Gray's WAGT Can Enter FCC Spectrum Auction - Broadcasting & Cable

Gray's WAGT Can Enter FCC Spectrum Auction

Court grants emergency stay
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Gray Television's WAGT Augusta, Ga., will be able to elect to participate in the spectrum auction after all.

John Ray, general manager of the station, sent an email to staffers late Wednesday night with the news that the Georgia Supreme Court had granted Gray's emergency motion to stay a lower court injunction that would have prevented it from participating.

Stations that have applied to the auction—WAGT did—have until March 29 to declare and the lower court decision called into question whether WAGT could do that.

It was a victory for the FCC, which benefits from having Gray participate in the auction given its high value—it had a high opening bid price given how much interference could be reduced by reclaiming its spectrum, one of the key inputs. (WAGT's opening bid price in the auction is $210,431,700, the second highest opening price in the market).

The court did not vacate the stay entirely but essentially granted an emergency stay of the stay, though it did not agree to expedited the hearing on the lower court stay, which Gray had asked for.

Media General had sued to block the unwinding of a JSA between Media General and WAGT under its contract with Schurz, from which Gray was buying the station. The FCC made unwinding that JSA a condition of its merger approval.

The FCC had weighed into the case, saying Media General could be jeopardizing its license by seeking a court remedy—preventing the unwinding of the JSA and WAGT's auction participation—contrary to the FCC deal conditions.

In a letter to a Georgia district court two weeks ago, the FCC and the Justice Department said that Media General violated FCC rules when it sought and received an injunction preventing: 1) the termination of the joint sales agreement between Media General and Schurz Communications' WAGT Augusta, and 2) WAGT's participation in the FCC's upcoming incentive auction.

As part of the FCC's Feb. 12 approval of the sale of some Schurz stations to Gray, including WAGT, Gray agreed to terminate the Media General JSA and the FCC made that a condition of the approval.

Media General then sued to defend its contractual relationship, including by blocking dissolution of the JSA contract and WAGT's auction participation. The court granted the injunction.

Gray signaled it was putting the station in the auction and even said it planned to shutter it beforehand, but the FCC actually required it to keep WAGT on the air pending the auction outcome.

"I am very pleased to share with you the great news that the Georgia Supreme Court issued an order GRANTING Gray’s emergency motion to stay the injunction previously issued by the Superior Court of Richmond County," Ray said in the email.   

"Media General and Gray are cooperating to facilitate the smooth return of WAGT to Gray's operation and control. The logistics are complicated, and it may take a few days to accomplish the transition.  We will, and we know that WJBF will, treat each other with complete professionalism and graciousness through this transition and afterward.  At the end of the day, WJBF and WRDW share the same deep passion and commitment to this community, and nothing will change that.

The litigation will continue, but for now, Gray will be the owner as well as the operator of WAGT.  I will continue to update you as developments occur.  In the meantime, THANK YOU for your support, resolve, and patience through these difficult few weeks."

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