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Commission Adopts Order on Recon. Regarding The Tribune Company

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Released: January 30, 2014

Federal Communications Commission

FCC 14-7

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
)

Shareholders of Tribune Company,
)
MB Docket No. 07-119
Transferors
)
)

and
)
)

Sam Zell, et al.
)
Transferees
)
)

For Consent to the Transfer of Control of
)
The Tribune Company
)
)

and
)
)

Applications for the Renewal of License of
)
File Nos. BRCT-20060811ASH, et al.
KTLA(TV), Los Angeles, California, et al.
)
)

MEMORANDUM OPINION AND ORDER ON RECONSIDERATION

Adopted: January 29, 2014

Released: January 30, 2014

By the Commission:

I.

INTRODUCTION

1.
The Commission has before it petitions for reconsideration of a decision granting the
applications to transfer control of Tribune Company and its licensee subsidiaries1 from its former
shareholders to Sam Zell, The Tribune Employee Stock Ownership Plan (“ESOP Plan”) as implemented
through the Tribune Employee Stock Ownership Trust (“Tribune Trust”), and EGI-TRB, LLC (“EGI-
TRB”).2 In that decision (“Tribune I”), the Commission also granted the broadcast license renewal
applications filed by Tribune for four of its stations.3 A petition for reconsideration was filed jointly by
the United Church of Christ, the Media Alliance, and Charles Benton (“UCC/MA”), and a petition was
filed by the International Brotherhood of the Teamsters (“Teamsters”). Oppositions were filed by
Tribune and the Zell Group. Replies were filed by UCC/MA and by the Teamsters. For the reasons
stated below, we grant UCC/MA’s petition for reconsideration with respect to standing, and in all other
respects we deny the petitions for reconsideration.

1 Shareholders of Tribune Company, Memorandum Opinion and Order, 22 FCC Rcd 21266 (2007) (“Tribune I” or
“MO&O”
). A list of the licenses to be transferred is attached as Exhibit 1.
2 Zell, the ESOP Plan, the Tribune Trust and EGI-TRB will be collectively referred to as the Zell Group.
3 Those stations are WPIX(TV), New York, New York; WTIC-TV, Hartford, Connecticut; WCCT-TV, Waterbury,
Connecticut; and KTLA(TV), Los Angeles, California.

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II.

BACKGROUND

2.
In a set of applications filed on May 1, 2007, the Applicants state that the ESOP Plan has
been established to provide Tribune employees with an equity interest in the company by investing
primarily in Tribune company stock.4 They go on to state that the ESOP Plan has an effective date of
January 1, 2007, and is intended to be a qualified employee benefit plan under Section 401(a) of the
Internal Revenue Code and an employee stock ownership plan within the meaning of Section 4975(e)(7)
of that code.5 The stated purpose of the ESOP Plan is to invest in Tribune stock and to hold that stock for
the benefit of the Tribune employees participating in the plan.
3.
According to the applications, the ESOP Plan is made up of: (1) the plan document,
which is included in the applications; (2) the plan committee, which determines the eligibility and
entitlement to benefits of Tribune employees under the terms of the plan and which has a fiduciary
obligation to act in the interest of employee participants; (3) the Tribune Trust, which holds title to the
stock and whose trustee has a fiduciary obligation to hold and vote the stock placed in the ESOP Plan in
accordance with the interests of the employee participants; and (4) the participating employees.6 The
applications state that, following the transfer and its associated transactions, Zell will be chairman of the
board of Tribune.7
4.
In connection with the applications, the Transferees requested temporary waivers of the
newspaper/broadcast cross-ownership (“NBCO”) Rule to permit, pending the outcome of the Media
Ownership Proceeding,
the common ownership of:
 KTLA(TV), Los Angeles, California, and the Los Angeles Times (“LA Times”),
 WPIX(TV), New York, New York, and Newsday,8
 WGN-TV and WGN(AM), Chicago, Illinois, and The Chicago Tribune,
 WSFL(TV), Miami, Florida, and the Ft. Lauderdale South Florida Sun-Sentinel, and
 WTIC-TV, Hartford, Connecticut, WCCT-TV, Waterbury, Connecticut, and the Hartford
Courant.9
In their petition to deny, UCC/MA opposed the waiver requests.10 The Media Institute, Gannett, and the
Newspaper Association of America supported the waiver request.
5.
The Commission denied the requested waivers in all markets except Chicago and
required the Transferees to come into compliance with the NBCO Rule, in all markets except Chicago,

