**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | *  | File Nos. BTCCT-20070514AOR  |
|                                  | *) | *et al*.                     |
| **Paxson Management Corporation  | ** |                              |
| and Lowell W. Paxson**           |    |                              |
|                                  | *  |                              |
| (Transferors)                    | *) |                              |
|                                  | ** |                              |
| and                              |    |                              |
|                                  | *  |                              |
| **CIG Media LLC**                | *) |                              |
|                                  | ** |                              |
| (Transferee)                     |    |                              |
|                                  | *  |                              |
| For Transfer of Control of ION   | *) |                              |
| Media Networks, Inc., and        | ** |                              |
| Certain Subsidiaries, Licensees  |    |                              |
| of Station KPPX(TV), Tolleson,   | *  |                              |
| Arizona, *et al.*                | *) |                              |
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**MEMORANDUM OPINION AND ORDER**

**Adopted: December 30, 2007 Released: December 31, 2007**

By the Commission: Commissioner Copps concurring and issuing a
statement.

# INTRODUCTION

1.  Before the Commission are the applications listed in the attached
    Appendix that seek to transfer control of licensee subsidiaries of
    ION Media Networks, Inc. ("ION"),[^1] from Lowell W. Paxson and
    Paxson Management Corporation ("PMC") to CIG Media LLC ("CIG
    Media"). ION is the direct or indirect parent of licensee
    subsidiaries that hold 59 full-service broadcast television licenses
    and associated low-power, Class A, and television translator
    licenses. ION stockholders Gradient Partners, L.P., Gradient OC
    Master, Ltd., Caspian Capital Advisors, LLC, River Vail Holdings,
    L.L.C., Latigo Master Fund, Ltd., Par-Four Master Fund, Ltd., and
    Southpaw Credit Opportunity Master Funds LP (the "Petitioners"),
    filed a consolidated petition to deny on June 18, 2007, which they
    supplemented on June 29, 2007.[^2] ION, CIG Media, and NBC
    Universal, Inc. ("NBC") filed separate oppositions on July 11, 2007.
    For the reasons set forth below, we deny the petition to deny and
    grant the applications.

# BACKGROUND

## The Transaction

2.  Initially, ION's capitalization consisted of two classes of common
    stock, both of which carried voting rights, and four classes of
    preferred stock, one of which carried voting rights. Lowell Paxson
    holds voting control through his ownership of ION's Class B common
    stock, which carries "super-voting" rights entitling him to an
    approximately 52.3% voting interest. On November 7, 2005, PMC also
    entered into a PMC Management and Proxy Agreement with the purpose
    of placing more operational control over the individual stations
    with Lowell Paxson.[^3] Lowell Paxson has a 99% voting and equity
    interest in PMC. Though the proposed transaction and
    recapitalization effort will occur in several stages, after
    consummation, CIG Media, which currently owns one class of ION
    nonvoting stock, will have acquired Lowell Paxson's control stock.
    It will then terminate the PMC Management and Proxy Agreement, and
    take the company private.

3.  CIG Media is ultimately controlled by Kenneth Griffin, Todd Gjervold
    and Joe Russell. Equity ownership of CIG media is divided between
    two private equity funds -- Citadel Wellington, LLC ("Citadel
    Wellington"), and Citadel Kensington Global Strategies Fund, Ltd.
    ("Citadel Kensington"). Both Citadel Wellington and Citadel
    Kensington operate as insulated, limited members of CIG Media,[^4]
    while management and voting control of Citadel Wellington, Citadel
    Kensington, and CIG Media rests with the Citadel Limited
    Partnership. The Citadel Investment Group, L.L.C. and its 100%
    direct and indirect owner, Kenneth Griffin, serve as General Partner
    of the Citadel Limited Partnership, while the Citadel Limited
    Partnership is otherwise managed by its Portfolio Managers Todd
    Gjervold and Joe Russell.

4.  In 1999 NBC entered into an investment relationship with Paxson,
    which was reflected in three agreements: an Investment Agreement; a
    Stockholder Agreement; and a Warrant and Call Agreement. These
    agreements were filed with the Commission pursuant to Section
    73.3613 of the Commission's rules.[^5] As a result of the
    agreements, NBC acquired an economic interest in Paxson, reflected
    originally in a separate class of nonvoting preferred stock that was
    convertible to voting common stock. NBC also acquired an option to
    purchase the control stock held by Lowell Paxson, which could not be
    exercised unless and until the Commission's multiple ownership rules
    were modified. In addition to the financial relationship between NBC
    and Paxson, the 1999 Investment Agreement contained provisions
    setting forth certain aspects of the corporate governance of Paxson.
    Under Section 4.1 of the Investment Agreement, NBC held approval
    rights over certain Paxson corporate actions. As set forth in the
    1999 Stockholder Agreement, NBC also had the right to nominate three
    members to the Paxson Board of Directors.

5.  In 2001, Paxson initiated arbitration alleging that NBC's planned
    acquisition of Telemundo Communications Group, Inc. ("Telemundo")
    violated the 1999 agreements. Paxson also filed a Petition to Deny
    and Request for Declaratory Ruling opposing the transfer of control
    applications, in which it alleged that "certain actions by the
    NBC-nominated members of Paxson's board of directors have violated
    certain terms of their 1999 agreements and may have caused
    attribution of Paxson's television stations to NBC contrary to the
    multiple ownership rules."[^6] The Commission granted in part the
    Request for Declaratory Ruling, and admonished NBC for the conduct
    of its nominees after their election.[^7]

6.  In 2005, ION and NBC restructured their investment relationship.
    Among other changes to the relationship, NBC "waived a number of its
    rights under the 1999 agreements," which included significantly
    limiting those corporate actions requiring prior NBC approval.[^8]
    Lowell Paxson also stepped down as director, Chairman and Chief
    Executive Officer of ION, and was replaced by Brandon Burgess, who
    resigned from his employment with NBC to take the position.[^9] Mr.
    Burgess was subsequently appointed to the ION Board of Directors.

7.  In connection with the proposed transaction, the parties have
    entered into five primary agreements: (1) a Master Transaction
    Agreement describing the recapitalization process, in particular the
    process by which CIG Media will acquire Lowell Paxson's
    shares;[^10] (2) a Call Agreement between CIG Media and a subsidiary
    of NBC granting the NBC subsidiary an option to acquire, subject to
    Commission approval, the shares CIG Media will acquire from Lowell
    Paxson as part of the proposed transaction; (3) a second Call
    Agreement granting the NBC subsidiary an option to purchase
    additional shares held by Lowell Paxson; (4) a Stockholders'
    Agreement governing the corporate governance of the post-transaction
    ION, the relevant provisions of which will take effect after
    consummation; and (5) a separate Put/Call Agreement, whereby CIG
    Media will, under certain circumstances, have the right to put its
    ION shares to NBC, and NBC will have the right to call those ION
    shares held by CIG Media. Pursuant to the May 4, 2007, Stockholders'
    Agreement, NBC will have the right to nominate two members to the
    ION Board of Directors once its voting interest reaches a certain
    threshold. While originally part of the 2007 Stockholders'
    Agreement, ION notified the Commission on November 26, 2007, that it
    had removed a related provision contained in Section 3.1(b)(iii)
    that provided NBC with the contingent right to name two board
    observers should it not be entitled to nominate members to the ION
    Board of Directors. The 2007 Stockholders Agreement also restored
    several of the minority investor protection rights relinquished
    in 2005. Pursuant to the November 26, 2007, amendment, ION revised
    Sections 5(d), (f), and (m) of the May 4, 2007, Stockholders'
    Agreement. Under the revised Sections 5(d) and (m), ION does not
    need written approval from NBC prior to entering into individual
    station agreements relating to the use of the digital spectrum, or
    entering into joints sales, local marketing and similar agreements
    relating to a certain proportion of ION's stations. Under the
    revised Section 5(f), NBC will have the right to approve the sale of
    individual ION station sales, if the station is located in one of
    the 10 largest DMAs, and has a fair market value of 10 percent or
    greater than the book value of ION's consolidated tangible assets.

