FCC OKAYS NBC ACQUISITION OF TELEMUNDO, CREATING 3-WAY IN L.A.
FCC on Wed. approved NBC’s acquisition of Telemundo, giving network and its parent GE control of 2 TV stations each in N.Y., Chicago, Dallas and Miami, and creating nation’s first triopoly with common ownership of 3 stations in L.A. NBC requested and was granted year to come into compliance with Commission’s ownership rules, which allow duopoly but not triopoly. NBC said it would divest KVEA (Ch. 52) in L.A. to meet FCC rules and in meantime would operate that station independently of others. Acquisition gives NBC additional 11 full-power TV stations and 17 low-power and TV translator stations.
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Under terms first announced in Oct., NBC will pay $1.98 billion for Telemundo. Coalition of Hispanic groups and Paxson Communications both opposed acquisition (CD Dec 6 p11). Spokeswoman for National Council of La Raza, which was among groups opposing deal, said it was “extremely disappointed” by decision and would continue to monitor NBC’s actions on Hispanic programming, employment and other issues. Paxson spokeswoman said company was studying decision and would have no further comment “at this time.” NBC spokesman said only that company was “very pleased” with FCC’s decision.
FCC Comr. Copps issued separate statement in which he approved decision in part and dissented in part. While he praised NBC’s commitment to continuing Spanish-language programming and said he believed network’s backing would ease financial current pressures on Telemundo, he said he couldn’t accept NBC’s 3-way ownership in L.A. “I cannot support this level of concentration by a single owner absent compelling public interest,” Copps said.
Hispanic groups contended that acquisition wasn’t in public interest because NBC hadn’t demonstrated that Telemundo, under NBC’s leadership, would become more effective competitor to its chief Spanish-language programming rival, Univision. Those groups also were seeking guarantees of Hispanic employment at Telemundo stations. NBC said it was under no obligation to disclose its postmerger employment plans. It also said acquisition would enhance programming diversity by meeting needs of broad segment of Spanish-speaking population. FCC said Hispanic groups had “provided no evidence, other than their own opinion, that Hispanic employment will suffer.”
Paxson argued that acquisition violated provisions of NBC’s agreements with Paxson because it would prevent NBC from following through with its planned purchase of Paxson. NBC currently owns more than 30% of Paxson. Paxson is in arbitration with NBC over its own contractual dispute and FCC said in its ruling Wed. that Commission was not proper forum to resolve “such private matters.” Paxson essentially had argued that acquiring both Telemundo and Paxson would put NBC in violation of ownership limits. Despite allowing NBC- Telemundo deal, FCC admonished NBC for exerting control over Paxson’s board and said that conduct showed NBC had held attributable ownership interest in Paxson. As result, FCC said NBC was “ultimately in violation of our multiple ownership rules.” Agency said admonishment was enough, however, since NBC’s board nominees since had resigned.
FCC said fact that L.A. had 19 independently owned TV stations meant that triopoly would have “less of an impact” on both diversity and competition than such deal would have had in smaller, less diverse market. FCC said size and scope of sale of 3rd station in L.A. warranted allowing NBC 12 months to divest itself of that station. Commission ordered NBC to submit report every 90 days on its progress. FTC had approved deal in Nov. (CD Nov. 23 p9)