4 See, e.g., Exhibit 5 to Application for Transfer of Control of WPIX(TV), New York, New York. Exhibit 5 is
identical in all of the transfer applications. Exhibit 6, which is also identical in all of the applications, contains the
Agreement and Plan of Merger, the Securities Purchase Agreement, the ESOP Purchase Agreement and the
documents setting up the ESOP Trust. Copies of all of the applications are part of MB Docket 07-119.
5 Exhibit 5 at 3.
6 Id.
7 Id. at 4.
8 The applicants’ original waiver for WPIX(TV) also sought permission for the continued cross-ownership of the
Stamford, Connecticut, Advocate, and the Greenwich, Connecticut, Greenwich Times and WPIX(TV). On
November 21, 2007, the applicants filed an amendment stating that they had consummated the sale of the Advocate
and the Greenwich Times to the Hearst Corporation.
9 The Transferees also sought, and received, a failing station waiver to permit continued ownership of both WTIC-
TV and WCCT-TV. 22 FCC Rcd at 21279–81.
10 Free Press and Findlay Publishing submitted letters stating that they are opposed to the NBCO waivers. The
Commission treated those letters as informal objections.
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where it granted a permanent waiver.11 The Commission justified the permanent waiver in part because
the “uniquely long-term symbiotic relationship between [Tribune’s] broadcast stations” and the Chicago
Tribune
had created “important sources of quality news and public affairs programming in the Chicago
market” that, because of the particular circumstances of that market, might be harmed as a result of forced
divesture.12 Were this not enough to show that the purpose of the rule — “enhancing diversity in
programming service to the public”13 — would be disserved by divestiture, the Commission also
recognized that, given the nature of Chicago’s modern media market (the third largest in the country),
“any detriment to diversity caused by common ownership” would be “negligible.”14
6.
In the MO&O, the Commission also ruled that UCC had not demonstrated that it had
standing to file a petition to deny against any of the transfer applications other than those for WSFL(TV),
Miami, Florida, and WPIX(TV), New York, New York, and that MA had failed to demonstrate that it had
standing to file against any of the transfer applications.15 The basis for this ruling was that the petitioners
had failed to submit the required affidavits.16 Nonetheless, because of the serious policy considerations in
this proceeding, the Commission considered the issues raised by the petitioners in its decision.17
7.
In addition, in the MO&O the Commission ruled that the Transferee’s proposed
organizational structure complied with the Commission’s rules and that any additional review of that
structure to determine whether it could be modified to more fully promote the public interest was both
inappropriate under the Communications Act of 1934, as amended,18 and unwarranted.19
8.
In their petition for reconsideration, UCC/MA challenge the ruling on standing, stating
that it is inconsistent with past Commission practice.20 In addition, they challenge the decision to grant
the permanent waiver of the NBCO Rule in the Chicago market and the actions regarding Tribune’s

11 In the case of the other stations, the Commission required Tribune to come into compliance with the NBCO Rule
either by selling the non-compliant properties or placing them in a divestiture trust within 6 months of the date of the
MO&O. In the event that the Transferees challenged the decision in court, the Commission granted a temporary
waiver for either two years or until six months after the conclusion of the litigation, whichever would be longer.
The Commission also recognized that the NBCO Rule was under review at that time. The Commission stated that if
the rule was revised before January 1, 2008, the Transferees would have two years to come into compliance with the
rule as revised. If the rule was not revised, the Transferees were bound by the 6-month time limit. In the renewal
applications for WPIX(TV), KTLA(TV), WCCT-TV, and WTIC-TV, Tribune had sought waivers of the NBCO
Rule for the newspaper/broadcast combinations in those markets. The Commission denied the requested waivers,
but granted the renewal applications subject to divestiture conditions which tracked those set out in the context of
the transfer applications.
12 22 FCC Rcd at 21277–78.
13 Amendment of Sections 73.34, 73.240, and 73.636 of the Commission’s Rules Relating to Multiple Ownership of
Standard, FM, and Television Broadcast Stations
, Second Report and Order, 50 FCC 2d 1046, 1079 (1975) (“1975
Order”), aff’d sub nom., FCC v. Nat’l Citizens Comm. for Broad., 436 U.S. 775 (1978)
14 22 FCC Rcd at 21277-78.
15 Id. at 21268-69.
16 Id. at 21269.
17 Id.
18 47 U.S.C. § 309.
19 22 FCC Rcd at 21272-73.
20 UCC/MA Petition for Recon, MB Docket 07-119, at 5-12 (“UCC/MA Petition for Recon”).
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stations in the other markets impacted by the NBCO Rule.21 Finally, UCC/MA challenge the grant of the
renewal of the licenses of KTLA(TV), WTIC-TV, WCCT-TV, and WPIX(TV).22
9.
The Teamsters seek reconsideration of the finding that the post-transfer governing
structure of Tribune complies with Commission rules regarding ownership and control of broadcast
stations.

III.

DISCUSSION

A.

