# FCC-93-340: FOX Television Stations INC (07/09/93): FOX Television Stations INC

> Federal · Rulings · In force

URL: https://www.frixlaw.com/law-library/statutes/FCC_FCC_93_340

## Section

- **Citation:** FCC-93-340: FOX Television Stations INC (07/09/93)
- **Heading:** FOX Television Stations INC
- **Jurisdiction:** Federal
- **Kind:** Rulings
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** FCC Declaratory Rulings / FOX Television Stations INC

## Text

8 FCC Red No. 16
Federal Communications Commission Record
FCC 93-340
Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of
FOX TELEVISION STATIONS INC.
Licensee of Television Station
WNYW. New York. New York
Request for waiver of the
Broadcast-Newspaper Cross-Ownership
Rule.Relating to WNYW and
the New York Post
DECLARATORY RULING
Adopted: June 29, 1993;
Released: July 9, 1993
By the Commission: Chairman Quello issuing a separate
statement: Commissioner Barrett dissenting and issuing a
separate statement: Commissioner Duggan issuing a sepa-
rate statement.
Introduction
Background
Procedural Issues
Ripeness
Table of Contents
Commission jurisdiction
Substantive Issues
Waiver of Broadcast-Newspaper Rule
Fox's waiver re4uest
Comments
Discussion
Misrepresentation
Pleadings
Discussion
EEO Matters
Paragraph
1
3
13
18
20
21
27
37
58
66
76
1 Interested parties were given the opportunity to comment on
Fox's waiver request. with an initial deadline of April 26. 1993.
Public Notice, DA 93--B2. released April 12. 1993. That com-
ment deadline was extended to May 10. 1993 by Order, DA
93-.\58. released April lb, 1993, based upon our request to Fox
for further information and an extension request from Caucus
for Media Diversity. Replies were due on May 17. 1993. Al-
though we did not provide for the submission of further plead-
ings. several parties filed responses to Fox's May 17 reply
comments. In order that we may develop the fullest record
possible. we have elected to consider, over Fox·s objection. all
filings submitted in this proceeding, even those filed after the
5341
INTRODUCTION
1. The Commission has before it for consideration a
re4uest from Fox Television Stations Inc. (Fox) for perma-
nent waiver of the broadcast-newspaper cross-ownership
rule. Section 73.3555(d)(3) of the Commission·s Rules.
which generally proscribes common ownership of a broad-
cast station and a daily newspaper in the same market
n this proceeding, even those filed after the
5341
INTRODUCTION
1. The Commission has before it for consideration a
re4uest from Fox Television Stations Inc. (Fox) for perma-
nent waiver of the broadcast-newspaper cross-ownership
rule. Section 73.3555(d)(3) of the Commission·s Rules.
which generally proscribes common ownership of a broad-
cast station and a daily newspaper in the same market. Fox
seeks a waiver so that it may continue to hold the license
for television station WNYW. Channel 5. New York. New
York. following the ac4uisition of the New York Post by
NYP Acquisition Corp. (NYP). Both Fox and NYP. subsid-
iaries of The News Corporation Limited (News Corp.). are
controlled by K. Rupert Murdoch. Comments. reply com-
ments. and responses. as well as dozens of letters, were
submitted both in opposition to. and in support of. Fox's
request. 1
2. Of the ten parties submitting formal comments or
reply comments. seven. Caucus for Media Diversity (Cau-
cus).
Champion
Holding
Company
(Champion).
Fleischman & Walsh (Fleischman). Drs. Lenora Fulani.
Rafael Mendez. Fred Newman and the National Alliance
(Fulani). Metropolitan Council of National Association for
the Advancement of Colored People Branches and the New
'fork Ams1erdam Sews (NAACP). National Association of
Black Owned Broadcasters (NAUOB). National Black Me-
dia Coalition and the Committee to Lliminate Media Of-
fensive to African People ( NBMC). oppose Commission
grant of waiver to Fox. and two. the Official Committee of
Unsecured Creditors of the Ne1r York Post (Creditors) and
WLIG-TV. Inc. (WLIG). support such a grant. Media Ac-
cess Project and Washington Area Citizens Coalition Inter-
ested in Viewers· Constitutional Rights (MAP). while
taking no position on Fox\ re4uest. urge that in the event
a waiver is granted. the Commission narrowly tailor that
decision.
BACKGROUND
3. Upon Fox\ acquisition in LQ86 of WNYW. New York.
New York. Murdoch
Post (Creditors) and
WLIG-TV. Inc. (WLIG). support such a grant. Media Ac-
cess Project and Washington Area Citizens Coalition Inter-
ested in Viewers· Constitutional Rights (MAP). while
taking no position on Fox\ re4uest. urge that in the event
a waiver is granted. the Commission narrowly tailor that
decision.
BACKGROUND
3. Upon Fox\ acquisition in LQ86 of WNYW. New York.
New York. Murdoch. as principal of Fox.2 was granted a
two-year period in which to divest his direct or indirect
interests in the Sew York Pos1, which he had purchased in
1976. Jfetromedia Radio & Telei·ision, Inc., 102 F.C.C. 2d
1334 ( 1985).3 He did so in March L 988. assigning owner-
ship of the newspaper to real estate developer Peter S.
Kalikow. the current owner. Following acquisition of the
newspaper. Kalikow states. he was able to sustain the Post's
operations through his real estate holdings. but upon de-
claring personal bankruptcy in August 1991. "it became
evident" that his real estate company could no longer
function as the newspaper\ source of capital.
May 17 reply date.
2
At the time of this acqu1s1t1on Fox was known as News
America Television Incorporated and WNYW as WNEW-TV.
.\ This transaction, involving the assignment of WNYW to Fox.
also included. among others. WFLD-TV. a Chicago. Illinois
television station. Murdoch's then-ownership of the Chicago
Sun-Times created a second broadcast-new~paper cross-owner-
ship violation, which was also waived for a two-year period .
.'vletromedia Radio & Television, Inc.. 102 F.C.C. 2d at 1353.
Murdoch disposed of the Sun-Times shortly after obtaining the
temporary waiver. See Health and Jfcdicinc Policy Group v.
FCC. 807 F.2d 1038, W.\O n.3 (D.C. Cir. 1986).
. Murdoch's then-ownership of the Chicago
Sun-Times created a second broadcast-new~paper cross-owner-
ship violation, which was also waived for a two-year period .
.'vletromedia Radio & Television, Inc.. 102 F.C.C. 2d at 1353.
Murdoch disposed of the Sun-Times shortly after obtaining the
temporary waiver. See Health and Jfcdicinc Policy Group v.
FCC. 807 F.2d 1038, W.\O n.3 (D.C. Cir. 1986).

