GE, RCA Seek Waiver on Broadcast Licenses
RCA and General Electric Co. said Thursday that they have asked the Federal Communications Commission for an 18-month waiver of rules that would bar General Electric from taking over broadcast licenses owned by RCA’s NBC subsidiary in New York, Washington and Chicago.
The move came as RCA shareholders approved the company’s merger with General Electric. Of the shares outstanding, 61.6% were voted in favor of the proposal while 6.7% were voted against it. Not all shareholders voted.
The FCC waiver was sought to give the companies an opportunity to sell or swap NBC radio or television stations in the three cities with less time pressure, an RCA spokesman said. RCA has been allowed to hold multiple licenses under a grandfather clause, but its special terms would not apply after transfer of the licenses to General Electric.
Declines Prediction
Steven Sewell, an official in the FCC’s mass media bureau, declined to predict whether the waiver request would be approved but noted that the commission approved a similar request from Capital Cities Communications when it took over the rival ABC network. “This is not without precedent,” he said.
RCA’s NBC subsidiary owns WNBC-TV, WNBC-AM and WYNY-FM in New York; WRC-TV and WKYS-FM in Washington, and WMAQ-TV, WMAW-AM and WKQX-FM in Chicago.
Analysts expect the company to sell or swap the radio stations but to keep the television properties.
At a rancorous meeting at the Marriott Marquis Hotel here, RCA shareholders representing 56.1 million shares voted in favor of the deal while 4.4 million shares were voted in opposition. Holders representing another 545,000 shares cast votes in abstention.
Although the vote was lopsided in favor of the deal, Chairman Thornton F. Bradshaw and other RCA officials endured a three-hour stream of criticism from shareholders. Some contended the $66.50-a-share offer was far less than they should have received, while others deplored the end of independence for a company that has long been a technological leader.
None Speak in Favor
No shareholders spoke up in favor of the deal, which is due for completion in the third quarter.
Bradshaw noted that the offer price was 40% above the stock’s closing price on Dec. 5, the day GE first made the offer, and represented a substantial 16 times the company’s per-share earnings.
He suggested that the disgruntled shareholders might be overestimating the company’s prospects, noting that Standard & Poor’s, the credit rating agency, said in December that the financial performance of all RCA units had recently been “sub par.”
Noting that the company’s stock price was $15 when he joined the company in 1981, he said RCA could nonetheless not count on continued growth without General Electric’s financial and technical help. “We don’t see that 1986 is entirely a year we can count on,” he added.
