Rosenworcel in 3-2 Audacy Order: Claims of Special Treatment Are 'Cynical and Wrong'

Audacy, the second-largest radio group in the U.S., requested the waiver to allow it to first complete a court-approved bankruptcy restructuring plan to cancel $1.6 billion in debt before it goes through the foreign-ownership review process. The reorganization will lead to the Soros family-affiliated Fund for Policy Reform holding a controlling interest in Audacy through a chain of subsidiaries. The waiver process for Audacy mirrored procedures the agency used for a host of previous bankruptcy restructurings going back to 2018, said Rosenworcel in her statement with the order. All were approved without objection from Carr, who was on the commission for each of them. “The Applicant is not asking the Commission to break new ground; rather, it is following a well-worn path,” said the order. “The stock structure proposed by the Applicant has been approved for decades.”

In a news conference Thursday and his dissent issued Monday, Carr said the order is “unprecedented” because the item was voted by the full commission instead of approved at the bureau level like on past decisions. “The commission has never done this before. So why are we voting for a first-ever fast track today?” Carr wrote. The item had been set for a bureau-level decision but was bumped up to the full FCC following pressure from Sen. Ted Cruz, R-Texas (see 2408150047). “It is hornbook law that staff level decisions (whether they complied with federal law or not) do not set precedent for the Commission,” Carr wrote. He said he would support a formal FCC rulemaking proceeding on streamlining review for companies emerging from bankruptcy but said the current rules don’t allow for it.

Commissioner Nathan Simington said the item wasn’t presented to the commissioners with sufficient notice and doesn’t contain sufficient public interest justification for the waiver or enough information about the deal. “The first outreach I received about this transaction, the application for which has been pending before the Commission since March, was when I was informed by bureau staff in August that: thanks but no thanks, they would handle it for me,” Simington wrote. “And now that I have been afforded an opportunity to weigh in, I have no meaningful record to review, and consequently no way to determine” if the item is in the public interest, he said.

Since the FCC opened up the foreign-ownership process in 2016, the waiver sought by Audacy has been a standard procedure, said longtime broadcast attorney Jack Goodman, echoing comments from several other broadcast attorneys. “It is essential that the FCC’s regulatory processes are fair and predictable so that broadcasters can innovate and invest in their stations to the benefit of communities across the country,” said NAB CEO Curtis LeGeyt in a release praising the order. “To ensure a vibrant future, we need a transparent, fair and predictable regulatory process for broadcast license transfers and renewals -- devoid of politics -- that allows local radio and television stations a fair chance to compete for the investment capital that is necessary to continue serving the public.” Benton Institute for Broadband & Society Senior Counselor Andrew Schwartzman said he was “heartened that Commissioners Carr and Simington have moved in my direction” in thinking the FCC too lax on foreign-ownership review. “However, these two born-again regulators’ concerns are misplaced here,” Schwartzman said. “Whether or I not I like the Media Bureau’s established practices, this deal followed those precedents.”

Rep. Chip Roy, R-Texas, who first raised concerns about Audacy’s review waiver in April (see 2405030072), repeatedly criticized the FCC’s decision. “This reckless, unprecedented move will impact radio stations reaching millions of listeners across the U.S. -- handing off our airwaves to foreign interests,” his press office said. It’s “another reason why” the Nov. 5 presidential election “matters so much,” Roy said: “We need” former President Donald Trump, the Republican nominee, “to put the right people on FCC and stop this takeover!” He later contrasted the FCC “illegally fast-tracking Soros buying up radio stations to push propaganda” with the commission’s decision to bar SpaceX from the Rural Digital Opportunity Fund program (see 2312140048).

Senate Commerce Committee ranking member Ted Cruz, R-Texas, didn’t comment on the FCC’s decision, but a spokesperson noted his August push for a full FCC vote on the waiver request (see 2408090051) likely pressured Rosenworcel to back off from her “initial attempt to force the license transfer through a bureau-level order.” House Oversight Committee Chairman James Comer, R-Ky., and Rep. Nick Langworthy, R-N.Y., who are probing the FCC’s handling of the proceeding (see 2409270053), didn’t comment Monday.

Both Simington and Carr also argued that the FCC’s willingness to approve the Audacy request ran counter to its stance in other proceedings, including the scuttled Standard General/Tegna deal. “The Commission of today has apparently learned its lesson, and is ready to rock and roll to get blockbuster media deals back on track! (Provided, naturally, that they are the right sorts of deals involving the right sorts of owners,)” Simington wrote. In Standard General/Tegna, the FCC said the companies hadn’t shown the FCC that the deal wouldn’t lead to job cuts, Carr said. “Under Goose v. Gander, the FCC must ding these Applicants for the same reason,” he said. Carr’s reference to Standard/Tegna is “misplaced,” said Schwartzman, who represented merger opponents in that proceeding. The FCC raised the jobs issue there because of a “fully developed record raising substantial and material questions of fact, not an offhand suggestion that maybe there would be job losses,” he said. “This may represent a disagreement over 10th-floor procedures, more than a substantive disagreement about the outcome,” Goodman said.