******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In re Application of ) ) Keymarket of South Carolina, Inc. ) (Assignor) ) File Nos. BAL-971110GG ) BALH-971110GH and ) BAL-971110GI ) Sinclair Radio of Greenville Licensee, Inc. ) (Assignee) ) ) For Assignment of Licenses of ) WYRD(AM), Greenville, South Carolina ) WFBC-FM, Greenville, South Carolina ) WORD(AM), Spartanburg, South Carolina ) ) and ) ) Spartan Communications, Inc. ) File Nos. BAL-971110GE (Assignor) ) BALH-971110GF ) BALFT-971110TW and ) ) Sinclair Radio of Greenville Licensee, Inc. ) (Assignee) ) ) For Assignment of Licenses of ) WSPA(AM), Spartanburg, South Carolina ) WSPA-FM, Spartanburg, South Carolina ) W249AR, Asheville, North Carolina ) MEMORANDUM OPINION AND ORDER Adopted: June 23, 1998 Released: June 24, 1998 By the Chief, Mass Media Bureau: 1. The Chief, Mass Media Bureau, has under consideration: (1) the above-captioned applications for assignment of the licenses of WYRD(AM) and WFBC-FM, Greenville, South Carolina, and WORD(AM), Spartanburg, South Carolina, from Keymarket of South Carolina, Inc., to Sinclair Radio of Greenville Licensee, Inc. ("Sinclair"); (2) the above-captioned applications for assignments of the licenses of WSPA(AM), WSPA-FM, Spartanburg, South Carolina, and FM translator station W249AR, Asheville, North Carolina, from Spartan Communications, Inc. ("Spartan"), to Sinclair; and (3) Sinclair's related request for waiver of 47 C.F.R. 73.3555(c), the Commission's one-to-a-market rule, which restricts common radio and television station ownership in the same market. The applications and the waiver request are unopposed. For the reasons set forth below, we grant the assignment applications along with a temporary, conditional waiver of our one-to-a-market rule. We also grant the application to assign the license for the FM translator station W249AR. Background 2. Sinclair, which is applying here to acquire five radio stations, is a subsidiary of Sinclair Broadcast Group, Inc. ("SBG"). WLOS Licensee, Inc., Sinclair's sister corporation and also a subsidiary of SBG, is the licensee of VHF television station WLOS(TV) (ABC affiliate), Asheville, North Carolina. Grant of the instant assignment applications would create a new radio-television station combination because the Grade A contour of WLOS(TV) entirely encompasses Greenville, South Carolina, the community of license of WYRD(AM) and WFBC-FM, and the predicted 1 mV/m contour of WSPA-FM, Spartanburg, South Carolina, completely encompasses Asheville, the community of license of WLOS(TV). Accordingly, Sinclair requests a waiver of the Commission's rules to permit common ownership of WLOS(TV), WYRD(AM), WFBC-FM, and WSPA-FM. The Grade A contour of WLOS(TV) does not encompass Spartanburg, South Carolina, the community of license of WSPA(AM) and WORD(AM). Nor do the 2 mV/m contours of those stations encompass Asheville, North Carolina, WLOS(TV)'s community of license. Therefore, a waiver of our one-to-a-market rule would not be required and is not requested for WORD(AM) and WSPA(AM). If Sinclair is permitted to acquire WFBC-FM, WSPA-FM, WSPA(AM), WYRD(AM), and WORD(AM), SBG will control one TV, two FM and three AM stations in the Greenville-Spartanburg, S.C. - Asheville, N.C. - Anderson, S.C. Designated Market Area ("DMA"), the 35th largest DMA in the country. Sinclair also proposes to acquire FM translator station W249AR, Asheville, North Carolina, which rebroadcasts the signal of WSPA-FM. Additionally, Sinclair Broadcasting Group also has a local management agreement (LMA) with WFBC-TV, an independent UHF station in Anderson, South Carolina. 3. Sinclair bases its waiver request on the one-to-a-market waiver standards adopted in Second Report and Order, Amendment of Section 73.3555 of the Commission's Rules, the Broadcast Multiple Ownership Rules, 4 FCC Rcd 1741 (1989) ("Second Report and Order"); recon. granted in part and denied in part, 4 FCC Rcd 6489 (1989) ("Second Report and Order Recon."). Under these standards, the Commission presumes that waiver of the rule will serve the public interest in cases involving television and radio station combinations in the top 25 markets where at least 30 separately owned, operated and controlled broadcast licensees, or "voices," would remain after the proposed combination. Second Report and Order, 4 FCC Rcd at 1751-52. The Commission also presumes that the public will be served by the acquisition of "failed" stations, i.e., stations that have not been operating for a substantial period of time, or that are involved in bankruptcy proceedings. 47 C.F.R. 73.3555, n.7(2). Other waiver requests are evaluated using more rigorous case-by-case criteria, also set forth in the Second Report and Order. 