Sponsorship Identification Concerning A Lease Management Agreement

Here's one for those who know the FCC Rules a bit better than I do:

In the event a radio station chooses to do a Lease Management Agreement I am curious

Does the entity signing the Lease Management Agreement identify itself as the purchaser of radio station's airtime under the Agreement?

If so, how frequently must the entity signing the Lease Management Agreement be announced over the air

For example, if required, must the station, say, identify itself by saying "Programming provided by 'entity" perhaps as part of the hourly Legal ID.

David, thanks so much for the info.

The thing I don't know is if they have to identify themselves over the air as such under the Sponsor Identification rules.

If I sell an hour to a guy to do a real estate show I must identify the purchaser of the time. The FCC Rules don't seem to clarify between a commercial announcement and a program time buyer or a Lease Management Agreement purchaser.

When G&E Studios was 'buying time', the full broadcast day, they stated 'you're listening to programming from G&E Studios' at the top of the hour. I'm wondering if the same should apply to a LMA as far as identifying them as in 'Sponsorship Identification'.

Knowing of LMAs in my market, I never recall the entity on the LMA saying they were providing the programming but I admit I'm not sure what passes muster if it was required.

Thank you. That is my thinking as well. Anyway an LMA hits the Public File, so it is not like you're hiding anything.

DavidEduardo said:

My understanding is that the LMAer is not an advertiser buying an infomercial, but a tenant who is renting the station to program and sell to advertisers. Thus all the commercials have to have sponsor, but the LMAer does not because they are not sponsoring anything.

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That's how it was with the LMAs we were involved with. But we always had two people who were employees of the owner, with one having to be management. The rest of the staff were employees of the LMA. At one point, our 2 FMs had separate owners, both LMAed to the same operator, so we had 4 people employed by the 2 owners, the rest by the LMA.

We never mentioned anything about LMAs on the air.

JRH said:

That's how it was with the LMAs we were involved with. But we always had two people who were employees of the owner, with one having to be management. The rest of the staff were employees of the LMA. At one point, our 2 FMs had separate owners, both LMAed to the same operator, so we had 4 people employed by the 2 owners, the rest by the LMA.

We never mentioned anything about LMAs on the air.

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LMAs don't have to be mentioned on-air or passed by the FCC for approval. The documents do have to be in the station's public file.

The station licensee remains fully responsible for FCC compliance, as if they were actually running the station. This includes maintaining a "meaningful staff presence" at the stations main studio, responsibility for political content, verbage that gets "out of hand", sponsor identification and technical compliance. In practice, reality is usually much different.

There are several LMAs that I'm involved with, or am familiar with at arms-reach. In one case, the licensee owns the station's tower, which is also the home to two other stations. They provide full engineering for the site and LMA'd transmitter, with user access only to the audio processing and on/off control of the transmitter. Representing one of the tenants, I have full control of our transmitters, with access to the site owner's engineers as backup.

In another case, the licensee generally expect me (as a representative of the LMA) to handle maintenance, though they also have an available engineer and monitor the station's EAS system. As far as I can tell, they pay no attention to content and I can only assume they keep the public file in order.

In the other cases, I maintain full control of the stations' tower sites, even to the point that I have the only keys to the transmitter buildings. That certainly works for me, though I can see some FCC conflicts over positive control of the transmitter. Unfortunately, the licensee feels it's our baby and I get nowhere, trying to give them access. We're covered by a paper trail in that regard.

It can be a strange business!

It's standard practice to notify the Commission in writing, that a station is operating under an LMA arrangement, even if that arrangement is also included in the Public Inspection File. What you don't want, especially as a station licensee/owner, is a market competitor filing some sort of complaint against the LMA-leasee or the structure of the LMA, catching the Commission off guard. If the FCC has to investigate the complaint not knowing the LMA existed, they will go through everything with a fine tooth comb. The licensee obviously absorbs any legal representation costs and any risks associated with such an investigation.

Sending a letter is so much cheaper.

This may not be the best place to debate my question, Kelly, but I am curious.

My training was not to bother the FCC with issues that were outside the rules. If LMA notification isn't required, who would you send the letter to and why would they care?

Normally, the only time I see LMAs (outside of a public file) are when they're filed in CDBS as part of a sale.

Sure, happy to clarify: As I mentioned, the Commission will care should another licensee or member of the community objects-to, or makes allegations, right or wrong, that the 'tenant' is operating the station in lieu of a licensee, the licensee isn't acting within the rules, or the LMA somehow allows the tenant to effectively exceed the ownership cap in a market. Here's an example from my past: A group owner negotiates an LMA with a TV station licensee/owner located along the central coast in California. The station has been on the market for quite a while, so the licensee wants to cut expenses immediately by hand over operations to my company in the form of an LMA. This includes all Op-Ex and personnel costs. The licensee leaves one person on their payroll. In comes a major movie celebrity, let's call him Mr. E, who's wife just happens to be the anchor of the evening news of the LMA station. Mr. E had been negotiating with the station licensee for the past two years to purchase the station, and is really pissed that the licensee did an LMA with my company. Mr. E lawyer's-up and starts trying to rally California politicians who he feels there is influence to his cause. Politicians make inquiries to the FCC, angry letters and lawsuits are threatened. At the end of the month, the FCC responds back to Mr. E, that since my company had already informed and cleared the structure of the LMA with Commission Staff, before enacted and that after an investigation, found the station to be running in accordance with the legal terms of the LMA as filed.

Having your FCC attorney file a letter to the Commission alerting them to the LMA structure, including financial arrangements and expectations, can save you a lot headaches down the road.

Very good example. Clearly, I was taking a simplistic viewpoint.

Thanks!