Would News Corp. Need FCC Help to Keep Stations, Newsday?

Media Giant Would Own Two TV Stations, Two Local Newspapers in New York Market

By John Eggerton -- Broadcasting & Cable, 4/22/2008 4:31:00 PM

There seems to be some question as to whether News Corp. would have to either apply for a Federal Communications Commission waiver or divest its New York TV stations if it decides to buy Newsday.

The company already owns two TV stations in the New York market and one local newspaper, the New York Post, as well as national paper The Wall Street Journal. Old FCC rules prevented News Corp. from owning the stations and paper, but it got a financial-distress waiver because of the ill health of the Post. It is allowed to own the Journal because that is considered a national paper rather than a local one.

Even though there are FCC limits on newspaper-broadcast cross-ownership, the company could buy Newsday without the FCC having to approve the deal because no TV or radio license is involved. The FCC does review deals involving newspapers buying stations because those licenses change hands. In addition, owning both would become an issue at license-renewal time no matter whether it was a newspaper buying a broadcast outlet or the other way around.

News Corp.'s licenses are currently up for renewal in New York --WWOR and WNYW-- If the FCC applies the new cross-ownership rule it adopted in December, News Corp. would likely need either a waiver or would have to divest, since the rule specifically said it allows the ownership of one station and one newspaper, not two stations.

Of course, News Corp. could wait until its licenses were renewed -- it filed for renewal in February of last year, but there were various challenges to that renewal from activist groups. If so, the issue would not come up again for another eight years -- the term of a license.

The new cross-ownership rule went into effect March 20, but it has been challenged in court by broadcasters as too little deregulation and by anti-consolidation activists as too much.

Andrew J. Schwartzman of consolidation critic Media Access Project said that if there is a Newsday deal, it should face "a very strong presumption against it."

He pointed out that owning two stations and just one paper, as News Corp. does, is already outside of the new cross-ownership rules.

In a statement, Free Press, which is challenging the News Corp. waiver in court, said the FCC should put the kibosh on any deal. "The sale of Newsday to News Corp. is a clear violation of even the severely weakened FCC limits on how much media one company can own in one market," the group said. "This sale should not be permitted under any circumstances. New York, like the rest of America, needs more media choices, viewpoints and competition -- not more consolidation.”

An FCC spokeswoman had not returned a call for comment at press time, but the commission does not generally comment on matters not yet before it. Fox was not commenting on the permutations. It is likely that lawyers for both were huddling over the issue. An FCC source said that was the case on its part.

If the FCC does condition the renewal of the licenses, News Corp. would likely appeal that to the full commission, then to an administrative law judge, and finally to the D.C. Circuit.