Thursday, March 22, 2007

FCC Approves Disney/ABC - Citadel deal

March 22, 2007

With the Sirius and XM merger application filed, it seems appropriate to discuss news events in the competitiveness of the sector:

According to Radio & Records:

The FCC has approved Citadel Broadcasting’s acquisition of 24 Disney/ABC Radio stations. However, as part of the deal, Citadel has agreed to spin-off 11 of the stations it currently owns in order to not exceed the FCC’s local ownership cap rules. Those 11 stations will be transferred into a trust while Citadel begins the process of finding buyers for them.

When the acquisition was announced in February 2006, the deal was valued at $2.7 billion.

In a statement, FCC commissioner Jonathan Adelstein said that he approved of the deal in part, “Because of Citadel’s commitment to comply with our media ownership rules and to make special efforts to increase diversity of ownership. One of the positive results of this merger is that Citadel is losing its grandfathering rights with respect to eleven stations in seven markets in which its attributable [sic] radio interests exceed our local radio ownership limits. I am pleased that Citadel decided to resolve this issue by creating a non-attributable trust for the purpose of divesting the merged entity of these non-compliant stations.”

Commissioner Michael Copps added, “While I am always troubled by the effects on our media environment of allowing a large media conglomerate to acquire even more stations, I believe this transaction is narrowly—quite narrowly—in the public interest because ABC’s and Citadel’s holdings do not overlap in any local market and, most important, because Citadel must divest the 11 stations that it owns in excess of our local ownership limits.”

Copps tagged his comments with this: “I will be watching the trust’s efforts closely to ensure the results envisioned in this item.”

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3/22/2007 07:30:00 PM

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