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Emmis Succeeds in Efforts to Transfer Austin Stations to STI Telecable

FCC granted the requested local ownership rules waiver

The long-awaited move to sell six Emmis radio stations in the Austin market has gotten the final green light from the Federal Communications Commission.

Earlier this month the FCC granted a waiver request submitted by Emmis Austin Radio Broadcasting Co. to transfer control of its licensed stations in the Austin Nielson Audio Market to Sinclair Telecable. Together, Sinclair and Emmis operated the cluster of stations for the last 16 years. In June 2019, it was announced that Emmis would sell the radio cluster for $39.3 million.

But first, the group had to run the FCC waiver gauntlet.

The waiver was being requested because, under the FCC’s local ownership rules, a licensee in the Austin market can have an attributable interest in up to seven commercial radio stations, with not more than four being in the same AM or FM service. Up until now, Emmis had interest in five FM stations in the Austin market, which is one more FM station than is permitted under the commission’s rules.

Of note: FCC rules allowed for common ownership of those six stations under local ownership rules in effect in 2003; that combination was grandfathered in when the latest local ownership rules were modified. According to the commission,  grandfathered combinations are allowed to continue as long as the station’s licensee does not propose a change that creates a new violation of the ownership rules. If such a change is proposed, however, that grandfathering terminates and the licensee must come into compliance with the new multiple ownership limits.

In this particular instance, Emmis needed a waiver from the commission to grant the application — or the partnership would have to divest one FM station in the market.

In requesting the waiver, Emmis said that the proposed transaction is not a sale of the partnership of its Austin stations but more akin to a corporate restructuring since Emmis and Sinclair Telecable are co-partners. The licensee argued that the continued grandfathering will serve the public interest by allowing the sustained operation of a thriving cluster, one which Emmis said offers market listeners diverse and distinct formats by one of its long-standing owners.

In this case, the FCC agreed.

The commission granted Emmis’ waiver request of the local ownership rules, saying that the move would not compromise viewpoint diversity and competition in the Austin market. The FCC also said that the structure of the Austin market itself favors grant of the waiver: The market is already highly diverse in terms of ownership and programming, the commission said, with at least 21 owners and 28 distinct program formats.

The move now gives Sinclair Telecable 100% ownership of those five stations, including KLBJ(FM), KGSR(FM), KLZT(FM), KROX(FM) and KBPA(FM).

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