NBC’s Telemundo buy OK’d by FCC

Apr 15, 2002  •  Post A Comment

NBC took ownership of Telemundo Communications Group Friday, three days after the Federal Communications Commission approved the network’s $2.7 billion acquisition of Telemundo’s 11 television stations and gave NBC up to a year to run three TV stations in Los Angeles.
But at the same time, the agency admonished the network for allegedly running afoul of FCC ownership rules as a result of its major stake in Paxson Communications.
Besides gaining a third station in Los Angeles, NBC under the Telemundo deal picks up a second TV outlet in four markets: New York, Chicago, Dallas and Miami. It also gets two cable TV networks: MUN II and Telemundo Internacional.
Though the FCC’s duopoly rules bar common ownership of more than two TV stations in any market, the agency gave NBC a year to come into compliance with the regulation in Los Angeles.
Paxson Communications has been trying to derail the Telemundo acquisition on grounds that it could jeopardize the ability of NBC to exercise an existing option to acquire Paxson’s stations. The FCC rejected Paxson’s petition to deny.
But the agency admonished NBC and Paxson because their deal resulted in NBC naming three of its employees to Paxson’s board, and those directors reportedly attempted to influence Paxson activities on NBC’s behalf.
“We find that the placement of NBC employees on Paxson’s board, as well as the subsequent actions of these directors, resulted in NBC having an attributable interest in Paxson … ultimately in violation of our multiple ownership rules,” the FCC said.
The three NBC directors resigned from the Paxson board after Paxson filed its petition to deny the Telemundo transaction in December.
In response, Lawrence Tu, NBC’s executive vice president and general counsel, said, “We are very pleased that the FCC has approved our acquisition of Telemundo and agrees that NBC and Paxson’s arrangements are consistent with FCC requirements.”
Paxson had no comment.