Thanks to the COVID-19 pandemic, asset purchase agreements filed with the FCC prior to March 16 — in particular those for radio stations — may have led the buyer and seller to revise the final purchase price of payment terms associated with any deal that closed after the end of the first quarter of 2020.
Do the sellers of a broadcast media property have an obligation to notify the FCC if they close a sale for a demonstrably lower, or different, price than what was listed in the original APA the FCC granted?
It’s a question presented to RBR+TVBR by a reader, and we shared it with several esteemed Washington, D.C. communications attorneys. Two responded.
David Oxenford, a partner with Wilkinson Barker Knauer who has taken a key role in most Educational Media Foundation transactions of late, had this to say:
Not if it happens after the deal has been approved by the FCC.
To that end, Oxenford notes that, at least with his clients, there’s not been much in the way of renegotiations of deal prices. And, he finds that surprising.
Also chiming in is Francisco Montero, Partner with Fletcher Heald & Hildreth.
According to Montero, if a purchase agreement is amended to change the terms of the purchase price, there is an obligation to keep the application current.
“There is a certification that the application that was filed contains all the material terms of the transaction,” Montero says.
Having said that, Montero is sure there are instances when, especially after the FCC has already granted the application, there is a renegotiation of the purchase price prior to consummation.
What normally happens in this case? “The parties just file a consummation notice without notifying the FCC of the changed payment terms,” Montero says.
But, if you switched, for example, from an all-cash deal to a seller-financed deal, beware.
“You must inform the FCC of the secured debt if secured by the station assets,” Montero advises.
