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The Deal: FCC Tries to Spark Foreign Capital Infusion Into Stations

Gallant said station owners would be eager to sell right now because broadcast valuations have spiked. "Now would be a great time to sell because of the run-up in stock prices," he said.

David Honig, president of the Minority Media and Telecommunications Council, an advocacy group for minority ownership initiatives that also runs a minority-focused station brokerage, said raising capital for station purchases by minorities has been a struggle since 1995. That year, Congress did away with a program providing tax breaks to owners who sold stations to minorities. Minority ownership of stations quadrupled during the 17 years the tax break was in place, but since then "access to capital is the No. 1 impediment to growth of minority ownership in broadcast stations," Honig said.

According to Free Press, women own a total of only 67 stations, or 4.97% of all stations, and minorities own only 44 stations, or 3.26% of all stations.

Honig said foreign buyers are unlikely to acquire total control of the stations, choosing instead to let local personnel make the operational and programming decisions. He won't reveal the names of interested investors but said MMTC's brokerage business has fielded inquiries from potential buyers in the U.K. Japan, Jamaica, Nigeria, Spain and Venezuela.

Honig also predicted that lifting the cap would lead to reciprocal elimination of foreign ownership restrictions in other countries, opening the door for station groups, particularly Spanish-language broadcasters like Univision Communications that would likely want to expand into Mexico and Latin America.

Sherrese Smith, partner in the media practice at Paul Hastings, suggested that TV stations, which are more profitable than radio outlets, will be the first target of foreign investors. "The initial influx will be on the TV side. New money is something the industry could use to continue growing and put broadcasting in line with the other telecom industries. There's a recognition that additional funding is needed from outside the U.S."

-- Written by Bill McConnell In Washington
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