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Foreign ownership - is it allowed now?

L

LITTLEBOYBLUE

Seeing the $200+M bid for Fisher from Canada makes me wonder what happened to the ban against foreign ownership of US Radio/TV licenses? Did that go away? How does Rupert Murdoch get around it -- or does he just own the NETWORK and no actual station licenses?

Anyone remember if the foreign ownership ban (used to) apply to cable networks too? Guess not if cable carries Al Jazerra, CBC, BBC, etc.
 
LITTLEBOYBLUE said:
Seeing the $200+M bid for Fisher from Canada makes me wonder what happened to the ban against foreign ownership of US Radio/TV licenses? Did that go away? How does Rupert Murdoch get around it -- or does he just own the NETWORK and no actual station licenses?

Anyone remember if the foreign ownership ban (used to) apply to cable networks too? Guess not if cable carries Al Jazerra, CBC, BBC, etc.
Click to expand...

I think it's as simple as establishing an American division for the foreign corporation. Also Murdoch became a US citizen.

It's $$$ that matters and whatever domestic law against anything can be circumvented with it......
 
"Section 310(b) of the Communications Act provides that certain FCC licenses, including broadcasting, shall not be granted or held by aliens, their representatives, corporations organized under the laws of foreign governments, corporations having over 20% of their capital stock owned or voted by aliens, foreign governments (etc.)"

There has been a move afoot at the FCC to increase that number to 49% for members of NAFTA. This could be an attempt to bring that into fruition.
 
Or it could be that those real estate investors from Canada don't realize that foreign ownership and control of broadcast stations is prohibited in both the US and Canada.
 
Shiny Knob said:
"Section 310(b) of the Communications Act provides that certain FCC licenses, including broadcasting, shall not be granted or held by aliens, their representatives, corporations organized under the laws of foreign governments, corporations having over 20% of their capital stock owned or voted by aliens, foreign governments (etc.)"

There has been a move afoot at the FCC to increase that number to 49% for members of NAFTA. This could be an attempt to bring that into fruition.
Click to expand...

If they were tendering an offer they had to know about the law and they must have skirted the law via a loophole or other special circumstance... Nobody wastes money drawing up and deal and making an offer unless they think it can work.
 
Foreign-based companys set up shop in the US all the time, becoming U.S. corporate divisions. BMW USA comes to mind, or what about Honda of America?

If you spend a few minutes searching on-line at what constitutes a US corporation, you'd see there are several ways of fulfilling the requirements which would allow them to operate radio and TV properties.

I'm not familiar with all of Fisher' assets, but it seems to me those buildings and property in Downtown Seattle are worth more than the $211 million offer. I was reading the reaction from the bidder, who was clearly nonplussed by the fast 'no thank you' reply from Fisher. Not-so ironically, Fisher stock had a good day after they turned down the offer.
 
That's what I love about this place. Tell somebody coal is black and they start telling you it's not black, it's not coal...
 
Think about it. If they raised foreign ownership control to 49% or 100% would they have a major impact on programming decision and biases? Think about it. Lets just say if Univision was owed by half or 100% of Televisa of Mexico. Would you see some biased about Mexican news and government such as propaganda or government mouthpiece?
 
e-dawg said:
Think about it. If they raised foreign ownership control to 49% or 100% would they have a major impact on programming decision and biases? Think about it. Lets just say if Univision was owed by half or 100% of Televisa of Mexico. Would you see some biased about Mexican news and government such as propaganda or government mouthpiece?
Click to expand...

I could be mistaken, but I believe that the majority of the programming on Univision is produced and created by Televisa, South of the border. In fact, a few years ago I'd read that Televisa was attempting to purchase a majority stake in Univision, but instead the sale went to private equity.
 
It appears that the hedge fund group based in BC trying do the hostile takeover of Fisher, included a group called FrontFour, which if you dig in further, just happens to also already own about 179,000 shares in Fisher.

To the original point of this post; it appears that clearly the Canadian real estate company with hedge fund, has no intent on becoming TV or radio operators. The pursuer is focused on owning the Fisher real estate in downtown Seattle. I'd be willing to bet that their intent is to spin-off all the broadcast properties after the takeover was nearing completion, probably to one or more US companies, thus avoiding any need to comply with US licensing restrictions.

