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(Paramount) to KRRT, Inc. (Buyer).  x=Buyer proposes to operate KRRT(TV) pursuant to a local marketing agreement with River City  xBroadcasting, L.P., the licensee of KABBTV, San Antonio, Texas. An informal objection to the  xMapplication was filed on September 28, 1994 by HarteHanks Television, Inc. (HarteHanks),  xlicensee of KENS(TV), San Antonio. Buyer filed a response and a supplement to that response,  xand HarteHanks replied and subsequently filed a pleading urging the Commission to require the  xsubmission by the parties of certain documents. On January 20, 1995, the staff requested  xadditional documents, River City submitted the documents, and, on February 16, 1995, Harte xHanks supplemented its informal objection. On March 8, 1995, PostNewsweek Stations, San  x[Antonio, Inc. (PostNewsweek), licensee of KSATTV, San Antonio, also filed an objection, to  xwhich Buyer responded. On May 15, 1995, River City furnished additional information to the Commission, and on May 30, 1995, Buyer and River City filed an amendment. "#',-(-(ZZ%"Ԍ  X-x` `  hh@ BACKGROUND  x Prior to the pending transaction between Paramount and Buyer, River City, on May 24,  X- xz1994, entered into an option agreement with Paramount to purchase KRRT(TV).! yO- x;ԍ The May 1994 option agreement, a copy of which was timely filed by Paramount pursuant to Section 73.3613  xiof the Commission's Rules, was entered into by River City, Paramount, and Paramount Stations Group, Inc., the  ximmediate parent of the licensee. For ease of reference, we shall refer to the licensee and its parent collectively  x,as "Paramount." The May 1994 option agreement followed a sinceexpired option agreement entered into between  xRiver City and Paramount on November 24, 1993. That earlier option agreement, also timely filed with the Commission, is not relevant to our determination here. Television  xjstation KRRT(TV), whose community of license is Kerrville, is located within the San Antonio xVictoria area of dominant influence (ADI), the nation's thirtysixth largest market. River City  xis the licensee of KABBTV, also located in the San AntonioVictoria market. As consideration  x/for the option contract, River City paid Paramount $1.5 million. Under the agreement, upon  xexercise of the option Paramount was to transfer the $1.5 million to an escrow agent, who would  X - xhold the money as the deposit for purchase of KRRT(TV). @! yO-ԍ See ParamountRiver City option agreement of May 24, 1994, at Section 2, Insert B. The option agreement also provided  xthat in the event River City exercised its option to purchase the station, the purchase agreement  x=to be executed between River City and Paramount was to be in the form of the Asset Purchase  X - xAgreement annexed to the option agreement.  ! yO?- xhԍ Id. at Section 2, Insert A. The only changes that could be made to the Asset Purchase Agreement, according  xto Section 2, Insert A of the option agreement, were those: (1) relating to the name and organization of a River City  x,assignee; (2) specified in the draft agreement as applicable only to River City; and (3) constituting updates to the disclosure schedule. Finally, River City was contractually authorized,  x<so long as consented to by Paramount, to assign the option agreement to "any person or entity,"  xywho would be entitled to "all rights and obligations" of River City under the agreement, as well  Xy-as under the companion Asset Purchase Agreement.Ay ! yO-ԍ Id. at Section 8.A  x During the spring of 1994, according to Buyer, River City realized that the Commission  xwould not conclude the pending television ownership rule making proceeding prior to expiration  xof the option agreement. Under existing rules, River City would not be able to exercise the  xoption to purchase KRRT(TV) while continuing to own KABBTV in the same market.  x[Consequently, Buyer notes, River City commenced "exploring" the assignment of its option to  xan experienced broadcaster with whom it wished to enter into a time brokerage arrangement. To  xthat end, Buyer states, River City principal Barry Baker approached Buyer principal Myron Jones  xyregarding the acquisition of KRRT(TV). Jones is majority shareholder, director, chief executive  xlofficer and treasurer of JJK Broadcasting, Inc., the parent company of Buyer. Baker, it is  x-represented, had become acquainted, through various industry meetings, with Jones, who is also"|H ,-(-(ZZ"  xthe longtime majority stockholder of The Jet Broadcasting Co., Inc., licensee of television station  x\WJETTV and radio station WJET(FM), Erie, Pennsylvania, and of WHOT, Inc., licensee of  xradio stations WHOT(AM) and WHOTFM, Youngstown, Ohio. Negotiations between the two parties ensued.  x On July 15, 1994, via an Assignment and Assumption of Option Agreement executed on that  xday, River City assigned to Buyer its option contract with Paramount. Pursuant to the assignment  x=agreement, Buyer agreed to exercise the option and execute the Asset Purchase Agreement as  xdrafted by River City and Paramount and as annexed to their option agreement. In exchange,  xBuyer promised to deliver to River City a payment of $500,000 and a nonrecourse promissory  xjnote for the balance of the $1.5 million River City had paid to Paramount. River City states that  xkBuyer wired $500,000 to River City's bank account in St. Louis, Missouri on August 1, 1994, and signed a nonrecourse promissory note payable to River City for $1 million on July 17, 1994.   