Spanish Broadcasting System (SBS) has cleared another regulatory step in its effort to emerge from Chapter 11, with the Federal Communications Commission (FCC) accepting the company’s proposed ownership restructuring for review.
The agency’s Media Bureau opened a pleading cycle covering applications to transfer control of SBS license subsidiaries to the company’s post-bankruptcy owners. The Bureau is also reviewing SBS’s request for approval of foreign ownership levels that would exceed the 25 percent benchmark in federal law.
Under SBS’s reorganization plan, all existing company stock would be canceled when the broadcaster exits bankruptcy. The shares would be replaced with newly issued common stock and new secured notes, shifting ownership from current shareholders to former debt holders.
The restructuring would also end Chief Executive Officer Raúl Alarcón’s longtime voting control of SBS. The reorganized company would be controlled by an investor base made up largely of investment funds that entered the bankruptcy as creditors. Under the plan, no person or entity would hold more than 50 percent of SBS or have the ability to elect a majority of its new board.
The foreign ownership component of the plan is substantial: SBS estimates foreign investors would hold an aggregate 64 percent equity interest and 67 percent voting interest in the reorganized company. Before bankruptcy, foreign investors held 13 percent of SBS equity and 4 percent of its voting interests.
SBS is asking the FCC to approve aggregate foreign equity and voting ownership of up to 100 percent, giving the company flexibility for future changes in its investor base. The broadcaster is also seeking specific approval for foreign investors whose interests would exceed the FCC’s 5 percent threshold, along with advance approval allowing certain investors to increase their stakes up to a non-controlling 49.99 percent.
The plan would give larger positions to investors from the Cayman Islands, Jersey, Ireland and Japan.
The request builds on foreign ownership authority the FCC granted SBS in 2023, when the Commission allowed foreign investors to indirectly own up to 49.99 percent of the company’s equity. SBS did not seek comparable voting authority at the time because Alarcón’s super-voting shares left him in control.
The FCC also agreed to skip a new formal referral to the Executive Branch agencies commonly known as Team Telecom. Foreign ownership petitions are typically reviewed for national security, law enforcement, foreign policy and trade concerns, but SBS argued a new referral was unnecessary because the company is already subject to a 2022 agreement with the Justice Department and other federal agencies.
SBS told the FCC it remains in compliance with that agreement and will continue complying after the restructuring. The Media Bureau agreed, saying a new referral would not be an efficient use of resources.
SBS says approval will allow it to emerge from bankruptcy, compensate creditors and continue operating 20 stations in markets including New York, Los Angeles, Miami, Chicago, Houston, Orlando, Tampa, San Francisco and Puerto Rico.
