Opposition Mounts over Hawaii TV Operational Merger
citizen’s media group in Hawaii is challenging a planned operational merger of
two TV stations serving the state.
“Media Council Hawai‘i--formerly the Honolulu Community-Media Council--will
challenge the illegal Raycom Media deal involving Stations KHNL, KGMB, and KFVE
at the FCC,” the group said in a statement released Sept. 4.
The group said it retained legal counsel to challenge a shared services
agreement among KGMB-TV, KHNL-TV and KFVE-TV. The Institute for Public
Representation at Georgetown University Law Center will pursue the Council’s
position in Washington.
KGMB is the CBS affiliate in Hawaii owned by MGC Capital Corp. in Arlington,
Va.; Raycom Media of Montgomery, Ala., owns KHNL and KFVE, the NBC and
MyNetworkTV affiliates, respectively.
The two groups announced in August their intention to combine station
operations and lay off 68 employees. The motivation was financial, as with many
other stations around the country. Revenues are off by around 25 percent
compared to recent years.
“The purpose of a shared services agreement is to not only secure the future of
KHNL, K5 and KGMB, but to operate them more efficiently and effectively without
diminishing the quality of news and other programming provided to our customers
in Hawaii,” said Paul McTear, president and CEO of Raycom Media. “We realize
there may be other financial and business options available, and while we are
certainly open to discussing these with any interested party, the economic
reality is that this market cannot support five traditionally separated
television stations, all with duplicated costs. Rather than experiencing the
loss of one, or possibly two stations in Hawaii, we intend to preserve three
stations that provide important and valuable local, national and international
programming to viewers in Hawaii.”
The SSA would create the largest news organization in Hawaii. The MCH countered
that it would give Raycom undue media leverage in the island state.
“MCH asserts that the agreement is nothing more than a thinly veiled attempt to
avoid regulatory scrutiny by the FCC, and that Raycom will exercise control
over all three stations in defiance of FCC ownership rules,” the Media Council
stated. “Raycom will control 45 percent of the revenues in this market as well
as editorial control, programming and advertising sales related to all three
Members of the group charge that the SSA flies in the face of the public
“Stations are granted licenses to serve the public interest in the communities
they serve,” said Chris Conybeare, president of MCH. This arrangement will
reduce diversity of opinion, create canned newscasts, increase advertising
rates, strangle independent programming, and raise barriers to any who wish to
enter the market. These effects are all contrary to public interest and the
Raycom was the target of a Department of Justice lawsuit last year when it
could not divest a station in Richmond, Va., under terms the DOJ laid out for
Raycom’s acquisition of another station there.
More on Raycom’s operations:
“Scrutiny grows over Raycom’s Hawaii TV station merger,” at the Honolulu
August 28, 2008: “DOJ Files
Suit Against Raycom”
The U.S. Department of Justice has filed a civil lawsuit today against Raycom
Media of Montgomery, Ala., because the company failed to sell a TV station in
Richmond, Va. Raycom was required to sell a station as part of a deal it cut
with the DOJ when the media company acquired WWBT-TV from Lincoln Financial
Media last April.