Thursday, August 19, 2010

A number of broadcasters support the AM/FM Subcaps

A number of broadcasters teamed up to file reply comments with the FCC seeking repeal of the AM/FM subcaps on July 26. The coalition represents some 668 stations in markets of all sizes. My two broadcasting companies (Monticello Media and MSG Radio) as well as our brokerage firm signed onto the comments.

If the subcaps are repealed, it will result in new capital coming into our capital starved industry. I predict that a number of broadcasting companies may be saved from bankruptcy if the subcaps are removed on a timely basis.

The subcaps are no longer (if ever) justified. You can read the details in the Reply Comments. Essentially, if you operate in a market where ownership of four FMs and two AMs is allowed (or four AMs and two FMs), the removal of the subcaps would allow you to own six stations, regardless of flavor. If they are repealed, unprofitable clusters can swap/trade/buy/sell and improve their strategic and financial positions.

Repealing the subcaps will awaken a stagnant industry, introduce fresh capital, and open doors for new minority ownership. Let's hope that the FCC sees the wisdom of eliminating an antiquated burden on broadcasters.

Click here for the filing: Reply Comments

That is my opinion. What is yours?

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