CHARLESTON, W.Va. -- What had been a speed bump in John Raese's effort to become the king of all media in Morgantown may be turning into a brick wall.
Recall that in October, the Federal Communications Commission briefly granted, then rescinded a transfer of ownership application for Raese's radio empire to buy the only remaining truly viable competition in the Morgantown radio market, WCLG-AM and FM.
The FCC halted the process to look into a complaint filed by Joe Potter, senior vice president of IMG Sports, contending that Raese and brother David were, in part, buying the stations to prevent WCLG management from finalizing a contract to air West Virginia University sports on the stations. Potter, citing Gazette articles, also raised the issue that the company buying WCLG AM-FM, AJG Corp., is not an independent company, but a branch of Raese's West Virginia Radio Corp., created to evade FCC restrictions limiting the number of stations any one company may own in a particular market.
Industry observers figured that was merely a setback, given the FCC's historic lenience on enforcing market ownership restrictions.
However, that may have changed last week, when the FCC notified media giant Sinclair Broadcast Group that it would not approve its proposal to buy Allbritton Communications for $985 million, since Sinclair's plan to spin off TV stations in Charleston, S.C.; Birmingham, Ala.; and Harrisonburg, Pa., to so-called "sidecar" companies would violate ownership restrictions in those markets. The FCC is asking Sinclair to "amend or withdraw" its proposal.
The FCC concluded the sidecar companies are too closely aligned with Sinclair, and the arrangement would allow Sinclair to effectively operate the new stations through shared services agreements, or SSAs.
(Raese's company currently has a similar arrangement with WCLG AM-FM, called a time brokerage agreement, which from Aug. 12 to such time as the license transfer is finalized, allows WVRC/AJG to provide all programming for the stations, except for two hours on Sunday mornings.)
Raese and his minions didn't invent the concept of setting up a shell company to evade FCC ownership restrictions -- as media watchdog FreePress notes, the big boys like Sinclair, Gannett, Nexstar, and Tribune Co. have been doing it for years, buying up stations across the country.
FreePress notes: "In some communities, one company owns two, three and even four local TV stations -- and airs the same news programming on all of these outlets. The result: an echo chamber where all the news looks and sounds the same."
(Which is why in the Charleston-Huntington market, you see the same news on Sinclair TV stations WCHS and WVAH.)
In two years, the number of stations owned or operated by Sinclair has grown from 58 to 161, including 30 owned by three shell, or sidecar, companies Sinclair has set up to get around the FCC, according to FreePress.