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Mission Broadcasting terminates deal to acquire Detroit’s WADL

The decision to dissolve the purchase agreement with Adell Broadcasting comes about a month after the FCC conditionally approved the deal.

The decision to dissolve the purchase agreement with Adell Broadcasting comes about a month after the FCC conditionally approved the deal.

An aerial photograph shows the television studios of Adell-owned WADL-TV in Detroit. (Courtesy photo)
An aerial photograph shows the television studios of Adell-owned WADL-TV in Detroit. (Courtesy photo)

Mission Broadcasting is no longer moving forward with its $75 million acquisition of a Detroit-area television station, The Desk has learned.

On Wednesday, Mission President and CEO Dennis Thatcher notified WADL-TV (Channel 38) owner Kevin Adell that the company would be terminating a planned purchase agreement to acquire the station.

The decision comes one year after Mission agreed to acquire WADL from Adell, and about one month after the Federal Communications Commission’s (FCC) Media Bureau bestowed its blessing on the deal, albeit with some strings attached.

Those conditions required Mission and Adell to modify certain parts of their purchase agreement, which would have restricted Mission’s ability to use funds provided by Nexstar Media Group to close the deal. It would have also restricted Mission from entering into shared services agreements with Nexstar, and required all parties to back away from a stipulation that would have given Nexstar the option to purchase WADL from Mission within a certain time frame.

Those conditions were too onerous for Mission to move forward with the deal, and the company didn’t contemplate the FCC requiring amendments when it entered into the purchase agreement, Thatcher said in his letter to Adell. For those reasons, Mission would not be moving forward with the deal, the letter affirmed.

Representatives from Mission notified the FCC late Wednesday afternoon about their decision, according to a filing reviewed by The Desk.

Reached for comment, Adell said Mission’s decision to terminate the deal was “irrelevant” because Nexstar still needs to find a home in Detroit for its CW Network. Last year, the CW Network affiliation moved from Paramount-owned WKBD (Channel 50) to WADL under a handshake deal between Adell and Nexstar that was presumed on an imminent closure of the Mission deal.

The deal faced strong opposition from pay television interest groups, who filed informal objections with the FCC last summer. Their concerns largely rested on Mission’s desire to have Nexstar operate WADL if the deal closed, and whether Nexstar would charge cable and satellite companies higher fees to carry the station.

After it became apparent to Adell that the deal would take longer to close, he requested a fee from Nexstar to continue offering CW Network programming on WADL. He later pulled CW Network shows off his station, citing the lack of a long-term agreement and subsequent payments by Nexstar to continue carrying the network’s programming.

Within two weeks, Nexstar entered into an agreement with the E. W. Scripps Company to offer CW Network programming on WMYD (Channel 20). That agreement ends on September 1.

In phone conversations with The Desk over the last several weeks, Adell has reiterated his position that Nexstar needs a full-power television station in the Detroit market for a long-term affiliation. With Paramount uninterested and Scripps converting WMYD back to a full-time independent this fall, the only independent station left in the market for the CW Network affiliation is his, Adell proferred.

But there are two other options: Nexstar could reach a deal with another television station in Detroit to bring CW Network shows to a digital sub-channel of another station. Graham Media-owned WDIV (Channel 4) is a leading candidate for the CW Network affiliation under this arrangement.

Kevin Adell, the owner of Adell Broadcasting and WADL in Detroit.
Kevin Adell, the owner of Adell Broadcasting and WADL in Detroit. (Photo courtesy Adell Media)

Adell believes that option is a non-starter for Nexstar, because it would relegate CW shows to a secondary tier of a major network affiliate. WDIV already allocates a significant portion of its digital broadcast spectrum to airing NBC programs in full high-definition; carrying CW shows on a digital sub-channel would require the CW’s shows and live sports to be broadcast in standard definition, and wouldn’t guarantee its carriage on cable, satellite or streaming platforms in the market, he said.

The other option would involve Nexstar distribution a national feed of the CW Network, called the CW Plus, on cable in the Detroit market. Typically, the CW Plus is reserved for stations and cable outlets that serve markets below the top 100 as designated by Nielsen Media Group. Detroit is the 13th-largest television market in the country, according to Nielsen; offering the CW Plus to cable companies would keep other TV viewers locked out, especially those who have “cut the cord” for broadcast TV and streaming.

The most-likely scenario involves Nexstar negotiating a deal with Adell directly, rather than using Mission as a proxy. Adell says he is open to a local marketing agreement by which Nexstar pays him to operate WADL. That arrangement would not require the approval of the FCC, since WADL’s broadcast license and related assets would remain Adell’s property.

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 11 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.
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