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Martin Proposes Two-Year Tribune Waivers

Company Has Deal to Be Sold to Investor Sam Zell, Employee Group 11/28/2007 04:22:00 AM Eastern

Federal Communications Commission chairman Kevin Martin proposed granting Tribune temporary -- at least two-year -- waivers for its newspaper-broadcast cross-ownership in a handful of markets.

Tribune has said that it needed the waivers by this month or the deal to sell the company to investor Sam Zell and an employee group could unwind. Martin proposes a vote by Friday (Nov. 30)

Martin has said in the past that he wouldn't be opposed to granting the temporary waivers, pointing to his planned Dec. 18 vote on loosening the cross-ownership ban, which would moot all but the waiver for Tribune's ownership of WTXX-TV and the Hartford Courant. That combination is in a market outside of the top 20 and would not pass muster under the chairman's proposal, which is to allow cross-ownership in top 20 markets among other than the top-four-rated stations.

Martin would not say Wednesday whether or not Hartford was included in the proposal.

Commissioner Jonathan Adelstein, echoing earlier complaints, complained again at Tuesday's public FCC meeting that Tribune was being used as a human shield for the chairman's push for that Dec. 18 vote, so Martin likely has his three votes for the waivers, though he would not comment on that Wednesday, saying "I don't know what action finally the commission should take, or what the commission will wind up doing."

Martin told reporters that the timing of the vote was to square it with the 20 business days Tribune said it needs so that its deal could still go through.

Several weeks ago, Martin suggested that he would grant the waivers so long as the FCC was on his timetable for that Dec. 18 vote on loosening the newspaper-broadcast cross-ownership rules. But he also said that if the commission didn't stay on that timetable -- which commission and Hill Democrats say is a rush to judgment -- "then we should be applying the rules as they apply now."

That had led to the "human shield" complaints, which Martin said Wednesday were off base.

But Wednesday, Martin also said that whether or not there are new or old rules on Dec. 18, he was recommending granting the waivers, which would be for two years or six months after the end of any litigation over the current or new rules, whichever is longer.

"I think it is fair to recognize that whether we move forward on the 18th under the new rule or under the old rules," he said, "these are rules that have been under significant litigation back and forth, and I don't think it is appropriate to require companies to be divesting properties that would be going on."

Tribune had asked for indefinite waivers, but Martin said he did not think that was appropriate. Somewhat ironically, Tribune could trigger a two-year waiver by challenging the decision not to grant it an indefinite waiver, since that would qualify as litigation, Martin confirmed.

That means that rather than wait for the Dec. 18 crossownership vote, Tribune could conceivably sue immediately after the Friday vote and not have to divest in Hartford--Martin has suggested it would probably have to do so.

Martin did not address that, but he did say that the crossownership in Chicago--WGN and the Tribune--would come under a separate analysis as one of the combos grandfathered when the crossownership ban was adopted in 1975. He said Wednesday he expected that combo would remain grandfathered.

Asked if other companies could seek a similar two-year waiver policy, he said he know of no other companies in the same situation with a deadline for a deal. "There are unique circumstances in the fact that they have a transaction in front of us that is implicated by a rule that the court has already supported the commission's removing and that I have proposed at the same time a change in that rule that would accomodate almost all of the properties involved in the transaction."

Tribune Chairman Dennis FitzSimons was understandably buoyed by the news. “We are pleased with Chairman Martin's proposal which, if approved, will enable Tribune's going-private transaction to close by the end of the year. This will allow Tribune’s local media outlets to continue their commitment to outstanding journalism and
service to our readers, viewers, listeners and advertisers.”

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