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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In re Applications of ) ) Gaylord Entertainment Company ) (Transferor) ) ) and ) File No. BTCCT-990503IB ) CBS Corporation ) (Transferee) ) ) For Consent to the Transfer of Control of) Gaylord Broadcasting Company, L.P.) Licensee of Television Station ) KTVT(TV), Ft. Worth, Texas ) MEMORANDUM OPINION AND ORDER Adopted: August 3, 1999 Released: August 3, 1999 By the Chief, Mass Media Bureau: 1. The Commission, by the Chief, Mass Media Bureau, acting pursuant to delegated authority, has before it the above-captioned application seeking consent to the transfer of control of Gaylord Broadcasting Company, L.P., licensee of television station KTVT(TV), Channel 11 (CBS), Ft. Worth, Texas, from Gaylord Entertainment Company (Gaylord) to CBS Corporation (CBS). Through its affiliated entity, Infinity Broadcasting Corp., CBS has attributable interests in Texas radio stations KRLD(AM), Dallas; KLUV(AM), Dallas; KHVN(AM), Ft. Worth; KYNG(FM), Dallas; KLUV-FM, Dallas; KVIL-FM, Highland Park; KRBV(FM), Dallas; and KOAI(FM), Ft. Worth. Because the Grade A contour of KTVT encompasses the communities of license of each of these radio stations, CBS requests waivers of 47 C.F.R.  73.3555(c), the one-to-a-market rule. For the reasons stated below, we will grant a conditional one-to-a-market waiver, as well as the proposed transfer of control application. Background 2. In 1989, the Commission set forth its standard for waivers of its one-to-a-market rule. See Second Report and Order in MM Docket 87-7, 4 FCC Rcd 1741 (1989) (Second Report and Order), recon. granted in part and denied in part, 4 FCC Rcd 6489 (1989) (Second Report and Order Recon.). The Commission stated that it would presumptively favor waiver requests involving (a) stations serving the top 25 markets where at least 30 separately owned, operated and controlled stations will remain following the proposed combination (the "top 25 market/30 voice standard"); or (b) "failed" stations, i.e., stations which have not been operating for a substantial period of time (four months or more) or are involved in bankruptcy proceedings. Otherwise, waiver requests must be evaluated under the case-by-case standard. See 47 C.F.R.  73.3555(c), Note 7. Under the case- by-case standard, the Commission makes a public interest determination based upon the following criteria: (1) the potential public service benefits of joint operation of the facilities such as economies of scale, cost savings and programming and service benefits; (2) the types of facilities involved; (3) the number of media outlets owned by the applicant in the relevant market; (4) the financial difficulties of the stations involved; and (5) the nature of the relevant market in light of the level of competition and diversity after the joint operation is implemented. Second Report and Order, 4 FCC Rcd at 1753-54. Not all five factors are necessarily relevant in each case. Id. at 1761. 3. While the Dallas-Ft. Worth market is the 7th ranked television Designated Market Area (DMA) and the data supplied by CBS demonstrates that there would be more than 30 separately- owned, operated and controlled broadcast stations after the proposed transfer of control, prevailing precedent dictates that CBS's waiver request be evaluated under the case-by-case approach, because the radio component of the proposed combination exceeds those permitted prior to the adoption of the Telecommunications Act of 1996. See Triathlon Broadcasting of Little Rock Licensee, Inc., 12 FCC Rcd 13907 (MMB 1997); and S.E. Licensee G.P., 11 FCC Rcd 16727 (1996) (permanent waivers permitted when combination does not exceed 1 TV, 2 AM and 2 FM stations). In such cases, the Commission has declined to grant permanent waivers of the one-to-a-market rule, and instead has granted temporary waivers conditioned on the outcome of related issues raised in the television ownership rulemaking proceeding. See Television Ownership Second Further Notice, supra. In this case, CBS asks that we split the proposed combination into two separate transactions and grant a permanent waiver to permit it to own KTVT, 2 of the AM stations and 2 of the FM stations. For the remaining AM station and 3 FM stations, CBS requests that we grant a temporary waiver conditioned on the outcome of the television rulemaking proceeding. CBS does not state for which ownership combination it would like the Commission to grant a permanent one-to-a-market waiver and which ownership combination it would like a temporary waiver. It is not Commission practice to examine piecemeal proposed ownership combinations that would exceed the limits set forth in one-to-a-market rule. We examine the complete ownership combination to determine whether a waiver would serve the public interest. Therefore, we find that a permanent waiver would not be appropriate here and decline CBS's request. Accordingly, we will examine CBS's waiver showing under our case-by-case criteria to determine whether CBS's conditional common ownership of 1 television station and 8 radio stations in the Dallas-Ft. Worth DMA is consistent with the public interest. 