Remember, Cash Is Always King

We started the new week reading a fascinating account in The Wall Street Journal about the family struggle for the control of Block Communications. In the article was a passing reference to Block’s decision to sell its small group of TV stations, including its FOX and CW duopoly in Louisville to Atlanta-based Gray Media last August.

Well, that got us to thinking, “Hey wait, if the Block sale to Gray was announced last August and the Nexstar acquisition of TEGNA was announced last November…why has the latter move of sixty plus stations already gotten FCC (and DOJ) approval, while the sale of just four full powered TV stations is still languishing at the commission, awaiting final approval.

Come to think of it, there are a number of station transactions that were announced last year, well before the blockbuster Nexstar-TEGNA deal, that are still listed as “pending review” before the FCC. Even the original reporting on that mega-transaction suggested it wouldn’t be approved and close before the third quarter of this year, or perhaps “late 2026.”

And those were considered “optimistic” time frames for a deal of that size and complexity.

While it might be easy to go off on a conspiracy-laden rant here about the lightning speed that CEO Perry Sook was able to get his “big deal of the day” pushed through the typically slow corridors of Washington regulatory agencies, our focus is more about what is keeping the other ownership changes that are still “stuck in the queue” in the halls of the FCC offices on L Street in the District?

It would also be exceptionally easy to suggest some political motive for why some deals are getting approved by the Brendan Carr led FCC and others aren’t. Who knows, maybe if we poured through the database of the Federal Elections Commission, we would learn who has (or hasn’t) made the larger contributions to whichever political party one might suggest was necessary to receive preferential treatment. (To be clear, we could do this research, but our “team” is apparently out at a “team building” exercise this week.)

What’s even more perplexing is that our friend Matthew Keys at TheDesk.net is just reporting that the FCC is telling Congress that it will need less money in its annual operating budget for next year. The Commission says that it will reduce spending by almost $18 million, mostly by apparently imitating the broadcasting business, and reducing its headcount by over 100. As Keys writes: “The agency said the proposal reflects an effort to create a “lean, accountable, and efficient” organization by trimming expenses, primarily through workforce reductions.”

Excellent! The same efficiency that is on prime display with the speedy approval of transactions that create duopolies, triopolies, and probably at some point, outright monopolies of local TV station ownership.

The ever more-efficient FCC did manage to approve the transaction of ten former Byron Allen-owned Allen Media Group stations to the aforementioned Gray Media. That transaction, worth about $171 million, received FCC approval just after the Nexstar-TEGNA deal was okayed last month. It was originally announced last August too, shortly after the proposed deal between Block and Gray we previously noted.

And just moments ago, we learned that Byron Allen will be expanding his late-night real estate on the CBS television network. Variety.com reports that Allen has signed a deal where he will lease two hours of the late night schedule on CBS, starting at 11:35pm Eastern, beginning after the departure of “The Late Show with Stephen Colbert” this May.

Would you look at that? Brendan Carr gets one of those pesky late night talk show hosts exercising their First Amendment rights off of a whole network of licensed TV stations — without having to revoke a single license! Byron Allen, who couldn’t make money as a local station owner and operator, unloads most of his stations, and picks up some cash to pay some bills. And CBS turns into a “paid programmer” in the time period “after your late local news.” (At least for as long as a late local newscast is still a thing.”)

So really, everybody wins! (Well, at least everybody but the viewers, one might argue.)

We’ll wrap it up here with some free advice to the accounts receivable department at CBS, based on what we have heard from some vendors. Cash those late-night checks quickly, whenever you get them. As former GE CEO Jack Welch was fond of saying:“Cash is King.”

In more situations than you might think.

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