Alpha Media Files for Chapter 11 Bankruptcy Protection

[davideduardo]

I was talking about after approval of the restructure plus ownership percentage approval. Let's assume a new management team is put into place that now answer to the foreign ownership group. If the corporate management team is made up of radio/media folks, they will be constantly walking on thin ice because the foreign group is even less knowledgeable about how domestic media consumption works than most of the people who contribute to this discussion board.

Actually, there are many formerly pure radio companies, particularly in Europe, that are way ahead of the US in using new media to complement the old technology. Because European nations, for the most part, limited frequency assignments, such companies developed alternative services and products as soon as the Internet began being viable.

Other countries are less developed in the new media world. They're always looking to get into some form of 'show business' here in the U.S.

Not really. Most who are in or looking are very successful broadcast-based new media users in Europe and the UK. And they all seem to be better programmed than US organizations.

 

[Kelly A]

Actually, there are many formerly pure radio companies, particularly in Europe, that are way ahead of the US in using new media to complement the old technology. Because European nations, for the most part, limited frequency assignments, such companies developed alternative services and products as soon as the Internet began being viable.

That's my point: They are looking for inroads to the U.S. media consumer. Even if by ownership of legacy media operations.

Not really. Most who are in or looking are very successful broadcast-based new media users in Europe and the UK. And they all seem to be better programmed than US organizations.

Government owned/controlled.

 

[davideduardo]

That's my point: They are looking for inroads to the U.S. media consumer. Even if by ownership of legacy media operations.

Government owned/controlled.

Nope. NRG and all the private operators in France, Italy, Germany, Spain and others are very advanced commercial operators as are the local and national station nets in the UK and Ireland. Even the Nordic nations have excellent national private groups.

 

[TheBigA]

That's my point: They are looking for inroads to the U.S. media consumer.

Still neither will have 50% ownership. Alpha's investors are merely looking for some cash partners.

 

[Kelly A]

Still neither will have 50% ownership. Alpha's investors are merely looking for some cash partners.

Understood, but for various reasons, some of them might be considered archaic, I don't think the Commission should allow foreign ownership of more than 49%, as it relates to a company owning/licensee-of traditional broadcast facilities. MVPD or cable channels? Those are subscription based businesses without licenses issued by the federal government.
From a practical standpoint, I understand there's nothing stopping a company like Alpha from just selling their programming time to the highest foreign bidder. Not that I have any insider knowledge that's being considered. I still hang on to the old school principal that only U.S. citizens should be eligible to hold and control federally-issued broadcast licenses. Could that harm opportunities for struggling, over-leveraged broadcast companies in the future? Sure. Business decisions that don't pan out happen all the time. We shouldn't need to change the game rules just because companies make grievous miscalculations.

 

[TheBigA]

We shouldn't need to change the game rules just because companies make grievous miscalculations.

The game rules have changed, whether we like them or not. In this case, it is selective enforcement, making requirements of broadcasters that don't apply to their competitors.

 

[gr8oldies]

The game rules have changed, whether we like them or not. In this case, it is selective enforcement, making requirements of broadcasters that don't apply to their competitors.

Absolute Radio USA could work for me. I've heard them and "not bad".

 

[Kelly A]

The game rules have changed, whether we like them or not. In this case, it is selective enforcement, making requirements of broadcasters that don't apply to their competitors.

But that's the thing, just as an example that isn't broadcast-related: Amazon Web Services (AWS) and Dell make a bunch of acquisitions, running up tons of debt anticipating that the cloud computing business will go in a certain direction. In the end, AWS and Alphabet (Google Cloud Service) start eating Dell's lunch. Should the SEC make rules changes to even the playing field for Dell? Or because any one company or business sector makes some errant decisions that involve their future and change the competitive model?

 

[TheBigA]

Should the SEC make rules changes to even the playing field for Dell?

That's not what this is about.

But the fact is that Alpha has to ASK permission, and the FCC can say no. Or the FCC can put limits on it. They aren't "changing the rules." The FCC wants to be able to say NO.

