Could News Corp lose right to broadcast in the US

[Scott Fybush]

On 7/19/2011 5:23 PM, Dan.Strassberg wrote:
> But if he IS convicted, he won't lose any broadcast licenses. The FCC
> will let him sell his holdings in the company/ies that hold the
> broadcast licenses. Or he will be allowed to place those holdings in a
> blind trust. He is too well connected to be stripped of any holdings,
> even if he is convicted of premeditated murder, which does not seem likely.

I wouldn't be so certain at this point. And the issue is more complex 
than just Murdoch's own personal stake in News Corp. and its subsidiary 
license-holding entities. The licenses to WFXT and WNYW and WWOR and the 
rest (including the Fox cable-channel satellite uplinks, which *are* FCC 
licensed even if the cable networks themselves are not) are held not by 
Murdoch as an individual but by Fox Television Stations as a "corporate 
person."

And it's the character of Fox Television Stations, Inc. and of its 
ultimate parent company, News Corporation, that would determine whether 
the company - with or without Murdoch himself at the helm - can continue 
to hold US broadcast licenses should there be a challenge.

Again, the relevant precedent appears to me to be the RKO licenses. 
While it was individual General Tire executives who were convicted of 
bribery abroad, it was General Tire/RKO as a corporate entity that was 
deemed unfit to continue to hold licenses.

Should that come to pass, there are several precedents the FCC might 
choose to follow. It's extraordinarily unlikely that it would simply 
order the Fox stations off the air and leave their channels vacant. This 
has never happened with major-market stations, but has happened with 
smaller radio signals over the years. (I was just in Terre Haute, IN, 
where three frequencies remain silent more than a decade after the FCC 
stripped Mike Rice's stations of their licenses after Rice was convicted 
of child abuse.)

It's more likely that the stations will be allowed to continue operating 
temporarily, perhaps in a trust, with Fox selling the non-license assets 
(studios, towers, programming) to a new owner and the proceeds of the 
actual license sale being diverted somewhere that won't directly benefit 
News Corp.

This happened recently in Scranton, where Doug Lane was allowed to sell 
his stations to another owner after being convicted of felony child 
abuse. The portion of the sale price attributed to the licenses ended up 
going to the local DA for a child-abuse prevention program.

It's also essentially what happened with the RKO stations. RKO wasn't 
allowed to take a profit from the sale of the WNAC/WRKO license assets, 
but the FCC couldn't stop it from selling 7 Bulfinch Place and 45 Tower 
Road to Mugar for what was surely a healthy amount by 1980 standards.

s