FCC Allows 100% Ownership of US Station by Canadian Owner

The FCC has issued a Declaratory Ruling approving the acquisition by a company owned by a Canadian citizen of 100% of the ownership interest in a company that owns an AM radio stations in Seattle.  

Radio Punjab CEO Sukhdev Dhillon filed a $75,000 deal in August 2023 to buy out partner Mohan Cheema’s 80% stake in KNTS (1680). Because Dhillon — who already owns a 20% interest in their jointly owned BAAZ Broadcasting — is a Canadian citizen, it required FCC approval to exceed the 25% foreign ownership limit.

Until about a decade ago, a 25% limit in the parent company of an FCC broadcast licensee would have been the limit allowed by the FCC under Section imposed on foreign ownership of a US broadcast station by Section 310(b)(4) of the Communications Act.  Section 310(b) limits non-US citizens from holding more than 20% of a broadcast licensee, and foreign owners cannot hold more than 25% of a parent company “if the Commission finds that the public interest will be served by the refusal or revocation of such license.” 

Any foreign owner seeking to acquire a substantial stake in a US broadcast station must be reviewed by various Executive Branch agencies to ensure that there are no perceived security risks raised by the proposed acquisition. The FCC has to do its own review as well.  The approval process for the first acquisition by a foreign owner often takes a full year or more (the deal approved last week was filed with the FCC almost exactly a year ago), so don’t expect to complete an acquisition by a foreign owner on the same timeline as that for the completion of a deal by US citizens.  But, once a foreign owner is approved by the FCC, as long as the ownership of that acquiring company stays the same, it can in most cases acquire additional US stations without going through this extended review process. 

Acquiring companies with foreign ownership must track their ownership, and the addition of new foreign investors into their companies likely will require that those investors first go through this extended review process.  US companies also need to track their foreign ownership to ensure that it does not go about the statutory limits without FCC consent.  The FCC has issued guidance on how public US companies can track their foreign ownership