lxThe same day that Buyer assumed the option agreement and the related Asset Purchase  xAgreement from River City, it signed a letter of intent with River City to enter into a definitive  xtime brokerage agreement, based upon the terms of a draft agreement previously reviewed by the  xstaff. On August 1, 1994, Buyer, as assignee of the option agreement, exercised the option and  xentered into a purchase agreement with Paramount for the assets of KRRT(TV). That purchase  xagreement is nearly identical to the Asset Purchase Agreement drafted by River City and  xParamount in connection with their option agreement. Paramount and Buyer filed with the  xCommission their assignment application containing the ParamountBuyer purchase agreement on August 10, 1994.  X-x` `   INFORMAL OBJECTIONS  X-  _ xHarteHanks and PostNewsweek object to Commission action on the assignment  xZapplication on three general grounds. First, both HarteHanks and PostNewsweek argue that the  xCommission should seek more information pertaining to the BuyerRiver City relationship before  xit may make a public interest determination. While HarteHanks urges the Commission to  xcompel Buyer and River City to disclose "all of the details" concerning River City's participation  xin the "entire scheme of contemplated transactions," PostNewsweek limits its demand to those  x.facts surrounding Buyer's ability to terminate the time brokerage arrangement. Second, Harte x>Hanks opposes the assignment because River City's involvement and financial stake in the  xivarious transactions described above "strongly suggests" the existence of a realpartyininterest  X- xissue.wx! yOT"- xYԍ HarteHanks also concludes, absent legal argument or factallegations, that the structure of the transaction  yO#- xbefore us implicates the Commission's crossinterest policy and crossownership rules, as well as the "bona fides  xand candor" of Buyer. The crossinterest policy, the Commission has determined, is not violated where a television  yO$- xlicensee in a market brokers time on a television station in the same market. See Reexamination of the  yOt%- xCommission's CrossInterest Policy, 4 FCC Rcd 2208, 2214 (1989). The crossownership allegation is subsumed in  xthe realpartyininterest allegation, because a finding that River City, already a licensee in the San Antonio  xmarket, controls Buyer would violate the Commission's duopoly rule. As to the lack of candor issue, the matter"',-(-(&" is also inextricably linked to our finding in the realpartyininterest allegation.w In support of this latter allegation, HarteHanks points to three facets of the proposed"X,-(-(ZZ"  xLenterprise: (1) River City's alleged dominant role in structuring the transaction; (2) River City's  x<proposed time brokerage agreement with Buyer; and (3) River City's alleged "substantial financial  xxstake" in the pending assignment, including its loan to Buyer for onethird of the acquisition price  xof KRRT(TV) and its payment of brokerage fees, which, HarteHanks alleges, constitutes direct  xrepayment of Buyer's senior loan. Finally, PostNewsweek asserts that the Commission should  xdefer action on Buyer's application pending the outcome of the rule making proceeding relating  Xv- x0to local marketing agreements. See Review of the Commission's Regulations Governing  X_-Television Broadcasting in MM Docket 91221, 10 FCC Rcd 3524 (1995).  X1- Disclosure of information  X -  mx Preliminarily, we note that Buyer did not indicate on its application that it intended to  xenter into a time brokerage arrangement with River City. On November 18, 1994, in response  X - xto a staff letter requesting that information, X! yO-ԍ See Letter from Clay C. Pendarvis, Chief, Television Branch, dated November 15, 1994. Buyer submitted a copy of its proposed Time  xBrokerage Agreement with River City, a document which was then made available by the staff  xto HarteHanks. At the time, the staff had not expressly required the submission of a time  xxbrokerage agreement concurrently with that of a related assignment application. That requirement  Xy- xNwas articulated by the Mass Media Bureau in a Public Notice released June 1, 1995. We  xreiterate here that in order that we may render public interest determinations predicated on  xcomplete, not partial, proposals of licenseestobe, we require that time brokerage arrangements be fully referenced in the applications of those intending to lease out their airtime.   _xSince the Buyer's November 18, 1994 submission of the proposed Time Brokerage  xMAgreement, HarteHanks, and, later, PostNewsweek, have requested that Buyer file certain  xinformation and copies of various corollary agreements cited in that document and in the Asset  xPurchase Agreement. Buyer and River City have, upon the request of staff, furnished all of the  xdocuments relevant to our determination here, including the Assignment and Assumption of  xOption Agreement between Buyer and River City, the proposed Option Agreement for purchase  xof KRRT(TV) by River City, the Loan and Security Agreement and related promissory notes for  xMthe funds to be advanced to Buyer by River City, and a proposed subordination agreement  xbetween Buyer's senior lender and River City. In light of our receipt of those and other  xagreements, we dismiss as moot HarteHanks' and PostNewsweek's assertions that Buyer need  xdivulge any further details concerning its relationship with River City. Accordingly, we shall  X -address the merits of the objectors' substantive allegations.  