Coincidence? WSJ (Owned By Rupert Murdoch) Complains About FCC Media Ownership Restrictions

[TomCADem]

Rupert Murdoch and Fox News opposition to President Obama is not purely ideological. Beneath the surface, President Obama championed diverse media causes as a Senator, and News Corp added numerous media properties under President Bush, including the Wall Street Journal. Now, here is the Wall Street Journal indirectly attacking these media ownership restrictions:

http://online.wsj.com/article/SB125322915767921233.html?mod=googlenews_wsj

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Wall Street lenders are tripping over federal media-ownership rules as they find themselves the unexpected owners of several distressed radio, television and newspaper companies.

The issue has taken center stage at Citadel Broadcasting Corp., as one of the U.S.'s largest radio broadcasters races to revamp its balance sheet. Citadel has offered senior lenders owed $2 billion -- including J.P. Morgan Chase & Co., General Electric Co.'s GE Capital and ING Groep NV -- a deal that would exchange a big chunk of debt for equity, people familiar with the negotiations said.

On Wednesday, Citadel faced a deadline to make a $2 million interest payment, but its status remained unclear. Talks have slowed in recent days in part because some lenders have been caught off-guard by Federal Communications Commission rules designed to limit concentrated holdings of media firms, said people familiar with the matter.

The snag shows another unintended consequence of the credit boom: Lenders are being forced to take on equity stakes of companies that borrowed large amounts of debt and now can't make payments and must restructure.

But for big banks and hedge funds holding debt in everything from radio and television stations to newspapers, FCC rules have made restructurings more complex. The FCC must approve media sales and has specific rules that limit ownership of multiple media outlets in individual markets, even when such shareholder stakes are small.

The calculus can be even more difficult for hedge funds, some of which are registered offshore. The FCC caps foreign ownership at 20% of a U.S. broadcaster -- 25% if the stake is through a holding company -- which can change how new ownership stakes are structured.

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[elleng]

1. WSJ reporting is pretty good,

and your highlighted paragraph is correct.

Its their editorials that are crappitude.