After a brief review, the Dept. of Justice says it has no objections to Apollo Global Management’s proposed buyout of a majority stake in Cox Media Group’s radio portfolio. The DOJ has told the Federal Communications Commission that it is no longer asking for any action on the proposed deal to be delayed at the Commission while it reviews the potential foreign ownership implications of the transaction.
What triggered the hold was Apollo’s petition that had sought to exceed the 25% cap on foreign ownership. As Inside Radio reported last month, Apollo said in a petition to the FCC that although the firm’s current foreign ownership is below the 25% threshold, the Delaware-based company is treated as a foreign-controlled entity since, under the Commission’s foreign ownership analysis, the voting interests of its U.S. owners are held through a Cayman Islands entity. So it’s asking the FCC to exceed the 25% cap, arguing Apollo is not only based in the States but it’s controlled by three U.S. citizens: Scott Kleinman, John Suydam and David Sambur.
But that foreign ownership implication triggered a review by what’s known as Team Telecom. It is made up of experts from the Departments of Homeland Security, Defense and Justice which analyze any deals with foreign ownership implications. They had no problems with what they saw. “Based on the information provided to the agencies by the applicant and analysis by the agencies of potential national security, law enforcement, and public safety issues, the agencies hereby notify the Commission that they have no objection to the application,” said Lee Licata, an attorney in the DOJ’s National Security Division, in a letter sent to the FCC this week. It means just the FCC review process stands in the way of Apollo Global Management acquiring a majority 77% stake in Cox Media Group. Cox Enterprises would retain a 23% minority stake.
In a $500 million deal announced in June, Apollo seeks to buy 50 radio stations from Cox Media Group across 11 markets, including Atlanta, Miami, Houston, Tampa, Jacksonville, San Antonio, Tulsa, and Nassau-Suffolk, NY. The deal also includes Cox’s national TV rep firm CoxReps and Cox’s Washington, D.C. news bureau operations. Apollo previously struck a $3.1 billion deal to buy Cox’s television station group, including the radio-TV-newspaper combination in Dayton, OH. In order to comply with FCC ownership limits, two stations—alternative “97X” WSUN in Tampa and CHR “Power 95.3” WPYO in Orlando—will be placed in the Elliot Evers-run CXR Stations Trust for sale.