Entercom, CBS Radio Request Temporary Ownership Waiver; OK Expected

Entercom and CBS Radio filed applications with the FCC for approval of Entercom’s all-stock buy of CBS (see 1702020070), show FCC and SEC filings. As part of deal approval, Entercom agreed to divest stations in seven markets, and the companies are asking the FCC for a six-month waiver of the TV/radio cross-ownership rules to allow CBS CEO Les Moonves and CBS Chief Operating Officer Joseph Ianniello to sit on the Entercom board (see 1703210041), said an SEC filing. The deal is expected to close in the second half of 2017, Entercom said.

Since the waiver request is temporary, it likely will be approved, several communication lawyers told us. “It doesn’t seem like an unreasonable request,” said Georgetown University Institute for Public Representation Senior Counselor Andrew Schwartzman, a longtime advocate for strong broadcast ownership regulation. The waiver is necessary since CBS and Entercom have licenses in four overlapping markets, the SEC filing said. “As directors of Entercom and officers of CBS, Messrs. Moonves and Ianniello will have attributable interests in the television stations owned by CBS and the radio stations owned by Entercom following the Merger.” Since the deal is seen as likely to get approved with Entercom’s divestitures, and the waiver request includes a six-month maximum, it's unlikely the FCC will deny it, attorneys said.

Markets where divestitures will take place are listed in a Form 314 filing in the FCC’s Consolidated Database System (CDBS). The companies will divest two FM stations in Boston, one in Los Angeles, three in Sacramento, one in San Diego, four in San Francisco, two in Seattle, and one in Wilkes Barre-Scranton, Pennsylvania. Under the deal, any of the 14 stations that haven’t been sold by the merger’s close will be put in a trust, with MVP Capital founder and broadcast broker Elliot Evers as trustee, according the application. It's expected the divested stations will all be Entercom stations rather than CBS Radio licenses, the filing said. “No stations owned by CBS’s radio business will be divested prior to the closing of the Merger,” the SEC filing said.

The application for the deal includes an “Entercom Character Disclosure” on Entercom’s KDND(FM) Sacramento's being the subject of a hearing designation order over a 2007 radio contest that led to a listener's death (see 1702030074). Entercom turned KDND’s license in as part of the lead-up to the merger and agreed to a settlement with Media Action Center -- which petitioned against KDND’s license renewal, the filing said. Along with Entercom’s agreement to turn in KDND’s license, MAC received “an amount less than $40,000” in the settlement, according to a joint settlement agreement. FCC Administrative Law Judge Richard Sippel on Thursday dismissed the matter, according to the Form 314 filing.