It was bad enough when the merger of LIN Television Corp. and then-Chancellor Media Corp. had to be canceled, killing Thomas O. Hicks'plans to build a media empire comprising TV as well as radio and outdoor assets. Now Hicks has to back out of LIN, as well as his Sunrise Television Corp., altogether. Well, publicly, at least. Hicks will turn his attributable interest in both companies into nonattributable interest as Chancellor-now AMFM Inc.-readies its merger into Clear Channel Communications Inc.
According to a March 14 document filed with the FCC, all but one of Hicks'Class A shares in Sunrise, which give him ultimate control of that company, will be converted into Class B non-voting stock. The controlling A share will be sold to Sunrise CEO Robert N. Smith's company-Smith Broadcasting Partners LP-for $200.
Similar paperwork is under way for Hicks'interest in LIN, several sources say. The actions mean Hicks and his leveraged-buyout firm, Hicks, Muse, Tate & Furst Inc., drop off Broadcasting & Cable's annual list of the nation's Top 25 Media Groups (see "Special Report," page 30). LIN and Sunrise combined would have been No. 21 on that list. However, LIN standing alone manages to remain, at No. 24.
Hicks has to duck behind the scenes of both LIN and Sunrise in order to avoid conflicts with his pending merger partner, Clear Channel, of which Hicks will be the largest shareholder, says Peter Brodsky, a principal in Hicks Muse.
In some cases, Clear Channel and Sunrise and/or LIN own TV stations in the same market. The FCC allows a company to own two TVs per market, depending on certain factors such as the number of unique owners left in the market after a duopoly. In some cases, Hicks'interests in all three companies would break FCC rules. In Providence, R.I., for example, Clear Channel already controls both WPRI-TV and WNAC-TV and Sunrise owns wnac-tv.
There also are situations where Hicks'interest in a LIN or Sunrise TV station would require Clear Channel to sell all or some of its radio stations in the market. While the FCC allows TV-radio crossownership, that currently is limited to the top 50 markets. In market No. 105, Springfield, Mass., for example, LIN has the option to buy WWLP(TV) and Clear Channel controls two AMs and one FM.
Despite going nonattributable, Hicks maintains his financial investments in LIN and Sunrise. "If the [FCC] rules [were] relaxed, we would find a way to reverse the process," says Hicks Muse partner Dan Blanks. "I promise you, we wouldn't do this if we had a choice."