FCC 93-340
Federal Communications Commission Record
8 FCC Red No. 16
4. It was at this time that Murdoch·s interest in the Pos1
was apparently rekindled. but as a creditor rather than as a
potential buyer. Based upon the terms of the 1988 pur-
chase and sale agreement with Kalikow. according to News
Corp. executive vice president and group general counsel
Arthur M. Siskind. Kalikow and the Pos(s parent com-
pany. The New York Post Co .. Inc .. owned by Kalikow.
agreed to perform certain obligations for which News
America Publishing Incorpoqlted (News America). the
publishing unit of News Corp .. remained contingently lia-
ble. In addition. News America was granted a right of first
refusal to purchase the newspaper in the event Kalikow
proposed to dispose of it. As a wntingent creditor. there-
fore. News America became. and still remains. a member
of the creditors· committee in Kalikow's personal bank-
ruptcy, attending committee meetings and bankruptcy
hearings in Kalikow·s. and later the Pos(s. bankruptcy
proceedings.
5. In February 1992. Kalikow notes. he entered into
negotiations with Hollinger. Inc .. one of the world"s lead-
ing newspaper publishers. and its principal Conrad Black.
represented by broker Veronis. Suhler & Associates. Inc.
(VS&A). an investment banking firm serving the media
and communications industry. Hollinger sought a joint
venture arrangement with Kalikow in order co ac4uire the
New York Daily .Vews and to combine its operations with
those of the Post. Several meetings with Black and VS&A
ensued. but by the first part of April 1992 "we realized."
Kalikow states
y broker Veronis. Suhler & Associates. Inc.
(VS&A). an investment banking firm serving the media
and communications industry. Hollinger sought a joint
venture arrangement with Kalikow in order co ac4uire the
New York Daily .Vews and to combine its operations with
those of the Post. Several meetings with Black and VS&A
ensued. but by the first part of April 1992 "we realized."
Kalikow states. "that there was no way that we could do a
deal with Mr. Black .... " Discussions continued for a
short period thereafter.
6. By this time. however. according to Kalikow. prelimi-
nary conversations that had commenced between Kalikow
and Apollo Investment Fund as early as January 1992 had
intensified. Represented by Leon Black. John Hannan and
Jerry Finkelstein. Apollo. notes Kalikow. met with him
often to work out the details of a proposed two-part trans-
action: Apollo would enter into a joint venture with
Kalikow as to his real estate holdings and into a separate
joint venture withx Bankers Trust Company and Kalikow
as to the Post. These discussions. which apparently widened
to include the creditors· committee in Kalikow"s bank-
ruptcy proceeding. resulted in a series of "term sheets"
which described the proposed transactions. Nevertheless.
Kalikow states, Apollo and his creditors· committee "could
not come together" on the first part of the transaction. the
real estate holdings. but negotiations were maintained with
regard to the Post. In the meantime. Kalikow obtained a $3
million line of credit from Bankers Trust Company. en-
abling the Post to operate through 1992.
7. During July and August 1992. the Apollo-Bankers
Trust negotiations with Kalikow progressed while Kalikow
sought a separate deal with outside investors for his real
estate assets. In October ! 992. Kalikow notes, he was told
by Apollo and Bankers Trust that talks were advancing
well and he no longer needed to attend meetings. The
transaction, he states he was told
to operate through 1992.
7. During July and August 1992. the Apollo-Bankers
Trust negotiations with Kalikow progressed while Kalikow
sought a separate deal with outside investors for his real
estate assets. In October ! 992. Kalikow notes, he was told
by Apollo and Bankers Trust that talks were advancing
well and he no longer needed to attend meetings. The
transaction, he states he was told. was to be concluded in a
"short time." Despite "rumors" to the contrary. Kalikow
contends. he was assured in December 1992 by both Apol-
lo and Bankers Trust that a deal was in the offing. How-
ever, in early January 1993. the Apollo-Bankers Trust deal
"had broken down," Kalikow states. and the Bankers Trust
working capital loan was clearly inadequate to cover the
Post's operating costs. Although Bankers Trust "grudging-
ly" agreed to extend the term of the loan. according to
5342
Kalikow. it did so on two conditions: that operating losses
at the Post be eliminated and that a substitute source of
funds for the newspaper be found.
8. Efforts to comply with the first condition. Kalikow
states. resulted in increasing the Post's newsstand price
from 40 to 50 cents and securing. with cooperation from
the trade unions. a 20 percent reduction in labor costs. As
for the second condition. Kalikow indicates. he approached
"any possible investor who had previously expressed any
type of interest in either an outright purchase or a joint
venture with the .Vew York Post. " On January 19. 1993.
Kalikow met with representatives of Marvin Davis of Davis
Companies. Several other meetings occurred. including a
walk through the Post plant. but. Kalikow maintains. al-
though he made several follow-up telephone calls, he never
heard from Davis again. And on January 20. Kalikow met
with Dusty Rhodes of National Review, which also resulted
in no further action.
9. In need of a continuing line of credit during the
extended search for investors
vis
Companies. Several other meetings occurred. including a
walk through the Post plant. but. Kalikow maintains. al-
though he made several follow-up telephone calls, he never
heard from Davis again. And on January 20. Kalikow met
with Dusty Rhodes of National Review, which also resulted
in no further action.
9. In need of a continuing line of credit during the
extended search for investors. Kalikow entered around-
the-clock negotiations with Bankers Trust over the week-
end of January 23 and 24. 1993. No agreement was
reached. But while he was at the Pos(s offices on Sunday.
January 2-L to inform the staff that publication of the
newspaper would be suspended. Kalikow states. he received
a telephone call from Steven Hoffenberg. principal of
Towers Financial Corporation. Hoffenberg. who. Kalikow
notes. apparently had become interested in the Post
through the efforts of Governor Mario Cuomo "s staff in
locating a purchaser. agreed to assume the role of lender
while he arranged to purchase the Post and its real prop-
erty. That entailed. among other things. obtaining consent
of the bankruptcy court presiding over Kalikow"s personal
bankruptcy. However. a lawsuit stemming from a Securities
and Exchange Commission investigation of Hoffenberg re-
sulted in the freezing of Hoffenberg·s personal assets and
those of Towers Financial. effectively precluding him from
purchasing the Post. Undaunted. Hoffenberg. according to
Kalikow. sought to enlist other investors in the purchase of
the Post, eventually reaching an agreement in late February
with real estate developer Abraham Hirschfeld. After a
falling out with Hoffenberg in early March, Kalikow states.
Hirschfeld emerged as the sole potential purchaser of the
newspaper.
10. Because the contracts with both Hoffenberg and
Hirschfeld contained non-solicitation provisions
ught to enlist other investors in the purchase of
the Post, eventually reaching an agreement in late February
with real estate developer Abraham Hirschfeld. After a
falling out with Hoffenberg in early March, Kalikow states.
Hirschfeld emerged as the sole potential purchaser of the
newspaper.
10. Because the contracts with both Hoffenberg and
Hirschfeld contained non-solicitation provisions. Kalikow
terminated his search for other offers until the court in
Kalikow"s personal bankruptcy proceeding ordered the
recommencement of solicitation as a condition of its ap-
proval of the Hirschfeld contract. Several potential pur-
chasers emerged. according to Kalikow. including Lester
Ewell. who dispatched a signed contract to Kalikow. but
failed to demonstrate his good faith to the court. Kalikow
also met with. and provided information to, Ronald Lauder
of Estee Lauder. Leon Charney. Mortimer Zuckerman of
Boston Properties and owner of New York's Daily News,
James Nederlander. Kenneth Lipper of Lipper Company.
Inc .. and Thomas Tisch. all of whom. Kalikow states. "were
looking for assurances of a profitable investment which we
were not able to provide." On March 12. 1993, the court
granted Hirschfeld operational control of the Post, based in
part. according to the Creditors. on his pledge to invest at
least $3 million in the newspaper. Chaos followed. the
Creditors state: Hirschfeld fired the Post's editor-in-chief
and three other editors and columnists. triggering a "re-
volt" against Hirschfeld by the editorial staff.
ot able to provide." On March 12. 1993, the court
granted Hirschfeld operational control of the Post, based in
part. according to the Creditors. on his pledge to invest at
least $3 million in the newspaper. Chaos followed. the
Creditors state: Hirschfeld fired the Post's editor-in-chief
and three other editors and columnists. triggering a "re-
volt" against Hirschfeld by the editorial staff.