X- River City as the real partyininterest   NxThe Commission evaluates realpartyininterest allegations as it does those concerning  X"- xNde facto control. Univision Holdings, Inc., 7 FCC Rcd 6672, 6675 (1992), reconsideration"",-(-(ZZ!"  X- xdenied, 8 FCC Rcd 3931 (1993). That is, we must examine not only the applicant's formal legal  X- x[control, but any factual circumstances indicating abdication of that legal control. WWIZ, Inc.,  X- x36 FCC 561, reconsideration denied, 37 FCC 685 (1964), aff'd sub nom. Lorain Journal v. FCC,  X- xl351 F.2d 824 (D.C. Cir. 1965), cert. denied, 383 U.S. 967 (1966). Central to our examination  X- xare the loci of control of the proposed licensee's finances, personnel and programming. E.g.,  X- xStereo Broadcasters, Inc., 87 FCC 2d 87 (1981), reconsideration denied, 50 R.R.2d 1346 (1982). It is against this legal standard we assess the HarteHanks allegations.  XH-  Zx River City's role in structuring the transaction.  HarteHanks suggests that the "origin  xand conception, negotiation, [and] structuring" of the transaction in the assignment now before  xus demonstrate River City's ability to exercise control over KRRT(TV). Specifically, Harte xHanks cites River City's negotiation of the terms included in the May 24, 1994 option agreement  x=with Paramount and the accompanying Asset Purchase Agreement, River City's solicitation of  xBuyer for assumption of the Paramount option contract, Buyer's nearly wholesale assumption of those terms, and River City's unilateral drafting of the proposed Time Brokerage Agreement.   xIt is true that when dealing with "newly created" companies, the circumstances  Xy- x/surrounding their creation and the preparation of their applications are relevant. Univision  Xb- xHoldings, Inc., 7 FCC at 6675. But in this case, Buyer, while legally a "newly created" entity,  xMis composed entirely of two shareholders, Myron Jones, as CEO, treasurer, director and 70 xpercent voting shareholder, and John Kanzius, as president, director, and 30% voting shareholder,  x-who, according to Commission records, also are the sole owners of two established broadcasting  X-entities, The Jet Broadcasting Co. and WHOT, Inc.X! yO- xhԍ The Ownership Reports for WJETTV, WJET(AM), WHOT(AM), and WHOTFM indicate that the stock held by John  xYKanzius in those stations' licensees is jointly owned with his wife, Mary Ann Kanzius. John Kanzius votes the stock. We also note that Mary Ann Kanzius is the only other principal of Buyer here, serving as secretary and director. Those  xxcompanies, as noted above, are the licensees of four broadcast stations, three of which have been  X-owned and operated by Myron Jones for nearly three decades or more. ! yOC- xԍ In its response, Buyer notes that Myron Jones has owned and operated WJETTV since it went on the air in  x1966, WHOTFM, since it went on the air in 1959, and WHOT(AM), since it went on the air in 1955. Jones acquired  xWJET(FM) in 1986, at which time he was required to divest for compliance with the Commission's multiple ownership rules WJET(AM), a station he had acquired in 1951.   "xThe facts here, therefore, do not resemble those found in the line of cases where the  Xe- xnominal owners, neophytes in the field of broadcasting, are alleged to have yielded their de jure  XN- xcontrol to experienced broadcasters assuming purportedly passive roles. E.g., Evergreen  X7- x{Broadcasting Co., 6 FCC Rcd 5599, 560001 (1991)("The outsiders' greater familiarity with  xbroadcasting is pertinent in this case in determining the likelihood that the proposed ownership  X - xstructure accurately reflects how control will be exercised."); Royce International Broadcasting,  X- xl5 FCC Rcd 7063 (1990); Metroplex Communications, Inc., 5 FCC Rcd 5610 (1990). Rather," ,-(-(ZZ"  xwhat we are confronted with here is Buyer, which is owned by experienced broadcasters with  xworking knowledge of the rights and obligations contained in contractual arrangements and which  xhas entered into a series of legal transactions with River City, a discrete, equally experienced broadcaster.   xBased upon the equivalent bargaining power possessed by each of Buyer and River City,  x[we are not persuaded that the chronology of events, either individually or collectively, leading  X_- xyto the assignment application pending before us manifests River City's alleged de facto control  xof Buyer. First, to find that a third party's solicitation of a proposed licensee's participation in  xla given transaction is demonstrative of control would unduly inhibit the workings of the  xmarketplace. Option holders, such as River City, would be able to assign their option to only  xthe limited universe of parties who themselves initiate such contacts. Not only do we eschew  x/any undue restriction of the alienability of legitimate options for the purchase of broadcast  xKproperties, but we believe active solicitation by the holders of such options is a crucial ingredient  xof a robust marketplace. Moreover, once approached by River City, Buyer was in no way  xcompelled to pursue the transaction. Buyer was, as it asserts, free to reject River City's proposal  x=had it been unwilling to accept any of the terms. We find, therefore, that River City's initiation of contact with Buyer is not probative of control.   