In the meantime, TicTok is owned 100% by China, and they can compete with American owned companies. Sure, there was the footsie that Trump tried to play last year, but at the end of the day, TikTok didn't have to sell, and they're still making money.

 

[SomeRadioGuy]

Understood, but for various reasons, some of them might be considered archaic, I don't think the Commission should allow foreign ownership of more than 49%, as it relates to a company owning/licensee-of traditional broadcast facilities.

They already do. Australian citizens Richard burns & his wife (i forget her name!) own 100 percent of a group of stations in SE Alaska and Texarkana, TX

And an entirely seperate, unrelated company.. Resonate Broadcasting, also based in Australia.. owns several stations in Hawaii. They didnt get a waiver, but somehow some of the principals of REsonate Australia are part of Resonate Hawaii.. maybe dual citizenship, I'm not sure.

 

[davideduardo]

Business decisions that don't pan out happen all the time. We shouldn't need to change the game rules just because companies make grievous miscalculations.

This is not a specific case exclusive to Alpha. For a number of years, the FCC has been dealing on a case by case basis with foreign participation in broadcast ownership.

It's just that major group transactions or transfer of control are more prominent. But there are cases of total or near total foreign ownership of small numbers of stations in FL, AK and South Texas. And a number of larger exceptions have been in place for years, the most prominent being the approximately 40% ownership of Univision.

One of the motivating factors in changing FCC rules concerns the way investments in publicly traded shares are owned where much of that sector is done using street names; it is hard to know whether the investor is a U.S. citizen. That makes it very hard for companies that want to be exchange traded to be in ownership compliance.

Alpha's case is not unique. There are a number of U.S. broadcasters that can raise more capital when allowing foreign investment. As others have mentioned, the stigma of over the air broadcasting manifested by domestic investors is not as pronounced outside the country and there is capital looking to be placed in the US... still.

 

[SomeRadioGuy]

It's just that major group transactions or transfer of control are more prominent. But there are cases of total or near total foreign ownership of small numbers of stations in FL, AK and South Texas. And a number of larger exceptions have been in place for years, the most prominent being the approximately 40% ownership of Univision.

We had the same thought, @DavidEduardo! (look up!) Don't forget Hawaii too!

 

[davideduardo]

They already do. Australian citizens Richard burns & his wife (i forget her name!) own 100 percent of a group of stations in SE Alaska and Texarkana, TX

And an entirely seperate, unrelated company.. Resonate Broadcasting, also based in Australia.. owns several stations in Hawaii. They didnt get a waiver, but somehow some of the principals of REsonate Australia are part of Resonate Hawaii.. maybe dual citizenship, I'm not sure.

And there is a Mexican national and his company owning US stations along the border. And an Italian national with several stations and translators in the SE Florida market area.

For years... decades... there have been US stations owned by the husband or wife of a non-citizen where it is obvious but nonetheless legal for the marriage partner or even their children to own U.S. stations.

There are ways around all kinds of regulations. There were plenty of cases back in the one AM, one FM per market days where children, siblings, and other relatives all owned stations in one market.

 

[SomeRadioGuy]

And there is a Mexican national and his company owning US stations along the border. And an Italian national with several stations and translators in the SE Florida market area.

For years... decades... there have been US stations owned by the husband or wife of a non-citizen where it is obvious but nonetheless legal for the marriage partner or even their children to own U.S. stations.

There are ways around all kinds of regulations. There were plenty of cases back in the one AM, one FM per market days where children, siblings, and other relatives all owned stations in one market.

Like.. the group that owns and operates KAMA 750 El Paso and another staiton there, is pretty directly related to a mexican company.. but another case of.. i dont remember the exact details.

 

[davideduardo]

Like.. the group that owns and operates KAMA 750 El Paso and another staiton there, is pretty directly related to a mexican company.. but another case of.. i dont remember the exact details.

That group's U.S. property is owned by the son of Francisco Aguirre, the head of GRC. He was born in Houston when Francisco was married to 60's singer and actress Emily Cranz, and is a dual U.S. and Mexican citizen.

 

[Kelly A]

This is not a specific case exclusive to Alpha. For a number of years, the FCC has been dealing on a case by case basis with foreign participation in broadcast ownership.