## Petitioner's Allegations

8.  The Petitioners filed a request to enjoin the transaction in the
    Court of Chancery of the State of Delaware in connection with a suit
    challenging an exchange offer involving their shares. The Court
    denied the request for injunction on June 10, 2007, but the civil
    suit remains pending. Petitioners allege both here and in the
    pending civil suit that the transaction is "designed to forcibly
    extract from \[Petitioners\] hundreds of millions of dollars, give
    that extracted value to \[CIG Media\] and NBC, and thereby force
    Petitioners to pay for the acquisition of \[ION\] by \[CIG Media\]
    and NBC."[^11]

9.  The Petitioners argue that the rights granted NBC in the May 4,
    2007, Stockholders' Agreement will render ION's television stations
    attributable to NBC, thus resulting in violation of the Section
    73.3555 of the Commission's rules (the "local television ownership
    rule") in several markets.[^12] They contend, more specifically,
    that the rights contained in the 2007 Stockholders' Agreement exceed
    the limits the *2002 Telemundo Order* placed upon the NBC/Paxson
    relationship. The Petitioners state that NBC is attempting here what
    it could not do in 2002, namely, take control of ION.

10. The Petitioners cite, in particular, NBC's right to nominate two
    members to the ION Board of Directors. They state that, "\[w\]hile
    there is no assurance that \[NBC's\] nominees will be elected, there
    is no assurance that they will [not]{.underline} be elected."[^13]
    They maintain that NBC will use its financial influence, and right
    to approve certain corporate actions, to ensure their nominees'
    election. Further, they note that election of NBC employees to the
    Paxson board was a critical factor in the *2002 Telemundo Order*,
    and that Section 3.1(b)(ii) of the 2007 Stockholders' Agreement only
    precludes the nomination of NBC employees "until such time as
    \[NBC\] determines, in its reasonable discretion, that the
    Communications Act permits \[NBC\] to nominate an employee of
    \[NBC\] or any of its affiliates to be an \[ION Director.\]"[^14]
    They argue that such language improperly usurps the "FCC's role as
    arbiter of what is acceptable under the attribution rules."[^15]
    They also contend that Brandon Burgess is not independent, and cite
    NBC's contingent right to name two board observers, noting that
    board observers were "at each of the meetings in 2007 at which
    alternative recapitalization proposals were discussed."[^16] As
    noted above, however, the right to name board observers been removed
    from the 2007 Stockholders' Agreement.

11. In addition to allegedly holding an attributable interest in ION,
    the Petitioners argue that "CIG \[Media\] and NBC have orchestrated
    a premature, unauthorized transfer of control of \[ION\] through a
    number of strategies."[^17] First, the Petitioners state "that NBC
    will transfer its call rights to CIG for no apparent comparable
    monetary consideration, other than reciprocal call rights."[^18] The
    Petitioners claim that this transaction violates business logic and
    sound fiduciary judgment because ION will incur \$580 million in new
    long term debt - which could swell to \$650 million in new long term
    debt depending on the outcome of the exchange transaction with ION's
    preferred shareholders - in exchange for only \$100 million in new
    money. Second, the Petitioners challenge the new call rights granted
    NBC, in particular the fact that NBC paid 80% of the exercise price
    as consideration. Finally, the Petitioners claim that the 2005
    agreements between ION and NBC resulted in a change of control
    because ION is allegedly obligated by the agreements to support any
    NBC-sponsored transaction.

12. In its supplement, the Petitioners challenge NBC's limited veto
    right over ION's budget items. They also argue for the first time
    that CIG Media has acquired unauthorized control over ION. The
    Petitioners cite Section 10.03 of the 2007 Master Transaction
    Agreement, in which CIG Media allegedly has the current right to
    designate two members of the ION board of directors, and is further
    allegedly entitled to designate a director to fill any vacancy
    resulting from the departure of representatives of certain classes
    of stock. Petitioners also allege that Section 3.3 of the November
    7, 2005, Amended and Restated Stockholder Agreement among Paxson
    Communications Corporation, Lowell Paxson, and NBC also required Mr.
    Paxson to vote his "control stock" for directors in the same manner
    as the Class A stock, 90% of which was held by CIG Media at the time
    the supplement was filed. Consequently, the Petitoners argue that
    CIG Media presently has the power to elect all members of the ION
    Board of Directors. The Petitioners cite provisions in the 2007
    Master Transaction Agreement that require CIG and NBC to keep each
    other informed about the status of any stockholder litigation,
    require both CIG and NBC to consent to the settlement of that
    litigation, and provide both parties with the right to jointly
    participate in the defense of any stockholder litigation.

13. ION, CIG Media, and NBC argue in their respective oppositions that
    the Petitioners' allegations stem from a private business dispute
    among ION shareholders of a type that the Commission has long stated
    is best resolved by courts of competent jurisdiction. They contend
    that, contrary to the Petitioners' allegations, the various
    agreements entered into as part of the proposed transaction have
    been structured to comply with the *2002 Telemundo Order*. They
    maintain, for instance, that the *2002 Telemundo Order* did not
    prohibit NBC's right to nominate two members to the ION Board of
    Directors so long as the nominees are neither employees or agents of
    NBC.[^19] They further maintain that the appointment of Mr. Burgess
    as CEO of ION and member of the ION Board of Directors complies with
    the *2002 Telemundo Order* because Mr. Burgess "completely severed
    his employment and financial relationship with \[NBC\] and pledged
    to remain independent from \[NBC\] in all ways."[^20] NBC argues, in
    particular, that Section 3.1(b)(ii) of the 2007 Stockholders'
    Agreement simply permits it to respond to a change of Commission
    rules, is standard in such agreements, and does not usurp the
    Commission's role in determining what interests are attributable.
    ION, CIG Media, and NBC also contend that the Commission
    specifically approved NBC's right to approve certain ION corporate
    actions contained in Section 5 of the May 2007 Stockholders'
    Agreement. They state, in particular, that the Commission, in the
    *2002 Telemundo Order*, "approved a budget approval right that
    provided for a default to the prior year's budget in the event of a
    dispute."[^21] NBC argues, in particular, that the budget approval
    right contained in the 2007 Stockholders' Agreement is even more
    limited than the one considered in 2002 since it does not permit NBC
    to reject an entire budget. ION, CIG Media, and NBC also argue that
    "the mere right to consent to settlement of litigation has been
    approved by the Commission as a permissible minority shareholder
    right that does not evince *de facto* control."[^22]

14. ION, CIG Media, and NBC argue that whether the proposed transaction
    violates business logic or sound fiduciary judgment is not within
    the jurisdiction of the Commission to determine. They maintain that,
    in any case, a special committee of independent directors has
    already approved the transaction. ION and NBC argue that NBC's
    option to acquire CIG Media's control shares is permissible since
    the Commission has long held that unexercised options do not result
    in attribution. They also argue that the up-front payment of 80% of
    the option price is not indicative of an unauthorized transfer of
    control and does not otherwise violate Commission rules so long as
    the payment combined with NBC's other investments in ION comply with
    the Equity/Debt Plus ("EDP") attribution threshold.[^23] NBC argues
    that the Petitioners have not alleged that the consideration paid
    for the option would result in attribution under the EDP attribution
    standard.

