In re Application of GEORGE P.
MOONEY, ROBERT E. CRENSHAW, ET AL. (TRANSFERORS) AND GEORGE P. MOONEY, ROBERT
E. CRENSHAW, ET AL. (TRANSFEREES) For Transfer of Control of Mooney
Broadcasting Corp., Sole Stockholder of Mooney-WMAK, Inc. Licensee of Station
WMAK, Nashville, Tenn.
File No. BTC-5779
FEDERAL COMMUNICATIONS COMMISSION
17 F.C.C.2d 404 (1969)
RELEASE-NUMBER: FCC 69-356
April 9, 1969 Adopted
ACTION:
ORDER
BY THE
COMMISSION: COMMISSIONER BARTLEY DISSENTING AND
ISSUING A STATEMENT IN WHICH COMMISSIONER JOHNSON JOINS. COMMISSIONER COX ABSTAINING FROM VOTING.
[*404] We have before us the aforementioned
application.
1. Mooney Broadcasting Corp., the parent
corporation of Mooney-WMAK, Inc., licensee of station WMAK,
2. The transfer of control application
heretofore mentioned results from the sale of Mooney Broadcasting Corp. stock to the public in order to acquire
additional funds for station operation.
As a result of that sale, the transferor herein has relinquished de jure
control of Mooney Broadcasting Corp., but has retained de facto control which
means that management of the station above described will remain in the hands
of the transferor. We find no
trafficking in broadcast licenses.
3. In view of these circumstances, we conclude:
(a) That a grant of this application will serve the public interest,
convenience, and necessity; and (b) that section 1.597 of our rules should be
waived in the public interest and the application Granted.
4. Accordingly, section 1.597 of the
Commission's rules is waived and the above application is Granted.
FEDERAL
COMMUNICATIONS COMMISSION, BEN F. WAPLE, Secretary.
[*405] DISSENTING
STATEMENT OF COMMISSIONER ROBERT T. BARTLEY IN WHICH COMMISSIONER JOHNSON JOINS
I vote
to set the applications for evidentiary hearing on issues of waiving the 3-year
rule, trafficking, financial qualifications, and how the public interest would
be served by the licensee's becoming a publicly held corporation.
The
applicant has not shown, in my opinion, good cause for waiver of the 3-year
rule. Exhibit 1 of both applications
states as "good cause" that a primary concern of the 3-year rule
"was to assure that a licensee had time to perfect his program proposals
so as to render a meritorious program service"; that "no changes are
proposed in the operations and/or programming" of the stations; and that
"Accordingly, there will be a continuity of service to the public."
In a letter of December 10, 1968, from the applicant's legal counsel, it is
stated that "The public stock offering is necessary to alleviate financial
stress." Section 1.597, the "3-year rule," provides that such
application "will be designated for hearing on appropriate issues pursuant
to section 309 (b) of the Communications Act of 1934, as amended", unless
the Commission is able to find that, in pertinent part, there is unavailability
of capital, death or disability of station principals, or other changed
circumstances affecting the licensee since acquisition of the license. The applicant makes no such showing, and the
Commission has made no such finding.
In my
opinion, this transaction raises a serious question of trafficking. The transaction itself involves an
"increase of capitalization from 10,000 to 1,000,000 shares" and the
sale of 150,000 shares to the public at $8 a share for a total of $1,200,000,
less $180,000 for underwriting fees, and a net of $1,020,000. Thus, the present stockholders, on an
investment of $63,500, parlay their control into a $1,020,000 deal, $220,000 of
which "will be used for general corporate purposes and future
expansion." [Emphasis added.] Moreover, there would be 250,000 outstanding
shares which, offered to the public at the same price of $8 a share, would net
another $2 million, or a total of approximately $3,020,000 (from an initial
investment of $63,500). That is, in my
opinion, a brazen attempt to traffick in ownership of broadcast licenses.
The
foregoing is, of course, a proposal (which the Commission majority
approves). If the public does not buy
the stock, the applicant would not be financially qualified to effectuate this
transfer of control as proposed. I
believe that the Commission is in no position to rest a finding of financial
qualification on a guess that the public will buy the stock. The proposal seems to be a contingent
application -- contingent upon successful sale of the stock to the public --
and the Commission rules preclude the acceptance of contingent
applications. Certainly, a grant should
not be made until resolution of the financial qualification issue in an
evidentiary hearing.
The
Commission cites no reason in support of the public interest being served by
this transaction of turning the licensee into a publicly held corporation. To the contrary, the public interest could
well be derogated by the instant proposal.
In a corporation, the stock of
[*406] which is widely traded
either over-the-counter or on the exchanges, maintaining an attractive price of
the stock and attractive dividends can become paramount and, thus, relegate to
lesser consideration the operation of the stations in the public interest. The stations can well become investment
tools instead of servants to the public interest.
In view
of the foregoing, I dissent to the waiver and the grant and vote for an
evidentiary hearing on the foregoing matters.