4. Sinclair submits a specific factual showing pursuant to the "case-by-case" standard outlined in the Second Report and Order. We will consider the waiver request under this standard because the DMA implicated here is the 35th largest in the country and there is no claim that any of the radio stations to be acquired is a "failed station," as defined by the Commission. Moreover, evaluation of the waiver request under the case-by-case standard is appropriate because the proposed transactions involve the common ownership of more than one same-service radio station with a television station. See Memorandum Opinion and Order, MM Docket 91-140, 7 FCC Rcd 6387, 6394 n. 40 (1992); see also Moosey Communications, Inc., 8 FCC Rcd 5247 (1993). Under the case-by-case standard, we make a public interest determination based upon the following criteria: (1) the potential public service benefits of joint operation of the facilities, such as the economies of scale, cost savings and programming and service benefits; (2) the types of facilities involved; (3) the number of media outlets owned by the applicant in the relevant market; (4) the financial difficulties of the stations involved; and (5) the nature of the relevant market in light of the level of competition and diversity after the joint operation is implemented. Second Report and Order, 4 FCC Rcd at 1753-54. We note that not all five of the case-by-case factors are necessarily relevant in each case. Second Report and Order Recon., 4 FCC Rcd at 6491. Sinclair submits a showing that addresses each of the criteria. W aiver Showing 5. Public Service Benefits of Joint Operation. Sinclair contends that the proposed combination of WLOS(TV), WFBC-FM, WSPA-FM and WYRD(AM), as well as the inclusion of WSPA(AM) and WORD(AM) in the combination, would result in significant cost savings due to centralization of management and accounting, purchasing efficiencies and cross-promotion of stations. Although a one-to- a-market waiver is not necessary with respect to WORD(AM) and WSPA(AM), Sinclair included them in this analysis because they will be jointly operated with the stations that do require a one-to-a-market waiver. Sinclair estimates savings of $85,000 from its proposed common ownership and joint operation of WLOS(TV) and WSPA(AM) and WSPA-FM, the radio stations it seeks to acquire in the first of its two assignment applications. Sinclair estimates that approximately $50,000 will be saved on promotional expenses, an estimated $25,000 will be saved by centralizing management and accounting staffs, and approximately $10,000 will be saved through purchasing efficiencies. With respect to the radio stations Sinclair seeks to acquire in the second of its two assignment applications, WYRD(AM), WFBC-FM and WORD(AM), Sinclair estimates savings of $80,000 from their proposed joint operation with WLOS(TV). Sinclair states that approximately $50,000 will be saved on promotional expenses, $25,000 will be saved on centralization of management, accounting and news gathering, and $5,000 will be saved due to purchasing efficiencies. Overall, Sinclair anticipates a savings of $165,000 from its proposed common ownership and joint operation of WLOS(TV), WFBC-FM, WSPA-FM, WSPA(AM), WYRD(AM), and WORD(AM). Sinclair states that it will use the cost savings to acquire quality programming and hire talent with a greater appeal to its audience. 6. Sinclair states that it will invest the cost savings into expanded local programming. Specifically, the radio stations in the proposed combination would have access to WLOS(TV)'s news and weather bulletins and live coverage of local emergencies, as well as coverage of debates between local political candidates. All of the radio stations will also provide local sports, news, and public affairs information to WLOS(TV) so that news, public opinion, and information about events occurring in the Greenville/Spartanburg area can also be disseminated in the Asheville area by the television station. For example, Sinclair states that station WORD(AM), for which a waiver is not required, will provide WLOS(TV) with excerpts from the Russ Cassell Show, a daily live news/talk program with a 25-year presence in the Spartanburg community. Sinclair will further use the cost savings to enhance its Julian Sinclair Smith Scholarship program, which provides scholarships to minority students interested in studying communications and electrical engineering, and to implement an internet partnership between WLOS(TV) and the public schools in Greenville. 