FCC Greenlights Cox-Urban One Houston Deal With Conditions

 

Story by Inside RadioWritten by Scott Halleran

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Urban One has won approval from the Federal Communications Commission for its $27.5 million purchase of four FMs in Houston from Cox Media Group. To comply with the commission’s local ownership rules, the African American media specialist is spinning off two FMs in H-Town. Once the deal with CMG closes, the spin-offs will be placed in the Sugarland Trust on the condition that both stations be sold within two years.

In April, Urban One subsidiary Radio One inked a deal to acquire CMG’s entire Houston radio cluster: Country “93Q KKBQ-FM, the classic rock “Eagle 106.9 & 107.5” simulcast of KHPT-FM and KGLK-FM, and classic country “Country Legends 97.1” KTHT-FM.

Urban One already owns three FMs in H-Town, a market with 76 full-service radio stations, where the subcap is five FMs. So it will place two stations – KTHT and its own gospel “Praise 92.1” KROI – in the Sugarland Trust once the deal with Cox closes. That would leave Urban One with the maximum allowed five FMs.

In approving the deal, the FCC has given the Sugarland Trust two years to sell the two stations. That won’t be a problem for KROI since Urban One in April signed a deal to sell it to Spanish Broadcasting System for $7.5 million. Urban One has said it is “actively engaged in discussions to sell KTHT.”

Under terms of the license transfer approval, the trust is required to provide every six months a report describing the efforts to market those assets to third parties.

Because they create a “potential for abuse,” the Commission is selective about granting permission for divestiture trusts, saying it does so “only where necessary, and then to as limited an extent as possible.”

But Media Bureau Audio Division Chief Albert Shuldiner notes that the Urban One deal won’t diminish the number of voices in the Houston market since it has committed to trying to sell both spin-offs to in-market minority operators or new market entrants. Shuldiner points out that Urban One has already agreed to sell KROI to a minority-owned broadcaster that is a new entrant to the Houston market. And he says the trust will give Urban One and the trustee more time to find a buyer for KTHT. Both of the spin-offs are high powered Class C stations.

“Under these circumstances we conclude that the proposed use of the divestiture trust for a limited period is in the public interest,” Shuldiner concludes. “Based on our review of the assignment applications, we conclude that the applicants are fully qualified and that grant of the applications, subject to the conditions set forth below, will serve the public interest, convenience, and necessity.”