WASHINGTON — Paxson Communications has entered an agreement to sell its Cedar Rapids, Iowa, station to a minority-owned broadcast company, with the hope that the deal will eventually result in a new formula for calculating the national ownership limits.
Paxson agreed to sell KPXR-TV to Epcom, a minority-controlled broadcast company headed by Ed Parker, former president and chief financial officer of Blackstar. In addition, Paxson will assign the rights to own and construct stations in Fargo, N.D.; Odessa, Texas; Davenport, Iowa; and Wausau, Wis.
Although Paxson will initially retain a nonvoting minority stake in Epcom, the company will ask the FCC to increase its stake to a 49% of voting stock. Paxson and Epcom will petition the FCC that a 49% voting stake in the five stations should not be counted against Paxson’s 35% national audience cap.
Paxson will argue that allowing unattributed ownership in minority-owned property will provide incentives for broadcasters to bolster investment in TV stations owned by minorities and women.
Blacks, Latinos and women make up less than 3% of all broadcast owners. Boosting the percentage of minorities and women has been single most important theme of FCC chairman Bill Kennard’s tenure.
If Paxson succeeds in his efforts to sidestep the audience cap through investment in minority-owned Epcom, it could set off a wave of interest in minority companies.
All the major networks are chafing at the 35% ownership cap. The Big Four webs are having trouble eking out a profit from their network operations and would love to add more high-profit margin stations to their holdings.