Pandora’s Purchase of KXMZ Could be Blocked on Foreign Ownership Grounds…

If you want to own an American radio station, you have to be American enough in the eyes of the Federal Communications Commission.  Which means, not more than 20 percent owned by foreign companies or interests.

Pandora, a publicly-owned company with significant foreign ownership, could fail that test according to paperwork now surfacing.

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According to allegations and filings now submitted by ASCAP, Pandora likely falls above the 20 percent-mark, thereby disqualifying it for ownership of an American radio tower.  Which means, the FCC could decide that Pandora is not qualified to own Rapid City, South Dakota terrestrial radio station KXMZ, based on a technicality.

In its submission, which shows bitter hostility towards Pandora, ASCAP asserts that foreign ownership numbers were submitted in haste to satisfy both the owners of the KXMZ and the FCC.  In one case, ASCAP alleges that Pandora was in the process of surveying its owners to determine ‘alien ownership’ levels while it was simultaneously signing the paperwork with KXMZ owner Connoisseur Media Licenses, LLC.  The results, unsurprisingly, said Pandora was in the clear.

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But ASCAP goes further, alleging that Pandora not only rushed through its due diligence, but actively fudged its submissions to show a lower percentage.  That means mis-counting and mis-categorizing different groups of investors, without even knowing the number themselves.

The presence of investors like these, ASCAP argues, may easily be throwing Pandora past the 20 percent mark.  In fact, a quick look at Pandora’s NASDAQ-listed institutional investors shows a quick tally of 17.73 percent (see above).

“The fact that foreign entities frequently buy and sell significant amounts of Pandora stock demonstrates the likelihood that at least an additional 2.27 percent of Pandora’s stock is foreign owned or owned by companies with foreign ownership.”

A full copy of the filing is here.

5 Responses

  1. Radio & Records Vet

    ASCAP better be careful. Aren’t Clear Channel, Cumulus, etc publicly traded companies? If that’s true and it’s found out that move than 20% of the investors are not from the US holy crap …

    • Danny Ray Hubbard

      This case may cause us to divest…

      Danny Ray Hubbard

      Harvest Tyme Production

  2. Vail, CO

    Really, really, really sloppy work by ASCAP: they are saying maybe Pandora is more than 20%? When they should be proving it is more than 20%.

  3. Visitor

    “But ASCAP goes further, alleging that Pandora not only rushed through its due diligence, but actively fudged its submissions to show a lower percentage.”

    Nice move.

  4. Yves Villeneuve

    Doubt Pandora would have a legit case in broadcasting over millions of channels on the Internet without also broadcasting those same millions of channels through terrestrial towers.

    Investor beware: Pandora now selling you a pipe dream to keep you invested.