4. Public Service Benefits of Joint Operations. CBS maintains that the proposed common ownership of KTVT and the radio stations will generate new operating and advertising efficiencies, broaden access to and awareness of public interest and community programming and significantly improve the quality of news, weather, traffic and other community service programming provided by all of the stations. 5. CBS estimates that it will realize a cost savings of $800,000 annually as a result of the common ownership of the stations. Specifically, CBS notes that it will save approximately $100,000 in corporate overhead by offering existing in-house legal, engineering, administrative and accounting services to KTVT. These savings, CBS suggests, will permit the improvement of the technical facilities, public affairs programming and community outreach efforts of KTVT and the radio stations. CBS also estimates that it will save $50,000 due to the stations' combined purchasing power for direct mail, outdoor advertising, promotional merchandise and audience research services. CBS also anticipates saving approximately $500,000 in cross-promotion costs, as well as through jointly- promoted public service campaigns and community service events and joint advertising of employment opportunities. Finally, CBS estimates that it will save approximately $150,000 as a result of the anticipated consolidation of radio and television programming, including the sharing of television news resources such as reporters, talent, stringers and wire services. 6. With respect to programming, CBS anticipates that the cost savings and other synergies generated by the common ownership of KTVT and the radio stations will allow it to provide new and expanded programming services to the public. For example, CBS notes that, as a CBS owned and operated station, KTVT will have access to CBS's substantial news gathering resources. Furthermore, KTVT's production and development facilities will improve the radio stations' public affairs programming and local, national and international news coverage. CBS states that it anticipates that KTVT news staff will be able to provide news, weather, and sports programming segments to the radio stations. CBS also proposes joint news arrangements between KRLD(AM) and KTVT which will expand both the scope and depth of their local news operations. CBS states that the benefits of improved newscasts on KTVT will in turn be used to improve the news programming provided by all of the radio stations. CBS notes that at least one of the radio stations will offer a nightly simulcast of one or more of KTVT's local newscasts, which would not occur absent common ownership of the stations. 7. Given the possibility of severe weather conditions in the area, CBS proposes to devote a portion of the cost savings generated by common ownership of KTVT and the radio stations to improving all of its stations' ability to gather and disseminate weather information. CBS states that the radio stations will have access to four full-time meteorologists, as well as KTVT's weather forecast reports including local emergency weather bulletins. KTVT may also initiate a joint weather reporting service with KRLD(AM) to strengthen the weather forecasting and reporting capabilities of both stations. CBS also states that KTVT and the radio stations will work together to enhance their traffic reporting capabilities. The radio stations will also have access to the KTVT helicopter traffic reports. 