FCC: Journal can’t have KNIN
Don Day | November 10, 2008KNIN 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.
Nice try, KNIN management. You tried to cheat and you got caught. Oops.
While I am sure Journal would have made nine a success, I for one am glad to see one less case of consolidation in this market or any other for that matter!!!!
I guess it all depends on your definition of “success,” RadioActive.
There’s not really that much of a trick to making money if you lay off as many employees as you can and make the remaining ones do double duty, which seems to be the paradigm in broadcasting these days.
I’m not picking on Journal here. That’s pretty much what any new owner would do with KNIN.
Can I submit my budget to FCC??? Maybe they will find me some money.
Sounds like the FCC model should be the universal model for all media instead of whatever model KNIN was using. If that happened, I bet more stations would find money.
I wonder if the KNIN sales people told their clients and potential clients that the station was a money loser when they went out on calls.
By success I merely meant that they have the resources to do with the signal pretty much whatever they want….NOT that it would have necessarily been for the good, welfare or neccessity of anyone else including the employees who would lose their jobs….. I work for a big faceless, guttless multinational corporate giant…all they seem to care about is PROFIT…. and they treat their employees accordingly….It creates a very poor work environment.
Sadly, I must agree with you about all that, R.A.
Go BANKS!
Maybe he should ask for his share of the $750B bailout!
Or better yet, they should bring back SUDDENLY SUSAN!
For a station that boasts “entertainment television” the only thing entertaining seems to be the corporate shenanigans behind the tube.
According to the FCC’s legal website, The FCC has not denied the application. The transfer is still a go. Considering how bad Banks needs the money, I don’t see how they can deny it.
Editor’s note: The Shadow’s information is incorrect – see http://www.fcc.gov/Daily_Releases/Daily_Digest/2008/dd081110.html and scroll to “KNIN(TV), CALDWELL, IDAHO. Dismissed the request to assign the license of KNIN-TV, Caldwell, Idaho…” near the bottom.
Journal has been denied in its request to buy KNIN.