Standing

10.
Under the Communications Act of 1934, as amended (the “Act”), 23 only a “party in
interest” has standing to file a petition to deny. The petition to deny must contain specific allegations of
fact demonstrating that the petitioner is a party in interest and that a grant of the application would be
inconsistent with the public interest, convenience, and necessity.24 The allegations of fact, except for
those of which official notice may be taken, must be supported by an affidavit of a person with personal
knowledge of the facts alleged.25 Among the facts to be alleged is that the petitioner is a resident of the
station’s service area or a regular viewer of the station.26 In the MO&O, the Commission found that MA
and UCC had failed to demonstrate standing in respect to parts of the proceeding.27 For the reasons
explained below, we reverse that finding here.
11.
In the MO&O, the Commission found that, in the context of the transfer proceeding, MA
had not offered the required affidavit and, therefore, had not demonstrated that it had standing. UCC had
only offered affidavits from viewers in the New York City and Miami markets. As a result, the
Commission found that UCC had standing to challenge the transfer applications only in regard to those
markets.28 The Commission also found that standing to file a petition to deny against one application that
forms part of a multi-station transaction does not automatically confer standing to oppose every single
application that is part of the transaction, especially when the opposition is based on market-specific
waivers, as is the case here.29 In regard to the renewal applications, the Commission held that, contrary to
Tribune’s assertions, UCC, having filed the requisite affidavits, had demonstrated standing to oppose the
renewals of WPIX(TV), WCCT-TV, and WTIC-TV.30

21 Id. at 13-20.
22 Id. at 2.
23 47 U.S.C. § 309(d); 47 C.F.R. § 73.3584.
24 47 U.S.C. § 309(d).
25 Id.
26 See In re Curators of Univ. of Missouri, 16 FCC Rcd 1174, 1175 (2001) (“In order to qualify as a party in interest,
petitioners to deny seeking to represent the interests of their members must show that one or more of their members
resides within the station's service area or regularly listens to or views a station and that such listening or viewing is
not the result of transient contacts with the station.”). Factual allegations as to why grant of a broadcast application
would not serve the public interest, combined with a showing of local residence, “supply the predicate for finding
injury in fact.” Petition for Rulemaking to Establish Standards for Determining the Standing of a Party to Petition
to Deny a Broadcast Application
, Memorandum Opinion and Order, 82 FCC 2d 89, 98–99 (1980) (“1980 Policy
Statement
”).
27 Tribune I, 22 FCC Rcd at 21269.
28 Id. at 21269.
29 Id.
30 Id.
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12.
In their petition for reconsideration, UCC/MA argue that the Commission erred in
denying UCC standing as a petitioner to deny the transfer applications in the Hartford, Los Angeles, and
Chicago markets and in denying MA standing to deny the Los Angeles transfer. They claim that their
declarations fulfilled the requirements on Section 309(d)(1) of the Communications Act31 because they
attest that UCC has members in all of the affected markets and that MA has members in Los Angeles.32
They also assert that the Commission ignored its own findings that UCC and MA had standing to
challenge the Tribune renewals in the markets at issue, as well as Commission precedent on standing in
other multiple-market transactions.33 Finally, UCC and MA included with their petition for
reconsideration declarations from a UCC member residing in Chicago and an MA member residing in
Los Angeles.
13.
In his declaration attached to the UCC/MA petition to deny the transfer of control, Jeff
Perlstein states that he is the Executive Director of MA, which is located in Oakland, California. He also
states that MA has 1900 members throughout California, “a significant number of whom reside in Los
Angeles, California,”34 but he does not claim to reside in the service area of any of the stations at issue,
and there are no declarations from any members of MA who reside in the service area of any of the
stations. In its petition to deny the renewal of KTLA(TV), Los Angeles, California, MA included the
declarations of Jay Levin and David Adelson, both of whom state that they are residents of Los Angeles
and regular viewers of KTLA(TV).
14.
Attached to the UCC/MA petition to deny the transfer of control are the declarations of
the following UCC members: Laurinda Hafner, a resident of Miami, Florida and a regular viewer of
WSFL(TV); the Reverend Mark Bigelow, a resident of Centerpoint, New York, and a regular view of
WPIX(TV); and the Reverend Mark Lukens, a resident of East Rockaway, New York, and a regular
viewer of WPIX(TV). Also attached is the declaration of Robert Chase, Director of Communications of
the United Church of Christ, who is based in Cleveland, Ohio. He states that UCC has members in the
Los Angeles, Chicago, Ft. Lauderdale-Miami, Hartford, and Long Island/Southern Connecticut areas.35
Attached to the petition to deny the renewals of WCCT-TV and WTIC-TV are several statements from
individuals who state that they reside in the relevant communities and are regular viewers of the stations.
UCC also attached declarations from individuals who state that they are residents of the service area of
WPIX(TV) and viewers of the station.
15.
On reconsideration, we find that UCC had standing to challenge the transfer applications
for the Hartford and Chicago markets and that MA had standing to challenge the Los Angeles transfer
application. First, UCC and MA were parties to the Hartford and Los Angeles license renewal application
proceedings, respectively, having provided affidavits or declarations of members residing in those areas.36
The Commission consolidated the license renewal and transfer application proceedings.37 The UCC/MA
member declarations regarding the renewal applications concern the same stations, markets, and
ownership combinations as those at issue in the transfer proceeding. Therefore, under these particular
circumstances, we conclude that the declarations pertaining to the renewal applications were sufficient to
establish standing with respect to the transfer application.38 Second, UCC provided declarations of