7. Types of Facilities. Sinclair's waiver showing lists WLOS(TV) as an ABC affiliate operating on VHF Channel 13 at an effective radiated power ("ERP") of 178.0 kw from an antenna 853 meters height above average terrain ("HAAT"). WSPA-FM is a Class C station that operates on Channel 255 (98.9 MHz) with an ERP of 100 kw from an antenna 582 meters HAAT. WYRD(AM) is a Class B station that operates on 1330 kHz with an ERP of 5.0 kw. WFBC-FM is a Class C station that operates on Channel 229 (93.7 MHz) with 100 kw horizontal and 97 kw vertical ERP from an antenna 564 meters HAAT. 8. Sinclair acknowledges that these stations are technically significant but maintains that other local stations have technically significant facilities as well. Sinclair cites two other VHF television stations in the DMA with comparable technical facilities to those of WLOS(TV) as well as a "high-powered" UHF station. In addition, Sinclair lists 12 Class C FM stations as being in the television metro market with technical facilities comparable to those of WFBC-FM and WSPA-FM and seven AM stations in the television metro market having technical facilities comparable to those of WYRD(AM). 9. Other Media Outlets. As indicated above, in addition to the stations for which waiver of the one-to-a-market rule is required, Sinclair proposes to acquire WORD(AM) and WSPA(AM), both of which are in the Greenville-Spartanburg TV metro market, and FM translator station W249AR, Asheville, North Carolina, which rebroadcasts the signal of WSPA-FM. Sinclair also has a local management agreement ("LMA") with independent UHF station WFBC-TV, Anderson, South Carolina, which is in the TV metro market as well. 10. Economic Status. Sinclair states that none of the radio stations involved in this waiver request is in financial distress. 11. Competition and Diversity in the Market. The final factor in Sinclair's showing is the nature of the relevant market in light of the Commission's concerns about diversity and competition. Sinclair asserts that the Greenville-Spartanburg DMA is the 35th largest in the country. Sinclair states that there are 12 television stations (eight commercial and four noncommercial) in the DMA licensed to 10 separate and distinct owners. Sinclair then states that there are 47 radio stations (39 commercial and eight noncommercial) in the TV metro market. Of those 47 stations, 32 are licensed to separate owners, according to Sinclair. In sum, Sinclair contends that there are currently 59 radio and television stations licensed to 42 separate owners, and that the number of separate owners would decrease to 40 following approval of its proposed combination. Finally, Sinclair states that there are 63 cable systems operated by 21 separate operators that reach 60 percent of households in the DMA. Sinclair also states that the DMA is served by 10 daily newspapers and 40 weekly newspapers. Discussion 12. Radio Ownership Rules. We turn first to Sinclair's compliance with our local radio ownership rules. 47 C.F.R. 73.3555(a)(1). Our analysis of the data Sinclair has submitted indicates that two separate radio markets are formed by the stations Sinclair proposes to acquire because not all of the contours of the stations that Sinclair proposes to own overlap each other. Market 1 for radio ownership purposes contains WFBC-FM, WSPA-FM, WSPA(AM), and WORD(AM). Market 2 consists of WFBC- FM, WSPA-FM, and WYRD(AM). Both Markets 1 and 2 overlap the signals of at least 83 commercial radio stations. Under our rules, in a radio market with more than 45 commercial radio stations a party may own, operate, or control up to eight commercial radio stations, not more than five of which are in the same service (AM or FM). Sinclair's proposed ownership of four commercial radio stations, two FM and two AM, in the first market, and three commercial radio stations, two FM and one AM, in the second market, complies with the numerical local ownership limits. Moreover, our review of the record in this case reveals no other circumstances that would preclude grant of the applications. We conclude that, with respect to local radio ownership, Sinclair's acquisition of WFBC-FM, WSPA-FM, WSPA(AM), WYRD(AM) and WORD(AM) would be consistent with the public interest. 13. One-to-a-Market Waiver. Before considering Sinclair's request for a waiver of the one-to-a- market rule, we must determine what weight, if any we should accord Sinclair's existing LMA with WFBC-TV in Anderson, South Carolina, in assessing that request. Currently, television LMAs are not attributable to the brokering station, nor, taken alone, are they considered a "meaningful" relationship within the scope of the cross-interest policy. Rep WWBB, G.P.,11 FCC Rcd 19689, 19693-94 (1996); S.E. Licensee G.P., 11 FCC Rcd 16727, 16732 (1996). At present, therefore, we will not accord significance to Sinclair's existing television LMA in evaluating its ownership waiver request. Our decision here in no way prejudges the issues in our ownership and attribution proceedings. We have proposed to attribute television LMAs to the brokering station where the stations involved are in the same market and the brokerage arrangement includes more than 15 percent of the brokered station's weekly broadcast hours. Review of the Commission's Regulations Governing Attribution of Broadcast and Cable/MDS Interests, Further Notice