Media General Wants WAGT Spectrum Auction Proceeds

Media General has amended a breach of contract suit, including seeking any proceeds from the potential auction of WAGT Augusta, Ga., spectrum in the broadcast incentive auction.

Media General told the Georgia Supreme Court that it is no longer seeking an injunction blocking Gray Television from taking over the operation of WAGT or participating in the FCC's spectrum incentive auction—WAGT applied to participate. But it also told another court that Media General should get all the auction proceeds if the station enters and wins the spectrum auction lottery.

Two weeks ago, Gray got an emergency stay from the Georgia Supreme Court of the injunction.

Related: FCC's Wheeler—Spectrum Auction Could Extend Into FY 2017

Media General secured in a lower court an injunction that had blocked Gray from taking over the station and from putting its spectrum in the auction, as Gray signaled it might do. WAGT's opening bid price in the auction is $210,431,700, the second highest opening price in the market, though the price will likely be lower.

Media General is still challenging the unwinding of its JSA with Schurz, the former owner of WAGT, in the Richmond, Country, Georgia Superior Court, but filed an amended complaint April 1 whose asks included: "any profits from the sale of the WAGT station's spectrum in the spectrum auction, if WAGT is sold in the spectrum auction."

Related: Videohouse to Court—We Should Be in Spectrum Auction

The Supreme Court must approve Media General's request to vacate the preliminary injunction but is expected to do so. Neither Gray nor Schurz opposed the motion.

Media General had sued to block the unwinding of a JSA between Media General and WAGT under Media General's contract with Schurz, from which Gray was buying the station. The FCC made unwinding that JSA a condition of its merger approval.

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The FCC had weighed into the case, saying 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 deal conditions.

In a letter to the lower court three weeks ago, the FCC and Justice Department said that Media General violated FCC rules when it sought and received an injunction preventing: 1) the termination of the joint sales agreement between Media General and Schurz Communications' WAGT Augusta, and 2) WAGT's participation in the FCC's upcoming incentive auction.

Related: Senators Grill Wheeler on JSAs

As part of the FCC's Feb. 12 approval of the sale of some Schurz stations to Gray, including WAGT, Gray agreed to terminate the Media General JSA and the FCC made that a condition of the approval.

Media General then sued to defend its contractual relationship, including by blocking dissolution of the JSA contract and WAGT's auction participation. The court granted the injunction.

Gray signaled it was putting the station in the auction and even said it planned to shutter it beforehand—a source said Gray had offered to find new jobs for WAGT employees—but the FCC actually required it to keep WAGT on the air pending the auction outcome.

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

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.