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FCC Rejects Petitions in Dothan Deal

Agency doesn’t see collusion between Holladay brothers

The FCC has denied two related petitions filed by Leigh Thomas, manager and officer of WOOF(AM/FM), Dothan, Ala.

Thomas filed a Petition for Reconsideration late last year after the FCC denied her earlier petition for an investigation concerning the sale of seven stations in the Dothan market.

The stations concerned and transferred were WBBK(FM) in Blakely, Ga., from Magic Broadcasting Alabama Licensing to Alabama Media Investments; WESP(FM) in Dothan, Ala., and WDBT(FM) in Headland, Ala., from Gulf South Communications to Southeast Alabama Broadcasters; WLDA(FM) in Slocomb, Ala., and WJRL(FM) in Fort Rucker, Ala., from Magic to Southeast Alabama Broadcasters; WKMX(FM) in Enterprise, Ala., and WTVY(FM) in Dothan, Ala., from Magic to Gulf South.

The FCC treated these interrelated transactions as a single transaction. Thomas argued that the transfers created an anticompetitive environment for the Dothan market.

She also filed a Petition to Deny specifically against the transactions involving Southeast Alabama Broadcasters –WESP, WDBT [aka WECB(FM)], WLDA and WJRL. That was filed in January of this year.

This, and the above-mentioned Petition for Reconsideration, now have been denied.

In her filings, Thomas argued that because Clay Holladay is both president and majority shareholder of Gulf South and the brother of Robert Holladay, who controls Alabama Media, the deals presented the likelihood of and opportunity for collusion that would be against the public interest. Thomas asserted that because Magic initially approached Gulf South about purchasing the five stations, despite Gulf South owning the maximum stations in the market, Clay Holladay brokered these deals in order to illegally monopolize the market.

The FCC noted that Clay Holladay, through Gulf South, agreed to sell two of his existing stations in order to purchase two of the Magic stations and to find separate buyers for the remaining Magic properties. He did so: Georgia Edmiston formed SAB, purchasing WLDA and WJRL, and Alisha Cummings initially formed AMI and purchased WBBK. After the sales, SAB entered into a local marketing agreement and an asset purchase agreement with Robert Holladay, who controls Alabama Media, to sell its new stations to Alabama Media.

Thomas argued that the timing of the following sale from SAB to Alabama Media indicates that it was planned in advance of SAB’s original purchases and therefore should have been indicated in the original FCC petition. However, the FCC disagreed and said that it does not consider future sales that have not been solidified when approving petitions, citing Section 73.3613 as the relevant provision.

The commission also did not find facts to support the claim that Clay Holladay exercised de facto control over the Dothan market and Alabama Media, aside from the fact that the two men are brothers.

Thomas also argued that the filings did not properly reveal the family relationship of the Holladay brothers. The commission did not find evidence for a prima facie case against the Holladay brothers but found that Robert Holladay acted independently to compete against his brother’s stations in the market and that Edmiston also retained control of her company and legally made the sale to Holladay.