xThat Buyer entered into a purchase agreement with Paramount, whose terms had been  xnegotiated between Paramount and River City, also evidences no control by River City over  x=Buyer. It is an axiom of the law of contracts that the general assignment and/or assumption of  xa contract operates as "an assignment of the assignor's rights and a delegation of his unperformed  X- x0duties under the contract." Second Restatement of Contracts, 328(1)(1981). Thus, the  xacceptance by an assignee of such an assignment operates "as a promise" to the assignor that the assignee will perform the assignor's unperformed duties and the original " ,-(-(ZZ"  X- xobligor of the assigned duties, then, is an "intended beneficiary" of that promise. Id. at 328(2).  xyThat is, when assuming rights and obligations under an agreement, the assignee steps into the  xposition of the assignor. Buyer here, therefore, had the choice of entering into the Assignment  xand Assumption Agreement with River City, with its attendant rights and duties as established between Paramount and River City, or of declining to assume River City's position.   xFinally, River City's early creation, and attempts to obtain staff approval, of the proposed  xTime Brokerage Agreement indicate only that it was seeking to assign its option agreement to  x-a particular class of assignees: those interested in a time brokerage arrangement, particularly one  xjin conformance with Commission rules. Indeed, Buyer represents in its response that it signed  xa letter of intent "to enter into a Time Brokerage Agreement based on the terms of the draft time  xbrokerage agreement approved by the Commission's [staff]." So long as the Commission permits  X - xtime brokering, see e.g., PartTime Programming, 82 FCC 2d 107, 108 (1980), we cannot  xpreclude a time broker from seeking willing participants. Time brokerage arrangements are  xcircumscribed by the Commission to the extent that the contracts governing those relationships  x!must include specific provisions relating to programming and other continuing licensee  X- x\obligations. E.g., Gisela Huberman, Esquire, 6 FCC 2d 5397 (MMB 1991); Joseph A. Belisle,  Xy- xEsquire, 5 FCC Rcd 7585 (MMB 1990); Roy Russo, Esquire, 5 FCC Rcd 7586 (MMB 1990);  Xb- xDominic Monahan, Esquire, 6 FCC Rcd 1867 (MMB 1990); Peter D. O'Connell, Esquire, 6 FCC  XK- x0Rcd 1869 (MMB 1990); Brian Madden, Esquire, 6 FCC Rcd 1871 (MMB 1990); Joseph F.  X4- xBryant, 6 FCC Rcd 6121, 6123 (Video Services Div., MMB 1991). We view River City's  xjconsultations with staff, therefore, merely as an attempt to prepare an agreement in compliance  xwith Commission rules and policies, and not an attempt to insert provisions advantageous to  x\itself. We find that Buyer's lack of participation at that stage is not evidence of River City's control over Buyer.   xIn sum, in light of Buyer's established record as a broadcaster, we find that River City has  x[exercised no control over that entity in arranging the preliminaries to the application before us.  xiIndeed, we note that that application has been prepared and prosecuted by Buyer's own attorney,  xwho, based on the WJET(TV) Ownership Reports, has served as the communications counsel of  XN-record for Buyer's principals since at least 1986._ XN! yO- xԍ HarteHanks attempts to raise the specter of control by pointing to River City's submission of the documents  xrequested of Buyer by the staff. We do not view the filing of agreements by River City, a party to all of those agreements, as demonstration of its control over Buyer._  X -  lx Time Brokerage Agreement.  HarteHanks asserts that the very existence of a time  x.brokerage agreement further reinforces the conclusion that Buyer is not a wholly independent  xMentity. Specifically, HarteHanks argues that the termination clauses of the Time Brokerage  xlAgreement, which require Buyer to pay to River City an amount equal to all payments of  xprincipal to the institutional lender, suggest that River City, not Buyer, is making Buyer's senior  x<debt payments. HarteHanks, as well as PostNewsweek, also point to the termination provisions  x[of the agreement, as well as to the duration of the agreement, as a restraint of Buyer's ability to""  ,-(-(ZZ!" "escape" the time brokerage arrangement.   xWe note here, as we have earlier, that the brokerage relationship between Buyer and River  xCity has not yet commenced. Indeed, the Time Brokerage Agreement before us has not even  xybeen executed. Any concerns we may have with the provisions of that agreement as originally  xproposed have since been cured, or will be, by amendment prior to execution. Thus, we shall  xhave no basis to assume, absent properly supported specific allegations of fact to the contrary,  xthat Buyer and River City will operate in a manner differing from that delineated in their  XH-agreement as amended. News International, PLC, 97 FCC 2d 349, 356 (1984).   #xA licensee's participation in a time brokerage arrangement does not constitute an  xunauthorized transfer of control under Section 310(d) of the Act unless the agreement vests a  X - xMdisproportionate degree of control in the broker. Roy R. Russo, Esq., 5 FCC Rcd 7586, 7587  x(MMB 1990). The Commission's threepart standard for assessing control applies with equal  X - xforce to a licensee that is party to a local agreement. See, e.g., id. at 7587. Thus, a licensee  xinvolved in a local marketing relationship is not relieved of its overarching duty to retain ultimate  xcontrol, that is, to mandate basic policies pertaining to the fundamental station operations of  xprogramming, personnel and finances. But, as is true with any broadcaster, even one whose  xistation is brokered, a licensee is permitted under Section 310(d) to delegate daytoday operations  xrelating to those three areas, so long as the licensee continues to set the policies guiding those  X4- xoperations. See Southwest Texas Public Broadcasting Council, 85 FCC 2d 713 (1981); The  X- xAlabama Educational Television Commission, 33 FCC 2d 495, 508 (1972). In sum, we look not  xxto who executes the programming, personnel and finance responsibilities, but who establishes the policies governing the three areas.  