8 FCC Red No. 16
Federal Communications Commission Record
FCC 93-340
11. As the editorial situation deteriorated and it became
apparent. Kalikow states. that Hirschfeld also was unable to
complete the purchase. Kalikow. on March 15. 1993.
placed the Pos(s parent company. New York Post Co .. in
bankruptcy. The Pos(s overall conditions were dire. ac-
cording to Patrick Purcell. the newly appointed publisher
who held that post from 1987 until the sale to Kalikow in
1988. Not only was the editorial staff depleted of key
members and morale. Purcell states. but circulation. which
had hovered around 500.000 in early 1988. when Murdoch
disposed of the Post, now stood at 380.636 daily. Newsprint
and ink supplies. notes production director Al Palmer.
became scarce when the vendors of these products. after
three Post checks were returned for insufficient funds.
refused to deal with the newspaper on other than an
advance-payment basis. Advertisers, Purcell notes. became
reluctant to place advertisements in the Post following the
issuance of a 99-count criminal indictment against the
newspaper and some of its personnel for falsifying circula-
tion records and defrauding advertisers. They either aban-
doned the paper or enjoyed the free rebate program
imposed by the district attorney during the most lucrative
advertising months. from August to December 1992. While
the newspaper's revenues declined. Purcell adds. so did the
number of payments made by the Post: little beyond net
paychecks had been paid in the two weeks prior to March
29. Employee pension. welfare and 401K deductions went
unpaid. And
paper or enjoyed the free rebate program
imposed by the district attorney during the most lucrative
advertising months. from August to December 1992. While
the newspaper's revenues declined. Purcell adds. so did the
number of payments made by the Post: little beyond net
paychecks had been paid in the two weeks prior to March
29. Employee pension. welfare and 401K deductions went
unpaid. And. according to Purcell. the Pos(s failure to pay
federal withholding taxes resulted in a liability to the Inter-
nal Revenue Service of approximately $3 million. which
remained outstanding from the fourth quarter of 1992.
Moreover. providers of such basic services as cleaning.
securitv. cafeteria and maintenance had either refused to
contra~! with the Post or threatened to terminate those
services.
12. As a result. prior to the week of March 25. 1993.
News Corp.\ general counsel Siskind states. Murdoch re-
ceived numerous entreaties to purchase the Post: from New
York Governor Mario Cuomo. one of New York·s United
States senators. various community leaders. as well as from
Post suppliers. employees. and the employees· labor union
representatives. Aware of the substantial losses incurred by
the Post, the amount of working capital needed to sustain
its operations. and the improvements in the economies and
operations required to revitalize the paper. Murdoch. ac-
cording to Siskind. agreed to assume management of the
Post conditioned upon: his obtaining a permanent waiver
of the Commission·s cross-ownership rule and his making
an offer to purchase the Post's assets. which included his
negotiating new arrangements with the paper·s unions. On
March 29. 1993. NYP. a subsidiary of News America ex-
ecuted with the New York Post Co. a management agree-
ment approved
the
next day
by
the
United States
Bankruptcy Court for the Southern District of New York.
In re The Sew York Post Co., Inc. (Bankruptcy Order), No.
In that case
to purchase the Post's assets. which included his
negotiating new arrangements with the paper·s unions. On
March 29. 1993. NYP. a subsidiary of News America ex-
ecuted with the New York Post Co. a management agree-
ment approved
the
next day
by
the
United States
Bankruptcy Court for the Southern District of New York.
In re The Sew York Post Co., Inc. (Bankruptcy Order), No.
In that case. the court rejected the contention that the
Commission's issuance of a declaratory order was premature
and unwarranted because state agencies were merely threatening
to impose restrictions affecting communications equipment and
had not as yet adopted such provisions. In the case before us.
however. the waiver request is based on more than mere specu-
lation and hypothesis: Fox has represented to the Commission
Murdoch's intentions
to
permanently acquire
the
Post;
Murdoch has assumed control of the newspaper pursuant to a
5343
93-8-41306 (Bankr. S.D. N.Y. March 30. 199.))(interim
order authorizing debtor New York Post Co. to enter into
management agreement with NYP). The agreement pro-
vides for termination of the later of June 1. 1993 or 60
days from March 29. 1993. the date the agreement was
executed. NYP has the right. "in its sole discretion." ac-
cording; to the agreement. to extend the termination date
for an additional 30 days in the event it has not ohtained a
waiver from the Commission by that date.
PROCEDURAL ISSUES
13. Ripeness. Many of the commenters challenging Fox·s
waiver request assert that the request is not "ripe" for
Commission adjudication because Murdoch has neither ac-
quired the Post nor made a commitment toward that end.
Nor. they note. has the bankruptcy court made a final
determination as to whether a sale to Murdoch would
benefit
the
dehtor
and
its
creditors.
Further.
the
commenters note. and Fox concedes. Murdoch may not
even prevail before the court. Murdoch. in essence.
NAACP argues. is asking for an "advance declaratory rul-
ing." and although
red the Post nor made a commitment toward that end.
Nor. they note. has the bankruptcy court made a final
determination as to whether a sale to Murdoch would
benefit
the
dehtor
and
its
creditors.
Further.
the
commenters note. and Fox concedes. Murdoch may not
even prevail before the court. Murdoch. in essence.
NAACP argues. is asking for an "advance declaratory rul-
ing." and although. it acknowledges. an agency may issue a
declaratory ruling. administrative practice "prefers" case-
or-controversy adjudication. NAACP suggests. therefore.
that we hold this matter in abeyance until bidding for the
Post is completed. Otherwise. it adds. Commission grant of
the cross-ownership waiver would confer its "imprimatur."
thereby giving Murdoch the "inside track" to becoming the
ultimate huyer.
14. We recognize that the Fox waiver request hefore us
does. in fact. lack a definitive purchase agreement or court-
approved long-term plan. As NAACP notes. a request for
declaratory ruling is not restricted. as are proceedings of
federal courts. to "cases and controversies" within the
meaning of Article III of the Constitution. Sortlz Carolina
Utilities Commission l'. FCC, 537 F.2d 787. 790 n.2 (4th
Cir.). cert. denied, 429 U.S. 1027 ( 1976).: ~Indeed. Sections
4(i) and (j) of the Communications Act. 47 C.F.R. § 154.
bestow upon the Commission the broad power ro issue
orders consistent with the Act "as may be necessary in the
execution of its functions." And Section 554( e) of the
Administrative Procedure Act. 5 U.S.C. §554(e). provides
that the Commission "may issue a declaratory order to
terminate a controversy or remove uncertainty." See also
47 C.F.R. §1.2. Although the Commission is not required
to issue a declaratory order "merely hecause a broadcaster
asks for one." it is clearly within the discretion of the
Commission to issue such order on a licensee's proposal.
Yale Broadcasting Company i•. FCC, 4 78 F.2d 594. 602
(D.C. Cir. 1973).
15
y issue a declaratory order to
terminate a controversy or remove uncertainty." See also
47 C.F.R. §1.2. Although the Commission is not required
to issue a declaratory order "merely hecause a broadcaster
asks for one." it is clearly within the discretion of the
Commission to issue such order on a licensee's proposal.
Yale Broadcasting Company i•. FCC, 4 78 F.2d 594. 602
(D.C. Cir. 1973).
15. The unique and severe financial situation of the Post
that apparently confronts the bankruptcy court in the case
before us. as described above. warrants our immediate at-
tention.5 Moreover. we reject Fleischman·s and NAACP"s
court-approved management agreement: and the bankruptcy
court granted NYP shared exclusivity with the debtor-New York
Post Co. to file a plan of reorganization and solicit acceptances
thereto. Bankruptcy Order, supra, at'5.:
5 Although we are free to issue a declaratory ruling even as to
a hypothetical situation. we are persuaded here that Murdoch's
request is not hypothetical. We
refer in this regard to
Murdoch's financial contributions under the interim manage-
ment agreement, totalling $4.224 million in the first six weeks