15. With respect to whether CIG Media has already acquired *de facto*
    control of ION, ION, CIG Media, and NBC all argue that the
    transaction has been structured so that control will not transferred
    until CIG Media closes on its acquisition of Lowell Paxson's control
    shares. They argue that under the 2007 Master Transaction Agreement,
    CIG Media can at most place two directors on the ION Board of
    Directors prior to acquisition of Lowell Paxson's control shares.
    They argue that this language in the 2007 Master Transaction
    Agreement supersedes the November 7, 2005, Amended and Restated
    Stockholder Agreement requiring that Lowell Paxson vote his shares
    in the same manner as the majority of Class A common stock. Instead,
    NBC argues that this provision of the November 7, 2005, agreement
    was meant to ensure that Lowell Paxson followed through on the
    commitments undertaken to restructure NBC's relationship with ION.
    Regardless, ION, CIG Media, and NBC all argue that PMC retains
    separate voting and operational control of ION's licensee
    subsidiaries as a result of the 2005 PMC Management and Proxy
    Agreement, and that this agreement will not be transferred until
    consummation of the instant transaction.

# DISCUSSION

## Standard of Review

16. Section 310(d) of the Act provides that no station license shall be
    transferred or assigned until the Commission, upon application,
    determines that the public interest, convenience, and necessity will
    be served thereby. In making this assessment, the Commission must
    first determine whether the proposed transaction would comply with
    the specific provisions of the Act,[^24] other applicable statutes,
    and the Rules.[^25] If the transaction would not violate a statute
    or rule, the Commission considers whether it could result in public
    interest harms by substantially frustrating or impairing the
    objectives or implementation of the Act or related statutes.[^26]
    The Commission then employs a balancing process, weighing any
    potential public interest harms of the proposed transaction against
    any potential public interest benefits.[^27] The applicants bear the
    burden of proving, by a preponderance of the evidence, that the
    proposed transaction, on balance, would serve the public
    interest.[^28]

17. In reviewing the petition to deny under the public interest
    standard, the Commission applies a two-step analysis. The Commission
    must first determine whether the petition contains specific
    allegations of fact sufficient to show that granting the application
    would be *prima facie* inconsistent with the public interest.[^29]
    This first step "is much like that performed by a trial judge
    considering a motion for directed verdict: if all the supporting
    facts alleged in the \[petition\] were true, could a reasonable
    factfinder conclude that the ultimate fact in dispute had been
    established."[^30] If a petition meets this first step, the
    Commission must determine whether, "on the basis of the application,
    the pleadings filed, or other matters which \[the Commission\] may
    officially notice," the petitioner has raised a substantial and
    material question of fact as to whether granting the application
    would serve the public interest.[^31] We find that the Petitioners
    have failed to raise a substantial and material question of fact as
    to whether NBC has acquired an attributable interest in ION. We
    further find that the Petitioners have failed to raise a substantial
    and material questions of fact as to whether NBC and/or CIG Media
    have prematurely acquired control over ION.

## Attribution

18. The Commission's attribution rules seek to identify those interests
    in or relationships to licensees that confer on their holders a
    degree of influence or control such that the holders have a
    realistic potential to affect the programming decisions of licensees
    or other core operating functions.[^32] Such interests, which are
    set forth both in Note 2 to Section 73.3555 of the Commission's
    rules and Commission precedent, [^33] will be attributed to their
    holders and deemed cognizable for purposes of determining compliance
    with the Commission's multiple ownership rules. In this case, NBC
    acknowledges that attribution of its interest in ION would result in
    violation of the Commission's broadcast television multiple
    ownership rule in multiple markets.[^34] For the reasons below, we
    conclude that neither NBC's existing interest in ION nor the
    interests in ION that NBC would obtain as a result of the proposed
    transfers are attributable to NBC for purposes for the Commission's
    multiple ownership rules.

### Approval Rights Over Certain Corporate Actions

19. In the past, the Commission has generally permitted nonattributable
    investors to hold certain minority investor protection rights,
    including the right to approve certain corporate matters that would
    alter, fundamentally, the nature and value of their investments.
    Approval rights permitted in the past have included such fundamental
    corporate matters as issuance of stock;[^35] amendments to the
    certificate of incorporation;[^36] acquisition or disposition of
    assets constituting more than 10% of the company's market or book
    value;[^37] merger, sale, liquidation, bankruptcy or winding-up of
    an entity;[^38] and certain transactions outside the ordinary course
    of business.[^39] Permitting a certain level of minority investor
    protection without implicating the multiple ownership rules is
    generally in the public interest because it encourages investment in
    broadcast properties, and thus enhances the ability of stations to
    provide better programming to the public. It also provides investors
    with the ability to invest in properties that they would not be able
    to own outright. However, as stated in previous cases, minority
    investor protections, in particular the right to approve certain
    corporate actions, must be "narrowly circumscribed,"[^40] so that
    the investor does not "become involved in the overarching
    policymaking activities" of the entity or the "day-to-day operations
    of \[its\] stations."[^41]

20. Section 5 of the May 4, 2007, Stockholders' Agreement between ION,
    CIG Media, and NBC, as revised on November 26, 2007, states that ION
    must obtain the prior written approval of NBC and CIG Media before
    it: (1) adopts any shareholders rights plan or enters into any
    material agreement that would prevent the acquisition of stock by
    NBC or CIG Media; (2) takes any action that would cause NBC or CIG
    Media to have an attributable interest in a broadcast facility,
    newspaper, or other communications facility licensed by the FCC; (3)
    adopts an annual budget, with the proviso that the prior year's
    budget will be used if the parties cannot reach agreement; (4)
    amends the certificate of incorporation or by-laws; (5) sells any
    station in the top 10 DMAs, provided that the station has a fair
    market value of 10 percent or more of the book value of ION's
    consolidated tangible assets; (6) sells assets during a 1-year
    period that constitute more than 20% of ION's book value, acquires
    assets during a 1-year period that constitute more than 10% of ION's
    book value, or enters into any merger where ION is not the surviving
    entity; (7) issues new stock, subject to certain exceptions; (8)
    splits, combines or reclassifies stock in a manner adverse to NBC or
    CIG Media; (9) enters into certain employment agreements; (10)
    increases the size of the board; and (11) files for bankruptcy or
    winds up the company.

21. We find the provisions contained in Section 5 of the May 4, 2007,
    Stockholders' Agreement, as listed above, mirror rights the
    Commission has previously approved. In particular, a budget approval
    right similar to the one contained in the 2007 Stockholders'
    Agreement was challenged by Paxson in its 2001 Petition to Deny and
    Request for Declaratory Ruling. As was the case in the *2002
    Telemundo Order*, we find the 2007 budget approval right does not
    result in attribution of NBC's interest since, as was the case for
    the 1999 agreements, it provides for the use of the prior year's
    budget in case of disagreement between NBC and Paxson/ION.[^42] To
    the extent any of the rights named above have not been specifically
    addressed in previous cases, we find that they are sufficiently
    "circumscribed," so as not to insert NBC into the overarching
    policymaking activities of ION or the day-to-day operations of its
    stations.

