FCC 'Eager' Buyer, Not Neutral, in Gray JSA Dispute, Says Media General
The FCC is playing the role of an “eager purchaser” rather than a disinterested neutral agency by intervening in the dispute between Gray Television and Media General over a joint sales agreement connected with Gray’s purchase of Schurz stations (see 1603100058), said Media General to Franklin County, Georgia, Superior Court Monday. Media General was filing in opposition to a Gray emergency motion for reconsideration filed Friday that seeks to dissolve a court ordered injunction keeping the JSA in place. The FCC’s statement of interest in the case shows the injunction is “in contravention of federal law,” Gray said. The FCC’s position is “the result of Gray’s aggressive and misleading lobbying effort,” Media General said.
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Numerous broadcast attorneys have told us Media General’s vehement opposition to the commission’s stance is surprising considering its pending $4.6 billion sale to Nexstar, which still requires FCC approval. The FCC ordered the JSA between Media General and the then-Schurz-owned WAGT Augusta dissolved as a condition of approving the Nexstar transaction. Some broadcast attorneys told us the case over the JSA could be the beginning of an effort by Nexstar to challenge the Media Bureau’s stance on JSAs in transactions for its buy of Media General. The case could also be an effort to keep WAGT Augusta out of the incentive auction, broadcast attorneys said. “The FCC wishes for its own purposes to have WAGT participate in the spectrum auction, and therefore favors this option over keeping Media General’s contract rights intact, “ Media General said. It had no comment to us.
The broadcaster’s opposition filing cites a letter from 12 senators of both parties (see 1603110080) accusing the FCC of bypassing the extended grandfathering for JSAs that Congress passed in the 2016 Appropriations Act. The Media General filing said the FCC was working to “undermine” JSAs and that the commission is in conflict with Congress’ intent.
Allowing the injunction to continue “will force both parties into a position of violating the FCC’s Order and the Communications Act, and it will result in irreparable damage to Gray,” Gray said. By arguing Media General violated the Communications Act by getting the court order, the FCC is violating Media General’s right of petition under the First Amendment, Media General said.
The FCC action could be seen as an overreach, interfering in a contract dispute between two companies, one broadcast attorney told us. The FCC previously has penalized broadcasters who entered into contracts violating FCC rules, said Wilkinson Barker broadcast lawyer David Oxenford in a blog post Sunday. Entities in contracts with broadcast stations “may want to think about provisions requiring the station owner to seek prior FCC approval before any relief is given to the other contract party,” as this case shows the FCC could view seeking court orders to enforce a contract as an unauthorized transfer of control, Oxenford said.