8. CBS predicts that common ownership of KTVT and the radio stations will enhance the issue-responsive programming provided by all of the stations. CBS notes that KTVT airs a one-hour live locally-originated program each weekday called "Positively TEXAS" featuring issues of community concern. This program may be simulcast on some of the radio stations which CBS predicts will significantly increase the number of residents that will have access to these segments. CBS also states that other KTVT programs may be simulcast on one or more of the radio stations. In conjunction with the radio stations, CBS also intends to develop local entertainment reports and community calendar segments to be broadcast on KTVT. 9. In addition, CBS states that KTVT and the radio stations will mount joint public service initiatives and community projects that will substantially benefit the Dallas-Ft. Worth market. By combining the public service initiatives of KTVT and the radio stations, CBS believes that it will be possible to devote even greater resources to the promotion and execution of these events. CBS believes that many of the radio stations' community service campaigns, such as Charity of the Month, Road Trip for Charity, Collin County Komen Run, Montage Festival of Art and Jazz, Christmas is for Caring, and KLUV-FM's Arbor Day, will be more effective by cross promotion, joint public service announcements and news stories aired on KTVT. Similarly, the radio stations will support KTVT's annual community service projects such as The 11 Days of Christmas Wishes, Race for the Cure, Beat the Pro, Wish Night and the Send a Kid to Camp campaign. Common ownership of the stations will mean that local law enforcement programs, for which the CBS radio stations are current participants, such as "Amber's Plan" which provides information about the possible abduction of children, will have a greater audience reach with KTVT's involvement. 10. Finally, CBS maintains that its commitment to equal employment opportunities will be maximized by combining the minority and female outreach programs of the radio stations and KTVT. In particular, CBS states that making KTVT's applicant pool accessible to the radio stations will improve the effectiveness of the reach of the radio stations' minority and female recruitment efforts. 11. Types of Facilities. KTVT operates on VHF channel 11 with an authorized power of 316 kilowatts from an antenna 509 meters above average terrain. CBS notes that, in the Dallas-Ft. Worth market, there are 2 other television stations (KDFW-TV, Channel 4 (Fox), Dallas; and KXAS- TV, Channel 5 (NBC), Ft. Worth) with facilities superior to KTVT. KRLD(AM) is a Class A AM station that operates on 1080 kHz with an effective radiated power of 50 kilowatts. KHVN(AM) is a Class B AM station that operates on 970 kHz with an effective radiated power of 1 kilowatt daytime and 0.27 kilowatts nighttime. KLUV(AM) is a Class B AM station that operates on 1190 kHz with an effective radiated power of 50 kilowatts. KYNG-FM is a Class C FM station that operates with an effective radiated power of 100 kilowatts from an antenna that is 466 meters above average terrain. KLUV-FM is a Class C FM station that operates with an effective radiated power of 100 kilowatts from an antenna that is 483 meters above average terrain. KVIL(FM) is a Class C FM station that operates with an effective radiated power of 100 kilowatts from an antenna that is 479 meters above average terrain. KRBV(FM) is a Class C FM station that operates with an effective radiated power of 100 kilowatts from an antenna that is 439 meters above average terrain. Finally, KOAI-FM is a Class C1 FM station that operates with effective radiated power of 28 kilowatts from an antenna that is 485 meters above average terrain. CBS notes that there are 15 other Class C FM radio stations with facilities comparable to its 4 Class C FM stations, and 1 AM station (WBAP(AM), Ft. Worth, Texas) with superior facilities to KRLD(AM), its strongest AM station. Based on this information, CBS concludes that its proposed ownership of KTVT when coupled with its existing radio stations would not dominate the market. 12. Other Media Outlets. Other than those stations included in the one-to-a-market waiver request, CBS does not own any other media outlets in the Dallas-Ft. Worth market. 13. Economic Status. CBS does not claim that any of the stations is in financial distress. However, CBS notes that the Commission has granted numerous one-to-a-market waivers in the absence of a showing of financial distress. 