### Nomination Right

22. Pursuant to Section 3.1(b)(ii) of the 2007 Stockholders' Agreement,
    NBC has the right to nominate two members to the ION Board of
    Directors contingent upon consummation of CIG Media's acquisition of
    Lowell Paxson's control shares, and specifically conditioned upon
    the nominee not being an employee of NBC or any of its subsidiaries
    and affiliates. We conclude that this right complies with the *2002
    Telemundo Order*, and is consistent with non-attributable status. In
    the *2002 Telemundo Order*, the Commission stated that "the
    placement of NBC employees on Paxson's board as well as the
    subsequent actions of these directors resulted in NBC having an
    attributable interest in Paxson."[^43] The Commission, consistent
    with past precedent addressing identical rights, did not find that
    the nomination right *per se* resulted in attribution. As stated by
    NBC in its opposition, NBC's nomination right does not ensure that
    its nominees will be elected to the board. The *2002 Telemundo
    Order* did, however, caution that future directors of ION "not be
    NBC employees or agents but persons who would reasonably be expected
    to act independently in all future matters."[^44]

23. With respect to Mr. Burgess's ongoing role with ION, the evidence of
    record indicates that Mr. Burgess severed his employment
    relationship with NBC prior to the 2005 restructuring of the
    NBC/Paxson relationship. As noted above, Mr. Burgess became a member
    of the Paxson board and was selected as CEO of Paxson concurrent
    with the 2005 restructuring, and he will retain these positions
    following consummation of the proposed transaction. In the *2002
    Telemundo Order*, the Commission noted that Mr. Burgess "sent a
    letter, on NBC letterhead, to Paxson demanding certain concessions
    be made with respect to the original agreements between the
    companies."[^45] The Commission stated that "\[t\]he fact that \[Mr.
    Burgess\] was speaking on behalf of NBC about high-level business
    matters demonstrates that Mr. Burgess was acting as a senior NBC
    executive protecting NBC's interests and not as an independent
    member of Paxson's board."[^46]

24. In *BBC License Subsidiary, L.P. (WLUK-TV)*, the Commission
    permitted a senior employee of Fox Television Stations, Inc. ("Fox")
    to terminate his employment relationship and take an executive
    position with a separate broadcast licensee in which Fox held a
    substantial interest.[^47] The Commission determined, conditioned
    upon the outcome of the then-pending review of the Commission's
    broadcast attribution rules, that the former employer could take the
    position without rendering Fox's interest attributable despite Fox's
    25% nonvoting stock interest with an option to acquire a 50% voting
    stock interest, its present right to vote on certain extraordinary
    corporate actions, and the station's affiliation agreement with the
    Fox Television Network.[^48] Neither the Commission's 1999 revision
    of the attribution rules, nor subsequent precedent, prohibits Mr.
    Burgess, as an ex-employee of NBC, from taking a position with ION.
    NBC states, specifically, that the 2005 Master Transaction Agreement
    "between \[NBC\] and ION provided (and continues to provide) that
    neither Mr. Burgess (nor any member of his immediate family or
    entity owned or controlled by him) would be an agent of \[NBC\] or
    any subsidiary or affiliate of \[NBC\]; that there were, and would
    be, no 'commitments, arrangements, or understandings, written or
    oral,' between Mr. Burgess and \[NBC\] pursuant to which Mr. Burgess
    would have 'any legal or financial obligation to \[NBC\];' and that
    Mr. Burgess would not be 'entitled to receive now or in the future
    from \[NBC\]...any compensation or benefits of any kind, or other
    valuable consideration (including but not limited to any offer of
    future positions with \[NBC\] or any of its subsidiaries or
    affiliates)' beyond his severance, vested pension benefits, and the
    like."[^49] Thus, we do not believe the fact that Mr. Burgess was a
    former employee, whether considered in isolation or in combination
    with NBC's other interests, results in attribution of ION's stations
    to NBC. NBC has denied that Mr. Burgess's appointment as CEO was a
    condition of the 2005 restructuring or the 2007 agreements, and
    review of the agreements does not indicate otherwise.

25. Further, the Petitioners have not provided specific evidence of the
    kind of conduct that concerned the Commission in the *2002 Telemundo
    Order*. Apparently, ION has taken steps to prevent any conflict of
    interest resulting from Mr. Burgess's former position with NBC. Mr.
    Burgess, for instance, is prohibited from "participating in any
    tender offer for company shares commenced by an affiliate of his
    former employer."[^50] Thus, not only do we find that Mr. Burgess is
    not an agent of NBC, but that his employment does not violate the
    Commission's admonition in the *2002 Telemundo Order* that any NBC
    nominees be "reasonably expected to act independently in all Paxson
    matters."[^51] Our determination, however, is based on the facts
    before us, and we reserve the right to revisit Mr. Burgess's role
    should new facts come to our attention.

26. The Commission, in the *2002 Telemundo Order*, made clear that
    nomination of an NBC employee or agent to the ION Board of Directors
    will result in attribution of NBC's interest. Both NBC and ION are
    obligated to comply with the *2002 Telemundo Order* until either the
    Commission or a court of competent jurisdiction reverses it,
    regardless of language contained in the 2007 Stockholders'
    Agreement. Section 3.1(b)(ii) of the 2007 Stockholders' Agreement
    states that "\[f\]or the avoidance of doubt....no individual
    nominated by \[NBC\] shall be an employee of \[NBC\] or any of its
    affiliates." We do not agree that the reference to NBC's reasonable
    discretion in Section 3.1(b)(ii) usurps the Commission's regulatory
    role. Instead, this provision appears to protect NBC's rights to
    nominate its employees to the ION board in the event that the
    Commission alters the policy set forth in the *2002 Telemundo
    Order*.

### Options

27. As noted above, NBC has entered into two Call Option Agreements and
    one Put-Call Agreement in connection with the proposed transaction.
    We do not find that these agreements, whether considered together or
    in isolation, or the price paid as consideration for these
    agreements, results in attribution of ION's stations to NBC. The
    Commission has held that unexercised options do not result in
    attribution since such interests do not provide the interest holder
    with the incentive or means of exerting influence over the core
    operations of a licensee.[^52] The fact that NBC paid 80% of the
    exercise price as consideration for the option does not, in itself,
    result in attribution of NBC's interest.[^53] The Commission does,
    however, include the amount of consideration paid for the option in
    determining whether the option holder's interest is attributable
    under the EDP attribution standard.[^54] Under the EDP standard, the
    Commission will attribute financial interests amounting to over 33%
    of the total assets of a mass media entity where the interest holder
    is either a major program supplier to the entity or a same-market
    media entity.[^55] In this case, the Petitioners do not allege that
    the consideration, along with NBC's other investment in ION will
    meet the EDP threshold of 33% of ION's total assets. In addition, on
    June 25, 2007, CIG Media filed an amendment to the applications
    setting forth in detail the post-consummation capitalization of ION,
    and certifying that the post-consummation EDP interest of NBC will
    be 15.91%.[^56]

## *De Facto* Control 

28. Lowell Paxson currently holds *de jure* control over ION as a result
    of his ownership of Class B common stock, and his ownership of PMC.
    Legal control of ION, therefore, will not pass to CIG Media until it
    consummates its acquisition of the control stock and terminates the
    2005 PMC Management and Proxy Agreement. In assessing *de facto*
    control the Commission looks beyond legal title and financial
    interests to determine who controls the policies governing
    programming, personnel and finances.[^57] An unauthorized transfer
    of *de facto* control would violate Section 310(d) of the Act.[^58]

29. The Petitioners have not provided specific evidence of conduct
    indicating that NBC or CIG Media actually determine ION's policies
    governing programming, personnel and finances. NBC's financial
    investment does not, in itself, demonstrate control over ION's basic
    operating policies. ION states that a Special Committee made up of
    independent members of the ION Board of Directors ultimately chose
    the proposed transaction over other alternative recapitalization
    offers.[^59] ION further states that the Special Committee "retained
    its own independent financial and legal advisors," and that the
    step-by-step process by which the Special Committee solicited and
    evaluated competing offers was disclosed in a Section 14D-9
    Solicitation/Recommendation Statement filed with the SEC. NBC's
    right to consent to settlement of shareholder litigation is not
    evidence of *de facto* control. The Commission has long recognized
    such a right as a permissible minority shareholder protection.[^60]

30. We further do not agree that CIG Media has prematurely acquired
    control over ION. CIG Media's current right to designate two members
    to the ION Board of Directors does not indicate a transfer of
    control since the board will have a total of 13 members. The
    Petitioners have not alleged that the right to fill any vacancies
    prior to closing will result in CIG Media designating a majority of
    the members of the ION board. The Petitioners cite Section 3.3 of
    the November 7, 2005, Amended and Restated Stockholder Agreement
    among Paxson Communications Corporation, Lowell Paxson, and NBC as
    support for both its contention that NBC has acquired control, and
    its alternative allegation that CIG Media has acquired control. With
    respect to NBC, the Petitioners argue that the provision forces
    Lowell Paxson to vote his control shares for any NBC-sponsored
    transaction. The Petitioners argue that it also gives CIG Media the
    current right to designate all members to the Board of Directors. It
    appears, however, that this provision is limited to circumstances
    pertaining to the 2005 restructuring, and that the 2007 Master
    Transaction Agreement limiting CIG Media's designation right to two
    members supersedes any contrary provisions in the 2005 agreement.
    The Petitioners have provided no evidence that NBC used this
    provision to force ION into a transaction that Lowell Paxson, or the
    ION Board of Directors, opposed.

