Last week, the FCC released a Consent Decree where a broadcast company admitted to certain unauthorized transfers of several stations, even though actual control of the stations, for the most part, did not change. Stock of the company was transferred into a trust by the company’s shareholder without FCC approval, even though the shareholder continued to control the station until his death approximately a decade later. For this transfer, and another occasioned by the voting of the trust’s stock by his children after his death, the company agreed to pay $8,000 to the government and enter into a compliance plan to assure that no similar transfers occur in the future.

This decision and two similar Consent Decrees entered into by public companies in recent months for, without prior FCC approval, moving station licenses among wholly-owned subsidiaries as part of corporate reorganizations (see decisions here and here), remind broadcasters that, if they are making any change in their ownership where the chain of control changes, even if actual control remains the same, they still need prior FCC approval. So putting controlling stock into a trust that the majority shareholder votes instead of holding it outright, or eliminating one company in a corporate ownership chain, or moving a license from one subsidiary company to another (or directly into the parent company), all require FCC approval before the change is made. These organizational changes, where control continues to reside in the same hands both before and after the change, are filed on an FCC Form 316 and can usually be approved by the FCC very quickly. While these changes may seem (and may in fact be) inconsequential in assessing who owns a broadcast company, the FCC (in broadcasting) still requires prior approval for such a change. Not securing that approval first may well, as in these recent cases, cost you in the long run through FCC fines, legal expenses, and the costs of instituting and administering a consent decree.