Report: FCC Not Following Normal Process For Audacy Transaction

Commissioner Brendan Carr of the Federal Communications Commission has sounded the alarm over a pending purchase which would allow billionaire Democratic donor George Soros to purchase hundreds of U.S. radio stations.

During a House Oversight Committee hearing last week, Carr objected to a deal that would allow a Soros-backed group to take ownership of 200 stations across 40 markets. He claimed the FCC was deviating from its normal procedure by allowing the purchase to take place.

“I think what’s interesting about it is that the FCC is not following its normal process for reviewing transactions that it has established over a number of years,” Carr warned. “It seems to me the FCC is poised, for the first time, to create an entirely new shortcut.”

The National Desk reports the transaction would break a rule preventing more than 25% foreign ownership of U.S. radio stations, Carr alleges. Despite this, Carr claimed the agency was expediting its review process.

“What we usually do is require people to file a petition with us, bring in the National Security Agency to review the foreign ownership—it’s probably no big deal here—but we review that foreign ownership and then we vote,” Carr said. “Here, they’re trying to do something that’s never been done before at a commission level.”

Inside Radio reports to get through the bankruptcy process as quickly as it could, Audacy set up the transaction in a way that would allow the restructuring to be completed and maintain short-term compliance with the foreign ownership limits until it secures approval from the FCC to have indirect foreign ownership of more than 25% — a process that can take up to a year to complete. Audacy’s alternative plan is to use special warrants that will not convert to equity until the government signs off.

But critics call that a “Soros shortcut” and have asked the FCC to reject Audacy’s plan that will allow it to go forward with its reorganization while the government’s review of the Soros-backed offshore fund’s involvement is reviewed. If the FCC were to agree, it would sideline Audacy’s proposed restructuring.

Insiders say Audacy isn’t looking for a new shortcut or a fast-track process, and that a full foreign ownership review will still take place after Audacy emerges from bankruptcy. They point out it is similar to the structure that has been used in several other Chapter 11 reorganizations in radio during the past several years, including iHeartMedia in 2019, Cumulus Media in 2018, LBI Media in 2019, and Alpha Media.

Rep. Nick Langworthy, R-N.Y., said during the hearing he was “extremely alarmed” by the purchase.

“Looking at the facts, it seems the administration is giving a left-wing billionaire, who is a major donor, a close ally, one of the chief funders of all of their efforts and their dark money, a free pass to take control of hundreds of local radio stations, flooding the airwaves with leftist propaganda and I think it’s blatant,” he said.