Dickey Broadcasting Company, owner of three Atlanta market AMs, will pay an $8,000 fine to the federal government as part of a consent decree. The Federal Communications Commission has been looking at several issues related to the transfer of control between the late Lew Dickey Sr. and a trust he created to hold the station licenses. The FCC will close its investigation as part of a consent decree agreed to by the company, which has also agreed to a three-year compliance plan to prevent a similar violation in the future.
According to the Media Bureau, Dickey created the trust and named his sons Lew Jr. and David as co-trustees in Aug. 2000. But the FCC said that Lew Sr. in reality controlled the trust as evidenced by his transfer of his 90% stake in Dickey Broadcasting Company (DBC) into the trust just a day after the entity was created. “In this manner he retained sole voting control of DBC,” Bureau chief Michelle Carey wrote in the order released Thursday.
That was only made clearer in Aug. 2010 when the trust was divided into six sub-trusts for each of Lew Sr.’s six children where each was supposed to have served as a trustee of their own separate sub-trust. But according to the FCC, the Dickey children weren’t aware of their status until shortly before Lew Sr. died in Nov. 2013. Just nine days before he passed away, the children took over the trust and Lew Sr.’s 10% equity was cancelled. In the years since the six Dickey children have jointly owned DBC.
The intra-family ownership structure, including the use of trusts, isn’t unheard of in an industry such as radio where families continue to own broadcast groups and pass stations on from one generation to the next. But in the case of Dickey Broadcasting Company, the FCC says the company failed to accurately report DBC’s ownership structure to the FCC.
The Dickey family told the Media Bureau the unauthorized transfers of control were inadvertent and due to Lew Sr.’s “complicated” estate planning. There also appears to have been a lack of communication between a father and his children. “[We] were not asked to take any actions as Trustees until shortly before my father’s death,” DBC president David Dickey told the FCC in a statement, adding, “Until recently it was my understanding that my father owned 99% of DBC.”
In agreeing to the consent decree and fine, the Dickey Broadcasting Company and the FCC both concede that moving forward with the investigation would be time-consuming for both the family and the Media Bureau.
DBC owns sports “680 The Fan” WCNN, sports “1340 The Fan” WIFN and “The Sports X 1230” WFOM in the Atlanta market as well as several translators that give the AMs outlets a place on the FM dial.