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Here is the Google cache of a Radio & Television Business Report article with more details. I italicized and underlined the relevant sentences below.


https://webcache.googleusercontent.com/search?q=cache:https%3A//www.rbr.com/npg-abandons-a-missouri-monopoly-move/

Quote

NPG Abandons A Missouri Monopoly Move

October 18, 2019
 

On April 4, one of the biggest transactions to result from the FCC’s November 2017 party-line vote to eliminate its cross-ownership rules for newspaper and broadcast media and for radio and TV, respectively, was struck.

It raised eyebrows, as it would have given one company control of the ABC, CBS, NBC and FOX affiliates serving one mid-America municipality and its surrounding towns.

It now seems that the Third Circuit of the U.S. Court of Appeals’ Sept. 23 decision to vacate and remand the rule write has played a part in the abandonment of what would have been a controversial multi-million dollar transaction.

 

On October 15, Wiley Rein communications law attorney John Burgett had a letter hand-delivered to the office of FCC Secretary Marlene Dortch requesting the dismissal of a Form 314 filing made some five months before by St. Joseph TV License Company.

That’s the official licensee of Heartland Media, which in April announced that it was selling its KQTV-2 in St. Joseph, Mo., to News-Press & Gazette Company (NPG) for $13,650,000.

The brief one-paragraph letter from Burgett requests that, on the licensees behalf, the application seeking Commission approval of this deal be dismissed.

“The transaction specified in the application is no longer being pursued,” Burgett said, offering no further comment.

The letter was added to the FCC’s KQTV online correspondence folder on Friday (10/18).

Via e-mail, Burgett explained to RBR+TVBR that the request to dismiss the application was two-fold: Heartland opted to request the application’s dismissal because of the combined result of the FCC’s delay in acting on the application — pending since early April — and the uncertainty raised by the Third Circuit remand.

It is the latter issue that will likely be magnified by brokers and attorneys, and by companies who have been sitting on deals forged solely by the cross-ownership rule revision.

Dirk Alsbury, KQTV Sales Manager and interim GM, was out of the office Friday and unavailable; Heather Shearin retired as KQTV GM in June, ending some 36 years in television. David Bradley, NPG’s CEO, was not immediately available for comment.

The now-scuttled deal involves a longtime ABC affiliate serving a city of 75,000 some 40 minutes to the north of Kansas City International Airport, sold in June 2016 by Nexstar Media Group to Heartland Media as part of a five-station, $115 million transaction.

Other stations in that transaction included WFFT-TV in Ft. Wayne, Ind.; KIMT-TV in Rochester, Minn.; WTHI-TV in Terre Haute, Ind.; and WLFI-TV in Lafayette, Ind.

Joining Heartland in the acquisition was Anthony Hauser’s MSouth Equity Partners.

Had “KQ2” been acquired by NPG, it would have been paired with FOX affiliated KNPN-LD 26, NBC affiliated KNPG-LD 21, and CBS affiliated KCJO-LD 30 — as well as “St. Joseph’s CW 6,” which is housed on the LD-2 channel associated with KNPG; it also brings St. Joseph the Spanish-language network Telemundo thanks to its presence on KNPG’s LD-3 signal.

If that’s not enough, NPG owns the daily News-Press, with roots dating to 1845.

With NPG no longer in the ABC affiliate’s future, it’s now up to Bob Prather to decide what to do next regarding KQ2.

Prather, who exited as Gray Television’s President/COO in June 2013, formed Heartland in October 2013.

Whatever move he makes, it will no longer result in one company controlling every Big Four affiliate in the nation’s 200th-largest market, with some 38,780 homes.

The NCTA – The Internet & Television Association is likely highly pleased. In June 6, it filed an informal objection to the transaction, saying the proposed acquisition “poses a serious risk of consumer and competitive harm.”

It also noted that NPG “exploited” a loophole in FCC rules that involves the use of low-power TV stations to avoid the Top-Four Prohibition in its duopoly regulations.

Then, there is the contentious issue of retransmission consent agreements with MVPDs and DBS providers DirecTV and DISH Network.

“Should the Commission allow NPG to acquire KQTV, any MVPD serving the St. Joseph
market that carries NPG’s stations would be forced to negotiate retransmission consent for all four top-four network affiliates with a single entity, NPG, granting NPG undue leverage in these negotiations, irrespective of the fact that only one of the stations is full power,” NCTA said. “This is precisely the type of consumer and competitive harm that the Top-Four
Prohibition is intended to prevent.”

Thanks to the Third Circuit, consumers will not be “harmed” by a deal NPG deemed important to the financial health of local television in America’s smallest markets.


 

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