## Alleged Violations of Corporate Law and Fiduciary Duties. 

31. The Petitioners' allegation that they will be forced to pay for the
    acquisition of ION by CIG Media through a disadvantageous exchange
    offer, that the transaction violates sound business logic or
    fiduciary judgment, and that the ION Board of Directors ignored more
    attractive competing offers are all aspects of the financial and
    business dispute before the Court of Chancery of the State of
    Delaware. Whether or not the transaction violated the rights of
    shareholders is a question of state law and private contract,
    matters which the Commission has historically and consistently left
    to local courts of appropriate jurisdiction.[^61] These allegations
    fail to demonstrate that grant of the applications would be *prima
    facie* inconsistent with the public interest. The Commission, in
    ruling on the instant applications, is solely determining whether
    grant would comply with the Commission's rules, and would otherwise
    serve the public interest, convenience, and necessity. Our consent
    does not require consummation prior to resolution of the
    Petitioners' civil suit and, therefore, in no way prejudices the
    Petitioners' rights.

## Pending Renewals

32. On September 1, 2004, the Office of Communication of the United
    Church of Christ, Inc., and the Center for Digital Democracy
    ("UCC"), filed a Petition to Deny opposing the license renewal
    applications of Station WPXW(TV), Manassas, Virginia, licensed to
    ION subsidiary Paxson Washington License, Inc. ("Paxson
    Washington"), and Station WDCA(TV), Washington, D.C., licensed to
    Fox Television Stations, Inc. UCC argues that the program *Miracle
    Pets* aired by Station WPXW(TV) during significant portions of the
    previous license term fails to qualify as programming specifically
    designed to serve the educational and informational needs of
    children (core programming), and that, therefore, Paxson Washington
    has failed to comply with the processing guidelines of Section
    73.671 of the Commission's rules, and has otherwise failed to
    demonstrate compliance with the Children's Television Act of 1990
    ("CTA").[^62] Station WPXW(TV)'s Form 398 Children's Television
    Programming Report for the quarter ending September 30, 2002,
    described *Miracle Pets* as a "one-hour live-action program"
    depicting "short reenactments of pets/animals doing heroic,
    extraordinary acts," which provides children with "positive role
    models, prosocial values and the importance of taking care of the
    pets in their lives."[^63] *Miracle Pets* was aired by Station
    WPXW(TV) from the first quarter of 2001 to the third quarter of
    2005.

33. In the past, the Commission has stated that "in multi-station
    transactions, it will grant the transfer of control application
    while \[a\] renewal application is pending as long as there are no
    basic qualification issues pending against the transferor or
    transferee that could not be resolved in the context of the transfer
    proceeding, and the transferee explicitly assents to standing in the
    stead of the transferor in the pending renewal proceeding."[^64] CIG
    Media has agreed "to succeed to the position of Transferors in any
    pending renewal applications and assume responsibility for any
    actions to be taken by the Commission in those proceedings."[^65] We
    note that UCC's allegations involve only one of the 60 full-service
    television stations that are subject to the proposed transaction,
    and that the Station WPXW(TV) renewal is the only one that remains
    outstanding. Without reaching a conclusion as to whether such
    programming qualifies as "core programming," we find that UCC's
    allegations do not raise a qualification issue involving Paxson
    Washington that would preclude action on the instant transfer of
    control applications. UCC has provided no evidence that Paxson
    Washington has engaged in intentional misrepresentation.

# CONCLUSION

34. We have reviewed the proposed merger and related pleadings and
    conclude that grant of the applications will comply with the
    Commission's rules. We conclude that the applicants are fully
    qualified and that grant of above-captioned applications, will serve
    the public interest, convenience, and necessity.

## V. ORDERING CLAUSES {#v.-ordering-clauses .unnumbered}

35. **IT IS ORDERED**, That the petition to deny filed by Gradient
    Partners, L.P., Gradient OC Master, Ltd., Caspian Capital Advisors,
    LLC, River Vail Holdings, L.L.C., Latigo Master Fund, Ltd., Par-Four
    Master Fund, Ltd., and Southpaw Credit Opportunity Master Funds LP
    **IS DENIED**.

36. **IT IS FURTHER ORDERED**, That the applications listed in the
    attached Appendix seeking consent to transfer control of ION Media
    Networks, Inc., from Lowell W. Paxson and Paxson Management
    Corporation to CIG Media LLC, **ARE** **GRANTED**.