31 47 U.S.C. § 309(d).
32 UCC/MA Petition for Recon at 5-6.
33 Id. at 7-10.
34 UCC/MA Petition to Deny, MB Docket 07-119, Declaration of Jeff Perlstein.
35 UCC/MA Petition to Deny, MB Docket 07-119, Declaration of Robert Chase.
36 See UCC/MA Petition for Recon. at 7–8.
37 22 FCC Rcd at 21267.
38 Our decision today only concerns the narrow set of circumstances described above.
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members residing in Miami and New York City in support of its petition to deny the transfer applications,
and UCC and MA, respectively, provided declarations of members residing in Chicago and Los Angeles
with their petition for reconsideration. Although the Commission generally does not allow a petitioner to
rely on new facts in a petition for reconsideration, the Commission will consider new facts where the
petitioner could not have offered the new facts earlier or where consideration of the new facts is required
in the public interest.39 Here, given conflicting Commission precedent as to whether the declarations filed
with its petition to deny were sufficient to establish standing,40, we conclude that UCC had a good-faith
basis for believing that the declarations it filed were sufficient to establish standing and acceptance of the
newly filed declarations serves the public interest.41 As a result, it is not necessary to determine whether
the filing of a single member affidavit or declaration would have been sufficient in this case to establish
standing with respect to all affected markets.42
16.
Recognizing that UCC/MA had standing to contest Tribune’s waiver requests does not,
however, alter any other decisions made in the MO&O because the Commission considered and
addressed all of UCC/MA’s substantive arguments there. The Commission did this by treating UCC/MA
as an informal objector to the extent they had not demonstrated standing.43
17.
In their petition for reconsideration, UCC/MA is joined by Charles Benton, who has not
previously participated in the proceeding. We need not address whether he is entitled to participate in the
proceeding under 47 C.F.R. § 1.106(b)(1) in light of our conclusion that UCC/MA has standing, because
his Declaration submitted in support of the UCC/MA petition does not advance any separate argument.

B.

The Chicago NBCO Waiver

18.
UCC/MA argues that the Commission’s decision to grant a permanent waiver of the
NBCO Rule in the Chicago market was arbitrary and capricious. Both Tribune and the Transferees argue

39 47 C.F.R. § 1.106(c).
40 UCC/MA Petition to Deny at 8-10 (citing Adelphia Communications Corporation, Memorandum Opinion and
Order, 21 FCC Rcd 8203, 8215-16 (2006) (declarations of Free Press Policy Director and National Hispanic Media
Coalition President that, inter alia, their members resided in areas served by Comcast, Time Warner Cable, and
Adelphia established organizations’ standing to challenge proposed acquisition of Adelphia by Comcast and Time
Warner); Hispanic Broadcasting Corp., Memorandum Opinion and Order, 18 FCC Rcd 18834, 18835 n.4 (2003)
(affidavit of National Hispanic Policy Institute (NHPI) President stating that he resided within the service area of
one of 65 radio station licenses sought to be transferred was sufficient to demonstrate standing to challenge the
entire transaction); Telemundo Communications Group, Inc., 17 FCC Rcd 6958, 6965 n.18 (2002) (organizational
standing based on affidavit from member in one of multiple markets affected by the transaction)) . But see Certain
Broadcast Stations Serving Communities in the State of Louisiana
, 7 FCC Rcd 1503 (1992) (declarations of local
chapter members demonstrated NAACP’s standing to challenge renewal applications only with regard to stations
where chapters were located); Certain Broadcast Stations Serving Communities in the Miami, Florida Area, 5 FCC
Rcd 4893 (1990) (same), vacated on other grounds, 1999 WL 511224 (1999).
41 See, e.g., Applications of KQED, Inc. for the Renewal of Licenses of Noncommercial Stations KQED-FM,
KQED-TV, & KQEC-TV San Francisco, California
, 88 F.C.C.2d 1159, 1166 (1982) (exercising discretion to accept
late-filed affidavits necessary to establish standing); Application of Hubbard Broad., Inc. for Renewal of License of
Station KSTP-TV, St. Paul, Minnesota
, 62 F.C.C.2d 970, 971 (1977) (“[S]ince both the original petition for
reconsideration and the subject application for review have affidavits attesting to the local residence of the affiants,”
petitioner who filed a timely informal objection to a renewal application “clearly has standing.”); Prime Cable of
Chicago, Inc.
, 77 Rad. Reg. 2d (P&F) 1038, 1041 (CSB 1995) (accepting new evidence that could have been
presented earlier as basis for granting reconsideration where new information cured an evidentiary defect).
42 In future multi-station transfer proceedings in which there are market-specific waivers and the parties seek to
challenge such waivers, we believe it would be prudent for parties to provide declarations from viewers and listeners
in relevant markets along with their petitions to deny.
43 22 FCC Rcd at 21269.
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that the decision was fully supported by the record and consistent with the Commission standards for
NBCO Rule waivers.44
19.
At the time the MO&O was adopted, Section 73.3555(d)(3) of the Commission’s rules
(the “Rules”) provided that “no license for [a] . . . TV broadcast station shall be granted to any party
(including all parties under common control) if such party directly or indirectly owns, operates, or
controls a daily newspaper and the grant of such license will result in . . .” the Grade A contour of that
television station encompassing the entire community in which such newspaper is published.45 When the
rule was adopted, most existing newspaper/broadcast combinations were grandfathered and such
grandfathered combinations were allowed to continue until the stations at issue were transferred to new
owners. In addition, a licensee was permitted to acquire a non-compliant newspaper in a market where it
owned a broadcast station, without requesting a waiver, as long as it came into compliance with the rule
prior to the end of the station’s license term.46 In addition to these two exceptions to the NBCO Rule, the
Commission contemplated the need for waivers to permit new cross-ownership patterns in situations
where application of the rule would be unduly harsh.47 Waivers were devised to accommodate four
situations: (1) where there is an inability to dispose of an interest in order to conform to the rules;
(2) where the only sale possible is at an artificially reduced price; (3) where separate ownership of the
newspaper and the broadcast station cannot be supported in the locality; and (4) where, for whatever
reason, the purpose of the rule would be disserved by divestiture.48 The Applicants made their waiver
requests, both in the renewal proceedings and the transfer proceedings, under the fourth prong of the test.
20.
In Tribune I, the Commission granted a permanent waiver of the NBCO Rule to
Tribune’s Chicago licensee (WGN-TV) because the “uniquely long-term symbiotic relationship between
[Tribune’s] broadcast stations” and the Chicago Tribune has created “important sources of quality news
and public affairs programming in the Chicago market” that, because of the particular circumstances of
that market, might flag with forced divestiture.49 The Commission found that the purpose of the rule —
“enhancing diversity in programming service to the public”50 — would be disserved by divestiture. The
Commission also found that, given the nature of Chicago’s modern media market (the third largest in the
country), “any detriment to diversity caused by common ownership” would be “negligible.”51