x Under the draft Time Brokerage Agreement before us, Buyer expressly enjoys ultimate  X- xMcontrol over the nearly fulltime programming ! yO#- xԍ Section 1.3 of the proposed Time Brokerage Agreement permits River City to program up to 162 hours per week. to be aired by River City: Buyer can require  xRiver City to air issues of importance to the local community and educational and informational  xprogramming for children aged 16 years and younger; Buyer may reject or refuse portions of  xRiver City programming which Buyer believes to be contrary to the public interest; and Buyer  xmay interrupt River City programming for that which, in its determination, is of greater local or  xnational public importance. In order to enable Buyer to monitor River City's programming, River  x=City is obligated under the agreement to give Buyer at least 24 hours notice of substantial and  xmaterial changes in programming. Moreover, Buyer is responsible for assessing the issues of  xNconcern to Kerrville and area residents and addressing those issues in its public service  xprogramming. Although River City has the right to program up to 162 hours per week on  xLKRRT(TV), which constitutes nearly all of Buyer's airtime, the Commission has never set limits  xon the amount of time a brokered station could sell. Instead, the Commission has cautioned that  xL"extensive time brokering might result in the licensee's relinquished or diminished control over  xyprogramming" if the licensee abdicates its core duties of ascertaining needs and interests of its"#  ,-(-(ZZe""  x>viewing public, formulates responsive programming, and maintaining "a familiarity with the  X- xMcontent of [its] programs." Cosmopolitan Broadcasting Corporation, 59 FCC 2d 558, 56061  x](1976). In this case, the time brokerage agreement affords Buyer ample rights to exercise control. We expect that that control will be duly exercised.   xAs for other aspects of station operations, Buyer is contractually obligated to maintain its  xlocal public inspection file and place materials in that file in a timely fashion and to maintain and  xstaff the main studio. Under the agreement, Buyer "will provide and be responsible" for station  x[personnel necessary for the broadcast transmission of programs and "other aspects of Station  X1- xoperation," including, at minimum, the station's general manager and another employee,f X1! yO - xiԍ This is consistent with the requisite staffing levels required of all broadcasters, including those operating  yOr - xunder time brokerage arrangements. See Jones Eastern of the Outer Banks, Inc., 7 FCC Rcd 6800 (1992); Roy Russo, 6 FCC Rcd at 7587.f and will  xbe responsible for the salaries, taxes, insurance and related costs for all the station personnel.  xyRiver City, by contrast, is responsible for the employment and costs associated with personnel  xused in the sale of commercial advertising time and the production of River City's programming.  xHowever, whenever on the station's premises, as established in the time brokerage agreement, all  xLof River City's employees will be subject to the overall supervision of Buyer's general manager  xand/or other employee. This personnel arrangement, as we have found in past cases involving  X- xlocal marketing agreements, does not indicate abdication of control to River City.  See, e.g., Peter  Xy-D. O'Connell, Esquire, 6 FCC Rcd 1869 (MMB 1991).   lxAs for Buyer's ability to revoke the activities it has delegated to River City, we also were  x[concerned, as was HarteHanks, about obligations originally imposed upon Buyer in the event  xthe brokerage arrangement had been terminated for reasons other than River City's consent.  xUnder those circumstances, Buyer was to be liable to River City for an amount equal to all of  xythe payments of principal paid in due course to Buyer's senior lender, Bankers Trust Company.  X- xLSee Sections 6.2(b), (c), as amended. Initially, River City justified this repayment penalty as an  xappropriate remedy for Buyer's unilateral termination of the agreement because cessation of the  xrelationship would result in an "unfair windfall [to Buyer] from the deal." To this end, therefore,  xRiver City asserted that it had to be made "at least partially whole" by that portion of the time  xzbrokerage fee used to pay down the principal of its senior bank debt. The fee arrangements  xworked out between a licensee and a broker may be based on the licensee's fixed costs, such as  xoperating costs, capital expenditures, debt service, and a profit. But the fee, once paid, becomes  xMthe property of the licensee and may be expended in any manner that the licensee chooses.  xRather than a "windfall" to the licensee, the brokerage fees should be viewed as the fair value  xof the licensee's airtime. Buyer and River City have now deleted this provision from their time  xbrokerage agreement and have amended the termination provisions so that now either Buyer or  xRiver City may terminate upon six months' written notice. Although the party terminating the  xNagreement must now pay the other party one million dollars, we believe that this level of  xKspecified damages, amounting to approximately three percent of the purchase price of the station, and the due date of such damages, at the sixmonth mark, is not confiscatory or onerous.""  ,-(-(ZZ!"Ԍ  ԙxFinally, the original provision here setting a term of five years and two additional five x[year renewals has been reformed by the parties to the agreement in accordance with a tenyear  xlimitation we require of all television brokerage arrangements. In sum, we find that the  xbrokerage arrangement between Buyer and River City, as amended, will not impinge upon Buyer's ultimate control of KRRT(TV).  Xv-  x  River City's financial stake.  HarteHanks contends that River City's financial interest  xin the pending transaction renders River City the "real interested party" on two general grounds:  x(1) River City's provision of monies to Buyer, as a loan and as payments of brokerage fees; and  x(2) River City's obligations to Paramount under the purchase agreement as conditions to Buyer's  X - xacquisition of KRRT(TV).  ! yO - xԍ HarteHanks also alleged that the proposed option agreement between Buyer and River City for the purchase  xof KRRT(TV) endowed River City with the right to control Buyer. In a May 15, 1995 letter, River City notified the  xCommission that it would not enter into an option agreement with Buyer. Accordingly, the allegations of HarteHanks regarding the terms of the option agreement are now moot. Specifically, as to the first ground, HarteHanks looks to River  xCity's funding of $1 million of the $1.5 million option payment/purchase deposit and of onethird  xof KRRT(TV)'s $30 million purchase price. Additionally, HarteHanks asserts that River City's  x-monthly payments to Buyer under the Time Brokerage Agreement, "under the guise of brokerage  x[fees and an escrow agent's facade," constitutes direct payment by River City of the $20 million  xsenior loan from Bankers Trust. As initially proposed, the monthly fees owed to Buyer by River  xCity each month were to be paid into an escrow account, and under the terms of Attachment 1.5  xKof the original Time Brokerage Agreement, an escrow agent was to disburse principal and interest  xpayments directly to Buyer's senior lender and the remainder to Buyer. HarteHanks concludes  x=that "[i]t is thus evident" that Buyer will be "wholly dependent upon River City" to finance its daily operations, capital expenditures and debt obligations.   !xIn response, Buyer represents that on August 1, 1994, pursuant to the Assignment and  x>Assumption of Option Agreement between it and River City, Buyer wired $500,000 to River  xCity's bank account in St. Louis and signed a nonrecourse promissory note to River City for $1  x=million, the balance of the option payment/purchase deposit. Since that response, on May 15, 1995, Buyer has informed the Commission in writing that it will be contributing a total " ,-(-(ZZ"  xjof $500,000 to the acquisition and that those funds will remain as equity. As for the $30 million  xzpurchase price, Buyer states that it will obtain a $20 million loan from an institutional lender,  x\Bankers Trust, and the remainder, "a significantly smaller amount of money," or $10 million,  xfrom River City. River City's position will be "structurally subordinate to the senior credit  xKfacility," Buyer contends, because that loan will be secured by a pledge of the stock of the parent  xof the licensee, while the senior debt will be secured by a pledge of the stock of the proposed  xllicensee itself. Thus, Buyer concludes, only Buyer's senior lender will have a lien on the  xjoperating assets and stock of the licenseetobe. Buyer also represents that River City will not  xguarantee the proposed licensee's obligations to the senior lender. As for payment of the  X1- xbrokerage fees to an escrow account, Buyer contends that it is "nothing more than a procedural  x.mechanism" and does not "make River City contractually liable" for Buyer's debts. (Emphasis  x?included.) Nevertheless, Buyer and River City have since amended their time brokerage agreement to eliminate the escrow arrangement in favor of direct payments to Buyer.  X -  xOn June 1, 1995, the Mass Media Bureau released a Public Notice, setting forth the  xprocessing standards for assignees proposing to operate a television station under a time  X- xbrokerage agreement. In the Public Notice, the Bureau stated that it would grant applications  xwhere the broker proposes relationships with the assignee which include at most the time  x/brokerage agreement and an arm'slength loan for some or all of the acquisition price of the  xstation or an option to purchase the station. As amended, we find that the debtorcreditor  xrelationship between Buyer and River City complies with the interim standard for time brokerage  xarrangements. Indeed, Buyer has exceeded that standard in that it has committed $500,000 of  xits own funds as an equity contribution and has arranged for twothirds of the purchase price of  x=the station to derive from a commercial lender, Bankers Trust. The broker, permitted under the  xinterim standards to finance all of the acquisition costs, is providing only onethird of the  xpurchase price, or $10 million, and that amount is structurally and expressly subordinated to the Bankers Trust loan.  x= With respect to HarteHanks' contention that the brokerage fees flowing from River City to  