Media General Eyes Auction Payoff

The ongoing battle between TV station groups Media General, Schurz and Gray over WAGT Augusta (Ga.) took a hard turn toward Washington last week and the billions at stake in the spectrum auction. 

Media General, which had been trying to keep Gray from taking over operation of WAGT from former owner Schurz and participating in the FCC’s spectrum auction, has dropped its legal challenge to that participation and instead wants any proceeds if the station’s spectrum is auctioned off. 

Gray signaled it planned to put the station in the auction— its attorney would not comment on whether it had elected to participate or not. If it wins, it could collect as much as a couple hundred million dollars, Media General wants to be the one getting the big payday. 

Media General had filed a breach of contract suit over the unwinding of its JSA with WAGT as part of that station’s purchase by Gray from Schurz. Media General had also tried to block that unwinding and WAGT’s potential participation via a related injunction, which it was granted by a lower court, but blocked temporarily by the Georgia Supreme Court. 

That meant Gray could participate in the auction and take control of the station, which it did. 

But Media General filed an amended complaint in its breach of contract suit last week and took aim at the auction proceeds, saying it wanted “any profits from the sale of WAGT station’s spectrum in the spectrum auction, if WAGT is sold….” 

Media General says it was a breach of contract for Schurz to sell the station to Gray knowing that a new FCC rule making JSAs attributable as ownership interests meant Gray could not maintain the JSA contract— which it says was supposed to last until 2020—since it owned WRDW in Augusta. 

A Media General spokesperson had no comment on its court filings. 

The FCC was not happy with the Media General suit. It has told the courts that Media General could be jeopardizing its license by seeking a court remedy—preventing the unwinding of the JSA and WAGT’s auction participation—contrary to the FCC’s deal conditions. 

But Congress could factor into the dispute. Republican legislators have not been pleased with the FCC’s conditions unwinding JSAs, saying they violate the spirit of a law passed last December providing a 10-year grandfathering of agreements struck before March 2014. 

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.