Tribune Waivers Get FCC Go-Ahead

Federal Communications Commission Grants Tribune Newspaper-Broadcast Cross-Ownership Waivers, Clearing the Way for Its Sale

By John Eggerton -- Broadcasting & Cable, 11/30/2007 4:14:00 PM

As expected, the Federal Communications Commission agreed to grant Tribune the waivers it needs to complete a deal to sell the company to investor Sam Zell and its own employees.

The vote was three to two on party lines, with the Democrats harshly critical.

Tribune has said that it needed to get the waivers of its newspaper-broadcast cross-ownerships in five markets at least 20 business days before the end of the year so that it could get the deal done by Jan. 1 or risk having it fall apart and having the company sold for parts.

After commission Democrats complained that chairman Kevin Martin was trying to condition the waivers on a December vote to loosen the cross-ownership ban, saying that they were prepared to vote within three business days of getting a waiver proposal, Martin took them up on the offer, circulating the item to them Tuesday after a late-night meeting and saying that the vote could be done by Friday.

Four of the five waivers would be for two years, or six months after the end of any litigation over the current or new rules, whichever is longer. A fifth, for the Chicago market, is permanent. Chariman Martin had signaled that the Chicago combo, which was one of a number of markets grandfathered when the FCC first levied the crossownership ban in the mid-1970's--would not be unwound.

While the Democrats pushed for a vote, they voted against the waivers.

Commissioner Jonathan Adelstein called it regulatory hostage-taking, while Commissioner Michael Copps called it "legal subterfuge."

Tribune had asked for indefinite waivers. The commission majority denied them, but Copps said what they did offer was a path to scrapping the crossownership ban entirely, something Martin fell short of in his proposal to loosen the ban in a vote planned for next month.

"[The FCC] denies the waiver request but offers an automatic (and unprecedented) waiver extension as soon as Tribune runs to the courthouse door," said Copps,"lasting for two years or until the litigation concludes – whichever is longer.  Presto!  Tribune gets at least a two-year waiver plus the ability to go to court immediately and see if they can get the entire rule thrown out."

Copps also took issue with the permanent waiver in Chicago as a "brazen reversal of thirty years of settled precedent" and saying there was no reason to grant the permanent waiver given that the stations were not in distress and there was nothing to distinguis it from other combinations that exist or could exist in the future.

Adelstein suggested he could have supported a straight two-year waiver, but not what he saw as the twisted result. "A simple two-year waiver would have accomplished the goals of the majority and the applicants," he said. "But instead, the Order employs certain novel, ill-advised and back-breaking legal gymnastics that will surely leave observers with their heads spinning.

Andrew Jay Schwartzman, president of Media Access Project, which opposed the waivers, joined the chorus of Boos: "The fact that this action was expected makes it no less outrageous," he told B&C. "Tribune was given MORE than it requested in a decision which is deceptively packaged to make it seem more reasonable than it really is.  Nor it is surprising, or pleasing, to see that Commissioners Tate and McDowell have telegraphed their votes on the upcoming ownership rulemaking.  Unless Congress or the Courts intervene, we will have a media landscape which is less democratic and more monolithic."

The commission Republicans who joined Martin in voting for the waivers saw it quite differently. "This is a good day for the 20,000 employees whose jobs depend on the outcome of this transaction," said Commissioner Deborah Taylor Tate, "and for the Chicago Tribune newspaper, a Chicago landmark since 1924."

"I am pleased to support the transfer of control of the Tribune Company to a new team headed by Sam Zell," said Commissioner Robert McDowell. "I am also pleased that today’s Order gives Tribune’s new owners the opportunity to keep their combined newspaper-broadcast properties." 

As an insurance policy, a vote on the Tribune transfer is also on the agenda for the Dec. 18 public meeting, according to sources, but like a lot of FCC items these days, that plan was overtaken by events.