of Proposed Rulemaking, 11 FCC Rcd 19895, 19908-09 (1996). Further, we have proposed that any LMA which would be attributable for duopoly rule purposes, under this approach "would also count in applying our other ownership rules, including, for example ... the one-to-a-market rule (or radio- television cross-ownership rule)." Id. (footnotes omitted). Thus, if we establish final rules for attributing LMAs, we would also assess whether the class of transactions involving radio, television, and LMA interests such as those involved in this case should be permitted to continue. Because this is a pending issue, we will condition any grant of a one-to-a-market waiver on the ultimate result reached in the pending rulemaking proceedings in attribution and television ownership concerning the significance of television LMAs. 14. Sinclair requests waiver of our one-to-a-market rule on the basis that it satisfies our case-by-case criteria, as set forth in the Second Report and Order. See Revision of Radio Rules and Policies (Recon.), 7 FCC Rcd 6387, 6394 n. 40 (1992). See also Rep WWBB G.P., 11 FCC Rcd. at 19689; Moosey Communications, Inc., 8 FCC Rcd 5247 (1993). In evaluating a request for a waiver of the one-to-a-market rule, the Commission's goal "is to permit the public to benefit from such efficiencies of operation as may be achieved through the use of common facilities and staff consistent with the maintenance of diversity and vigorous competition within the market areas involved." Second Report and Order Recon., 4 FCC Rcd at 6491. We conclude that Sinclair's showing in support of a waiver of the one-to-a-market rule meets our case-by-case criteria, and that a temporary conditional waiver in this instance is consistent with the public interest and would not have an adverse effect on diversity and competition in the Greenville-Spartanburg market. 15. Sinclair demonstrates that acquisition of WFBC-FM, WSPA-FM, WSPA(AM), WYRD(AM), and WORD(AM) will create efficiencies resulting in significant cost savings and the potential for enhanced programming and service benefits. In particular, the licensee presents a showing that it would save approximately $165,000 through joint ownership of the television and five radio stations due to centralization of management and accounting, purchasing efficiencies and cross-promotion of stations. Further, Sinclair states that its stations will share news and weather bulletins, live coverage of local emergencies, local sports events, coverage of debates between local political candidates, and other informational programming. In this manner, the radio stations will be able to enhance their news and public affairs programming and WLOS(TV) will be able to disseminate news, public opinion, and information about events occurring in the Greenville/Spartanburg area to a wider area. Sinclair will also use the cost savings to enhance its Julian Sinclair Smith Scholarship program, which provides scholarships to minority students interested in studying communications and electrical engineering, and to fund internet access for the Greenville public schools. 16. While Sinclair's commonly owned facilities will be significant in technical terms, our independent analysis verifies that comparable competing facilities exist. The Commission's "concern with the types of facilities merging under the authority of a one-to-a-market waiver reflects our interest in assessing the potential impact of a proposed combination of stations in a given market in order that we might predict and avoid any significant adverse effect on diversity or competition from too powerful a combination." Great American Television and Radio Co., Inc., 4 FCC Rcd 6347, 6349-50 (1989). Sinclair's FM stations, WFBC-FM and WSPA-FM, are Class C stations and our analysis shows that there are at least six additional comparable Class C commercial FM stations in the TV metro market. At least one additional commercial AM station in the TV metro market is comparable to the AM stations WSPA(AM) and WYRD(AM), both Class B stations, in the proposed combination. There are also three Class B AM stations with comparable daytime power and reduced nighttime power, including WORD(AM), another station in Sinclair's proposed combination. Our independent analysis also shows that there are two VHF stations in the DMA in addition to Sinclair's WLOS(TV), each with area coverage comparable to WLOS(TV). We conclude that the technical capabilities of the proposed combination do not present issues of market dominance inconsistent with the public interest. 17. With respect to financial conditions, as stated earlier, none of the stations in the proposed combination has demonstrated financial distress. However, we previously have indicated that not all five factors need be present to justify grant of a waiver. Second Report and Order Recon. 