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QWEST’S STATION QUEST

Qwest Broadcasting has changed its capitalization and ownership structure in an effort to gain FCC approval for the two station acquisitions it has pending.

Qwest, which was formed by producer Quincy Jones with substantial backing from Tribune Broadcasting, has deals pending to buy WATL Atlanta from Fox for $150 million and Jones’ WNOL New Orleans for $17 million.

But the FCC is concerned about how significant a role Tribune will play in the running of the two stations. Tribune already owns stations in both markets, and the commission is said to be worried that the group owner would have more leverage than the typical local marketing agreement in which one station programs or sells ad time for two stations in a market.

Many broadcasters are keeping a close eye on how the FCC deals with the Qwest application in anticipation of crafting similar deals.

To ease FCC concerns, Tribune said it would cut its voting and equity stake in Qwest to 33% from 45%; Qwest’s interest would grow to 67%.

As a result of the changes, Tribune’s $15 million contribution to the purchases would be cut to $8 million.

While Qwest said it will offer employment to members of the 65-person staff at WATL and the 42-person staff at WNOL, there will be significant cuts. Both Qwest and Tribune added that they are looking to reduce operating costs and after closing will co-locate the stations and reduce staff at the two Qwest stations to 15 apiece. Fox is eager for the FCC to approve Qwest’s new structure because it needs to close the sale of WATL to wrap up its purchase of WGHP Greensboro, N.C.

Also, Fox is said to want to sell its Denver station KDVR to Qwest and take its affiliation to Tribune-owned KWGN. KDVR would then become the WB Network affiliate in the nation’s 18th-largest market.

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