FCC: Journal can’t have KNINDon Day | November 10, 2008
KNIN won’t be joining the Journal Broadcast Group.
The Federal Communications Commission turned down Banks Broadcasting’s request to declare KNIN as a “failing station.” This makes Journal Broadcast Group’s bid to buy the station and combine it with KIVI Channel 6 impossible. For that matter, it means KNIN won’t be merged into any other Boise TV station for the time being, either.
Ironically, it was KNIN’s success — or at least lack of failure — that scuttled the deal. A station has to have three years of negative cash flow to get a “failing station waiver,” which allows an exception to rules that would generally block two co-owned stations in a market the size of Boise.
The accounting method used in filings by current station owner Banks Broadcasting & hopeful future owner Journal was rejected by the commission. Instead of actual cash flow, Banks submitted “free cash flow.”
The difference? Free cash flow includes money spent on items not directly related to station operations. Banks included capital expenditures in their formula – but the FCC says it uses the operating cash flow model, meaning the capital expenditures aren’t included. KNIN spent $320,000 on capital improvements from 2005-2007.
The kicker? KNIN made money in 2007 according to the FCC – a total of $61,891 in operating cash flow. As I reported, KNIN said it lost $63,455 in 2007. The FCC said they spent $124,945 on capital. Simple math gives you a profit of $61k before capital expenditures.
“Accordingly, we find that the applicants have not met this prong of the failing station waiver standard, and we will therefore deny the waiver request. Accordingly, IT IS ORDERED, That the request for a “failing station” waiver of the television duopoly rule, Section 73.3555(b)(2), to permit Journal to own and operate both KNIN and KIVI, IS DENIED.”
Mashing KIVI and KNIN into one entity would have meant layoffs in the Boise media industry, so folks at KNIN are understandably relieved.
One of two things would have to happen before KNIN would be able to merge with any other local station. Either the FCC would have to change the rules — or KNIN would have to fail this year, next year and in 2010… meaning a merger couldn’t happen until 2011.