xBuyer constitute direct payments to Bankers Trust or, as it alleges, a functional guarantee of the  xloan, we note, as discussed above, that in a brokerage arrangement the licensee makes its airtime  xavailable to the time broker in exchange for the equivalent of "rent," an amount calculated to  xincorporate the lessor's fixed and operating costs, including debt service, operating expenses,  xcapital expenditures, and a profit. It is irrelevant to the issue of control whether a portion of the  x>time brokerage fees paid to the licensee is applied to a thirdparty loan or to a loan from the  xLbroker itself. Instead, our primary focus of concern is the level of control, if any, abdicated via  xthe terms of the governing loan and/or security agreements. Here, Section 1.04 of the Buyer xRiver City Loan and Security Agreement provides for amendment of the terms of the agreement  xLand accompanying promissory notes immediately prior to the consummation of the KRRT(TV)  xzacquisition so as to "accommodate the reasonable requests of the senior lenders" of Buyer.  x.According to Buyer and River City, those specific amended terms cannot be finalized until the  xfinal documentation of the senior bank financing has been completed, which, in turn, cannot  xoccur, it is represented, until approval of Buyer's application before us. However, both Buyer  xand River City represent that the amended loan agreement will contain "essentially the same"#' ,-(-(ZZ%"  xstandard terms and conditions as those in the current Loan Agreement." Having reviewed those  X- xterms, as cited above, as well as those in the Pledge Agreement x! yOb- xԍ As required by Commission policy, see Minority Ownership of Broadcasting Facilities, 99 FCC 2d 1249, 12544  x(1985), the Pledge Agreement provides for Buyer's retention of voting rights in the stock during the term of the  x<hypothecation and, in the event of default, disposal of the stock at a private sale or public auction, subject to  xCommission approval. We observe, however, that Section 6 of the Pledge Agreement gives the right to River City,  xx"[a]t any such sale," to bid for and purchase the stock, which is to be held by a trustee, on River City's behalf,  xpursuant to a trust meeting the Commission's criteria. We expect that any sale in which a pledgee, such as River  yO-City or its agent or trustee, participates will be one in which there are several bona fide bidders. between River City and Myron  xJones and John Kanzius, the sole shareholders of Buyer's parent, we find no provisions, and  xHarteHanks has failed to cite any, that permit River City to wrest control of the station from  X-Buyer.! yO] - xԍ Buyer's obligation to commence payment of principal and accrued interest is triggered upon repayment of  xthe senior loan, thereby eliminating the occurrence of default so long as the senior loan is outstanding. As with  xany arm'slength loan, however, we expect that Buyer will repay the loan to River City in full. Moreover, we reserve  xhthe right to review the terms of the amended loan agreement and to seek modification of those terms, if necessary  xto comport with Commission rules and policies. To that end, therefore, we require Buyer to submit a copy of the amended loan agreement within 30 days of amendment thereof.  x\ As for payment of the monthly brokerage fees to an escrow agent, Buyer and River City  xhave eliminated that arrangement from their time brokerage agreement, so that Buyer will be free  xxto dispose of the brokerage fees as it desires. With respect to HarteHanks' assertion that Buyer's  xpurported financial dependence upon River City means that Buyer cannot "freely terminate" the  xtime brokerage arrangement without risking default on [that] debt," we disagree. First, there are  xjno terms in either the River City loan agreement, accompanying promissory note, or the Buyer xRiver City time brokerage agreement which make the River City loan contingent upon the  xcontinuation of the brokerage relationship. Second, in its letter of May 31, 1995, Buyer  xrepresents that while Bankers Trust "is aware" of Buyer's plans to enter into a time brokerage  xagreement with River City and has based the station's cash flow projections on the existence of  xthat agreement, "there will be no prohibition in the loan agreement on [Buyer] terminating the  x/LMA." Accordingly, in the event of termination of the agreement with River City, a choice  xwhich Buyer can unilaterally make under Section 6.2, Buyer will be free to join forces with  x/another broker or to affiliate the station with a television network, raising revenues directly  xthrough affiliation payments and advertising. Any such new source of revenues will enable  x[Buyer to continue making payments to Bankers Trust and to fulfill its loan obligations to River City as its junior lender.  x\ HarteHanks' second basis for alleging financial control by River City is predicated upon  xRiver City's obligation under the ParamountBuyer purchase agreement to procure approximately  xk$3 million of Paramount/Viacom programming. According to HarteHanks, this obligation is  xevidence of additional financing provided by River City to effect the assignment before us. The  xamount owed to Paramount by River City, totalling approximately $3 million, will allegedly be  xkrouted to Paramount in the form of programming agreements, the execution of which, Harte"e ,-(-(ZZ"ԫ xHanks argues, appears to be a material condition to consummation of the sale to Buyer under the  x[Asset Purchase Agreement. In response, Buyer maintains that River City's obligations are not  xan investment in KRRT(TV). Rather, according to Buyer, the contracts represent River City's  xseparate investment in Paramount programming and in River City's own television stations: the  xMay 5, 1994, programming agreements, Buyer states, provide that River City will purchase from Paramount programming to be aired on four River City stations in four different markets.  