44 We find the UCC/MA Petition for Reconsideration to be deficient under Section 1.106(d)(1) of the Commission’s
rules with respect to “the grant of indefinite ‘temporary’ waivers of the NBCO Rule” as to Tribune properties in
markets other than Chicago. UCC/MA Petition for Recon. at 2. UCC/MA maintain that the Commission did not
address their arguments concerning this issue, yet the Commission denied the requests for the very reasons
advocated by UCC/MA, see 22 FCC Rcd at 21275–76, paras. 29–30, and UCC/MA do not explain why they
maintain that that decision was erroneous. See 47 C.F.R. § 1.106(d)(1) (stating that a petition for reconsideration
“shall state with particularity the respects in which petitioner believes the action taken by the Commission . . .
should be changed . . . and shall state specifically the form or relief sought . . . .”); Petition of the State of Ohio for
Authority to Continue to Regulate Commercial Mobile Radio Service
, 10 FCC Rcd 12427, 12438 (1995)
(reconsideration petition insufficient under Section 1.106(d)(1) where petitioner did not request any changes in
underlying Commission action or cite findings of fact or conclusions of law which it believed to be erroneous).
45 47 C.F.R. § 73.3555(d)(3).
46 1975 Order, 50 FCC 2d at 1076 n. 25.
47 1975 Order, 50 FCC 2d at 1077.
48 1975 Order, 50 FCC 2d at 1084–85; Washington Star Communications, Inc., Memorandum Opinion and Order,
54 FCC 2d 669 (1975); Metromedia Radio and Television, Inc., Memorandum Opinion and Order, 102 FCC 2d
1334 (1985), aff’d, Health & Med. Policy Research Group v. FCC, 807 F.2d 1038 (D.C. Cir. 1987) (applying
standard in new, not previously grandfathered combination).
49 22 FCC Rcd at 21277–78.
50 1975 Order, 50 FCC 2d at para. 110.
51 22 FCC Rcd at 21277–78.
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21.
UCC/MA errs in suggesting that the only considerations by the Commission in granting
the Chicago permanent waiver were the length of the combination and the lack of an NBCO Rule when
Tribune first acquired its properties in Chicago.52 Although the long history and duration of the
combination surely informed the analysis, the thrust of the Commission’s analysis concerns the result of
that particular relationship: a uniquely integrated and symbiotic relationship that fosters the creation of
quality news and public affairs broadcasting to the demonstrated benefit of the public in the Chicago
market.53 Contrary to UCC/MA’s interpretation, the Commission did not hold that the Chicago
combination’s grandfathered status was enough by itself to justify a permanent waiver, but instead
contrasted the situation in Chicago with the lack of equities supporting a permanent waiver for Tribune’s
other properties. As the MO&O said, “Tribune knew at the time it created the combinations in other
markets [aside from Chicago] that they did not comply with the Commission’s rules.”54 Further, the
Commission emphasized that the size of the Chicago market and its similarity to other markets in which
the Commission previously approved permanent waivers — indeed, the Commission previously granted a
permanent waiver for a newspaper-broadcast combination in Chicago — persuaded it that any harm to
diversity caused by the common ownership is insignificant.55
22.
UCC/MA suggests that it was error to “grant an unsolicited permanent waiver,”56 but it
points to no rule or precedent that would forbid the granting of such a waiver. More to the point, the
Commission did not expect that the primary premises of the analysis — the “quality news and public
affairs programming” arising from the long-standing and symbiotic combination of WGN(AM), WGN-
TV, and the Chicago Tribune and the diverse sources of news in the unique circumstances of the Chicago
market —would disappear after two, five, or ten years. Having found that the Chicago combination
served the public interest, the Commission had no reason to establish an expiration date for the waiver.
23.
UCC/MA’s last contention is that Tribune has not met the “‘considerably heavier’”
burden set by our precedent for justifying a permanent waiver of the NBCO Rule,57 suggesting that this
burden can only be met when the prior owner of a newspaper or broadcast property seeks to reacquire that
property because it has fallen into financial distress and that “market size [is] barely relevant, if at all.”58
This narrow reading of precedent is unfounded. The Commission has never set out bright-line rules for
applying the fourth exception to the NBCO Rule since the point of a catch-all exception is to deal with
unforeseen circumstances without arbitrary strictures. Moreover, the Commission has consistently looked