FCC 93-340
Federal Communications Commission Record
8 FCC Red No. 16
attempts to draw parallels between Fox·s request and an
assignment application. the latter of which requires submis-
sion of a definitive. executed purchase and sale agreement."
The request before us does not involve the acquisition of a
broadcast station. whose transactional structure. unlike that
of a newspaper. must comport with statutory and regula-
tory restrictions. including reversionary. future and alien
ownership interests. as well as unauthorized transfers of
control. Contrary to some commenters· suggestions. the
submission of an executed agreement by parties to a long-
form application provides no guarantees that consumma-
tion will result: our grant of such application is permissive
and nothmandatory. Additionally. as discussed further be-
low
ions. including reversionary. future and alien
ownership interests. as well as unauthorized transfers of
control. Contrary to some commenters· suggestions. the
submission of an executed agreement by parties to a long-
form application provides no guarantees that consumma-
tion will result: our grant of such application is permissive
and nothmandatory. Additionally. as discussed further be-
low. under our public interest mandate. we have an obliga-
tion to consider a variety of factors. including the national
policy underlying other federal laws. such as the bank-
ruptcy laws pertinent to the case before us. See LaRose v.
FCC, 4CJ4 F.2d 1145. 1146 n.2 (D.C. Cir. 1974). We believe
that a decision to act now on Fox·s request would fulfill
that obligation by minimizing any conflict with the
tripartite policy objective of bankruptcy law: equality of
distribution among creditors. a fresh start for debtors. and
the efficient and economical administration of cases. See
Report of the Commission on the Bankruptcy Li11rs of the
United Swtes, H.R. Doc. No. 93-13 7. 93d. Cong .. 1st Sess ..
Pts. I and II. chapter 3 ( 1973)."
16. Under the Bankruptcy Code. the assets of a Chapter
11 entity. such as the Pos(s parent company. may be sold
pursuant to a Section 363( b) sale. 11 U .S.C. §363( b ). or
transferred to a third party under a plan of reorganization.
11 U.S.C. §1101 et seq. Whichever mechanism is employed.
according to the Creditors. Champion. a commenter which
maintains it has pursued acquisition of the Post since
March 15. and other interested parties will be given notice
and the opportunity to present offers because "lslerious
competing bids will help to increase the ultimate recovery
for unsecured creditors."' Commission action today. there-
fore. regardless of the outcome. will remove the "uncer-
tainty" of Murdoch·s eligibility under the Commission\
alone. combined with his broad publishing experience. his past
ownership of the Post
es will be given notice
and the opportunity to present offers because "lslerious
competing bids will help to increase the ultimate recovery
for unsecured creditors."' Commission action today. there-
fore. regardless of the outcome. will remove the "uncer-
tainty" of Murdoch·s eligibility under the Commission\
alone. combined with his broad publishing experience. his past
ownership of the Post. and his existing contractual contingent
liabilities associa\ed with the newspaper. Champion attempts to
diminish the risk assumed hy Murdoch in advancing millions of
dollars to the Post during the interim management agreement.
characterizing the funds as debtor-in-possession financing.
which have superpriority under bankruptcy law. We note. how-
ever. that the March 30 bankruptcy court order states that
Murdoch\ lien and 'ecurity interest on Post assets is expressly
subordinated
to
those
previously granted
to
Hoffenberg.
Hirschfeld and the Internal Revenue Service. Bankruptcv Order.
supra. at 7. Murdoch's financing of the Post in the interim.
therefore. does not appear to be risk-free.
° Caucus and NAACP argue. citing l'nited States \'. Storer
Broadcasting Co .. 351 U.S. 192 ( 1956), New Orleans Channel :!fl.
Inc. v. FCC. 830 F.2d 361 (D.C. Cir. 1987). and Rio Grande
Radio Fc//ow1hip. Inc. v. FCC. -Wb F.2d 664 (D.C. Cir. 1%X).
that because there is no "deal" before us. we have an incomplete
basis for reaching an informed decision. Yet. the common defect
in those cases. regarding, respectively. national ownership lim-
its, additional time with which to construct. and the clear
channel policy. were the applicants' utter failures to set forth
specific reasons. sufficient if true. to justify grant of the re-
quests. In contrast. as discussed below. Fox has provided specific
and detailed evidence that supports our grant of its waiver
request.
-
Fleischman and NAACP contend that Fox's reliance on
Channel 33, Inc .. 114 R.R
al time with which to construct. and the clear
channel policy. were the applicants' utter failures to set forth
specific reasons. sufficient if true. to justify grant of the re-
quests. In contrast. as discussed below. Fox has provided specific
and detailed evidence that supports our grant of its waiver
request.
-
Fleischman and NAACP contend that Fox's reliance on
Channel 33, Inc .. 114 R.R. 2d 1705 ( 1988), for the proposition that
5344
rules and regulations to permanently acquire the Post,
thereby permitting the court. the creditors. the debtor and
any other interested parties to proceed with the disposition
of the newspaper. Accordingly. for the reasons discussed
below. we believe the public interest isbest served by our
consideration of Murdoch's permanent waiver request at
this time. so that the court has before it the full com-
plement of eligible bidders.
17. The Commission takes no position on whether
Murdoch is the newspaper's only viable buyer. as Fox
alleges. Our action is not intended to suggest any Commis-
sion or regulatory preference for Murdoch or in any other
way to influence the bankruptcy court in its disposal of the
Post. However. to exclude Murdoch as a potential pur-
chaser may well ultimately disserve the underlying diver-
sity purposes of the cross-ownership rule and would not
accord appropriate deference to the policies and objectives
of bankruptcy law.
18. Commission Jurisdiction. Fleischman argues that be-
cause Commission jurisdiction is limited to matters relating
to "communication by wire and radio." quoting Section I
of the Act. 4 7 U .S.C. § 151. the preservation and economic
well-being of daily newspapers lies outside its statutory
authority. The Commission·s jurisdiction. Fleischman con-
cedes. does empower the Commission to preclude licensees
from owning collocated daily newspapers. as established in
Jiultiple Ownership - Second Report and Order in Docket
.Vo. 18110 (Second Report and Order), 50 F.C.C. 2d 1046.
on recon
.C. § 151. the preservation and economic
well-being of daily newspapers lies outside its statutory
authority. The Commission·s jurisdiction. Fleischman con-
cedes. does empower the Commission to preclude licensees
from owning collocated daily newspapers. as established in
Jiultiple Ownership - Second Report and Order in Docket
.Vo. 18110 (Second Report and Order), 50 F.C.C. 2d 1046.
on recon. (Second Report and Order Recoil.), 53 F.C.C. 2d
58CJ ( 1975). i1ff'd sub nom. FCC l'. Saiional Citizens Com-
mittee
for
Broadcasting,
436
U.S.
775
(1CJ78).
Yet.
Fleischman contends. although it may he appropriate for
the Commission to consider the financial health of a televi-
sion station when presented with a request for waiver of
the broadcast-newspaper cross-ownership rule. the Com-
mission may not. conversely. consider the financial situ-
ation of a daily newspaper. To do so. Fleischman and
the Commission give weight to bankruptcy court findings. is
misplaced. The applicants seeking waiver of the duopoly rule in
that case were creditors of a bankrupt licensee whose plan of
reorganization had been reviewed and approved by the bank-
ruptcy court. However. the bankruptcy court in the case before
us. Fleischman argues. has yet to reach a determination as to
whether a sale to Murdoch "would serve other federal policies."
We disagree with Fleischman's premise. The instruction to the
Commission in l.aRose v. FCC. 494 F.2d at l 1411 n.2. that we
"constantly be alert to determine whether lourl policies might
conflict with other federal policies and whether such conflict
can be minimized." did not limit such accommodation to only
the final stage of the bankruptcy proceeding. See also Seraphim
Corporation. 4 F.C.C. Red 8819, 8821 ( 1989)(Commission grant
of transfer of contrnl conditioned on bankruptcy court's ap-
proval of plan of reorganization upon which transfer is based).
In the case before us, where it is the newspaper and not the
broadcast stGtion that is in bankruptcy
." did not limit such accommodation to only
the final stage of the bankruptcy proceeding. See also Seraphim
Corporation. 4 F.C.C. Red 8819, 8821 ( 1989)(Commission grant
of transfer of contrnl conditioned on bankruptcy court's ap-
proval of plan of reorganization upon which transfer is based).
In the case before us, where it is the newspaper and not the
broadcast stGtion that is in bankruptcy. we believe we are able
to make the appropriate public interest determinations at this
stage of the court proceedings, without detriment to our own
processes and in furtherance of minimizing potential conflicts
with the federal bankruptcy laws' policy of resolving cases in an
impartial. expert and speedy manner. See Report of the Commis-
1ion on the Bankruptcy Laws of the l"nitcd States. supra.
>cr. See Comments of
Creditors at 2--l. 7-8.
03
Champion claims that it was not aware of or invited to
subsequent bankruptcy court conferences. Reply to Consolidated
Reply Comments of Fox Television Stations. Inc. ("Fox") Dated
May 17. llJ93, filed May 25. 1993 by Champion (Champion
Reply) at 8.

