NAB reports (Jan-Dec 1944)

1760 N STREET, N. W. WASHINGTON 6, D. C. Vol. 12, No. 30, July 28, 1944 FCC ASKS CONGRESSIONAL POLICY The FCC has asked Congressional direction as to the policy it should follow in passing on the sale of radio sta¬ tions where the sales prices are far in excess of the goingconcern and physical property values of the stations and appear to involve considerable compensation for the radio frequencies themselves. In identical letters to Senate Interstate Commerce Com¬ mittee Chairman Burton K. Wheeler and to Representa¬ tive Clarence Lea, Chairman of the House Interstate and Foreign Commerce Committee, FCC Chairman James Lawrence Fly suggested the “tremendously high prices” which radio stations command in the present market indi¬ cates the sellers may be profiting from their lien on a radio frequency which they have been authorized to use under the Communications Act of 1934, but whose owner¬ ship under the Act is reserved to the public. Chairman Fly’s letter which cites several such recent transfers of radio facilities, follows in part: “The Congress has had before it proposals to limit the amount of consideration to the value of the physical prop¬ erties (of radio stations) transferred but no provision of THANKS FOR YOUR CO-OPERATION ON WAC ADVERTISING QUESTIONNAIRE The letter addressed to all radio stations in the United States regarding paid WAC recruit¬ ment advertising has produced a welcome ava¬ lanche of replies. These are being sorted and tabulated as soon as received in order to main¬ tain a continuing report of the answers to the three questions asked in the questionnaire. DON'T FORGET TO RETURN YOUR QUESTIONNAIRE If you have not already filled out and re¬ turned your questionnaire, please do so at once. If you failed to receive a copy, wire or write NAS headquarters and one will be sent to you by return mail. 89.6% FAVOR PAID WAC RECRUITMENT ADVERTISING An analysis of 239 returns indicates that 89.6% of such stations are in favor of the ac¬ ceptance of paid WAC recruitment advertising. Those opposed provide 9.6% of the returns, while .8% might be classed in the "maybe" category. this character has been adopted. The statute does make clear that the frequencies are not in any way the property of the licensees. The Commission has rejected and is pre¬ pared to reject any transfer which on its face involves a consideration for the frequency. The Commission, ap¬ parently consistent with Congressional policy, has ap¬ proved transfers that involve going-concern values, good will, etc. There remains, however, a serious question of policy and one on which the law is not clear, as to whether the Commission should approve a transfer wherein the amount of the consideration is over and beyond any amount which can be reasonably allocated to physical values plus going-concern and good will, even though the written record does not itself show an allocation of a sum for the frequency. Our concern in this regard is heightened by the tremendously high prices which radio stations are commanding in the present state of the market. This is illustrated by the fact that one local station was sold for a half-million dollars and some regional stations are selling for a million or more. “It is the Commission’s policy to disapprove of transfers which obviously represent the activities of a promoter or broker, who is simply acquiring licenses and trafficking in them. Under the present state of the law, however, it is not clear that the Commission has either the duty or the power to disapprove of a transfer merely because the price is inordinately high — even though it may well be deduced that a substantial value is placed on the frequency. In the absence of a clear Congressional policy on this subject, we thought best to draw the matter to the attention of your own Committee and the House Committee on Inter¬ state and Foreign Commerce.” A partial list of important transfers of control and voluntary assignments of licenses and construction permits, showing date of Commission approval, follows: (Since January 1, 1944) KFOR, Lincoln, Nebr. ; 1240 kc., 250 watts, unlimited time; 4/18/44; from Sidles Co., et al, transferor, to Chas. T. and James Stuart, transferee; $100,000 for 100% of KID, Idaho Falls, Idaho; 1350 kc., 5 kw-LS, 500 watts-N ; unlimited time; 6/6/44; from J. W. Duckworth, transferor, to Walter Bauchman et al; $100,000 for 100% of stock. KJBS, San Francisco, Calif.; 1100 kc., 500 watts, Limited — WTAM; 6/20/44; from Mott Q. Brunton et al, trans¬ feror, to KJBS Broadcasters, a partnership; $200,000 for 100% of stock. KLRA, Little Rock, Ark.; 1010 kc., 10 kw.-LS, 5 kwDA-N ; unlimited; 5/30/44; from A. L. Chilton, transferor, to Gazette Publishing Co., transferee; $275,000 for 64.5% of stock. KOIL, Omaha, Nebr.; 1290 kc., 5 kw, unlimited, DA-N ; 4/18/44; from Sidles Co. et al, transferor, to Chas. T. and James Stuart, transferee; $250,000 for 100% of stock. KSLM, Salem, Ore.; 1390 kc., 1 kw, unlimited; 2/29/44; from H. B. Read, transferor, to Paul V. McElwain and Glen E. McCormack, transferee; $69,000 for 100% of stock. KTAR, Phoenix, Ariz. ; 620 kc., 5 kw, unlimited, DA-N; 7/18/44; from Arizona Publishing Co., transferor, to John J. Louis, transferee; $375,000 for 77.3% of stock. KWK, St. Louis, Mo.; 1380 kc., 5 kw-LS, 1 kw-N, un (Continued on page 2 48) July 28, 1944-247