52 See UCC/MA Petition for Recon. at 17–18.
53 See, e.g., WGN-TV Application, at Exhibit 18, pp. 30–33. According to Tribune, during the time period of
Tribune’s common ownership of the properties WGN-TV has expanded its broadcast to 31.5 hours per week of
regularly scheduled news programming, more than any other television station in the DMA. WGN-TV and
WGN(AM) are able to cover the wars in Iraq and Afghanistan, and give their stories a local perspective, through
their access to Chicago Tribune reporters assigned to those conflicts, including live interviews with reporters on the
ground. In addition, Tribune stated that the print and broadcast properties combined their efforts to cover political
news, including the 2002 Illinois gubernatorial debate and coverage of party conventions.
54 22 FCC Rcd at 21278. Because the Commission did not rely on the abstract grounds claimed by UCC/MA but
instead on the narrow circumstances of the transaction before it, UCC/MA’s suggestion that the Commission’s
“logic here would apply to the sale of every grandfathered cross-ownership,” Petition for Recon. at 15, is simply
wrong.
55 22 FCC Rcd at 21278.
56 UCC/MA Petition for Recon. at 14.
57 UCC/MA Petition for Recon. at 17 (quoting Applications of Capital Cities/ABC, Inc. and the Walt Disney
Company
, Memorandum Opinion and Order, 11 FCC Rcd 5841, 5887 (1996)); see also UCC/MA Petition for
Recon. at 19 n.19 (quoting Application of Hopkins Hall Broadcasting, Inc. and Shelbyville Publishing Co., Inc.,
Memorandum Opinion and Order, 10 FCC Rcd 9764, 9766 (1995)).
58 UCC/MA Petition for Recon. at 19.
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to the size and diversity of the market at issue in considering whether the purposes of the NBCO rule
would be served by its application in each case.59 Given the “uniquely long-term symbiotic relationship
between [Tribune’s] broadcast stations” and the Chicago Tribune that provides a special benefit of
continued cross-ownership, coupled with the slight cost to diversity in Chicago’s massive media market
of continued cross-ownership, Tribune has in fact shown sufficiently “unique or special circumstances”60
to justify the granting of a permanent waiver of the NBCO Rule to its Chicago licensees. Based on the
record, we find that the decision to grant a permanent waiver of the NBCO Rule was justified and affirm
the Commission’s decision on this issue.

C.

The License Renewals

24.
As noted above, UCC/MA state that they seek reconsideration of the “unexplained”
decision to grant the renewal of licenses of stations KTLA(TV), WTIC-TV, WCCT-TV, and WPIX(TV).
Their only argument in support of this statement is one sentence that says the Commission did not address
or justify why renewal should be granted to those licenses.61 This is incorrect. In the MO&O, the
Commission stated that the only issue remaining in the renewal proceedings was the requested NBCO
waivers and that the arguments raised in the transfer proceeding and the renewal proceedings were
essentially the same.62 Therefore, in the interest of administrative efficiency, it consolidated its analysis
of those arguments.63 In addition, the Commission addressed, and rejected, petitioners’ arguments that
the renewal applications had been defective on their face.64 In light of the fact that the Commission did
address the outstanding issues in the renewal proceedings, it cannot be said the decision to grant the
renewals was “unexplained.” We, therefore, affirm the decision to grant the renewals.

D.

