Here’s a deal that’s full of American Spirit, fueled by FCC “modernization.”
Raycom Media in late June forged an agreement with a longtime shared services agreement partner that would give it an Iowa TV station it could not legally obtain 15 years ago, when it owned another crosstown station.
At the same time, Raycom has moved forward with grabbing The CW affiliate in the capital of the Old Dominion, also operated via a shared services agreement.
Paperwork was filed with the Commission on Friday, following Raycom’s announced merger with Gray Television—the eventual recipient of this station. Two agreements were filed. The first agreement formally sees “KYOU License Subsidiary LLC,” controlled by American Spirit Media LLC, transfer control of KYOU-15 in Ottumwa, Iowa, to Raycom.
The price Raycom is paying to acquire KYOU-15 was not disclosed in the purchase agreement, which confirms that KYOU’s will eventually be assigned to Gray Television as part of a $3.6 billion merger with Raycom announced on June 25.
The second agreement filed with the Commission alongside the purchase agreement sees American Spirit transferring WUPV-65 in Richmond, licensed to Ashland, Va., to Raycom, in order for Gray Television to obtain control of The CW affiliate.
KYOU offers FOX programming on its main signal and is the Ottumwa-market NBC affiliate, offering programming via Channel 15.2 since late January 2018.
The transfer of KYOU comes some 15 years after Raycom was forced to sell the station, following its acquisition via the wholesale purchase of Waitt Media‘s properties.
At the time, Raycom owned KTVO-3, licensed to Kirksville, Mo. and also serving the Ottumwa, Iowa market. A duopoly was not possible due to the FCC’s rules as of 2003, and Raycom opted to keep the ABC affiliate while selling FOX-affiliated KYOU.
Raycom acted by selling KYOU to American Spirit Media and immediately entering into a shared services agreement and studio lease agreement with Raycom. This arrangement continued until now, even though Raycom in August 2003 parted ways with KTVO, selling it along with 11 other stations to Barrington Broadcasting for $262 million.
In Richmond, the history of WUPV’s ownership is tied to two other stations in the market. American Spirit predecessor Southeastern Media Holdings acquired WUPV and entered into a shared services agreement with Raycom’s then-owned WTVR-6 in Richmond. In November 2007, Raycom acquired Lincoln Financial Media‘s TV stations, which included NBC affiliate WWBT-12 in Richmond. It opted to keep WWBT, and sell WTVR. This resulted in a swap, with WTVR going to Local TV LLC — along with $83 million — in exchange of FOX-affiliated WBRC-TV in Birmingham, Ala.
Local TV LLC, backed by Oak Hill Capital Partners, was acquired by Tribune Media in 2013. Now, WTVR is poised to become a Sinclair Broadcast Group station.
Once that deal is approved, WTVR would finally wind up in Sinclair control more than 10 years after it wanted the station. In August 2008 the Department of Justice denied Raycom’s sale of WTVR to Sinclair. Why? Sinclair owned WRLH-TV in Richmond, and to meet FCC ownership limits agreed to sell it to Carma Broadcasting. Then, Sinclair would have engaged in a shared services agreement.
At the time, the government disapproved of such a plan.
Today, a full duopoly is permissible.
Under Chairman Ajit Pai, the FCC in November 2017 approved an Order that removes the “Eight-Voices Test” from the Local Television Ownership Rule. Instead, the Commission will use a “case-by-case review option in the Top-Four Prohibition to better reflect the competitive conditions in local markets.”
Further, the attribution rule for television JSAs was erased. Why? The GOP leadership at the FCC believes they are “beneficial agreements that serve the public interest by allowing television broadcasters to better serve their local markets.”
