NBC Universal challenges Pappas license - TvTechnology

NBC Universal challenges Pappas license

NBCU claims TV Azteca, the Mexican-owned parent of TV Azteca America, is violating the 33 percent investment threshold allowed under FCC rules for foreign investors.
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Telemundo owner NBC Universal has filed a petition with the FCC to deny the license renewal of KAZA Channel 54, a Los Angles-area Spanish language TV station.

Pappas Telecasting officially owns KAZA, a TV Azteca America affiliate. NBCU, a fierce competitor of TV Azteca America through Telemundo, is disputing that Pappas ownership.

NBCU claims TV Azteca, the Mexican-owned parent of TV Azteca America, has operating control and a majority interest (51.6 percent) of the station, which is beyond the 33 percent investment threshold allowed under FCC rules for foreign investors.

NBCU also charged that because of alleged fraud and criminal activity in Mexico, TV Azteca lacks “the character qualifications to own and operate a U.S. broadcast station.” The case is thought to be the first character-based challenge to the renewal of a TV station license since 1979.

TV Azteca does not actually own channel 54. Instead, the company took over operations three years ago through a complex financial arrangement with Pappas Telecasting. TV Azteca said it currently leases the station from Pappas.

Peter Pappas, executive vice president, told the “Los Angeles Times” that TV Azteca had “no ownership interest, direct or indirect, and any assertions that KAZA has ceded control to TV Azteca America are entirely inaccurate,” he said. “This is essentially an acrimonious and long-standing business dispute between NBC Universal-Telemundo and TV Azteca.”