FCC 93-340
Federal Communications Commission Record
8 FCC Red No. 16
ings filed or other matters of which we may take official
notice, the evidence arouses a sufficient doubt as to wheth-
er Fox intended a factual deception of the Commission to
warrant further inquiry. See Astroline, 857 F.2d at 1561-62:
Fox River Broadcasting, Inc., 93 FCC 2d 127. 129 ~ 6
( 1983).
67. With this in mind. we turn first to the representa-
tions Fox made in connection with its request that the
Commission act by June l, 1993. As outlined below. we
find that the totality of the evidence raises no substantial
and material question that Fox attempted to deceive the
Commission
y. See Astroline, 857 F.2d at 1561-62:
Fox River Broadcasting, Inc., 93 FCC 2d 127. 129 ~ 6
( 1983).
67. With this in mind. we turn first to the representa-
tions Fox made in connection with its request that the
Commission act by June l, 1993. As outlined below. we
find that the totality of the evidence raises no substantial
and material question that Fox attempted to deceive the
Commission. although some statements made by Fox in· its
waiver request. filed April 7. 1993, while technically ac-
curate. are potentially misleading. For example. Fox stated
without qualification: "[T[he management agreement ap-
proved by the Court has a termination date of June l,
1993 .. · .. It is therefore imperative that the Commission
act as expeditiously as possible and in any event prior to
June 1. 1993." Waiver Request at 8. The statement that the
management agreement has a June 1 termination date is
literally true. However. it is not fully revealing since .the
management agreement also provided for a 30-day exten-
sion at Murdoch's sole discretion. Request to Specify. Ap-
pendix B at 5. Moreover. Siskind represented to the
bankruptcy court. on March 25. 1993. that Murdoch was
"prepared to extend that sixty-day period to ninety days if
the extension is required to obtain the FCC waiver." Id.,
Appendix A at Tr. 63. Thus. the claim that action by June
1 was "imperative" might be considered an overstatement.
Similarly. Fox's characterization. without qualification. of
June 1. 1993 as a "deadline" was potentially misleading for
the same reason. Waiver Request at !I 7. In this regard. the
Commission's public notice setting the period for public
comment specifically noted that: "The termination date of
the court-approved management agreement is June 1.
1993." Public Notice, note 1. above.
68. Other evidence. however. rebuts these inferences and
indicates that there is no substantial and material question
of deceptive intent. In contrast to the statements cited
above
ard. the
Commission's public notice setting the period for public
comment specifically noted that: "The termination date of
the court-approved management agreement is June 1.
1993." Public Notice, note 1. above.
68. Other evidence. however. rebuts these inferences and
indicates that there is no substantial and material question
of deceptive intent. In contrast to the statements cited
above. another statement in the waiver re4uest plainly
appears to contemplate the possibility of operation beyond
June 1. Fox said: "under [the management agreement[ NYP
agreed to manage and provide financing to the newspaper
until at least June 1. 1993." Waiver Request at 7 (Emphasis
added.) This language underscores that although Fox urged
the Commission in extreme terms to act by June 1. it did
not conceal the fact that the "deadline" was self-imposed
and thus subject to being extended, if Murdoch so
desired.M Conversely. despite the extension provision.
Murdoch was contractually obligated to manage the Post
04
As a collateral matter, there is no basis for Caucus' allega-
tion that: "The Agreement provides for a 30-day extension, if
necessary. A FACT NEVER DISCLOSED TO THE FCC." Re-
quest to Specify at 6 (Emphasis in the original.) it is not true
that the extension was never disclosed. Fox submitted the agree-
ment, which contains the termination provision, at the request
of the Mass Media Bureau. shortly after filing the waiver re-
quest. before any oppositions were filed. See Letter from Hogan
& Hartson to Barbara Kreisman (Chief, Video Services Di-
vision) (Apr. 12. llJ93)
hS
See. e.g .. the analysis by VS&A. Consolidated Reply Com-
ments, filed May 17. 1993. by Fox (Consolidated Reply). Appen-
dix C. See also Comments of Creditors at -1-6 and the discussion
5356
only through June 1. Thus, Fox could truthfully tell the
Commission that there was a potential risk that Murdoch
would abandon the Post, if as of June 1, it did not appear
that favorable Commission action was likely
the analysis by VS&A. Consolidated Reply Com-
ments, filed May 17. 1993. by Fox (Consolidated Reply). Appen-
dix C. See also Comments of Creditors at -1-6 and the discussion
5356
only through June 1. Thus, Fox could truthfully tell the
Commission that there was a potential risk that Murdoch
would abandon the Post, if as of June 1, it did not appear
that favorable Commission action was likely. Under these
circumstances. although Fox's language was intemperate. it
did not materially distort the facts. Thus. there is no sub-
stantial and material question of intent to mislead.
69. As to Fox's representations regarding other potential
purchasers of the Post, we find that most of statements
made in this regard state simply that there are no other
"viable" purchasers of the Post. For example, Fox stated:
"[Operation by Murdoch! is the only viable way to pre-
serve New York's fourth major daily printed voice." Waiv-
er Request at 12. Whether a potential purchaser is "viable"
is by its very nature a question of opinion. and. indeed,
(see paragraph 38, above). we required Fox to make a
detailed showing in support of this generalization. Thus, we
find no prima facie question of misrepresentation based on
such statements. In any event. our own review of the
materials before us suggested that the question of Cham-
pion's viability was far from clear cut, and doubts about its
proposal were borne out by subse4uent events.h5 Thus there
is no substantial and material question of fact regarding
misrepresentation or lack of candor.
70. Two statements. 11owever. are more troublesome. Fox
represented that:
... [Njo other potential purchaser came hefore the
Bankruptcy Court to propose any interim plan to
save the Sew York Post. Thus. no viahle purchaser
other than NYP has demonstrated a willingness to
take on the enormous challenge and cost of stabiliz-
ing. much less revitalizing, the newspaper.
Waiver Request at 5. Similarly. Fox stated: "In fact
. are more troublesome. Fox
represented that:
... [Njo other potential purchaser came hefore the
Bankruptcy Court to propose any interim plan to
save the Sew York Post. Thus. no viahle purchaser
other than NYP has demonstrated a willingness to
take on the enormous challenge and cost of stabiliz-
ing. much less revitalizing, the newspaper.
Waiver Request at 5. Similarly. Fox stated: "In fact. neither
the Court nor any other party has been willing to 'itep in
and assume management responsibilities given the incredi-
bly difficult circumstances present at the newspaper." Op-
position to "Request to Modify Prrn.:edural Schedule," filed
April 16. 1993. by Fox at 4. These statements are literally
true since no other purchaser in fact presented an alter-
native plan to the bankruptcy court. However. they appear
potentially misleading since. as set forth in paragraphs
29-30. above. Champion apparently attempted to come be-
fore the bankruptcy court on March 19. l 993on and dem-
onstrate its willingness to purchase and manage the Post
and thereafter pursued discussions with Post officials and
the creditors· committee to perfect its proposal.h-
below. See note 8, supra. In any event, we would not have had
to resolve the question of Champion\ viability in ruling on
Fox's waiver request.
oh The transcript of the bankruptcy hearing does not. however.
support Caucus' statement that "Champion presented the bank-
ruptcy judge with a certified $1,000,000 check at a March 19,
llJ93 hearing session as proof both of Champion's serious inter-
est and its financial wherewithal." Request to Specify at 10. The
transcript indicates that the judge did not take up the subject of
Champion's proposal. Consolidated Reply. Appendix B., Exh. at
Tr. 11 l.
0 ~ In this regard, the Commission\ April lo, llJ93 order di-
rected Fox to provide a description of "efforts !subsequent to
the newspaper's bankruptcy! by the bankruptcy court to dispose
of the newspaper I.
al wherewithal." Request to Specify at 10. The
transcript indicates that the judge did not take up the subject of
Champion's proposal. Consolidated Reply. Appendix B., Exh. at
Tr. 11 l.
0 ~ In this regard, the Commission\ April lo, llJ93 order di-
rected Fox to provide a description of "efforts !subsequent to
the newspaper's bankruptcy! by the bankruptcy court to dispose
of the newspaper I.

