On March 12, 2014, the Media Bureau of the Federal Communications Commission (FCC) issued a Public Notice
providing guidance on how it will review pending and future proposed broadcast television acquisitions that contain sharing arrangements, option agreements or loan guarantees. Although the FCC has stated that the newly issued guidance is not a change in policy, the guidance departs from current practice or adds new material dimensions to the FCC review process. The key elements of the guidance include the application of a generalized public interest standard under which applicants will bear the burden of showing that transactions serve the public interest and, in particular, that sharing arrangements and option agreements maintain licensees’ economic interests in the ongoing and long-term success of stations. The guidance also creates a new requirement that, where license assets are conveyed separately from operating assets, the asset packages will each need to reflect fair market value. The guidance also provides that lending arrangements in which same-market broadcasters share a common lender will be scrutinized to ensure, in particular, that the arrangements are on arm’s-length terms and that guarantees do not create instruments for undue influence or diminish licensee incentives.