The Teamsters

25.
In the comments they filed in the original transfer proceeding, the Teamsters did not ask
that the Commission deny the application and did not allege that the proposed structure of Tribune
following the transfer of control would violate any Commission rule or policy. Instead, they asked that
the Commission “take a close look at the proposed ownership structure of the transferee” to determine
whether the Commission’s diversity and localism concerns had been adequately addressed and
minimized. The Commission’s decision quoted Section 310(d) of the Act, which states that, when acting
on an application for assignment or transfer of a license:

59 See Application of Hopkins Hall Broadcasting, 10 FCC Rcd at 9766 (stating that “[i]n analyzing the impact of a
waiver [of the NBCO Rule] on competition and diversity, it is necessary to first determine the relevant market,”
declining to grant a waiver when doing so would eliminate one of only three independent voices in small
community, and contrasting the local market of 32,000 people to the “major market[s]” of Chicago and New York);
see also, e.g., Fox Television Stations, Inc., Declaratory Ruling, 8 FCC Rcd 5341, 5351 (1993) (granting a
permanent waiver for a New York licensee, and “focus[ing] upon those media voices available in the city of New
York which are responsive to the local problems and needs of the residents there”); Applications of Capital
Cities/ABC, Inc.
, 11 FCC Rcd at 5890–91, 5892–93 (The Commission declined to grant the waivers without a more
detailed analysis of competition and diversity within the relevant markets. The applicants had only submitted
analysis’ based on DMA and not communities of license.).
60 Applications of Capital Cities/ABC, Inc., 11 FCC Rcd at 5888 (1996).
61 UCC/MA Petition for Recon. at 2.
62 22 FCC Rcd at 21267.
63 Id.
64 22 FCC Rcd at 21283–84.
9

Federal Communications Commission

FCC 14-7

[T]he Commission may not consider whether the public interest, convenience and
necessity may be served by the transfer, assignment, or disposal of the permit or license
to a person other than the proposed transferee or assignee.65
The Commission explained that this provision confines its review of a transfer of control application to
consideration of only the qualifications of the proposed transferee and does not permit it to consider
whether a different transferee might better serve the public interest. It also explained that the
Commission regularly reviews the organizational and governing structure of an applicant, but that in
conducting those types of reviews, the question is whether the organizational structure of a proposed
licensee complies with our rules and policies, not whether it hypothetically could be changed to better
serve the public interest. If an applicant’s structure results in a violation of the rules, the structure must be
revised or the application will be denied. If an applicant’s structure fully complies with the rules, there is
no basis on which to order its revision. The MO&O stated that to engage in the type of review urged by
the Teamsters would involve the Commission in endless speculation as to whether the organizational
structure of each individual applicant could somehow be improved to generate an additional public
interest benefit. Because no party had alleged that the Transferees’ proposed organizational and
governing structure violates any Commission rule or policy or any other statute, rule, or policy, the
Commission declined to conduct the kind of review sought by the Teamsters and did not order any
changes to the organizational or governing structure of the ESOP Plan or the Tribune Trust as a condition
of granting the transfer applications.
26.
In its petition for reconsideration, the Teamsters argued that the party controlling
Tribune, Zell, would not own Tribune. They further argued that the beneficiaries of the ESOP Plan, who
Teamsters contend are the rightful owners of Tribune, would have no role in the selection of Tribune’s
directors and would no have no opportunity to select the Tribune ESOP Plan trustee. The Teamsters
argued that this arrangement violated Section 310(d) of the Communications Act of 1934, as amended,66
because it separated beneficial ownership of Tribune from day-to-day control over station personnel,
programming, and finances. Teamsters concede that the Commission may lawfully vest control of a
broadcast licensee in a trust and that “ownership and control of a licensee may, consistent with Section
310(d), be divided between a trustee who has legal ownership and beneficiaries who have beneficial
ownership.”67
27.
In their opposition, the Transferees argued that the Teamsters misstated the degree of
separation between ownership and control of Tribune.68 They state that the ESOP, which was organized
as a trust under Illinois law, at all times held a controlling interest in Tribune and had the right to elect a
majority of the company’s board of directors, giving it control of the company.69 Furthermore, they stated
that the employee-beneficiaries of the ESOP plan held pass-through voting rights with respect to allocated
shares on specified major matters affecting Tribune, such as any sale of all or substantially all of
Tribune’s assets, on future mergers, and on recapitalizations.70 The Transferees also stated that the trustee
of the ESOP Plan was a fiduciary required under federal pension law to vote the stock solely for the
benefit of the employee participants. They contended that the trustee owed its fiduciary duty solely to the
employee participants and not to Tribune’s management or its board of directors.71

65 47 U.S.C. § 310(d).
66 Id.
67 Teamsters Reply to Opposition at 2.
68 Tribune Opposition to Teamster’s Petition for Recon. at 4.
69 Id.
70 Id.
71 Id.
10