8 FCC Red No. 16
Federal Communications Commission Record
FCC 93-340
71. The totality of the evidence before us. however. raises
no substantial and material question that Fox knew of
Champion·s continuing efforts at the time it made these
statements. and without such knowledge there could have
been no intent to deceive. Siskind admits that Post vice
president Faris discussed with him Champion ·s interest in
the Post, between March 22-25, 1993. after Champion's
attempted appearance at the March 19 bankruptcy hearing
and before the filing of the .waiver request. But both
Siskind and Faris indicate that, prior to Fox·s April 7
waiver request. Faris told Siskind that Champion would
not pursue its interest in the Post and that Faris did not
inform him of the memorandum of understanding. Id.,
Appendix B at 3, Appendix F at 4.08 Thus. in the con-
textOof Fox's belief that Champion was no longer pursuing
its interest, the above-quoted statements raise no substantial
and material questions of fact suggesting an intent to
deceive the Commission.
72. In addition, the evidence also does not support the
contention that. subsequent to the discussions between
Siskind and Faris. Fox would "presumably" have found out
about Champion·s proposal at the March 25 creditors·
committee meeting. See Champion Reply at 8. Siskind
acknowledges that the creditors· committee contained News
Corp. representatives. Consolidated Reply. Appendix B at
4. However. Siskind states that those representatives were
excluded from the March 25. 1993 meeting before Cham-
pion presented its proposal. Id.
73. Siskind 's claim that
t
about Champion·s proposal at the March 25 creditors·
committee meeting. See Champion Reply at 8. Siskind
acknowledges that the creditors· committee contained News
Corp. representatives. Consolidated Reply. Appendix B at
4. However. Siskind states that those representatives were
excluded from the March 25. 1993 meeting before Cham-
pion presented its proposal. Id.
73. Siskind 's claim that. after he spoke to Faris. he was
not informed of Champion's subsequent efforts to pursue
its proposal is consistent with the evidence. which indicates
that Champion was not successful in interesting either the
Post's management or the creditors· committee in its pro-
posal.09 In this regard, the evidence does not suggest that
the memorandum of understanding reflected substantial
interest on the part of the Post. Bumbaca. who executed
the agreement on behalf of the Post, explained the cir-
cumstances of its execution. Bumbaca stated that. although
he did not consider Champion ·s proposal realistic. he
signed the memorandum of understanding only so that
Champion would have the opportunity it wanted to present
the proposal to the creditors· committee.-0 Id. Bumbaca
explained that the memorandum did not reflect any nego-
tiation between Champion and the Post and that Bumbaca
did not discuss it with Post officials other than bankruptcy
h 8 Faris stated that soon after the March 19 bankruptcy hearing
he came to believe that Champion was not a viable buyer. He
further stated that. on March 22. 1993, when he told Cham-
pion's owner. Wahba. that Murdoch was interested in bidding
on the Post. Wahba said that he would step aside. Faris states
that, based on several conversations with Wahba, he believed
that Champion had ceased bidding on the Post. Faris states that,
although he knew that Wahba intended to meet with Post
official Bumbaca, he was not aware. at the time, that Bumbaca
had signed a memorandum of understanding with Champion.
Consolidated Reply, Appendix F at 2-5
e Post. Wahba said that he would step aside. Faris states
that, based on several conversations with Wahba, he believed
that Champion had ceased bidding on the Post. Faris states that,
although he knew that Wahba intended to meet with Post
official Bumbaca, he was not aware. at the time, that Bumbaca
had signed a memorandum of understanding with Champion.
Consolidated Reply, Appendix F at 2-5.
h 9
As discussed at note 27, above. it is also apparent that there
is no viable relationship between the Post and Zuckerman.
Zuckerman and Kalikow disagree as to the reasons for the
breakdown of their negotiations. Letter from Hogan & Hartson
to The Secretary, FCC (Apr. 20, 1993); Request to Specify.
Appendix M; Consolidated Reply, Appendix E; Letter from
Mortimer B. Zuckerman to Chairman James H. Quello (May
20, 1993).
5357
counsel. Marilyn Simon. who had instructed Bumbaca to
cooperate with Champion.: 1 Consolidated Reply. Appendix
G at 1-3.
74. Similarly, the evidence indicates that Champion
made no headway with the creditors· committee. See gen-
erally Comments of Creditors. A representative of the
creditors' committee states that the committee notified
Champion by telephone after the meeting that it did not
find Champion's proposal to be the basis for serious nego-
tiation and declined to accept Champion's $1 million
check. Id. at 6, Exh. C. Champion admits that the credi-
tors' committee has shown no interest in further negotia-
tion with Champion. Champion Reply at
11. These
circumstances do not suggest any reason that Fox would
have been apprised of Champion's proposals either on the
basis of Champion's subsequent contacts with the Post or
with the creditors' committee.
75. Accordingly. we find no substantial and material
questions of fact regarding misrepresentation or lack of
candor.
EEO MATTERS
76. NBMC contends that neither WNYW nor the Post
employ African-Americans in managerial or executive posi-
tions. Furthermore. NBMC contends
hampion's proposals either on the
basis of Champion's subsequent contacts with the Post or
with the creditors' committee.
75. Accordingly. we find no substantial and material
questions of fact regarding misrepresentation or lack of
candor.
EEO MATTERS
76. NBMC contends that neither WNYW nor the Post
employ African-Americans in managerial or executive posi-
tions. Furthermore. NBMC contends. African-American
employees at WNYW have filed employment discrimina-
tion complaints with the U.S. Equal Employment Op-
portunity Commission. violations. it claims. are sufficient
to trigger a review of WNYW under Section 73.2080 of the
Commission ·s Rules.
77. With regard to WNYW. Fox notes. 37.5 percent of its
employees are minorities. 22.4 of which are African-Ameri-
cans and 11.8 percent of which are Hispanic.- 2 Of the
top-four job categories at WNYW. Fox further states. 32.5
percent are held by minorities. of which 17.3 percent are
African-Americans and 11.8 percent are Hispanics.
78. Generally. our review of a broadcast licensee·s im-
plementation of its EEO program occurs at renewal time
or in connection with a license assignment or transfer of
control application.- 3 With respect to complaints filed with
the EEOC. resolution of such matters are initially within
the province of that agency pursuant to Memorandum of
-o
As noted at paragraph 30, above. the memorandum of
understanding states on its face that its provisions are contin-
gent on evidence of authorization by the Post to become effec-
tive. Request to Specify. Appendix F.
'I Kalikow, states that the reason he omitted Champion from a
list of potential buyers, requested by the Commission and sub-
mitted on April 20, 1993, is that he had no contact with
Champion. Consolidated Reply, Appendix E at 2. See Letter
from Hogan & Hartson to The Secretary. FCC (Apr. 20, 1993).
R
,,
The New York Metropolitan Statistical Area is approxi-
mately -18
percent minorities
F.
'I Kalikow, states that the reason he omitted Champion from a
list of potential buyers, requested by the Commission and sub-
mitted on April 20, 1993, is that he had no contact with
Champion. Consolidated Reply, Appendix E at 2. See Letter
from Hogan & Hartson to The Secretary. FCC (Apr. 20, 1993).
R
,,
The New York Metropolitan Statistical Area is approxi-
mately -18
percent minorities. 22.2 percent of which are
African-American and 18.5 percent of which are Hispanic.
73
Moreover. we have consistently stated that we will not look
at individual job categories in assessing EEO performance.
Rather, we look to a station's overall employment. including
the upper level job categories as a group. not to specific manage-
rial or executive positions. as NBMC would has us do. Carolina
Christian Broadcasting. Inc., 3 F.C.C. Red 1907. 1909 (1988).

