swaps, called Note 11, “is a freestanding and unbounded prohibition on certain programming purchases that has no basis in the FCC’s licensing authority,” said the brief. Congress didn’t grant the agency power over sales of network affiliation and the FCC “cannot fall back on” arguments that it has ancillary authority over other transactions “whenever it wants to do more than Congress allowed,” Gray said. By interpreting Note 11’s language against swaps to also apply to affiliation purchases and applying the rule to Gray’s deal with Denali media, the FCC “improperly redefined and expanded” Note 11 to bar any deal that creates a new top-four combination while the text of Note 11 states that the rule applies to transactions that result in a broadcaster owning two top-four stations. Since Gray already owned two top-four stations in the Anchorage market in 2020, it has argued that Note 11 doesn’t apply. With this interpretation of Note 11, the FCC “violated the principle that an agency must give fair notice of prohibited conduct before imposing penalties,” Gray said. The agency also “botched” the calculation of the $518,000 forfeiture by adding to the penalty for every day of the violation and adding the explanation that the violation was egregious “only after Gray responded to the NAL,” said the brief. “None of the FCC’s unauthorized transfer of control precedents supported the imposition of such a penalty,” Gray said. The FCC’s assertion it considered Gray’s efforts to mitigate the violation in calculating the forfeiture is an “empty boilerplate statement" and the agency provided only “incompetent evidence” that the Denali transaction led to substantial economic gain for Gray, the brief said.
A recent FCC Media Bureau Audio Division notice of apparent liability confirms that agency permission isn’t needed for gradual changes in noncommercial educational broadcaster governing boards, said Wiley broadcast attorney Kathryne Dickerson in an interview and blog post. In an August NAL proposing a $20,000 forfeiture (see 2308280071) for Olympia, Washington, translator owner Northwest Rock N Roll Preservation Society (NWR), the Audio Division rejected an accusation that the broadcaster had changed ownership without the FCC’s go-ahead because the multiple changes to the NWR board had happened over time rather than all at once. “We find that, because the nature of the changes to the NWR board were gradual, no unauthorized transfer of control of NWR occurred,” said the NAL. Though the agency made a similar ruling in a tentative conclusion in a 1989 notice of inquiry, it has never adopted the policy as a formal ruling, Dickerson said. In the August NAL, the agency said that though it isn’t bound by the 1989 NOI, the FCC “has hewed to them in later policy-making decisions.” With biennial ownership reports due soon, that acknowledgment should give some certainty for many NCE stations unclear on their status, Dickerson said. The decision is particularly notable because the NWR board gradually underwent a total changeover between 2010 and 2022, without FCC authorization, Dickerson said. The NAL's providing clarity on the agency’s view of such changeovers could save many NCE organizations time and money in preparing their ownership reports, Dickerson said.