ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, February 9, 1996 TAG: 9602090072
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Associated Press
WHILE THE FEDERAL RULING will result in the largest media corporation, regulations require Disney to give up or trade a few of its newspapers and radio stations.
Federal regulators cleared the way Thursday for Walt Disney Co. to take over Capital Cities/ABC Inc., creating the world's largest media company. The company will have to shed some properties, however.
The Federal Communications Commission voted 5-0 to remove the last hurdle to the $19 billion deal.
Disney said it would complete the acquisition by the end of the week.
The commission won't let Disney permanently own radio stations and a newspaper in Fort Worth, Texas, and in Pontiac-Detroit, Mich.
Instead, the commission would provide the company with a temporary waiver of one year from cross-ownership rules to give Disney time to sell or swap either the radio or the newspaper properties. The choice would be Disney's.
Still, Disney might be able to keep the Fort Worth and Pontiac-Detroit properties. The FCC said it would re-examine its newspaper-broadcast cross-ownership rules within the year.
``We are hopeful that it will ultimately allow us to retain the properties in the two cities,'' said Disney chief Michael Eisner, who otherwise applauded the FCC's action.
Even though all five commissioners voted to clear the deal, two of them - James Quello and Rachelle Chong - opposed the FCC's decision not to let Disney permanently own the properties in Fort Worth and Pontiac-Detroit. Both said ample media competition exists in the two markets. Each has more than 50 separately owned broadcast outlets, they said.
Quello said the FCC's newspaper-broadcast rules ``no longer reflect the realities of the marketplace.''
Federal regulations prohibit one company from owning a newspaper and a radio station in the same market. Legislation overhauling the nation's telecommunication laws, which President Clinton signed Thursday, would not change that.
In Fort Worth, Capital Cities/ABC owns WBAP-AM and KSCS-FM and the Fort Worth Star-Telegram. In Michigan, it owns WJR-AM and WHYT-FM in Detroit and the Oakland Press in Pontiac.
Capital Cities/ABC owned these properties before FCC regulations barred such ownership, the FCC says, but that status does not transfer to Disney.
For Disney to win a permanent waiver, it would have to prove that the combined ownership is in the public interest, the FCC says.
In 20 years, the FCC has granted only two waivers to its newspaper-broadcast cross-ownership rules. And the standard has been tough - in both cases, owners had to show the newspapers would otherwise go out of business, FCC attorneys said.
For Disney, the FCC waived local ownership rules so that Disney may permanently own TV-radio combinations in Chicago, New York, Los Angeles, San Francisco, Flint-Detroit, and Toledo-Detroit.
Disney and ABC shareholders approved the deal Jan. 4. Officials from both companies had no immediate comment.
LENGTH: Medium: 63 linesby CNB