4 FCC Rcd at 6491. We also have granted a number of one-to-a-market waivers where there was no finding that any of the stations were in financial distress. See, e.g., Louis C. DeArias 11 FCC Rcd 3662 (1996); Alta Gulf FM, Inc., 10 FCC Rcd 7750, 7751 (1995), Henry Broadcasting Co., 11 FCC Rcd 1175 (1995); Atlantic Morris Broadcasting, Inc., 10 FCC Rcd 9495 (1995); Secret Communications Ltd., 10 FCC Rcd 6874 (1995). 18. Regarding Sinclair s media holdings, we find that the proposed combination would not create undue concentration of ownership and control in the Greenville-Spartanburg market. We have verified that there are at least 33 commercial radio stations, of which 21 are separately owned, and seven non- commercial radio stations, each of which is separately owned, in the Greenville-Spartanburg TV metro market. There are also eight commercial television stations including WLOS(TV), each of which is separately owned, and four noncommercial television stations licensed to two separate owners, in the Greenville-Spartanburg DMA. All together, there are presently 52 broadcast stations licensed to 38 separate owners. After the proposed transaction, these 52 stations would be operated by 37 separate broadcast owners. Additionally, based on information provided by the applicant, there appear to be other media outlets in the market, including cable systems operated by 21 separate operators that reach 60 percent of households in the DMA, 10 daily newspapers and 40 weekly newspapers. This level of diversity is consistent with the level we have approved in previous waiver requests. Shareholders of Citicasters, Inc., 11 FCC Rcd 19135, 19140 (1996) (31 separate voices, nine daily newspapers, 58.9 percent cable penetration in 29th largest market); S.E. Licensee, G.P., 11 FCC Rcd 16728, 16731 (1996) (27 separate owners, nine daily newspapers, 58.1 percent cable penetration in 42nd largest market); Great American Television and Radio Co., Inc., 4 FCC Rcd 6347, 6348-6350 (33 separate voices, 21 daily newspapers and 50 percent cable penetration in 28th largest market). 19. With respect to economic concentration and competition, our independent analysis indicates that the three radio stations at issue in the one-to-a-market waiver request, WYRD(AM), WFBC-FM and WSPA-FM, together with WLOS(TV), receive a combined television and radio advertising revenue share of 21.1 percent, a figure consistent with temporary one-to-a-market waiver requests previously approved. See NewCity Communications, Inc., 12 FCC Rcd 3929 at 3944 (1997) (29 percent combined television and radio advertising shares); S.E. Licensee G.P., 11 FCC Rcd at 16734 (1996) (24.2 percent combined television and radio advertising share). 20. We conclude, based on the record, that grant of a temporary, conditional waiver is appropriate. Grant of the waiver will result in economic efficiencies and facilitate enhanced public interest programming without undue effect on competition or diversity in the Greenville-Spartanburg market. Ordering Clauses 21. Accordingly, IT IS ORDERED, that a temporary conditional waiver of the one-to-a-market rule, 47 C.F.R. 73.3555(c), to permit common ownership of stations WLOS(TV), Asheville, North Carolina, WYRD(AM), Greenville, South Carolina, WFBC-FM, Greenville, South Carolina, and WSPA- FM, Spartanburg, South Carolina, IS HEREBY GRANTED, subject to the outcome in the pending television ownership rulemaking proceeding, Review of the Commission's Regulations Governing Television Broadcast Ownership, Second Further Notice of Proposed Rulemaking, MM Docket Nos. 91-221 & 87-8, FCC 96-438 (released November 7, 1996). Should divestiture be required as a result of that proceeding, Sinclair is directed to file an application for Commission consent to sell the necessary station(s) within six months from the release of the final Order in that proceeding. Any request to extend this conditional waiver should be filed at least 45 days prior to the end of the six-month period and would be closely scrutinized. 22. IT IS FURTHER ORDERED, that, having found the applicants fully qualified and that grant of the applications would serve the public interest, the application to assign the licenses of WYRD(AM), Greenville, South Carolina, WFBC-FM, Greenville, South Carolina, and WORD(AM), Spartanburg, South Carolina, from Keymarket of South Carolina, Inc., to Sinclair Radio of Greenville Licensee, Inc., and the application to assign the licenses of WSPA(AM) and WSPA-FM, Spartanburg, South Carolina from Spartan Communications, Inc. to Sinclair Radio of Greenville Licensee, Inc. ARE HEREBY GRANTED. 23. IT IS FURTHER ORDERED, that, the application to assign the license for FM translator station W249AR, Spartanburg, South Carolina, from Spartan Communications, Inc. to Sinclair Radio of Greenville Licensee, Inc., IS HEREBY GRANTED. FEDERAL COMMUNICATIONS COMMISSION Roy J. Stewart Chief, Mass Media Bureau