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Minority groups rally around WADL owner, urge FCC to approve sale to Mission

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)

Two civil rights organizations have sent letters to the Federal Communications Commission (FCC) urging the agency to approve the sale of a Detroit-area television station to a company whose operations are controlled by Nexstar Media Group.

The letters were sent by Rev. Jesse Jackson of the Rainbow Push Coalition and Rev. Dr. Wendell Anthony of the Detroit chapter of the National Association for the Advancement of Colored People (NAACP), each of whom sent letters on behalf of African-American investors and shareholders who financially propped up WADL (Channel 38) decades ago.

Those shareholders stand to benefit from the sale of WADL to Mission Broadcasting, a company whose broadcast assets are entirely controlled by Nexstar, the largest independent owner of local television stations in the country. But the sale of WADL to Mission has been delayed for months after public interest groups filed informal objections with the FCC, saying the sale to Mission was nothing more than an attempt by Nexstar to sidestep certain federal ownership rules.

DOCUMENT: Read the letters sent to the FCC concerning the WADL sale (PDF)

Those rules limit how many licensed broadcast TV stations a single company may own. Under current federal regulation, the cap limits a broadcast company’s reach to 38 percent of the American television audience. Nexstar reached that limit when it acquired Tribune Media several years ago.

Nexstar and other broadcasters get around this restriction by exploiting a loophole that allows one broadcast station to be owned and licensed to a company that effectively outsources all aspects of the station’s operations to another.

Public interest groups say Nexstar is actively exploiting the loophole, and stands to benefit the most from any sale of WADL to Mission. That can only happen with the FCC’s blessing, and if it does, those groups say Nexstar would almost certainly demand significant fees for carriage of WADL on cable, satellite and streaming cable-like services.

In September, WADL’s current owner, Adell Broadcasting, attempted to ease those concerns by amending its purchase agreement with Mission. The amended agreement said WADL would elect for “must-carry” status for at least the next three years — meaning it would forego cable and satellite fees in exchange for required carriage on cable and satellite platforms.

Last week, Adell Broadcasting owner Kevin Adell sent his own letter to the FCC, urging the agency to approve the request and affirming the concerns of public interest groups were assuaged with the amended purchase agreement.

“With consolidation of the media industry, I have become one of the last private owners in a major market, taking the station as far as I can take it as an individual,” Adell wrote in the letter, which was address to FCC Chairperson Jessica Rosenworcel. “I did not create the consolidation, but now I have to deal with it.”

Adell wrote about how his parents worked with several African-American entrepreneurs in Detroit to build WADL from the ground up. Adell took over WADL as the station’s majority owner in the mid-2000s, while still affirming the station’s minority investors as stakeholders in the broadcast venture.

Adell said the FCC has not hesitated to approve deals involving Mission and Nexstar several times over the past few years, and he’s questioning why the agency has dragged its feet on this particular matter. A spokesperson with the FCC’s Media Bureau did not respond to two emails from The Desk seeking comment on the matter; the spokesperson’s inbox was configured with an automated response that said he was out of the office “from Monday,” but gave no indication when he would return.

In separate letters sent around the same time as Adell’s note, Revs.  Jackson and Anthony wrote that the sale of WADL to Mission stands to help African-American entrepreneurs who backed the station’s founding decades ago get a return on their investments.

“Their substantial investments were made with the intent of establishing a lasting inheritance for the future,” Rev. Jackson wrote in a letter dated November 17. “Now, it is imperative for the new custodians to carry forward this vision. The Rainbow Push Coalition endorses the completion of WADL’s sale, which represents the fulfillment of a long-held aspiration.”

Rev. Jackson wrote that the “six-month delay due to alleged market ownership rules” had ultimately resulted in an “obstacle” that “similar non-minority sales” do not typically face.

Likewise, Rev. Dr. Anthony highlighted the current situations of a few specific investors who stand to benefit from WADL’s sale if the FCC approves it.

“Most of the original investors, like Horace L. Sheffield, Jr., O’Neal Swanson, and George White, have passed away, leaving their hopes and dreams that their children and grandchildren would inherit the fruit of their investments,” Rev. Dr. Anthony wrote in the letter. “These families are finally, after all these years, in a position to do just that, if, and only if, this sale of WADL is allowed to proceed and be approved.”

Rev. Dr. Anthony said “ownership issues in [Detroit was] not, and has not been, a reason to delay or deny non-minority purchases in the same market,” though he offered no examples of other ownership deals that have sailed through with little FCC regulatory scrutiny.

The letters were just the first step in pressing the FCC to act on the sale. In a series of text messages on Monday, Adell said the Rainbow Push Coalition was requesting a meeting with FCC Commissioner Geoffrey Starks, whose office received a copy of Rev. Jackson’s letter earlier this month. The Desk could not independently confirm if Rev. Jackson or the NAACP had reached out to FCC Commissioner Starks’ office with a request for a meeting.

Adell affirms that his station’s sale to Mission is still pending, even though WADL recently chose to remove programming from the CW Network. The CW Network affiliation has since moved to WMYQ (Channel 20), a TV station owned by the E. W. Scripps Company; Adell has threatened to sue Scripps over the matter.

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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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