That's why my example were not licensed broadcast entities. Should we change federal rules for a certain business sector to account for new forms of competition who (in the case of streaming vs. broadcaster's) aren't licensed by the feds?

It's just that major group transactions or transfer of control are more prominent. But there are cases of total or near total foreign ownership of small numbers of stations in FL, AK and South Texas. And a number of larger exceptions have been in place for years, the most prominent being the approximately 40% ownership of Univision.

And in my mind, that's fine. Provided the attributal foreign ownership is no more than 49%.

One of the motivating factors in changing FCC rules concerns the way investments in publicly traded shares are owned where much of that sector is done using street names; it is hard to know whether the investor is a U.S. citizen. That makes it very hard for companies that want to be exchange traded to be in ownership compliance.

Then that's a limitation. If you're a publicly traded company with broadcast assets, you are still accountable to the FCC, the SEC, and any local state government(s) where you do business.

Alpha's case is not unique. There are a number of U.S. broadcasters that can raise more capital when allowing foreign investment. As others have mentioned, the stigma of over the air broadcasting manifested by domestic investors is not as pronounced outside the country and there is capital looking to be placed in the US... still.

Just because it's easier to get foreign investment, doesn't mean the rules should be changed to accommodate the business environment of corporations who aren't able to secure financing domestically. Rather than lobbying to move the goalposts, maybe they shouldn't be in the broadcasting game?

 

[TheBigA]

Just because it's easier to get foreign investment, doesn't mean the rules should be changed to accommodate the business environment of corporations who aren't able to secure financing domestically.

Once again, no one is changing any rules. The rules are still there, and you need to ask permission.

You keep inventing this idea that the FCC is changing rules, and they aren't. Meanwhile they are selling portions of the spectrum to telecom companies, and not all of them are 100% domestically owned.

 

[SomeRadioGuy]

That's why my example were not licensed broadcast entities. Should we change federal rules for a certain business sector to account for new forms of competition who (in the case of streaming vs. broadcaster's) aren't licensed by the feds?

And in my mind, that's fine. Provided the attributal foreign ownership is no more than 49%.

And once again, there are several cases of foreign folks who own 100 percent of US Broadcast stations

 

[davideduardo]

That's why my example were not licensed broadcast entities. Should we change federal rules for a certain business sector to account for new forms of competition who (in the case of streaming vs. broadcaster's) aren't licensed by the feds?

No, but we should change rules to adapt to a changing economy. In this case, the ownership of exchange traded shares via street names or through mutual funds makes it impossible to know the nationality of shareholders.

And in my mind, that's fine. Provided the attributal foreign ownership is no more than 49%.

Why? Radio and OTA TV are declining in usage and influence. The threat of foreign ownership doing anything but try to make a little money is negligible.

Then that's a limitation. If you're a publicly traded company with broadcast assets, you are still accountable to the FCC, the SEC, and any local state government(s) where you do business.

The issue here is that companies that want to be publicly traded today have no way of knowing who owns most of their shares. That applies to every business.

Just because it's easier to get foreign investment, doesn't mean the rules should be changed to accommodate the business environment of corporations who aren't able to secure financing domestically. Rather than lobbying to move the goalposts, maybe they shouldn't be in the broadcasting game?

The issue here is that many broadcast companies are possibly already owned in excess of the base limit by foreign entities and individuals since so few investors are directly (or indirectly via mutual fund ownership) identifiable as to nationality.

Several companies have filed for increased foreign ownership just to cover these untraceable situations.

This is way beyond a radio issue. It goes back to the time shares could be "electronically" owned or owned in a broker's "street account".

Were further restrictions to be put on ownership, it would mean that any kind of common ownership fund, such as retirement, mutual funds and investment trusts could not own shares in any company that owned broadcast stations. That would cause an immediate collapse of share values when all of those entities would have to divest everything from Viacom to iHeart bonds.

 

[Kelly A]

And once again, there are several cases of foreign folks who own 100 percent of US Broadcast stations

I've never said there isn't. It's MY opinion, that they shouldn't be allowed to. I am entitled to an opinion, last time I checked.