Pandora Radio has asked the FCC to decide whether foreign investors can own a portion of parent company of the Internet audio service. The decision could clear the way for the pending sale of a broadcast radio station from Connoisseur Media.
Generally, not more than 25% of U.S. station ownership can be held by foreign entities; Pandora believes it complies but can’t prove it, at least not in the way the Audio Division needs. That’s because the identity, and therefore the citizenship of more than half of the beneficial owners of outstanding Pandora shares cannot be ascertained due to Securities and Exchange Commission shareholder privacy regulations.
So Pandora Radio is asking the FCC for a declaratory ruling to allow foreign investors to hold up to a 49.99% voting interest and 100% equity interest in Pandora, its parent company, without additional commission approval. Under this requested ruling, Pandora would need to obtain prior FCC approval for the aggregate voting authority of foreign investors to exceed 49.99%, or if any change in the board is proposed that would result in the majority no longer being comprised of U.S. citizens.
At issue is the sale of KXMZ(FM), Box Elder, S.D., which has been pending since June 2013. Pandora Radio further states that grant of its request would “enhance both the localism and diversity of voices in the Rapid City radio market.”
Pandora said at the time it wanted to buy the station in an attempt to lower its music royalty rates. By owning a broadcast station, Pandora reasons it would qualify for the same Radio Music Licensing Committee royalty rates that broadcast radio pays ASCAP and BMI.
ASCAP asked the FCC to dismiss the sale application.
The FCC has found the petition acceptable for filing and is taking comments on the proposal (to MB Docket 14-109) until Aug. 28 and replies until Sept. 27.