FCC 93-340
Federal Communications Commission Record
8 FCC Red No. 16
Understanding Between the FCC and the EEOC, 70 F.C.C.
2d 2320. 2330 ( 1978). Under these circumstances. further
consideration of these allegations is not warranted. 74
CONCLUSION
79. We find that the commenters have failed to establish
a substantial and material question of fact. Consequently,
there is no need for a hearing under Section 309(d) of the
Act. We also find that grant of Fox's request for waiver of
Section 73.3555(d)(3) will serve the public interest.
80. Accordingly, IT IS ORDERED. that the comments
objecting to Fox's request for a waiver of the broadcast-
newspaper cross-ownership rule ARE DENIED. IT IS
FURTHER ORDERED, THAT the Request to Specify Mis-
representation Issues Against Rupert Murdoch and Fox,
filed May 6, 1993, by the Caucus for Media Diversity IS
DENIED, and that Fox's request for waiver of Section
73.3555(d)(3) IS GRANTED. contingent upon the bank-
ruptcy court's approval of Murdoch's bid or plan of reorga-
nization.
81
oadcast-
newspaper cross-ownership rule ARE DENIED. IT IS
FURTHER ORDERED, THAT the Request to Specify Mis-
representation Issues Against Rupert Murdoch and Fox,
filed May 6, 1993, by the Caucus for Media Diversity IS
DENIED, and that Fox's request for waiver of Section
73.3555(d)(3) IS GRANTED. contingent upon the bank-
ruptcy court's approval of Murdoch's bid or plan of reorga-
nization.
81. The staff of the Mass Media Bureau is directed to
send copies of this declaratory ruling to the parties filing
formal comments by certified mail. return receipt request-
ed.
FEDERAL COMMUNICATIONS COMMISSION
William F. Caton
Acting Secretary
' 4
Employment practices of the newspaper are not relevant to
the Commission's inquiry, and. in any event, the current mi-
nority employment profile at the Post is not attributable to
Murdoch. Nevertheless, Fox indicates in response to NBMC"s
allegations, under Murdoch's ownership of the Post. from Janu-
5358
ary l, IQ77 until lration Limited I News
Corp.J ~nd its role as a creditor in this Bankruptcy Court
proceed111g. Both Fox and NYP Acquisition Corp I NYPI
are subsidiaries of News Corp. News Corp .. through its
publishing unit News America Publishing Incorporated
JNews America[. has remained a contingent creditor to Mr.
Peter S. Kalikow. current owner of the Post, and the New
York Post Co .. Inc .. parent company of the Post. As a
contingent creditor
as a creditor in this Bankruptcy Court
proceed111g. Both Fox and NYP Acquisition Corp I NYPI
are subsidiaries of News Corp. News Corp .. through its
publishing unit News America Publishing Incorporated
JNews America[. has remained a contingent creditor to Mr.
Peter S. Kalikow. current owner of the Post, and the New
York Post Co .. Inc .. parent company of the Post. As a
contingent creditor. News America is a member of the
creditors' committee in Kalikow's personal bankruptcy.
and su?sequently_ in the Post 's bankruptcy proceedings.
There 1s a question raised by this proceedino- as to the
viability and disclosure of another bid for th; Post from
Champion Holding Company [ChampionJ. I believe the
declaratory ruling today resolves this issue prematurelv.
without investigating the effect of News America's involv~­
ment o~ the creditor committees in these bankruptcy court
proceedings. Thus. I believe a hearing is warranted to
resolve anyappearances raised by New America's involve-
men~ o~ the bankruptcy creditor committees in this pro-
ceed111g."
Finally. with respect to the case law cited in support of
t~is permanent _waiver. I cannot support the overall analy-
sis. I do not believe our case precedent supports more than
a temporary waiver. The Commission has previously grant-
ed only one permanent waiver since the television-news-
paper
broadcast
rule
was
promulgated.
That
action
~ounsel. The News Corporation Limited. April 19. 1993. pp. 3--1.
•
News America also was granted a right of first refusal tu
purchase the Post if Kalikow proposed to dispose of it.
elieve our case precedent supports more than
a temporary waiver. The Commission has previously grant-
ed only one permanent waiver since the television-news-
paper
broadcast
rule
was
promulgated.
That
action
~ounsel. The News Corporation Limited. April 19. 1993. pp. 3--1.
•
News America also was granted a right of first refusal tu
purchase the Post if Kalikow proposed to dispose of it.

