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FCC Places Limits on Station Trusts

Agency places two-year limit on Townsquare Media to find buyers

The FCC is letting broadcasters know with its latest decision the era of unlimited time that stations can be parked in a trust is over.

The agency cleared Townsquare Media’s plan to move three Cedar Rapids, Iowa, FMs into a trust to complete its $238 million deal with Cumulus Media. In doing so, the Audio Division gave Townsquare Media two years to find a buyer for the stations in the trust with a requirement to appraise the FCC every six months of its efforts to market the assets.

That’s a big change from 2008 when Clear Channel was allowed to place 57 stations into the Aloha Trust to comply with ownership limits. Five years later, 37 of those stations have been sold and assignment applications are pending for the sale of two more stations. Likewise, in a 2011 transaction involving Cumulus, licenses for 15 radio stations were assigned to a trust with no specific time limit on duration. Licenses for eight of those stations currently are held by a successor trust, according to the commission.

Why the change now?

Audio Division Chief Peter Doyle says in the decision the economy has improved compared to 2008. “The credit market for broadcast transactions appears to have substantially, if not fully, recovered,” states Doyle.

The FCC now finds that a “reasonable limitation” on the duration of a divestiture trust will best serve the public interest.