Published on Thursday, 04 February 2010 10:55
NextMedia (NM Licensing, LLC, officially) is asking the FCC for a waiver so that it is not forced to sell any of its Chicago area radio stations. When NextMedia declared Chapter 11 bankruptcy late in December, that effectively transfered ownership to NM's debtors. The new owners then have to follow the newest FCC rules about the amount of stations one owner can have in a single market, and NextMedia's previous grandfathered-in status was voided. With the Chicago cluster being the strongest in NextMedia's stable of radio stations, it is trying to hang on to all of them and not be forced to part with a few stations. This waiver request is a grasping attempt to hang on to all of their local stations & the money they generate.
NextMedia's case for the waiver is that many of their suburban Chicago stations are not really part of the "Chicago" market. In the 52 page document, NextMedia claims that south suburban WRXQ-FM, west suburban WWYW-FM Dundee IL and far northwest suburban WZSR-FM should not be considered as part of any market. Their argument is that their air transmissions do not reach the Chicago city limits. (The FCC would have to change it's rule on market sizes if they allow this argument, since the market includes the surrounding counties and not just the Chicago city borderlines.) Surprisingly, it did not mention WIIL-FM, which broadcasts out of another state and would make for a better argument.
Additionally, NextMedia argued to keep one station in their Greenville-New Bern-Jacksonville, NC cluster, arguing that the station gets such low ratings, it doesn't even register on Arbitron. So even though its transmissions are within the market, not enough people listen to it to make it count. (Good luck with that argument...)
If those don't work for them, NextMedia tries a secondary approach in the same waiver request. NextMedia is also asking to keep its clusters intact since the ownership change is just a formality. NextMedia is remaining under the same management and continuing operations just as they have in the past. The ownership change is just a debt restructuring tool to help the company flourish in the future.
NextMedia posted projected earnings estimates up to the year 2014. MN claims to have lost $1.8 million in 2008 and expects to show a loss of $1.6 million for 2009. However, for 2010, they are expecting a profit of $1.3 million. Inside this waiver request, they are also projecting profits of $8.1 million in 2011, $12.1 million in 2012, $16.2 million in 2013, and $20.2 million in 2014. With these projected profits, NextMedia expects to exit bankruptcy and return to the same ownership it had under its grandfathered status.
There is no definitive timetable for a response from the FCC.