#  FEDERAL COMMUNICATIONS COMMISSION {#federal-communications-commission .unnumbered}

Marlene H. Dortch

Secretary

**APPENDIX**

**Authorizations to be Transferred from Ion Media Networks, Inc., to CIG
Media LLC**

+-------------+--------------------+----------------+-----------------+
| *           | **Call Sign(s)**   | **Facility ID  | **File Number** |
| *Licensee** |                    | Number(s)**    |                 |
+-------------+--------------------+----------------+-----------------+
| America 51, | KPPX(TV),          | 26655          | BT              |
| LP          | Tolleson, AZ       |                | CCT-20070514AOR |
+-------------+--------------------+----------------+-----------------+
| Ocean State | WPXQ(TV), Block    | 50063          | BT              |
| Television, | Island, RI         |                | CCT-20070514APH |
| LLC         |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | WVPX(TV), Akron,   | 70491          | BT              |
| Akron       | OH                 |                | CCT-20070514APL |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | WYPX(TV),          | 13933          | BT              |
| Albany      | Amsterdam, NY      |                | CCT-20070514APU |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | WPXA(TV), Rome, GA | 51969          | BT              |
| Atlanta     |                    |                | CCT-20070514AQY |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | WZPX(TV), Battle   | 71871          | BT              |
| Battle      | Creek, MI          |                | CCT-20070514AQZ |
| Creek       |                    |                |                 |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | WBPX(TV), Boston,  | 7692           | BT              |
| Boston-68   | MA                 |                | CCT-20070514ARA |
| License,    |                    | 6477           |                 |
| Inc.        | WMPX-LP, Dennis,   |                | BTC             |
|             | MA                 | 6476           | TTL-20070514ARD |
|             |                    |                |                 |
|             | WDPX(TV), Vineyard | 48406          | BT              |
|             | Haven, MA          |                | CCT-20070514ARB |
|             |                    |                |                 |
|             | WPXG(TV), Concord, |                | BT              |
|             | NH                 |                | CCT-20070514ARC |
+-------------+--------------------+----------------+-----------------+
| Paxson      | WPXJ-TV, Batavia,  | 2325           | BT              |
| Buffalo     | NY                 |                | CCT-20070514ARE |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | WLPX-TV,           | 73189          | BT              |
| Charleston  | Charleston, WV     |                | CCT-20070514ARF |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | WCPX(TV), Chicago, | 10981          | BT              |
| Chicago     | IL                 |                | CCT-20070514ARG |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | WPXN-TV, New York, | 73356          | BT              |
| Com         | NY                 |                | CCT-20070514ARH |
| munications |                    | 73312          |                 |
| License     | WPXH(TV), Gadsden, |                | BT              |
| Company,    | AL                 | 6601           | CCT-20070514ARJ |
| LLC         |                    |                |                 |
|             | WXPX(TV),          | 29716          | BT              |
|             | Bradenton, FL      |                | CCT-20070514ARL |
|             |                    | 48608          |                 |
|             | WPXJ-LP,           |                | BTC             |
|             | Jacksonville, FL   | 65121          | TTL-20070514ARW |
|             |                    |                |                 |
|             | WPXM(TV), Miami,   | 21156          | BT              |
|             | FL                 |                | CCT-20070514ARM |
|             |                    | 5800           |                 |
|             | WIPX-LP,           |                | BT              |
|             | Indianapolis, IN   | 68544          | CTT-20070514ARU |
|             |                    |                |                 |
|             | KPXR(TV), Cedar    | 21245          | BT              |
|             | Rapids, IA         |                | CCT-20070514ARO |
|             |                    | 69792          |                 |
|             | WPXD(TV), Ann      |                | BT              |
|             | Arbor, MI          | 28468          | CCT-20070514ASF |
|             |                    |                |                 |
|             | W48AV, Detroit, MI | 67077          | BT              |
|             |                    |                | CTT-20070514ARQ |
|             | WFPX(TV),          | 70251          |                 |
|             | Fayetteville, NC   |                | BTC             |
|             |                    | 56852          | TTL-20070514ARK |
|             | KPXG-LP, Portland, |                |                 |
|             | OR                 |                | BTC             |
|             |                    |                | TTL-20070514ART |
|             | WNPX(TV),          |                |                 |
|             | Cookeville, TN     |                | BT              |
|             |                    |                | CCT-20070514ARN |
|             | WPXV(TV), Norfolk, |                |                 |
|             | VA                 |                | BT              |
|             |                    |                | CCT-20070514ARR |
|             | WPXR(TV), Roanoke, |                |                 |
|             | VA                 |                | BT              |
|             |                    |                | CCT-20070514ARI |
|             | KWPX(TV),          |                |                 |
|             | Bellevue, WA       |                | BT              |
|             |                    |                | CCT-20070514ARS |
+-------------+--------------------+----------------+-----------------+
| Paxson      | WPXU-LP,           | 2129           | BTC             |
| Com         | Amityville, NY     |                | TTL-20070514ARY |
| munications |                    | 18509          |                 |
| LPTV, Inc.  | KPXH-LP, Ft.       |                | BT              |
|             | Collins, CO        | 10321          | CTT-20070514ASB |
|             |                    |                |                 |
|             | WPXB-LP, Daytona   | 55114          | BT              |
|             | Beach, FL          |                | CTT-20070514ARZ |
|             |                    | 30258          |                 |
|             | W40BO, Boston, MA  |                | BT              |
|             |                    | 17746          | CTT-20070514ASC |
|             | WNPX-LP,           |                |                 |
|             | Nashville, TN      |                | BTC             |
|             |                    |                | TVL-20070514ASD |
|             | KBPX-LP, Houston,  |                |                 |
|             | TX                 |                | BTC             |
|             |                    |                | TTL-20070514ASA |
+-------------+--------------------+----------------+-----------------+
| Paxson      | KPXD(TV),          | 68834          | BT              |
| Dallas      | Arlington, TX      |                | CCT-20070514ASF |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | KPXC-TV, Denver,   | 68695          | BT              |
| Denver      | CO                 |                | CCT-20070514ASG |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson Des  | KFPX(TV), Newton,  | 81509          | BT              |
| Moines      | IA                 |                | CCT-20070514ASH |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | WGPX(TV),          | 65074          | BT              |
| Greensboro  | Burlington, NC     |                | CCT-20070514ASI |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | WEPX(TV),          | 81508          | BT              |
| Greenville  | Greenville, NC     |                | CCT-20070514ASJ |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | WHPX(TV), New      | 51980          | BT              |
| Hartford    | London, CT         |                | CCT-20070514ASK |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | KPXO(TV), Kaneohe, | 77483          | BT              |
| Hawaii      | HI                 |                | CCT-20070514ASL |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | KPXB(TV), Conroe,  | 58835          | BT              |
| Houston     | TX                 |                | CCT-20070514ASM |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | WIPX(TV),          | 10253          | BT              |
| I           | Bloomington, IN    |                | CCT-20070514ASO |
| ndianapolis |                    |                |                 |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | WPXU-TV,           | 37971          | BT              |
| J           | Jacksonville, NC   |                | CCT-20070514ASP |
| acksonville |                    |                |                 |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson Jax  | WPXC-TV,           | 71236          | BT              |
| License,    | Brunswick, GA      |                | CCT-20070514ASQ |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | KPXE(TV), Kansas   | 33337          | BT              |
| Kansas City | City, MO           |                | CCT-20070514ASR |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | WPXK(TV), Jellico, | 52628          | BT              |
| Knoxville   | TN                 |                | CCT-20070514ASS |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | WUPX-TV, Morehead, | 23138          | BT              |
| Lexington   | KY                 |                | CCT-20070514AST |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson Los  | KPXN(TV), San      | 58978          | BT              |
| Angeles     | Bernardino, CA     |                | CCT-20070514ASU |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | WPXE(TV), Kenosha, | 37104          | BT              |
| Milwaukee   | WI                 |                | CCT-20070514ASV |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | KPXM(TV), St.      | 35907          | BT              |
| Minneapolis | Cloud, MN          |                | CCT-20070514ASW |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | KOPX(TV), Oklahoma | 2566           | BT              |
| Oklahoma    | City, OK           |                | CCT-20070514ASX |
| City        |                    |                |                 |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | WOPX(TV),          | 67602          | BT              |
| Orlando     | Melbourne, FL      |                | CCT-20070514ASY |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | WPPX(TV),          | 51984          | BT              |
| P           | Wilmington, DE     |                | CCT-20070514ASZ |
| hiladelphia |                    |                |                 |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | WRPX(TV), Rocky    | 20590          | BT              |
| Raleigh     | Mount, NC          |                | CCT-20070514ATA |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | KSPX(TV),          | 52953          | BT              |
| Sacramento  | Sacramento, CA     |                | CCT-20070514ATB |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | KPXG(TV), Salem,   | 5801           | BT              |
| Salem       | OR                 |                | CCT-20070514ATC |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson Salt | KUPX(TV), Provo,   | 57884          | BT              |
| Lake City   | UT                 |                | CCT-20070514ATD |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson San  | KPXL(TV), Uvalde,  | 61173          | BT              |
| Antonio     | TX                 |                | CCT-20070514ATE |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson San  | KKPX(TV), San      | 22644          | BT              |
| Jose        | Jose, CA           |                | CCT-20070514ATF |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | WQPX(TV),          | 64690          | BT              |
| Scranton    | Scranton, PA       |                | CCT-20070514ATG |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | KGPX(TV), Spokane, | 81694          | BT              |
| Spokane     | WA                 |                | CCT-20070514ATH |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | WSPX-TV, Syracuse, | 64352          | BT              |
| Syracuse    | NY                 |                | CCT-20070514ATJ |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | KTPX(TV),          | 7078           | BT              |
| Tulsa       | Okmulgee, OK       |                | CCT-20070514ATK |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | WPXW(TV),          | 74091          | BT              |
| Washington  | Manassas, VA       |                | CCT-20070514ATL |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | WWPX(TV),          | 23264          | BT              |
| Wa          | Martinsburg, WV    |                | CCT-20070514ATN |
| shington-60 |                    |                |                 |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson      | WTPX(TV), Antigo,  | 86496          | BT              |
| Wausau      | WI                 |                | CCT-20070514ATM |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Paxson West | WPXP(TV), Lake     | 27290          | BT              |
| Palm Beach  | Worth, FL          |                | CCT-20070514ATO |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Ion Media   | WPXX-TV, Memphis,  | 21726          | BT              |
| Memphis     | TN                 |                | CCT-20070823AEO |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+
| Ion Media   | WPXL(TV), New      | 21729          | BT              |
| New Orleans | Orleans, LA        |                | CCT-20070823AER |
| License,    |                    |                |                 |
| Inc.        |                    |                |                 |
+-------------+--------------------+----------------+-----------------+

