This dramatic development follows an 8% buy-in from Global one month ago, as we reported HERE.
The U.S. Federal Communications Commission (FCC) is the rule-setting body which has established limits on foreign ownership of a radio license, and limits to stakeholding. The limit to license holding is zero — foreign entities may not hold a U.S. radio license. Global’s quest is to own a stake of a U.S. license holder (iHeartMedia), and the current FCC law limits potential foreign ownership to 20%.
It is in that context that a law firm representing Global has delivered a letter to Albert Shuldinger, Chief, Audio Division in the Media Bureau of the FCC, petitioning for an exemption.
It’s worth noting that at least one exemption has been granted before: In February, 2017, the FCC allowed a small Australian holding company to acquire a cluster of American stations: seven AMs, eight FMs, and 13 FM translators. Broadcast law attorney David Oxenford detailed that case at the time.
A more pertinent example was described by Oxenford one month before that, when the FCC allowed “aggregate foreign ownership” amounting to 49% of Univision.
The March 12 letter from Global’s lawyer to the FCC is interesting inasmuch as it seeks to correct what it calls a “remedial Petition for Declaratory Rulings” filed by iHeartMedia on March 8. That petition sought permission for a 9.99% acquired interest, according to the letter from Global’s lawyer. Global’s petition a few days later expresses bafflement at the apparent miscommunication between the two companies. Here, the issue is laid out (“GMEI” is Global Media Entertainment & Investments Trust):
“GMEI was frustrated to learn that iHeart’s advance approval request in the Petition only requested approval for non-controlling voting and equity ownership interests of no greater than 9.99%. GMEI also was surprised that the Petition did not reference GMEI’s request to seek advance approval for a non-controlling interest not to exceed 49.99%, nor did the Petition attempt to explain the basis for iHeart’s unilateral decision to limit the advance approval to 9.99% despite GMEI’s request.”
The letter goes on to directly request “advance approval” to negotiate a 49.99% non-controlling interest.
According to existing reporting, iHeartMedia was informed by Global on February 18, after the 8% investment, that Global would seek a larger share in a pursuit characterized as “non-hostile.”
(Thanks to Lee Cornell.)
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