Minority Deal Ordeal

The Senate Finance Committee’s vote to kill the FCC’s minority tax certificate program (see story, page 28) has other operators concerned about their own deals.

Tribune Broadcasting is one of the worried. Last December, Tribune formed a partnership with producer Quincy Jones to form Qwest with an agenda of buying TV stations and converting them into affiliates of Warner Bros.’ WB Network.

Tribune executives are still determining how the vote affects them and are expected to launch a full-court press in the coming days in hopes of saving their deals when the full Senate votes.

So far, Qwest, whose other partners include former football star Willie Davis, talk show host Geraldo Rivera and “Soul Train” host Don Cornelius, have deals to buy WATL Atlanta from Fox for $150 million, a stunning price considering that Fox bought the station two years ago for $60 million.

Qwest also has a deal to buy WNOL New Orleans from Jones for $17 million. Down the road, Qwest was hoping to buy Fox’s Denver-owned station, but with the tax certificate on the verge of elimination, everything is on hold.

Fox also will be keeping an eye on the Senate. Late last year Fox formed Blackstar LLP, a joint venture with minority broadcaster John Oxendine. That venture has yet to strike any deals and the loss of the certificate may affect its growth. Oxendine has said the firm is ready for this and will look for purchases with or without the certificate.

The demise of the tax certificate was also a blow to Viacom’s efforts to sell its five TV stations. The media giant had been hoping to unload the stations in a tax certificate deal, but when Congress came down on the cable deal, Viacom pulled the stations off the market.

Many observers now expect Viacom to try to sell the stations without the tax certificate. The stations at issue are CBS affiliates KMOX St. Louis and KSLA Shreveport, La.; and NBC affils WVIT Hartford, Conn., WNYT Albany and WHEC Rochester, both in New York. They are said to be worth about $400 million. Ellis Communications is said to have its eye on the Shreveport station, while several other broadcasters will bid on the remaining four stations.

As for the cable deal, Viacom is considering many options, including spinning off its cable systems to shareholders as part of a broader restructuring.

TCI, which along with Inter-media Partners and attorney Frank Washington, had teamed up to buy the systems, may also try to work a deal.

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