Four Petitions Challenge KFUO Sale: All the Petitions Question the Ability of the Proposed Buyer, Gateway Creative Broadcasting, Inc., to Raise the Capital Necessary. Another Aspect That Could Raise Some Eyebrows at the FCC Is the Provision That the Classical Music Format Would Be Moved to the Station's HD2 Channel
Absher, Frank, St. Louis Journalism Review
The proposed sale of St. Louis' KFUO-FM "Classic 99" is now in the hands of the Federal Communications Commission, along with three petitions to deny the transaction. The likelihood of such a denial, says a noted communications attorney, depends on the ability of the buyer and seller to address two specific complaints.
As was ably reported by Sarah Bryan Miller of the St. Louis Post-Dispatch on stltoday.com, the four petitioning groups are The Committee to Save KFUO-FM, the Radio Arts Foundation, and two local citizens' groups. All four petitions question the ability of the proposed buyer, Gateway Creative Broadcasting, Inc., to raise the capital necessary to complete the purchase. Financial information provided to the FCC by Gateway shows a deficit in the past two years of operations for its current radio stations, and the group has recently resorted to direct mail pleas for donations to fund its proposed purchase of KFUO-FM.
Gateway, as Joy FM, operates two smaller stations and broadcasts Christian music. Gateway certified in its FCC filing that it is financially qualified to make the KFUO purchase. Gateway's president, Sandra B. Brown, signed the paperwork attesting to the organization's financial qualifications.
Bryan Miller of the Post reported that Gateway says it has $350,000 in hand after a fundraising effort, over $1 million in donor pledges, and a commitment from Cass Commercial Bank for a loan of $1.7 million. Involved in the fundraising have been former Cardinals pitcher Andy Benes and slugger Albert Pujols and their wives, Bryan wrote.
Another aspect of the proposed sale that could raise some eyebrows at the FCC is the provision that the classical music format now heard on KFUO-FM would be moved to the station's HD2 channel, which Gateway would lease to KFUO's current owners, the Lutheran Church-Missouri Synod. However, there are rules against a seller using the station's facilities once the sale is completed, and such a lease would be in violation of these FCC rules. This lease-back has the potential to being considered by the FCC to be a violation of Section 73.1150 of the FCC's rules which prohibits the seller from reserving "the right to use the facilities of the station for any period whatsoever."
So the question now becomes one of how the Commission will react to these two major problem areas within the sales agreement. It is obvious from the texts of the petitions-to-deny that they are all efforts to derail the sale. John Garziglia, a communications attorney with the Washington, DC, law firm of Womble, Carlyle, Sandridge and Rice, thinks the petitions will almost certainly delay the sale.
In response to questions from SJR, Garziglia wrote: "Any petition to deny filed against an application has the potential to delay the FCC's action on the application for in excess of six months and often much longer." This would not be the case if the objections were deemed frivolous, he noted, and he also wrote that recently the FCC has made efforts to speed up the process.
A statement released by one citizens' petition group took note of the fact that the slowing of the process was one of the goals: "It is hoped that between the comments filed by the public during the 'public comment period' and the various other filed petitions to deny the transfer of license of KFUO-FM from the Lutheran Church-Missouri Synod to Gateway Creative Broadcasting, Inc. …