14. Economic Concentration and Competition in the Affected Market. CBS notes that the Dallas-Ft. Worth market is the 7th largest television DMA in the United States. CBS' engineering showing demonstrates that the market is currently served by at least 51 separately owned, operated and controlled broadcast licensees (including CBS). Excluding the subject stations, there are at least 58 radio stations (24 AM and 34 FM) licensed to 35 separate owners and 16 television stations licensed to 15 separate owners in the Dallas-Ft. Worth market. Following the consummation of the proposed transaction, there will be at least 50 independent voices operating in the market, which CBS maintains is a sufficient number to ensure robust competition. CBS notes that the Dallas-Ft. Worth market also has extensive cable penetration with approximately 40 cable systems serving over a million cable households representing 52% of total households. The market is also served by 8 multipoint distribution service (MDS) operators and 7 multipoint multichannel distribution service (MMDS) operators. Finally, the market is served by 22 daily newspapers, 34 weekly newspapers and numerous other local and national magazines with extensive circulation in the market. 15. With respect to economic concentration and competition in the affected markets, CBS cites to revenue data from BIA Research, Inc., which indicates that the revenue share for the radio stations is 34.23% and 13% for KTVT. According to this data, the combined revenue share for the proposed combination of stations would be 20.5%. CBS also notes that the advertising revenue shares for the three other major network affiliates in the market - WFAA(TV) (ABC), KXAS-TV (NBC) and KDFW(TV) (Fox) were significantly higher (24%, 19% and 16% respectively) than KTVT's revenue share. Based on these figures, and the numerous other independent voices in the market, CBS concludes that common ownership of KTVT and the radio stations would have a nominal impact on diversity or competition. Discussion 16. In evaluating a request for waiver of the one-to-a-market rule, our goal "is to permit the public to benefit from such efficiencies of operation as may be achieved through the use of common facilities and staff, consistent with the maintenance of diversity and vigorous competition within the market areas involved." Second Report and Order Recon., 4 FCC Rcd at 6491. We do not require that all five case-by-case criteria be satisfied as a precondition to a waiver, but rather that the overall consideration of these factors weigh in favor of the public interest. Id. at 6493; Second Report and Order, 4 FCC Rcd at 1753. We find that, based upon its case-by-case showing, CBS has justified a temporary waiver conditioned on the outcome of the rulemaking proceeding. 17. We have granted one-to-a-market waivers where the potential benefits of the combination, such as economies of scale, cost savings and programming benefits, indicate that waiver will serve the public interest. See, e.g., Fant Broadcasting Company of Minnesota, Inc., 13 FCC Rcd 21126 (1998). We find that CBS has shown that combining the operations of the eight radio stations together with KTVT will result in significant cost savings by consolidating several of the stations' program services, reducing corporate overhead, increasing the purchasing power of the stations for advertising costs, and reducing cross-promotion expenses. CBS has pledged to use a portion of these savings to improve the technical facilities, public affairs programming and community outreach efforts of KTVT and the radio stations. CBS has also pledged to devote a portion of the cost savings to improve all of its stations' ability to gather and disseminate news and weather information. Therefore, we find that common ownership will result in such public benefits as new and expanded programming services to the public. We also find that the sharing of employment information between KTVT and the radio stations will improve the effectiveness of the reach of the all of the stations' minority and female recruitment efforts. 18. With respect to the types of facilities involved, the Commission endeavors to predict and avoid any significant adverse effect on diversity or competition from too powerful a radio-television combination. Second Report and Order, 4 FCC Rcd at 6349. While this transaction would result in CBS owning a powerful VHF station along with several powerful radio stations, we find that there are numerous other stations with comparable or superior facilities in the market. For example, there are 2 other television stations (KDFW-TV and KXAS-TV) with facilities superior to KTVT. In addition, while CBS will own 4 Class C FM stations and 2 powerful AM stations, there are 15 other Class C FM radio stations with comparable facilities, and 1 AM station (WBAP(AM), Ft. Worth, Texas) with superior facilities to KRLD(AM), CBS's most powerful AM station. Therefore, we conclude that common ownership of the radio stations with KTVT will not vest CBS with significantly superior facilities that would present issues of market dominance inconsistent with the public interest. 