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FCC Proposes Fining Gray Half Million Dollars for Alleged Ownership Violation

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(Image credit: Gray Television)

In a first for an acquisition of a network affiliation, the FCC says Gray Television has "willfully and repeatedly" violated the commission's prohibition on owning two of the top-four rated full-power TV stations in a market. The FCC has proposed a half-million-dollar fine.

Also Read: MVPDs Applaud Proposed Gray Fine

The commission said that the proposed fine stemmed from its acquisition of the CBS affiliation of KTVA-TV--which went dark--when it already owned NBC affiliate KTUU-TV, both in Anchorage, Alaska. At the time the stations were ranked number one and two in the market. Gray put the CBS programming on its KYES-TV Anchorage, but then moved it to a co-owned low power station and simulcast it on a digital subchannel of KTUU-TV.

In 2016, the FCC clarified its rule on owning two of top four stations that it barred "the common ownership of two top-four stations with overlapping contours in the same DMA through the acquisition of a network affiliation."

Also Read: Gray: FCC Should Restore Rule Dereg

While the FCC said it had never proposed a forfeiture for an affiliation sale that triggered the ownership cap violation, it decided that the $8,000 per day fine for an unauthorized substantial transfer of control" was sufficiently analogous.

The proposed fine--Gray can still appeal it--is for five hundred eighteen thousand two hundred eighty three dollars ($518,283*), the statutory maximum. Had there been no maximum, it would have been 215 days of continuing violation (July through March 2020) at $8,000 per day, or over $1.6 million.

"By executing and consummating an agreement to apparently purchase the CBS affiliation from KTVA(TV) for KYES-TV, Gray caused a change in network affiliation that resulted in Gray’s owning and operating the top two of the top-four stations in the Anchorage DMA, as of July 31, 2020, in violation of Commission rules," the FCC said. "Gray’s acquisition of the affiliation of another Top 4 station in the market was “conscious and deliberate,” and thus willful, as evidenced by the fact that it consummated an agreement to do so without prior Commission approval."

Gray was not immediately reachable for comment.