FCC holds up Morgantown radio deal

CHARLESTON, W.Va. -- The Federal Communications Commission has rescinded a transfer-of-ownership application for two Morgantown radio stations following an objection raised by the company that produces West Virginia University sports broadcasts.IMG Sports Senior Vice President Joe Potter filed a letter calling on the FCC to closely review what appear to be "very close connections and operational control" between AJG Corp., operated as a trust for the descendents of John and David Raese, and West Virginia Radio Corp., which the Raeses own and operate as co-directors.Potter's complaint also asserts that IMG was close to finalizing a contract to air WVU sports broadcasts on Morgantown stations WCLG AM and FM, but was prevented by the terms of AJG's purchase agreement signed Aug. 9, which bars the current owner of WCLG from "entering into any contract or agreement" without the consent of AJG.Potter states that IMG had sent a draft contract for a two-year broadcast agreement to Bowers Broadcasting, owner of WCLG, on July 27, but was advised Aug. 2 that the contract could not move forward, because of the pending purchase agreement."I was personally in meetings where Bowers Broadcasting gave verbal assurances and commitments to be an affiliate carrying WVU athletics radio broadcasts during the 2013-14 and 2014-15 seasons," Potter states, noting the situation abruptly changed over the next six days."I believe that change was West Virginia Radio Corp. assuming control or trying to block the WCLG stations from being affiliates on WVU football game broadcasts," he contends.West Virginia Radio Corp. produced WVU radio broadcasts for years, but in July, WVU entered into a 12-year, $80 million third-tier media rights contract with Winston-Salem, N.C.-based IMG. Previously, West Virginia Radio Corp. filed a civil lawsuit against WVU, alleging fraud and collusion for allegedly tailoring a request for bids to favor IMG.IMG spokesman Andrew Giancola said Monday he could not comment at length on the letter to the FCC, noting that the civil lawsuit is in deposition stage in the state business court.Potter's letter contends that there are "very close connections and operational control" between AJG and West Virginia Radio Corp., possibly in violation of FCC regulations.Among his findings, he cites an Aug. 15 article in The Charleston Gazette regarding ties between the two companies, which he said "assembled numerous sources, many of them public records, demonstrating the interrelationship between West Virginia Radio Corp., which already has numerous stations in the Morgantown area, and AJG Corp."
In closing, Potter's letter states, "I sincerely hope that you will take a close look at the connections between West Virginia Radio Corp. and AJG Corp., and that, if they are as connected as we believe them to be, you evaluate the assignment of WCLG and WCLG-FM as if West Virginia Radio Corp., and not AJG Corp., is the buyer."Meanwhile, attorneys representing AJG and Bowers Broadcasting jointly sent a letter to the FCC calling for dismissal of IMG's complaint.Arlington, Va., attorney Matthew McCormick, representing AJG, and Washington, D.C., attorney David Oxenford, representing Bowers Broadcasting, contend that the issue of an IMG affiliation agreement with WCLG is not a matter for the FCC to address."Obviously, whether or not Bowers Broadcasting entered into an affiliation agreement with IMG is not a matter of FCC concern. Also of no concern to the FCC is the dispute between WVRC, WVU, IMG and others regarding the rights to broadcast WVU games. That dispute does not involve parties to the applications at hand," the letter states.
The letter also disputes the assertion that West Virginia Radio Corp. controls AJG, and states that, "neither David Raese nor John Raese hold an attributable interest in AJG."It states that Lauren M. Kelley Driscoll is the sole trustee of the AJG trust, and states that other than the trust, "Ms. Driscoll has no familial, personal, business or financial relationship with the grantors [the Raeses] or the beneficiaries."(A footnote adds, "In the interest of full disclosure, AJG has reported previously to the FCC that Ms. Driscoll's father, Charles McGill, was chairman of the board of Greer Industries, Inc., a West Virginia corporation in which the Raeses have ownership interests.")It also says the Gazette article should not have any weight in the FCC's review, noting, "The Commission has made clear time and time again that it will not take cognizance of allegations contained in newspaper articles in determining whether a substantial and material question has been raised as to an applicant's qualifications."AJG Vice President and General Manager Jack Murphy Jr. could not be reached for comment Monday. Murphy previously was sales manager for West Virginia Radio.According to the FCC records, AJG's offer to buy WCLG-AM/FM is for $1.8 million.
Reach Phil Kabler at philk@wvgazette.com or 304-348-1220.
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