MIXed message: Will FCC "clear" WUMX sale?
A year ago, the FCC blocked Clear Channel's acquisition of a Charlottesville radio station. Now, the regulatory agency has stunned the media world by announcing that it wants to loosen broadcast ownership rules, and to that end it held a major public hearing February 27 in Richmond.
According to Editor & Publisher, a leading media industry magazine, FCC Chairman Michael Powell and the two other Republicans on the five-member Commission want to replace decades-old regulations with new ones "supported by research and able to survive legal challenges in a market altered by the growth of the Internet, satellite broadcasts, and cable television."
Critics, however, say that media behemoths– such as Clear Channel, which owns over 1,200 radio stations across the country, including five or six in Charlottesville– already wield too much power.
Such fear is what prompted the FCC to put the brakes on Clear Channel's acquisition of Charlottesville's WUMX, better known as Mix 107.5-FM. Three years ago, Clear Channel tried to buy Mix, reportedly for $5.9 million.
However, the deal was structured as a lease-to-buy, since the FCC had early concerns about Clear Channel's share of the Charlottesville radio market. When the FCC spanked Clear Channel last March, Chairman Powell blistered the corporate giant for providing "no public interest benefits or mitigating circumstances" to defend its purchase.
"Indeed," said Powell, "the only significant evidence presented was that the transaction would create a market in which the top two owners would have a combined 94.2 percent market share."
The other big Charlottesville player is Eure Communications run by Brad Eure.
Eure is still smarting over the Justice Department's late 1990s request that he sell two little AM stations, WCHV and WKAV, in order to assemble his current powerhouse roster of three: 3WV, WINA, and WQMZ.
Ironically, the Justice Department's slap at Eure wound up helping Clear Channel, one of America's biggest radio conglomerates, gain control of six stations. Meanwhile, home-grown Eure had to settle for three . Brad Eure says he skipped the recent Richmond hearing because it looked like "the same-old, same-old."
In an event focused not just on radio but also on newspaper and television ownership, the Richmond hearing featured all five members of the Commission– including Chairman Powell.
"He has said we need to look at the rules, which date back to when there were just three networks," says FCC spokesperson Rosemary Kimball.
But what effect will these hearings and proposed new rules have on Clear Channel's continuing attempt to buy Mix 107.5?
"It's hard to tell," says Clear Channel lobbyist Andy Levin. "I think that acquisition is kind of on hold until the FCC completes its rule-making process." Levin says the FCC has been telling him the new rules could be ready as early as June, but he isn't expecting them until late summer.
Meanwhile, although Clear Channel may not actually own Mix 107.5, it certainly operates it. How long can that continue?
"It could, in theory, go on indefinitely," says an FCC source, declining to be named. The source adds that new rules may, however, address such situations.
Critics caution that mergers resulting from relaxed rules could leave, in Editor & Publisher's words, "a few huge companies in control of what people watch, hear, and read."
Perhaps the critics are too nervous, if the ratings are any indication.
Clear Channel dumped local Mix 107.5 team of Vinny Kice and Brooke Shealy in June 2002, only to see the numbers plummet as Texas-based "Kidd Kraddick in the Morning" took over.
According to the latest Arbitron figures, for the fall of 2002, Mix had 500 listeners ages 25-54 during any given weekday moment. By contrast, in the spring of 2002, before it nixed the local morning team, it had 700.