FCC 93-340
Federal Communications Commission Record
8 FCC Red No. 16
involved transferring control of a television station licensee
to a party which already owned a 22.5 percent interest in
that licensee. and whose parent corporation owned two
daily newspapers in the same market.·1 In that case. the
Commission found that the transaction did not create a
new ownership pattern.~ which is not true of the Fox waiver
request.
Furthermore. it is not clear to me that our precedent
permits more than a hearing to occur to resolve the merits
of a permanent waiver request. The Commission previously
sought such a hearing in a case where a permanent waiver
was sought to permit a transfer of de facto control of a
media property combination that had been grandfathered
under the cross-ownership rules. 5 The Commission found
that the financial data submitted in that matter was insuffi-
cient to determine whether the owner had. in fact. made a
"reasonable. good faith" attempt to sell the financially trou-
bled Washington Star.b The hearing was cancelled when the
parties amended their application and sought a temporary
waiver instead,7 hut that does not diminish the similarities
between Washington Star and the Fox request. Fox argues
that it is the only viable purchaser of the Post. but neither
Fox nor Kalikow have provided the Commission with evi-
dence sufficient to support that contention. No actual price
has heen cited for the Post transaction: the Commission has
been asked to rely insteadupon the processes of the Bank-
ruptcy Court to determine the best price.K Also
ween Washington Star and the Fox request. Fox argues
that it is the only viable purchaser of the Post. but neither
Fox nor Kalikow have provided the Commission with evi-
dence sufficient to support that contention. No actual price
has heen cited for the Post transaction: the Commission has
been asked to rely insteadupon the processes of the Bank-
ruptcy Court to determine the best price.K Also. the in-
formation provided regarding Kalikow·s effort to sell the
Post is essentially anecdotal." The media hroker 10 and em-
ployee statements. characterizing the financial condition of
the Post, also lack the detail needed for an accurate assess-
ment of Fox"s claims. 11
The Declaratory Ruling seeks to distinguish Washingwn
Star from Fox's request on the hasis of the Post's status in
Bankruptcy Court: that the financial status of the Post and
efforts to sell the newspaper are matters for the Bankruptcy
Court. not the Commission. However. such reasoning ig-
.l Field Communications Corporation. o5 F.C.C.2d 959 ( 1979). in
which control of Kaiser Broadcasting Corporation. licensee of
WFLD-TV in Chicago. went to Field Communications. which
held a 22.5 percent interest in Kaiser and owned two daily
newspapers. The Commission found that the transaction did not
create a new ownership pattern because petitioner Field con-
trolled the original permittee and licensee at commencement of
operation of the station. Field assigned its controlling interest to
Kaiser. ensuring its economic viability. Field retained the right
to make first offer to purchase Kaiser's interest. Also. the pro-
posal was not initiated by Field, but resulted from the complete
liquidation of its controlling partner.
~ Id.
5
Washington Star Communications, Inc., 54 F.C.C.2d ob9
( 1975).
0
Id. at 076.
Crosby :V. Boyd, et al., 57 F.C.C.2d .n5 ( 1976).
8
Hogan & Hartson Letter to the Commission. April 20, 1993,
pp. 1-3, and attached letter from Veronis. Suhler & Associates.
Inc., to Arthur Siskind
posal was not initiated by Field, but resulted from the complete
liquidation of its controlling partner.
~ Id.
5
Washington Star Communications, Inc., 54 F.C.C.2d ob9
( 1975).
0
Id. at 076.
Crosby :V. Boyd, et al., 57 F.C.C.2d .n5 ( 1976).
8
Hogan & Hartson Letter to the Commission. April 20, 1993,
pp. 1-3, and attached letter from Veronis. Suhler & Associates.
Inc., to Arthur Siskind. executive vice president and group
general counsel. The News Corporation Limited. April 19. 1993,
~- 9.
Request for Waiver of the Newspaper/Broadcast Cross-Own-
ership Rule Relating to WNYW(TV) and The New York Post,
Appendix E. Letter from Peter S. Kalikow to Commission
Chairman James Ouello, April 5, 1993, pp. 1-2, and Hogan &
Hartson letter to the Commission, April 20. 1993, attachment of
letter from Peter S. Kalikow to Commission Chairman James
Ouello, April 19, 1993, pp. l-3.
10
Hogan & Hartson letter to the Commission. April 20, 1993,
5368
nores Fox·s primary argument to the Commission for
granting the waiver: that Fox is the only viable purchaser
for the Post as well as the only party capable of preventing
the newspaper·s demise. Also ignored are the many chal-
lenges on record to that assertion. Thus. it would appear
that a substantial and material question of fact does exist.
creating the need for a hearing under Section 309(d) of the
Communications Act.
I contend that the Commission ought to grant a tem-
porary waiver and let the Bankruptcy Court go forward
with its determination. If NYP emerges as the owner from
that proceeding. the Commission can then
hold an
evidentiary hearing to determine the facts regarding Fox"s
request for a permanent waiver. Such an approach would
satisfy established precedent by permitting the Commission
to pursue its responsibilities in this matter. 12 At the same
time, the Commission's serious policy concerns in this
matter would not be subordinated to the bankruptcy pro-
cess. For these reasons
ission can then
hold an
evidentiary hearing to determine the facts regarding Fox"s
request for a permanent waiver. Such an approach would
satisfy established precedent by permitting the Commission
to pursue its responsibilities in this matter. 12 At the same
time, the Commission's serious policy concerns in this
matter would not be subordinated to the bankruptcy pro-
cess. For these reasons. I cannot support this decision
without requiring a hearing on the questions of fact. law
and policy with respect to this permanent cross-ownership
waiver.
Separate Statement
of
Commissioner Ervin S. Duggan
In the Matter of Fox Television Stations, Inc., Licensee of
Television Station WNYW, New York, :\few York, Request
for Waiver of the Broadcast-Newspaper Cross-Ownership
Rule Relating to WNYW and the New York Post
I support granting this waiver in the interest of putting
hefore the U.S. Bankruptcy Court of the Southern District
of New York the most complete range of huyers for the
Xew York Post. The life of the newspaper hangs in the
attachment of letter from Veronis. Suhler & Associates. Inc. to
Arthur Siskind, executive vice president and group general
counsel, The News Corporation Limited. April 19. 1993.
11
Request for Waiver of the Newspaper:Broadcast Cross-own-
ership Rule Relating to WNYW(fVJ and fhe .Vew }'ork Post.
Appendix C. April 7. 1993.
ii LaRose v. FCC 494 F.2d 1145. 1140 n.2 (D.C. Cir. 1974). in
which the court asserted that the Commission should "be alert
to determine whether its policies might conflict with other
federal policies and whether such conflict can be minimized."
This was a bankruptcy proceeding. in which the receiver. as
involuntary assignee of a corporate bankrupt's radio station
license, appealed a Commission decision denying license re-
newal and refusing, "on the grounds of administrative finality.
to entertain petition for reconsideration accompanied by a new
proposal of sale." There was no Commission waiver involved in
this case
be minimized."
This was a bankruptcy proceeding. in which the receiver. as
involuntary assignee of a corporate bankrupt's radio station
license, appealed a Commission decision denying license re-
newal and refusing, "on the grounds of administrative finality.
to entertain petition for reconsideration accompanied by a new
proposal of sale." There was no Commission waiver involved in
this case. The Court of Appeals reversed the Commission and
remanded the matter. holding that it was an abuse of discretion
for the Commission to refuse to consider the merits of the
court-appointed receiver's proposed sale and assignment of the
corporate bankrupts's broadcast license within weeks of the
Commission's refusal to renew the license hecause of the bank-
rupt principal 's misconduct. The Court said the action con-
stituted an abuse of discretion because it operated to frustrate
public interests recognized in the "Second Thursday" doctrine
by effectively depriving creditors of -;ignificant recovery of their
money. Id. at 1145.

8 FCC Red No. 16
Federal Communications Commission Record
balance. and without resolution of this waiver request and
the quick resuscitation of the Post, a distinctive voice in
the New York marketplace could well be lost. Such a loss
would be utterly antithetical to our clear and historic
policy of framing our regulations to promote a diversity of
viewpoints. Since granting the waiver would in my judg-
ment have the effect of promoting viewpoint diversity, I
support our action.
To those who would insist on rigid adherence by the
Commission to the cross-ownership ban. and as one who
has at times criticized waivers of our ownership rules. I
would say this: The Commission has always tempered its
skepticism about the benefits of cross-ownership with a
dispassionate
analysis
of
the
hard
realities
of the
marketplace. In my judgment, such an analysis in this case
demonstrates that waiving the rule will not in any way
threaten diversity of expression in New York City
ho
has at times criticized waivers of our ownership rules. I
would say this: The Commission has always tempered its
skepticism about the benefits of cross-ownership with a
dispassionate
analysis
of
the
hard
realities
of the
marketplace. In my judgment, such an analysis in this case
demonstrates that waiving the rule will not in any way
threaten diversity of expression in New York City. (Cur-
iously, some opponents of the waiver appear to object on
the grounds that it might provide too much diversity.)
What is clear to me is that there is no more media-
intensive market in the nation than New York. At a time
when a mere handful of two-newspaper towns still exist in
the United States. I see nothing but harm in a decision that
might deprive New York of its status as a three newspaper
town.
Granting this waiver helps forestall such an outcome by
permitting the Bankruptcy Court to make its own reasoned
judgments about the range of available purchasers of the
Post unclouded by doubt about the FCC's ultimate position
on the cross-ownership of the Post and WNYW(TV). It says
nothing about what the Commission might believe about
the qualifications of those purchasers. including the pri-
mary challenger. Champion Holding Company. That de-
cision is the court's to make.
Finally, I also would underscore a fact that opponents of
this permanent waiver have. in my judgment, failed to
refute. On one other occasion. the Commission considered
and then rejected a permanent waiver to permit the cross-
ownership of a television station and a daily newspaper in
the same market: in Washington. D.C. The newspaper was
the Washington Star. The FCC refused a permanent waiver,
and today the Star is silent: No victory for media diversity.
A different decision here, in my judgment, offers the great-
est hope of saving a troubled newspaper and broadening
the range of editorial voices in New York.
5369
FCC 93-340

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Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/FCC_FCC_93_340. Check the current official text before relying on it. Not legal advice.