Federal Communications Commission

FCC 14-7

28.
We find the Teamsters’ arguments to be without merit. Our Rules specifically permit
trusts designed to separate control of a licensee from beneficial ownership to serve as Commission
licensees.72 The Teamsters’ claim that Section 310(d) precludes a trustee from exercising control while
the beneficiaries of the trust receive only economic benefits is inconsistent with our Rules and with
precedent.73 In some proceedings, the Commission even has required ownership interests to be placed in
trusts when our Rules preclude the beneficial owner from exercising control over the licensee.74 Here, the
transfer of control was to a trust, which delegated day-to-day operations of the licensee to another
attributable party, who was answerable to the trust and to its trustee, who in turn had a fiduciary
obligation to the beneficiaries. In addition, we note that here the trust beneficiaries exercised a degree of
control over the licensees because of their pass through voting rights on certain major company decisions.
In addition, the Commission passed on the qualifications of Zell, the ESOP Plan, the Tribune Trust and
EGI-TRB and authorized Zell to exercise control along with the other transferees.75 Nothing in this
arrangement as presented in the record is in violation of our Rules and policies. Therefore, we affirm the
previous finding that the post-transfer organization of Tribune complied with our Rules and policies.

IV.

ORDERING CLAUSES

29.
ACCORDINGLY, IT IS ORDERED, the petition for reconsideration filed by the United
Church of Christ and the Media Alliance in MB Docket No. 07-119 IS GRANTED TO THE EXTENT
SET FORTH ABOVE AND OTHERWISE DENIED, and the petition for reconsideration filed by the
International Brotherhood of the Teamsters IS DENIED.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary

72 See 47 C.F.R. § 73.3555, Note 2(d) (2006). See also Applications of Arthur McBride, Jr., Memorandum Opinion
and Order, 14 FCC Rcd 13551 (Med Bur. 1999).
73 The cases cited by the Teamsters are not relevant. The first, Alabama Educational Television Commission
Decision
, 50 FCC 2d 461 (1975), does not deal with a licensee’s organizational structure. The second, Southwest
Texas Public Broadcasting Council
, 85 FCC 2d 713 (1981), holds that a licensee may delegate day-to-day control
over many matters to an unaffiliated third-party, as long as it does not relinquish all control without Commission
consent. Here, the Commission expressly granted its consent to the transfer of control to Zell and the other parties
identified in the applications.
74 Applications of Shareholders of AMFM, Inc., 15 FCC Rcd 16062,16072 (2000).
75 Tribune I, 22 FCC Rcd at 21284.
11

Federal Communications Commission

FCC 14-7

Exhibit 1

File Number

Call Sign

ID

Community

BTCCT-20070501AEY
WPIX
73881
New York, NY
BTCCT-20070501AEZ
WTXX
14959
Waterbury, CT
BTCCT-20070501AFC
KDAF
22201
Dallas, TX
BTCCT-20070501AFD
WTIC
146
Hartford, CT
BTCCT-20070501AFE
WPMT
10213
York, PA
BTCCT-20070501AFF
WPHL
73879
Philadelphia, PA
BTCCT-20070501AFG
WXIN
147
Indianapolis, IN
BTCCT-20070501AFJ
KWGN
35883
Denver, CO
BTCCT-20070501AFK
KTLA
35670
Los Angeles, CA
BTCCT-20070501AFL
KRCW
10192
Salem, OR
BTCCT-20070501AFM
WTTV
56523
Bloomington, IN
BTCCT-20070501AFN
WTTK
56526
Kokomo, IN
BTCCT-20070501AFR
KTXL
10205
Sacramento, CA
BTCCT-20070501AFS
KMYQ
69571
Seattle, WA
BTCCT-20070501AFT
WXMI
68433
Grand Rapids, MI
BTCCT-20070501AFZ
KPLR
35417
St. Louis, MO
BTCCT-20070501AGB
WSFL
10203
Miami, FL
BTCCT-20070501AGC
KHCW
23394
Houston, TX
BTCCT-20070501AGE
WGN
72115
Chicago, IL
BTCCT-20070501AGG
KCPQ
33894
Tacoma, WA
BTCCT-20070501AGL
KSWB
58827
San Diego, CA
BTCCT-20070501AGM
WDCW
30576
Washington, DC
BTCCT-20070501AGO
WGNO
72119
New Orleans, LA
BTCCT-20070501AGP
WNOL
54280
New Orleans, LA
BTCCT-20070501AFO
K20ES
12671
Pendleton, OR
BTCCT-20070501AFP
K24DX
12678
Pendleton, OR
BTCCT-20070501AFQ
KRCW-LP
35151
Portland, OR
BTCCT-20070501AFU
K25CH
69575
Centralia, WA
BTCCT-20070501AFV
K29ED
69574
Everett, WA
BTCCT-20070501AFW
W42CB
64440
Hesperia, MI
BTCCT-20070501AFX
W52DB
64442
Muskegon, MI
BTCCT-20070501AGH
K25CG
33898
Aberdeen, WA
BTCCT-20070501AGI
K42CM
33895
Centralia, WA
BTCCT-20070501AGJ
K54DX
33896
Ellensburg-Kittitas, WA
BTCCT-20070501AGK
K64ES
33899
Chelan, WA
BTCCT-20070501AGN
W51CY
64680
Chambersburg, PA
BTC-20070501AGF
WGN(AM)
72114
Chicago, IL
12

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