The owner of the MyNetwork TV affiliate serving the Motor City has notified the day-to-day head of the television broadcasting company that seeks to purchase the station that it will not participate in any regulatory appeal of a decision that allows the multimillion-dollar transaction to “proceed with caution.”
Could that refusal to participate not only lead to a non-consummation of the sale of WADL-38 in Detroit, but also place all of the “sidecar” arrangements presently allowed by the Commission under new scrutiny, jeopardizing the Shared Services Agreement benefits of multiple leading broadcast station groups?
That’s what Kevin Adell, CEO of Adell Broadcasting Co., is saying, sharing with RBR+TVBR that Mission Broadcasting is on its own as it has until June 30 to consummate the $75 million acquisition of WADL-38. Alternatively, Mission may appeal the FCC’s decision to grant the transfer of control of WADL, with six major conditions.
Mission has until May 23 to file an appeal of the Commission’s April 23 Memorandum Opinion and Order giving a green light to the deal — but only if several requirements were met on the part of the Dennis Thatcher-led Mission Broadcasting.
To get the WADL deal done, Mission cannot turn to its close shared services provider, Nexstar Media Group, for financing. Furthermore, it cannot present Nexstar with a “performance bonus,” which the FCC called “an undefined workaround” to a proposed 70%/30% split of advertising revenue between Mission and Nexstar. That 70%/30% arrangement was deemed OK with the Commission.
What was not deemed permissible by the Commission was an exercise option allowing Nexstar to acquire WADL-38 from Mission. Nexstar is also prohibited from handling retransmission consent negotiations on behalf of Mission, requiring the Thatcher-led group founded by the late David Smith in 1996 to take on that task.
Then, there’s the matter of what will happen in Detroit to The CW Network, which Nexstar maintains majority ownership in. On September 1, The E.W. Scripps Co.’s WMYD-20 in Detroit will drop the network, which it grabbed only because Nexstar did not pay Adell after WADL-38 briefly assumed The CW in 2023. Prior to that, it was on a CBS News & Stations property.
Where will The CW go? Some still believe that WADL-38 will be the home. But, that can’t happen under the conditions presented in the Mission deal, as “no more than 15% of the total programming time aired on the station, including through any affiliation with The CW Network, NewsNation, or any other programming source that is majority-owned or controlled by Nexstar or its affiliates,” is permitted.
Mission must close the transaction by June 29, absent of any appeal. And, as Adell states in a letter sent Monday via Federal Express and by e-mail to Thatcher, “I am NOT in for the long haul.” Adell adds, “I will NOT be participating in the appeal and I will make sure there is no reference in the appeal that this is a joint appeal.”
Adell also informed Thatcher and Mission Broadcasting in the letter that he will not be filing any further extensions of the asset purchase agreement first filed for Commission approval in May 2023.
He then gave Thatcher an ultimatum. “I suggest that you close on the WADL acquisition with the FCC conditions placed on the license transfer before June 30, 2024 or seek alternative stations in Detroit to fulfill your plans.”
After June 30, Adell will be exploring “all of my options.”
Reached for comment on Monday morning, Thatcher told RBR+TVBR, “We have no comment at this time.”
Meanwhile, Adell said via a string of text messages sent to RBR+TVBR across Saturday and Sunday that his non-participation in any further deal extension or an appeal “will affect the industry and anyone that has a ‘sidecar.'”
Why? Adell believes that if no appeal is filed, it will set up a hearing designation order, putting Mission’s planned acquisition of WADL-38 in the hands of Administrative Law Judge Jane Hinckley Halprin. Such a move “is a death sentence for Mission Broadcasting and anyone in the industry that has a sidecar,” Adell insists.
While the WADL deal may be DOA should it be headed to an ALJ — given the death of proposed deals between Standard General and TEGNA, and Tribune Media and Sinclair Broadcast Group — “sidecar” arrangements may not necessarily be doomed in one fell swoop.
In granting conditional approval of the WADL sale to Mission, the FCC noted that all of Mission’s stations were operated by Nexstar Media Group but that just one — WPIX-11 in New York — was in a market where Nexstar itself did not own a station. If Halprin’s team were to consider the WADL transaction, could the WPIX arrangement as it stands today be in jeopardy?
That’s what Adell believes.
Therefore, any action from Halprin could put all of the other shared services arrangements under a microscope — should Mission allow that to happen.
