Tribune Critics Seek to Block, Limit Cross Ownership Waivers

Days before the Tribune Company expects to clear a major hurdle in its long exit from bankruptcy, consumer advocate groups renewed their objections to requests from the company that would let its broadcast-newspaper cross ownership (NBCO) ban waivers survive a change in control of Tribune’s broadcast licenses. Free Press, Media Alliance, the National Association of Broadcast Employees and Technicians (NABET/CWA), the United Church of Christ and the Benton Foundation said in a letter Friday (http://xrl.us/bnnd46) that Tribune’s requests for waivers of the ban must be evaluated under the standard adopted with the rule in 1975 because a federal appeals court has remanded the commission’s most recent attempts to change it. Meanwhile, Tribune’s bankruptcy proceeding may finally be approaching an end. Creditors opposing the reorganization plan recently approved by a bankruptcy court have until Wednesday to post a $1.5 billion bond in order to stay it, court filings show.

The consumer group letter ignored the Tribune station’s record of public service, the amount of local news its stations produce and the decline in value in the newspaper industry, said Tribune Vice President Shaun Sheehan. The FCC already has a rulemaking under way to evaluate its media ownership rules, he said. “The onus is on the FCC, not the private parties, to justify why they should keep these rules,” he said. “Given the downturn in the newspaper marketplace in particular ... we're hopeful the FCC will see the merit of allowing these types of” waivers, Sheehan said.

But Tribune’s critics said the company has to prove it deserves the waivers under existing FCC rules. “Tribune has the burden to demonstrate that the purpose of the rule -- that is diversity, competition and localism -- would be better served by waiving the rule rather than applying it,” the groups said in the letter. “Although Tribune has filed much paper in this proceeding, it has failed to make the requisite showing for any waivers of the NBCO,” the letter said. The groups asked the FCC to require Tribune to divest enough assets to bring it in compliance with the NBCO ban before approving any license transfers.

The letter also pointed to reports about news outsourcing at the one of the Chicago Tribune’s websites (http://xrl.us/bnnd8o) as evidence that “Tribune is being operated to maximize profits without regard to the quality of local news coverage.” Tribune’s decision to stick with Journatic, the outsourcing contractor, after a local public radio station reported about the company’s practice of “employing Filipino freelance workers to write stories under aliases ... provides further evidence that allowing the continued cross-ownership would be detrimental to the Commission’s public interest goals of diversity and localism,” the letter said.

Finally, the letter said the commission should not approve Tribune’s waiver requests pending the outcome of its media ownership rule review. “Two earlier attempts by the Commission to alter the newspaper-broadcast cross ownership rule have been reversed by the Third [U.S.] Circuit Court” of Appeals, the letter said. “Whatever the commission decides to do in the 2010 Quadrennial Review will undoubtedly be appealed and will not become final for years,” it said: “Because the ownership limits have to be reviewed every four years, granting a temporary waiver on the outcome of the rulemaking would effectively be the same as granting a permanent waiver.”

A bankruptcy court filing shows Tribune incurred $96,554 in FCC-related attorneys’ fees in July. Its counsel, Dow Lohnes, applies each month to the bankruptcy court for interim compensation and reimbursement. Dow Lohnes spent 163.7 hours during the month representing Tribune on FCC matters, the filing shows.