**CONCURRING STATEMENT OF**

**COMMISSIONER MICHAEL J. COPPS**

 

Re: *Paxson Management Corporation and Lowell W. Paxson and CIG Media
LLC.*

Today's transaction involves the transfer of 60 full-service television
broadcast licenses to a purchaser about which the Commission knows
precious little. We do not know the identity of the investors in this
particular fund, and we do not know how this fund has treated other
companies it has owned in recent years. Though we know that the fund
does not own other media properties, we do not know whether our
attribution rules adequately capture the real distribution of power
within this new corporate owner. Indeed, we are not even sure what type
of entity we are dealing with here: Most press reports refer to it as a
"hedge fund," our own *Order* refers to it as a "private equity fund,"
while the company's own website describes it as "one of the world's most
sophisticated alternative investment institutions."[^66]

In short, we don't have anywhere near the information or context
necessary to know whether this change in control will harm viewers in
the 60 communities that the company is licensed to serve. This is an
especially urgent question because the stations at issue here---roughly
3% of the total TV stations in the United States---represent some of the
only outlets for independent broadcast programming available today. So
while it is certainly a good omen that the new owners will retain the
network's existing management, I do not believe the Commission has
enough information before it right now to say, with confidence, that the
network's commitment to programming diversity on the public airwaves
will endure under the new ownership structure. I, for one, will be
watching closely to see that it does.

At some level, the Commission's fundamental lack of curiosity about the
identity of our new licensees is hardly a surprise. Even as private
equity firms have begun to acquire substantial numbers of broadcast
stations (witness the Univision and Clear Channel acquisitions just this
year), the Commission has been content to emulate the figures in the
famous "see no evil, hear no evil, speak no evil" carving. This in stark
contrast to other branches of our government---like the President's
Working Group on Financial Markets and the Securities and Exchange
Commission---which have shown far greater interest in attempting to
understand the regulatory implications of hedge funds and similar
financial creations. Accordingly, I must concur in today's *Order* and
renew my call for a general Commission inquiry into the impact of
private equity, hedge funds, and other related investment vehicles on
our ability to protect, serve, and sustain the public interest in our
broadcast media.

[^1]: Paxson Communications Corporation ("Paxson") changed its corporate
    name to ION on February 28, 2006.

[^2]: The Petitioners allege viewer standing under *Office of
    Communication of the United Church of Christ v. FCC*, 359 F.2d 994
    (D.C. Cir. 1966). Citing various decisions of the U.S. Court of
    Appeals for the District of Columbia Circuit, ION, CIG Media, and
    NBC argue that viewer standing does not pertain here because grant
    of the applications would not harm the petitioners as viewers of the
    stations in question. *See, e.g., ION Opposition*, at 4, note 5,
    *citing Rainbow/Push Coalition v. FCC*, 330 F.3d 539, 545-546 (D.C.
    Cir. 2003). As noted in previous cases, "\[o\]ur administrative
    standard for broadcast standing is less stringent than the judicial
    standard applied to petitioners appealing Commission decisions in
    federal court." *Sagittarius Broadcasting Corp.*, Memorandum Opinion
    and Order, 18 FCC Rcd 22551, 22554, n. 20 (2003). Section 309(d)(1)
    of the Communications Act of 1934, as amended (the "Act"), provides
    that a party filing a petition to deny must demonstrate that he or
    she is a "party in interest." 47 U.S.C. § 309(d)(1). The Commission
    has granted viewer standing to petitioners raising similar
    allegations in the past. *Shareholders of Hispanic Broadcasting
    Corporation*, Memorandum Opinion and Order, 18 FCC Rcd 18834, 18835,
    n. 4 (2003) ("*2003 Univision Order*"). Even if the Petitioners
    lacked viewer standing, their allegation of economic injury would
    entitle them to party-in-interest standing. *Office of Communication
    of the United Church of Christ v. FCC*, 359 F.2d at 1000 (noting
    that judicial concept of standing has traditionally encompassed
    those alleging some economic injury). In this case, the Petitioners
    have alleged that the transaction is "designed to forcibly extract
    from \[Petitioners\] hundreds of millions of dollars." *Petition to
    Deny*, at 5-6. We, thus, find that the petitioners have demonstrated
    standing in the instant case.

[^3]: Paxson filed an FCC Form 316 transfer of control application
    reflecting the November 7, 2005, Management and Proxy Agreement,
    which the Commission granted on September 2, 2005. *See, e.g.,* File
    No. BTCCT-20050817ADL.

[^4]: *Applications For Transfer of Control*, at Exhibit 14-Supplement.
    Individuals or entities holding partnership and non-insulated
    limited partnership interests are generally subject to the
    Commission's broadcast multiple and cross-ownership rules,
    regardless of the amount or percentage of equity held. 47 C.F.R.
    §73.3555, Note (f)(1). An exception from attribution applies to
    insulated limited partners as set forth in the Notes to Section
    73.3555. *Id.* at Note (f)(1) and (2).

[^5]: 47 C.F.R. §73.3613.

[^6]: *Telemundo Communications Group, Inc.*, Memorandum Opinion and
    Order, 17 FCC Rcd 6958, 6967 (2002) ("*2002 Telemundo Order*").

[^7]: *Id.* at 6974. The Commission admonished Paxson as well, stating
    that "\[w\]e further clarify that we do not admonish Paxson for the
    decision to approve as directors NBC's employees, but rather for the
    decision not to remove the directors as offered by NBC and to
    continue this relationship in place, despite the actions taken by
    the NBC directors." *Id.*

[^8]: *NBC Opposition*, at 8.

[^9]: The 2005 agreements were filed with the Commission pursuant to
    Section 73.3613 of the Commission's rules. 47 C.F.R. § 73.3613.

[^10]: Certain aspects of the Master Transaction Agreement not effecting
    ultimate control of ION will take effect prior to closing.

[^11]: *Petition to Deny*, at 5-6.

[^12]: 47 C.F.R. §73.3555(b).

[^13]: *Petition to Deny*, at 9 (emphasis in original).

[^14]: May 4, 2007, Stockholders' Agreement, at ¶ 3.1(b)(ii).

[^15]: *Petition to Deny*, at 10.

[^16]: *Id.* at 11

[^17]: *Id.*

[^18]: *Id*.

[^19]: *NBC Opposition*, at 21.

[^20]: *Id.*, at 19.

[^21]: *Id.*, at 26.

[^22]: *CIG Media Opposition*, at 28. CIG Media cites *Roy M. Speer*, 11
    FCC Rcd 18393, 14156 (1996) as support.

[^23]: *See* 47 C.F.R. §73.3555, Note 2(i).