x We observe that the ParamountRiver City option agreement disallowed assignability of River  XH- xCity's rights under the Paramount programming agreements. See Insert D of November 24, 1994  xParamountRiver City Option Agreement. As we noted above, Buyer agreed to assume River  xCity's position visavis the option to purchase the Paramount television station. That River  xzCity's obligation to execute programming agreements is a condition to the ParamountBuyer  xclosing does not demonstrate that River City will control or influence Buyer's operation of  xKRRT(TV). Nor does it indicate that River City is financing a portion of the KRRT(TV)  xpurchase price, so long as the $3 million in programming agreements to be paid by River City  x0to Paramount is separate and apart from the $30 million consideration owed by Buyer to  xParamount under the Asset Purchase Agreement. In sum, we find that River City's provision of  Xy-a loan and payment of brokerage fees will not diminish Buyer's control over KRRT(TV).@y! yO- xԍ HarteHanks intimates that River City may exert control, financial or otherwise, over Buyer, because Section  x,2.6(b) of the draft copy of the purchase agreement annexed to the ParamountRiver City option agreement, upon  x;which the current agreement is modeled, states that the purchase price will be decreased by "an amount equal to  yOJ- xthe accrued vacation pay of employees whom the Buyer or the owner of KABBTV, San Antonio, Texas hires...."  xxHowever, we note that Section 2.6(b) in the Asset Purchase Agreement in the application before us was modified  xso that the purchase price will be decreased by "an amount equal to the accrued vacation pay of [current KRRT(TV)]  xemployees whom the Buyer hires...." Thus, the provision apparently applies only to Buyer's actions, not to those of River City.  XK- Deferral of applications pending outcome of rule making proceeding  X- x PostNewsweek urges that we defer action on the ParamountBuyer application pending the  xrule making proceeding relating to the use of local marketing agreements. Deferral, according  xxto PostNewsweek, will avoid prejudging "the proper resolution of the issues" before parties have  x.had an opportunity to file comments in the docket and setting a result that  X might be "at odds"  xwith the rules ultimately adopted by the Commission. To act on this adjudicatory proceeding  xprior to resolution of the rule making proceeding, PostNewsweek concludes, is to risk "making potentially inconsistent decisions within a relatively brief span of time."   xOur elicitation of comment on the utilization of local marketing agreements does not  xlconstrain us from acting on applications where the proposed buyer seeks to delegate its  xjprogramming operations to a time broker. Further delay would neither serve the public interest  xnor, as PostNewsweek asserts, "permit a more efficient resolution of the issues." Our action  xKhere, however, should not be viewed as a harbinger of any ultimate resolution of the pending rule  xmaking. As the Supreme Court has stated in a similar procedural context, a petitioner has no",-(-(ZZ"  xKvested right in the "suppositious eventualities" that the Commission might at some indeterminate  X- xtime modify its rules. FCC v. WJR, The Goodwill Station, Inc., 337 U.S. 265, 272 (1949).  x[Accordingly, for equitable reasons, we shall not defer action on the application before us. We  xkshall, however, condition grant of the application here upon resolution of the Commission's  X- x/related pending rule making proceeding, one reviewing the Commission's attribution rules.   X- xReview of the Commission's Rules Governing Attribution of Broadcast Interests (Attribution  Xv-Review), 10 FCC Rcd 3606 (1995).  XH-x` `  hh CONCLUSION  X -  x In conclusion, we find that neither HarteHanks nor PostNewsweek has raised a  xsubstantial and material question of fact that River City is the realpartyininterest in Buyer.  x=Further, PostNewsweek has not raised any justification for delaying action on the application  xbefore us. We find Buyer to be a qualified licensee and the assignment of license of KRRT(TV) from Paramount to Buyer to be in the public interest.   xAccordingly, IT IS ORDERED that the informal objections filed by HarteHanks and  xyPostNewsweek ARE DENIED. IT IS FURTHER ORDERED that the application for assignment  xof license for KRRT(TV), Kerrville, Texas, from Paramount to KRRT, Inc., BALCT940810KE,  x"IS GRANTED. Grant of this application is without prejudice to any future action the  xCommission may consider appropriate in light of the outcome of any action or change in rules  X- xor policies that the Commission may adopt in Review of the Commission's Regulations  X-Governing Attribution of Broadcast Interests, 10 FCC Rcd 3606 (1995). x` `  hh@ Sincerely, x` `  hh@ Barbara A. Kreisman x` `  hh@ Chief, Video Services Division x` `  hh@ Mass Media Bureau XX(  ,  cc: Kevin F. Reed, Esquire, counsel for River City Eric Werner, Esquire, counsel for HarteHanks Robert Branson, Esquire, counsel for PostNewsweek