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Audacy: Concerns Over Foreign Ownership Are Moot

It asked the FCC to reject petitions challenging emergence from bankruptcy

Audacy says challenges to its emergence from bankruptcy should be dismissed because its level of foreign ownership is now below the FCC’s threshold.

In approving the bankruptcy plan recently, the commission agreed temporarily to waive its 25% cap on foreign ownership for broadcast companies.

Audacy has now asked to withdraw its waiver request. It said foreign entities had been expected to control 27.2% of its equity and 31.4% of the voting interest; but after transfers of stock, those numbers are now 20.2% and 24.5% respectively, below the FCC’s threshold.

“Accordingly, the declaratory ruling requested in the petition no longer is necessary, and Audacy respectfully withdraws the petition,” Audacy Executive VP Andrew Sutor wrote in the filing.

Critics of the Audacy plan have cited worries of foreign influence and said the commission gave the plan a “Soros shortcut” for political reasons. They also say they worry about potential liberal bias in Audacy content.

Supporters have said the commission has granted foreign influence waivers in the past without problems. And they say the FCC has no role in regulating any politics that a broadcast company may favor in its programming.

The FCC approved Audacy’s reorganization plan along a 3–2 party-line vote last fall.

Several petitioners, including the Media Research Center, subsequently asked the FCC to reverse its approval due to concerns over the foreign ownership levels and other issues.

In its petition, the Media Research Center said it was concerned over the FCC putting off a required foreign ownership review and feared that Audacy’s new majority owner would imprint a liberal agenda on the new Audacy.

“With the purported concerns raised in the petitions regarding foreign ownership becoming entirely moot, Audacy reiterates its request that the commission dismiss the petitions to deny the petitioners request of relief,” Sutor wrote.

Laurel Tree Opportunities Corp., an investment firm with ties to billionaire philanthropist Geroge Soros and Soros Fund Management, now is the largest shareholder. The Soros-connected company purchased up to $400 million of Audacy debt and was repaid with stock in the restructured media company. The Soros family is estimated to hold a 40% stake.

“There is no question that George Soros and his affiliated businesses are looking to control these radio stations to advance their particular brand of activism,” MRC said in its petition for reconsideration.

Incoming Chairman Brendan Carr cast a no vote against the plan, complaining that the commission had adopted a “special shortcut” to approve it. Carr has since been quoted by several media outlets saying the decision will receive fresh scrutiny.

The bankruptcy reorganization process allowed Audacy to trim its debt from $1.9 billion to about $350 million.

Jerry Del Colliano, writing in his online newsletter Inside Music Media, reported that an Air Force veteran and shareholder in Audacy claims he lost most of his $700,000 retirement money due to the reorganization, “while George Soros got a sweet deal on debt.”

Alan Adams filed an objection to the bankruptcy proceeding in the Southern District of Texas Bankruptcy Court. He claims that in some cases, valuable FCC licenses held by Audacy had been valued at $0. “Assets, a few of which were sold immediately after declaring bankruptcy, were inaccurately valued or admitted from disclosures,” Adams wrote in the objection letter.

[Related: Audacy Asks Text Judge to Wrap Up Bankruptcy Case]

 

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