Investors in broadcast properties often seek to have their interests "insulated" from "attribution" meaning that the interests do not count in a multiple ownership analysis. In other words, if a party has an attributable interest in a company owning a broadcast station, that interest counts in determining whether the party can, under the FCC’s multiple ownership rules, own an interest in another station in the same market. The FCC has extensive case law describing when an interest is non-attributable and does not count in a multiple ownership review. In most cases, a non-attributable interest is one that does not hold voting rights on most company decisions. However, the Commission has always recognized that the non-attributable, non-voting equity owner may retain certain voting rights when dealing with certain fundamental company actions, as necessary to protect the fundamental integrity of their investment. In the recent decision approving the transfer of the Ion Media Network broadcast stations, the FCC clarified some of the permissible voting rights of nonattributable shareholders.
In the past, the FCC has permitted nonattributable owners to vote on certain fundamental actions of a company without threatening the owner’s nonattributable status. Such fundamental actions included changes in the articles of organization or the by-laws of the company, a sale of more than 10% of the assets of the company, a merger or transfer of control of the company, a declaration of bankruptcy, or the issuance of new stock. As these actions could all affect the fundamentals of the economic interests of the nonattributable owners, votes on these actions was permitted. In the Ion Media case, new rights were found to not affect the non-attributable status of their investments