When you look at the current Wall Street valuations of Fisher:

Television $144,416,000
Radio $14,918,000
Fisher Plaza $112,352,000
Other $46,455,000 (in the event of a take-over, cash which would go back to the shareholders, one of them being FrontFour.
Total $318,141,0

Now the board needs to justify that Wall Streets valuations are not an accurate representation of what the true or future value of Fisher is. It will be interesting to see how they pull that off..
 
So Wall street values KOMO-AM, KPLZ-FM and KVI-AM at 14 million? Seems a really small figure for valuation. Doesn't Fisher own some other radio too? Not sure about the other assets.
 
And to think that KDDS is only a rimshot and went to Bustos for $15-20 million just a few years ago.
 
radioguy123 said:
So Wall street values KOMO-AM, KPLZ-FM and KVI-AM at 14 million? Seems a really small figure for valuation. Doesn't Fisher own some other radio too? Not sure about the other assets.
Click to expand...

With broadcast property values lying pretty much at the bottom of the economic curve, it doesn't surprise me the estimated values are so low by comparison. Remember too, unlike what properties are worth in a sale to another broadcast entity, the street doesn't calculate value based on X-times cash flow, only asset value. That and AM stations aren't exactly coveted as worthwhile assets, Fisher has two in Seattle.

In some valuations across the country recently, I've seen AM stations come up with negative value. Five years ago, I can't think of a broadcast station that would be considered to have a value of zero or less. Unfortunately I suspect that trend for AM isn't going to change.
 
radioguy123 said:
Doesn't Fisher own some other radio too? Not sure about the other assets.
Click to expand...

Still have a few in Montana. They were part of Regional Group and couldn't be sold in bulk to Cherry Creek because Creek already had assets in that town. It's not a strategic placement .. it's a remnant of not being able to unload them at a decent price.
 
So here is the latest update: Apparently Fisher has an existing board member who has requested new member elections. In the event elections are held, depending on the bylaws I would assume, FrontFour Capital, a large shareholder mentioned in my earlier thread (the real estate group from Canada that wants their downtown Seattle buildings and property), has stated they intend on voting in four members from their group, stating..If elected, FrontFour's Fisher board representatives would conduct "a robust and impartial auction process for the sale of the company". In other words; they will keep the buildings and sell off all the broadcast properties and other assets.

This will be interesting to watch unfold. Fisher's current board better have some really good reasons why the existing board is working in the best interest of shareholders. Given the economic climate, shareholders could indeed vote to in essence, cash-out of Fisher. Of course the assumption on the part of FrontFour is that there are interested parties who have the capital to purchase Fishers broadcast properties after ousting the existing board.
 
LITTLEBOYBLUE said:
Anyone remember if the foreign ownership ban (used to) apply to cable networks too? Guess not if cable carries Al Jazerra, CBC, BBC, etc.
Click to expand...

Not sure if this what you meant - but what does would a foreign ownership ban of cable networks have to do with a cable system carrying a foreign network? Aren't these two separate issues?
 
justthenumbers said:
LITTLEBOYBLUE said:
Anyone remember if the foreign ownership ban (used to) apply to cable networks too? Guess not if cable carries Al Jazerra, CBC, BBC, etc.
Click to expand...

Not sure if this what you meant - but what does would a foreign ownership ban of cable networks have to do with a cable system carrying a foreign network? Aren't these two separate issues?
Click to expand...

I think you addressed it perfectly ... and it's what I was implying about a "network" reference too. With a network you can theoretically produce whatever you want ... but it doesn't reach a viewer/listener until you have an affiliate to carry it. So the content producers likely not subject to ownership limitations ... just distribution channels; and I suspect those restrictions don't apply to cable operators since we have all these choices available from around the globe. Before the channel explosion on cable systems many were buying dishes just to pick up the raw feeds anyway! (Which takes me to a tangent ... there is an interesting art piece at Henry/UW art gallery produced by Harry Shearer. He has all these monitors with playback of well known people just waiting for their cue from various satellite feeds -- so a wall full of monitors of famous dignitaries/anchors just sitting there!)
 
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