It is a move that could possibly lead to a thaw in regulatory policy when it comes to local broadcast television ownership limits. On June 19, the FCC’s Media Bureau, headed by Holly Saurer, gave its approval to a swap of stations between Brian and Patricia Lane’s Marquee Broadcasting and Gray Television.
That transaction has officially closed.
“We are excited to serve the Wyoming and Nebraska communities and look forward to working with leaders in the communities as well as other local media outlets to better serve the area with news and entertainment, as well as help local businesses grow,” Marquee CEO Patricia Lane said following the completion of a swap that required significant FCC regulatory scrutiny.
In a deal with no cash consideration, the Media Bureau said yes to a transaction announced on February 1 that sees Gray hand KCWY-13 in Casper, Wyo., affiliated with NBC and The CW+; KGWN-5 in Cheyenne, Wyo., a CBS/NBC/CW+ affiliate using KSTF-10 in Scottsbluff, Neb., as a semi-satellite to Marquee; and KNEP-TV in Sidney, Neb., marketed as an NBC affiliate serving western Nebraska to Marquee.
In return, Marquee will hand to Gray its Construction Permit for a new, unbuilt television station in Salt Lake City, which today carries the KCBU-TV calls.
Marquee Chief Operating Officer Gene Steinberg will serve as the interim General Manager of the newest markets for Marquee, which also owns stations in Maryland, Georgia, Kentucky, Ohio, and Idaho. The company with shared ownership between Patricia and Brian Lane also owns a construction permit for a full power television station in Sheridan, Wyo.
For Gray, the exit from Casper, Wyo., concludes an ownership tenure that saw Gray Television in January 2019 blame the Justice Department for major job cuts at the news department of its “Wyoming News Now” operation as the regulatory body refused to permit Gray to complete its February 2018 purchase of KGWC-14 in Casper, Wyo.
The DOJ said it created a situation where too much market concentration would result from a duopoly; Gray argued that KGWC’s ratings were so small that this would not be an issue.
In May 2019, with its merger with Raycom Media complete, Gray spoke out against the “top-4 restriction,” advocating for its “long overdue” abolishment. With the 2018 quadrennial review’s completion, Chairwoman Jessica Rosenworcel declined to make the change.
In the case of this swap, Saurer explained that the Local Television Ownership Rule generally prohibits, including the transfer or assignment of
ownership of multiple top-four affiliated program streams serving a single DMA. Yet, she said, the Commission will consider on a case-by-case basis whether the public interest would be served by permitting the arrangement to continue, including “any unique circumstances of the market and potential effects related to service disruption to viewers.”
With unopposed applications before the Commission, the Media Bureau reviewed the applicants’ case-by-case showing and found it would be in the public interest to permit Marquee to own KGWN in the Cheyenne-Scottsbluff DMA with both top-four network affiliations intact, “consistent with the standard articulated in the 2018 Quadrennial
Order.” Accordingly, Saurer said, the Media Bureau concluded that application of the Top-Four Prohibition is not warranted in this case as it granted the applications from Marquee and Gray.
Key to the decision is the assertion from Marquee and Gray that not only does the Cheyenne, Wyo.-Scottsbluff, Neb., DMA not support four independent stations, but it also does not even support one stand-alone NBC affiliated station. Enter Tideline Partners LLC head Greg Guy, who was called on as a media transactions expert on behalf of Gray Television. Guy, in a statement, shared that the “existing allocation of affiliations in the [Cheyenne-Scottsbluff] market demonstrates exactly why the sparse population spread over rural Wyoming and Nebraska cannot support four independent television station operators of the ‘Big 4’ affiliations.”
Thus, Marquee and Gray successfully argued, if KGWN could not be assigned with the two affiliations intact, the most likely result is that viewers in the Cheyenne-Scottsbluff
DMA will lose over-the-air access to NBC programming, local news service, or both.
In its decision, Saurer said, “The evidence in the record demonstrates that splitting up the top-four network affiliations currently on KGWN would likely lead to a reduction in network programming or local news in the Cheyenne-Scottsbluff DMA, which would not serve the public interest.”
Gray obtained KCWY, KSTF, KGWN and KNEP in a deal announced in November 2013; the agreement included KGNS-TV in Laredo, Tex., and was valued at $23 million.