[^24]: Section 310(d) requires that the Commission consider the
    applications as if the proposed transferee were applying for the
    licenses directly. 47 U.S.C. § 310(d). *See SBC Communications Inc.
    and AT&T Corp. Applications for Approval of Transfer of Control,* 20
    FCC Rcd 18290, 18300 ¶ 16 (2005) ("*SBC-AT&T Order*"); V*erizon
    Communications, Inc. and MCI, Inc. Applications for Approval of
    Transfer of Control,* 20 FCC Rcd 18433, 18442-43 ¶ 16 (2005)
    ("*Verizon-MCI Order*"); *Applications of Nextel Communications,
    Inc. and Sprint Corporation,* 20 FCC Rcd 13967, 13976 ¶ 20 (2005)
    ("*Sprint-Nextel Order*"); *News Corp.-Hughes Order,* 19 FCC Rcd at
    483 ¶ 15; *Comcast-AT&T Order,* 17 FCC Rcd at 23255 ¶ 26.

[^25]: *See, e.g., SBC-AT&T Order*, 20 FCC Rcd at 18300 ¶ 16;
    *Verizon-MCI Order*, 20 FCC Rcd at 18442-43 ¶ 16; *Applications for
    Consent to the Assignment of Licenses Pursuant to Section 310(d) of
    the Communications Act from NextWave Personal Communications, Inc.,
    Debtor-in-Possession, and NextWave Power Partners, Inc.,
    Debtor-in-Possession, to Subsidiaries of Cingular Wireless LLC*, 19
    FCC Rcd 2570, 2580-81 ¶ 24 (2004); *EchoStar Communications Corp.,
    General Motors Corp. and Hughes Electronics Corp., and EchoStar
    Communications Corp., Hearing Designation Order*, 17 FCC Rcd 20559,
    20574 ¶ 25 (2002) ("*EchoStar-DIRECTV HDO*").

[^26]: *See SBC-AT&T Order,* 20 FCC Rcd at 18300 ¶ 16; *Verizon-MCI
    Order,* 20 FCC Rcd at 18443 ¶ 16; *Sprint-Nextel Order,* 20 FCC Rcd
    at 13976 ¶ 20.

[^27]: *See SBC-AT&T Order,* 20 FCC Rcd at 18300 ¶ 16; *Verizon-MCI
    Order,* 20 FCC Rcd at 18443 ¶ 16; *Sprint-Nextel Order,* 20 FCC Rcd
    at 13976 ¶ 20; *News Corp.-Hughes Order*, 19 FCC Rcd at 483 ¶ 15;
    *Comcast-AT&T Order*, 17 FCC Rcd at 23255 ¶ 26.

[^28]: *See* *SBC-AT&T Order*, 20 FCC Rcd at 18300 ¶ 16; *Verizon-MCI
    Order*, 20 FCC Rcd at 18443 ¶ 16; *Comcast-AT&T Order,* 17 FCC Rcd
    at 23255 ¶ 26; *EchoStar-DIRECTV HDO*, 17 FCC Rcd at 20574 ¶ 25.

[^29]: 47 U.S.C. §309(d)(1); *Astroline Communications Co. Ltd.
    Partnership v. FCC,* 857 F.2d 1556 (D.C. Cir. 1988) ("*Astroline*").

[^30]: *Gencom, Inc. v. FCC*, 832 F.2d 171, 181 (D.C. Cir. 1987)
    ("*Gencom"*). *See also Serafyn v. FCC*, 149 F.3d 1213, 1216 (D.C.
    Cir. 1998) (affirming two-step public interest analysis)
    ("*Serafyn*").

[^31]: *Astroline*, 857 F.2d at 1561; 47 U.S.C. §309(e). *See also
    Gencom, Inc.*, 832 F.2d at 181.

[^32]: *Review of the Commission's Regulations Governing Attribution of
    Broadcast and Cable/MDS Interests*, Report and Order, 14 FCC Rcd
    12559 (1999) ("*1999 Attribution Order*").

[^33]: 47 C.F.R. §73.3555, Note 2.

[^34]: *See* 47 C.F.R. §73.3555(b).

[^35]: *Shareholders of AMFM, Inc.*, Memorandum Opinion and Order, 15
    FCC Rcd 16062, 16077 (2000).

[^36]: *Id.*

[^37]: *Roy M. Speer*, Memorandum Opinion and Order, 11 FCC Rcd 14147,
    14155-56, 14158 (1996).

[^38]: *Quincy D. Jones*, 11 FCC Rcd at 2482-2483.

[^39]: *Roy M. Speer*, 11 FCC Rcd at 14155; *Quincy D. Jones*, 11 FCC
    Rcd at 2482.

[^40]: *BBC License Subsidiary, Inc. (WLUK-TV)*, 10 FCC Rcd at 7933.
    *See, also, Quincy D. Jones*, 11 FCC Rcd at 2487; *News
    International PLC*, Memorandum Opinion and Order, 97 FCC 2d 349, 354
    (1984).

[^41]: *Roy M. Speer*, 11 FCC Rcd at 14158.

[^42]: *Id.* at 6974.

[^43]: *2002 Telemundo Order*, 17 FCC Rcd at 6973.

[^44]: *Id.* at 6974.

[^45]: *Id.* at 6972.

[^46]: *Id.*

[^47]: *BBC License Subsidiary, Inc. (WLUK-TV),* 10 FCC Rcd at 7933.

[^48]: *Id.*

[^49]: *NBC Opposition*, at 9.

[^50]: *ION Opposition*, at 14.

[^51]: *2002 Telemundo Order*, 17 FCC Rcd at 6974.

[^52]: *Review of the Commission's Regulations Governing Attribution of
    Broadcast and Cable/MDS Interests*, Order on Reconsideration, 16 FCC
    Rcd 1097, 1112 (2001) ("*Attribution Reconsideration"*).

[^53]: *See, e.g. Solar Broadcasting Company, Inc.*, 17 FCC Rcd 5467,
    5487 (2002)

[^54]: *Attribution Reconsideration,* 16 FCC Rcd at 1112.

[^55]: *1999 Attribution Order*, 14 FCC Rcd at 12579.

[^56]: *Applications For Transfer of Control*, at Exhibit 14-Supplement,
    page 3.

[^57]: *WGPR, Inc.,* 10 FCC Rcd 8140, 8142 (1995); *Choctaw Broadcasting
    Corp.*, 12 FCC Rcd 8534, 8539 (1997); *Southwest Texas Broadcasting
    Council*, 85 F.C.C. 2d 713, 715 (1981).

[^58]: 47 U.S.C. §310(d).

[^59]: *ION Opposition*, at 15.

[^60]: *Roy M. Speer,* 11 FCC Rcd at 14156.

[^61]: *2002 Telemundo Order*, 17 FCC Rcd at 6966. *Northwest
    Broadcasting, Inc.*, Memorandum Opinion and Order, 12 FCC Rcd 3289,
    3293 (1997); *John F. Runner, Receiver*, Memorandum Opinion and
    Order, 36 RR 2d 773, 778 (1976).

[^62]: 47 C.F.R. § 73.671; Pub. L. No. 101-437, 104 Stat. 996-1000,
    *codified at* 47 U.S.C. Sections 303a, 303b and 394.

[^63]: Station WPXW(TV) FCC 398 Children's Television Programming Report
    for the quarter ending September 30, 2002.

[^64]: *Shareholders of CBS Corporation*, Memorandum Opinion and Order,
    16 FCC Rcd 16072, 16072-16073 (2001). *See, also, Stockholders of
    CBS, Inc.*, Memorandum Opinion and Order, 11 FCC Rcd 3733 (1995),
    aff'd, *Serafyn v. FCC*, 149 F.3d 1213 (D.C. Cir. 1998); *Capital
    Cities/ABC, Inc.*, Memorandum Opinion and Order, 11 FCC Rcd 5841
    (1996).

[^65]: *Applications for Transfer of Control*, at Exhibit 14, page 5.

[^66]: *See* Marcia Vickers, "A Hedge Fund Superstar," *Fortune* (April
    3, 2007); "Citadel Investment Group, LLC: About Us," available at
    http://www.citadelgroup.com/ (last visited 12/28/07).