Fox Television's $5.4 billion purchase of the Chris-Craft TV group faces only minor obstacles as FCC commissioners begin final deliberations on the deal.
Public advocacy groups have been pushing to either block the 10-station deal or force the company to divest media properties because of conflicts with industry ownership limits and restrictions on foreign control of broadcast stations. (Fox parent, News Corp., is based in Australia.) But the agency isn't expected to take a hard line against the company and now even some divestitures expected when it filed merger documents in September may not have to be made.
The FCC's Mass Media Bureau, perhaps as early as today, is expected to offer its recommendations on the deal and a final decision by the four commissioners could come shortly. The Justice Dept. OK'd it last month.
One of the most contentious issues has been the request of News Corp., the parent of Fox, to add a second station to its New York City coverage area and also keep the New York Post, despite a ban on same-market newspaper/TV ownership. The bureau late last week appeared set to recommend a temporary waiver. It was unclear, however, whether the staff would urge ordering the company to comply by a specific date or keep both properties indefinitely, pending the FCC's broader review of the newspaper crossownership ban.
The commission's two Democrats have opposed open-ended waivers. But with Commissioner Susan Ness scheduled to step down by June 1 and new commissioners possibly taking posts soon after, she and Democrat Gloria Tristani have little power to delay.
News Corp. already has a waiver allowing it to own the Post and WNYW-TV. Advocacy groups say expanding the waiver to include WWOR-TV would concentrate control of the New York market. News Corp. officials contend the Post is losing money, and there aren't buyers.
Opponents say the company is cooking the books. Consumer groups represented by the Georgetown Law Center last week said financial documents submitted to the FCC overstate the Post's financial troubles. For instance, they say the construction of a new Post printing plant is listed as a liability , while the plant itself is carried as an asset on News Corp.'s books. Also, they say the Post "opportunistically" timed a 50% cut in the newsstand price in order to increase short-term losses. News Corp. officials last week declined comment on the complaints.
Sources familiar with the deal say questions about foreign ownership raised by FCC staff also have been resolved, absolving the company of a $127 million-plus tax bill that would have been generated if the deal needed to be redone.
The company's obligation to sell enough stations to get under the 35% cap on a station group's national TV household reach has been thrown into doubt by court battles over the audience limit. With the Chris-Craft deal, national reach of Fox O&Os would be 41%. Fox has agreed to sell one station, KTVX-TV Salt Lake City.