A request from Draper Media to exceed local ownership caps on the central Delmarva Peninsula and create a nine-station cluster — eight of them being FM signals — is facing push back from a competitor in the market.
DataTech Digital, which operates the news/talk simulcast of WGMD(FM), licensed to Rehoboth Beach, Del., and WUSX(FM), licensed to Seaford, Del., argues that expanding to eight FM signals gives Draper too much local market control and hurts fair competition.
Draper Media is attempting a $2.5 million acquisition of five radio stations from Forever Media, which violates the FCC’s current local radio ownership limits in the Salisbury, Del. – Ocean City, Md., radio market, forcing Draper to request an official waiver.
The Lewes, Del.-based DataTech Digital argued that Draper would own a competitive advantage based on numbers alone. It also pointed to an increase in the market’s revenue-share concentration.
Draper Media is attempting to acquire WAFL(FM), WCHK(FM) and WNCL(AM), all licensed to Milford, Del., WAVD(FM), licensed to Ocean Pines, Md., WXDE(FM), licensed to Lewes.
DataTech argued that Draper – under the current rules – is only allowed to own seven stations total in the Salisbury–Ocean City metro with no more than four stations within the AM or FM service.
In addition, with its four FM stations it currently operates, Draper already has an audience share of 21.7% audience share in the metro, according to DataTech’s filing. It said that iHeartMedia has the top audience share at approximately 43%.
The same imbalance holds true for revenue share in the market, according to DataTech. It contended that Draper’s estimated revenue share would rise from 21.6% to 32.9% if the FCC grants the waiver.
In its petition to deny, DataTech also questioned Draper’s pledge that listeners can expect to hear more local news on its stations following the acquisition. Draper also promised to keep in place the programming formats of the Forever Media stations it hopes to acquire.
“Importantly, (Draper) does not submit the specific staffing levels, hours of local news, preserved formats, separate advertising operations or measurable investments,” DataTech said.
Draper then responded in an opposition to DataTech’s request to deny, arguing that both radio listeners and advertisers benefit when local owners like itself reinvest in the market, realize the benefits of scaled operations and therefore improve local service.
“Strong competitors make for better radio, and the transaction will allow Draper to compete more effectively with iHeartMedia, the market’s largest and strongest competitor,” Draper told the FCC.
Moreover, Draper said other competitors will not “suffer” from increased competition, unless those competitors decide not to meet competitive challenges.
“DataTech has very successfully run its two stations with 18 competitors in the market – it operates the eighth-ranked station in the market and is the third-leading station group in terms of revenues – and DataTech provides no argument as to why the transaction will somehow make DataTech less successful against 17 competitors,” Draper wrote.
Draper already has more stations than DataTech, it explained, and it argued that hasn’t stopped DataTech from achieving competitive success in the marketplace.
As for DataTech casting doubt on Draper’s stated intention to improve the local service provided by the additional stations, Draper said it has not submitted (and is not required to submit) detailed plans for operating the stations. However, it expects to “increase the amount of hyper-local content on the stations.”
Drapers concluded its response: “Ultimately, DataTech fails to raise any substantial or material issue suggesting that grant of the applications will harm the public interest.”
[Related: “More Radio Groups Seek Market Waivers to Exceed Strict Ownership Caps”]