19. While CBS has not claimed that any of the stations are experiencing financial difficulties, that fact does not preclude a grant of the waiver request. We have permitted one-to-a-market waivers in a number of cases where none of the stations were experiencing financial difficulties. See, e.g., S.E. Licensee G.P., 11 FCC Rcd 16727 (1996); Alta Gulf FM, Inc., 10 FCC Rcd 7750 (1995); Secret Communications, L.P., 10 FCC Rcd 6874 (1995). 20. With respect to diversity and competition, we find that there are a sufficient number of media voices serving the relevant market such that the common ownership and operation of these stations will not have an unduly negative impact on these factors. We calculate that, after the transfer of control of KTVT is approved and consummated, the combined television and radio stations will continue to compete with 16 other television stations, licensed to 15 separate licensees, and 58 radio stations, licensed to 35 separate licensees, representing 50 separately owned and operated media voices. We further find that the Dallas-Ft. Worth market is served by numerous other media including 40 cable systems, 8 MDS operators, 7 MMDS operators, 22 daily newspapers, and 34 weekly newspapers. 21. Finally, the revenue data indicate that the proposed combination will not create any undue concentration of ownership or control of broadcast media within the Dallas-Ft. Worth market. These data indicate that in the Dallas-Ft. Worth DMA, the radio stations receive a combined 34.23% share of the radio advertising revenue and that KTVT receives 13% of the television advertising revenue. Together the radio stations and KTVT receive a combined television and radio station advertising share of 20.5%. We note that KTVT is ranked lower than the three other major network affiliated television stations in the Dallas-Ft. Worth market. Furthermore, while KVIL-FM and KRLD(AM) are the two leading revenue-generating radio stations in the market, their individual revenue shares (11.9% and 6.5% respectively) are not large enough to raise an issue of market dominance. Overall, the level of combined advertising revenue is consistent with revenue levels approved in other temporary conditional one-to-a-market waivers in smaller markets with fewer separately-owned broadcast voice. See, e.g., LCH Communications, Inc., DA 99-1247, released June 24, 1999. Accordingly, we find that the proposed combination will not create any undue concentration of ownership or control of broadcast media in the Dallas-Ft. Worth market. 22. We conclude that, when examined in its totality, CBS's showing meets our case-by-case waiver criteria and grant of a one-to-a-market waiver, conditioned on the outcome of our pending television ownership rulemaking proceeding, would be in the public interest. Grant of a one-to-a- market waiver will result in significant cost savings and operational efficiencies that will translate into public benefits through enhanced public affairs programming, increased promotion of community activities, improved weather and news coverage and improved employment opportunities. We further conclude that diversity and competition within the market area involved will not be unduly diminished. In view of the foregoing, and having determined that the applicants are qualified in all respects, we find that a grant of the KTVT transfer of control application will serve the public interest, convenience and necessity. Conclusion 23. Accordingly, IT IS ORDERED, That the request for waiver of the Commission's one-to- a-market rule, 47 C.F.R.  73.3555(c), to permit common ownership of stations KTVT(TV), Ft. Worth, Texas, and KRLD(AM), Dallas, Texas; KLUV(AM), Dallas, Texas; KHVN(AM), Ft. Worth, Texas; KYNG(FM), Dallas, Texas; KLUV-FM, Dallas, Texas; KVIL-FM, Highland Park, Texas; KRBV(FM), Dallas, Texas; and KOAI(FM), Ft. Worth, Texas, IS GRANTED, subject to the outcome of the Commission's pending broadcast television ownership rulemaking proceeding in MM Docket Nos. 91-221 and 87-8. Should divestiture be required as a result of that proceeding, CBS is directed to file, within six months from the release of the final Order in that proceeding, an application(s) for Commission consent to dispose of such station(s) as would be necessary for it to come into compliance with the rules as provided in the final Order. 24. IT IS FURTHER ORDERED, That the application (File No. BTCCT-990503IB) for transfer of control of Gaylord Broadcasting Company, L.P., from Gaylord Entertainment Company to CBS Corporation, IS GRANTED. FEDERAL COMMUNICATIONS COMMISSION Roy J. Stewart Chief, Mass Media Bureau