Shareholders who have investments in a Detroit-area independent television station will call for statewide rallies this week over inaction by federal regulators to approve the transfer of the station’s license to a larger company.
On Monday, Rev. Horace Sheffield III will distribute a call for action on behalf of the minority shareholders of Detroit’s WADL-TV (Channel 38), with a request for rallies across the state of Michigan over the FCC’s lengthy delay in deciding an application to transfer the station’s license to Mission Broadcasting.
The Desk obtained a draft copy of the press release slated to go out Monday morning, which states that a number of other faith-based leaders and their respective groups — including Bishop Charles Ellis and Rainbow Push Coalition founder Rev. Jesse Jackson, Jr. — have expressed solidarity with shareholders in pushing for WADL’s sale to Mission since the station’s current owner, Adell Broadcasting, filed an application with the FCC last May.
Mission is planning to purchase the station’s assets for $75 million, using funds provided by Nexstar Media Group. Mission’s entire slate of television stations are currently operated by Nexstar through shared services agreements, and the sale of WADL to Mission is predicated on a similar arrangement with Nexstar once the deal closes.
Before the deal can be finalized, the FCC must approve the transfer of WADL’s license from Adell to Mission — something that regulators have been hesitant to approve amid opposition from public interest groups that represent cable and satellite TV companies.
Last month, the FCC imposed a fine of over $1 million against Nexstar and a smaller fine against Mission over a shared services agreement involving New York-based WPIX-TV (Channel 11, CW). Acting on a complaint filed by Comcast, the FCC found that Nexstar exerted too much control over the Mission-licensed station, which put Nexstar over a federal ownership cap that limits the reach of one broadcaster to 38 percent of the American television viewing audience.
Before the FCC’s fine last month, officials at the agency repeatedly told Adell and the station’s minority shareholders that the delays were due to enforcement actions that were still pending at the agency, according to materials obtained exclusively by The Desk.
During a March 18 meeting with FCC officials, Chairperson Jessica Rosenworcel wouldn’t discuss the specifics of the enforcement action, but told Adell and the station’s minority shareholders that there was “an issue associated with the buyer that has to be resolved by the commission” before the FCC could approve or deny the application.
In a later meeting with FCC Commissioner Geoffrey Starks, Adell and the minority shareholder groups were ultimately led to believe that the deal would not be approved. Shortly after the meeting, Adell Broadcasting owner Kevin Adell told The Desk he was no longer convinced that the application to transfer WADL’s license would get FCC approval, and that he felt the application was likely “dead on arrival” when it was first filed last year.
“I just don’t see a path forward with the FCC,” Adell said in a phone interview with The Desk. “I’ve been to five meetings, and the last one was very clear.”
Rosenworcel’s office has not returned a request seeking comment.
Adell’s frustration is felt by minority shareholder groups, who feel the same anxiety and concern over the fate of the deal. Those groups say the $75 million that Adell would earn from the sale of WADL would substantially benefit minority investors who put up the initial capital to get the station off the ground several decades ago.
If the deal falls through, the groups may have a tougher time generating a return on their investments. Moreover, investors and their supporters say a rejection of the application would be contrary to the FCC’s stated mission of fostering diversity and inclusiveness in the commercial broadcasting industry.
“The planned demonstrations reflect a wider call for the FCC to advance its commitment to a diverse and inclusive media landscape,” a spokesperson for the minority investor groups and their supporters said in the draft press release. “The stakeholders of WADL are calling for a fair and timely resolution to their application, emphasizing the importance of diversity in media ownership and the critical voice it represents in our democracy.”
Adell’s deal with Mission to transfer the station’s license and related applications has a termination date of June 30.
