50 High Bids Withdrawn in Auction; Some Owe Big Bucks

50 High Bids Withdrawn in Auction; Some Owe Big Bucks
Author:
Publish date:

Bidding at auction can be costly - even if you don't win.
Some auction participants owe the FCC money for withdrawing bids in the recent FM auction. At least one owes the FCC more than $840,000 for its withdrawn bids.
Out of 456 qualified bidders in the auction, eventually 110 won frequencies, with $147.8 million net winning bids. Nearly 30 frequencies went unspoken for and may be included in a subsequent auction, sources said.
But during the 62 rounds of bidding over 14 days, 50 high bids were withdrawn. Some participants withdrew bids for more than one CP. Steven R. Bartholomew and College Creek Broadcasting withdrew the most, with seven and five bids withdrawn respectively, followed by Cumulus and Fireside Media at four each.
They owe different amounts of money, because under the FCC's auction rules, a bidder that withdraws a high bid during the auction must pay the difference between the amount withdrawn and the amount of the subsequent winning bid.
The amounts due vary widely. Cumulus owes $115,020 and College Creek is liable for $844,950, while Fireside Media owes $17,318 and Bartholomew owes just $6,085.
The FCC won't charge withdrawers if the subsequent winner or any subsequent withdrawn bid equals or exceeds it. If a high bid is withdrawn for a CP that didn't sell at the auction, the bidder would need to make an interim payment of 3% of the net amount of the withdrawn bid. The bank would deduct this amount from upfront payments or down payments on deposit.
But none of the 50 who owe for withdrawing fall into this exemption.
Down payments on the frequencies are due from the winners at Mellon Bank in Pittsburgh Dec. 15.

Related