Pandora is now cleared to become a broadcast station owner.
The Media Bureau has approved Pandora’s purchase of KXMZ(FM), Box Elder, S.D., for $600,000 from Connoisseur Media and denied an objection from ASCAP.
The approval of the station sale was expected as the commission recently approved a waiver so the parent company of the Internet audio firm could exceed the 25% foreign media ownership benchmark. FCC Chairman Tom Wheeler had indicated at the NAB Show in April that he’s in favor of loosening foreign ownership limits to spur foreign investment in U.S. broadcast companies and vice-versa.
The bureau subsequently approved Pandora’s petition in May with conditions, like submitting information on how it will certify its foreign ownership.
Pandora said when it announced the station purchase in 2013 it wanted to become a broadcast station owner in order to reduce its streaming royalty rates. ASCAP said that meant Pandora wasn’t “sincere” about becoming a broadcaster.
ASCAP and Pandora are involved in litigation over performance royalties and ASCAP objected to the station purchase. In May, ASCAP told the agency the information Pandora supplied only confirms the deal is in the public interest, but doesn’t fulfill the stronger proof needed for foreign ownership certification.
Connoisseur and Pandora had a clause written into the sales agreement that allowed either of them to walk away from the deal by June 10 of this year; ASCAP called that a “red herring” because neither was likely to cancel the transaction at this point, especially because of the local market agreement by which Pandora has been operating KXMZ since 2013.
Pandora argued that it agrees with the commission’s arguments in favor of granting the foreign ownership waiver, that the Internet audio firm’s current ownership situation serves the public interest and “does not raise immediate concerns regarding foreign interest or control.”
In the decision signed by Media Bureau Chief Peter Doyle, he wrote that ASCAP doesn’t fit into the traditional definition of an aggrieved broadcaster who can fight a transaction since it’s not a broadcaster, a regular listener or even a listener within the station’s contour. ASCAP submitted a filing by someone who claimed to be a station listener, however both Pandora and the FCC said it was illegible and the filing didn’t state the person lived in the market nor if the person was a regular KXMZ listener.
The upshot? ASCAP hadn’t proved its case and the bureau denied its objection, allowing the Pandora-Connoisseur transaction to close.