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                              FOR RECORD ONLY
$// MO&O-Savoy-fox: Assignment of Licenses FCC 95-364 //$
$/ 73.3555-Multiple Ownership /$
$/ Sec. 309(b) of Act-Action upon applications /$
$/ Sec. 310(d) of Act-Limitation on Holding and Transfer of License /$
                                Before the
                     FEDERAL COMMUNICATIONS COMMISSION
                          Washington, D.C.  20554
                                                  FCC 95-364
In re Applications of                )
                                     )
BBC LICENSE SUBSIDIARY L.P.          )       File Nos. BALCT-941031KF
(Assignor)                           )                BALCT-941032KG
                                     )                BALCT-941031KH
and                                  )                BALTT-941031KI
                                     )
SF HONOLULU LICENSE                  )
SUBSIDIARY, INC.                     )
(Assignee)                           )
                                     )
For Assignment of Licenses of        )
KHON-TV, Honolulu, Hawaii,           )
KAII-TV, Wailuku, Hawaii,            )
KHAW-TV, Hilo, Hawaii,               )
and K55DZ, Lihue, Hawaii             )
                                     )
BBC LICENSE SUBSIDIARY L.P.          )       File No. BALCT-941031KJ
(Assignor)                           )
                                     )
and                                  )
                                     )
SF MOBILE LICENSE                    )
SUBSIDIARY, INC.                     )
(Assignee)                           )
                                     )
For Assignment of License of         )
WALA-TV, Mobile, Alabama             )
                                     )
BBC LICENSE SUBSIDIARY L.P.          )       File No. BALCT-941031KK
(Assignor)                           )
                                     )
and                                  )
                                     )
SF NEW ORLEANS LICENSE               )
SUBSIDIARY, INC.                     )
(Assignee)                           )
                                     )
For Assignment of License of         )
WVUE(TV), New Orleans, Louisiana     )
                                     )
BBC LICENSE SUBSIDIARY L.P.          )       File Nos. BALCT-941014LH
(Assignor)                           )                 BALTT-941014LI
                                     )
and                                  )
                                     )
SF GREEN BAY LICENSE                 )
SUBSIDIARY, INC.                     )
(Assignee)                           )
                                     )
For Assignment of Licenses of        )
WLUK-TV, Green Bay, Wisconsin        )
and W40AN, Escanaba, Michigan        )
                       MEMORANDUM OPINION AND ORDER
Adopted:   August 17, 1995                            Released:  August 18, 1995
By the Commission:  Commissioner Ness issuing a statement.
  1.  The Commission has before it for consideration the above-captioned applications
seeking consent to the assignment to subsidiaries of SF Multistations, Inc. (SF Multistations)
the licenses of:  KHON-TV, Channel 2 (NBC), Honolulu; KAII-TV, Channel 7 (NBC),
Wailuku; KHAW-TV, Channel 11 (NBC), Hilo; television translator station K55DZ, Lihue;
WALA-TV, Channel 10 (NBC), Mobile; and WVUE(TV), Channel 8 (ABC), New Orleans.
SF Multistations also seeks authority to continue operating KAII-TV and KHAW-TV as
television satellite stations of KHON-TV pursuant to Note 5 of Section 73.3555 of the
Commission's Rules, 47 C.F.R. 73.3555.  The Louisiana State Conference of Branches of
the NAACP and the New Orleans Branch of the NAACP (collectively, NAACP) timely filed
a petition to deny the WVUE(TV) application, and NBC, Inc. (NBC) filed a timely petition
to deny all of the SF Multistations applications.  Vincent Bruno, a resident of New Orleans,
filed an untimely petition to deny the WVUE(TV) application.  SF Multistations opposed the
petitions and NAACP replied.  On February 22, 1995, March 30, 1995, and June 20, 1995,
the staff sent letters of inquiry to SF Multistations, which responded to the letters on March
8, 1995,  on April 3, 1995, and on June 22, 1995, respectively.  NAACP commented on
each of SF Multistations' responses.
                                BACKGROUND
  2.  On April 27, 1995, the Commission conditionally granted the applications for
assignment of licenses of WLUK-TV, Green Bay, and television translator station W40AN,
Escanaba, Michigan, to a subsidiary of SF Broadcasting of Wisconsin, Inc. (SF Wisconsin).
BBC License Subsidiary, Inc., FCC 95-179 (released April 27, 1995).  Like SF Wisconsin,
SF Multistations, the parent company of the proposed licensees now before us, is a venture
formed by Savoy Pictures Entertainment, Inc. (Savoy) and Fox Television Stations, Inc.
(Fox).  Savoy is a publicly traded U.S. entertainment company and Fox is a company whose
principal business is owning and operating television stations and is under common
ownership with Fox Broadcasting Company, which operates the national Fox television
network.
  3.  In the Green Bay proceeding, the Savoy-Fox venture asserted that Fox was not a party
to the applications because its ownership in the enterprise comprised only nonvoting stock,
including common and preferred shares.  Because the details of the ownership and
governance of SF Wisconsin were set forth in that case and largely mirror those of SF
Multistations now before us in this proceeding, we describe them briefly here.  Savoy, via its
purchase of Class A voting common stock, contributed 55 percent of the equity of SF
Wisconsin.  Fox contributed the remaining 45 percent through its purchase of Class B
nonvoting common stock and nonvoting preferred stock.  Fox also held future ownership
rights, which entitled it within the first year of ownership of WLUK-TV to purchase an
amount of shares such that it would own up to one-half of all common stock shares of the
enterprise.  Those shares were to carry no immediate voting rights, but three weeks prior to
the third anniversary date of the establishment of the venture, Fox could, in its sole
discretion, obtain negative control of the company by exchanging all of its Class B nonvoting
shares of common stock for an equal number of Class A voting shares.
  4.  The management of SF Wisconsin, as detailed in BBC License Subsidiary, FCC 95-179
at 6-11, was directed by a three-member board of directors, composed of two Savoy
principals and a former Fox employee, Thomas Herwitz.  Extraordinary board actions,
however, were subject to the approval of Fox.  The day-to-day operations of the broadcast
facilities were to be managed by Herwitz, in his capacity as president of SF Wisconsin,
subject to the authority of the board.  His term was set at three years.  In addition, Savoy-
Fox hired another Fox employee, William Cunningham, who was to be elected as an officer
of SF Wisconsin.  Finally, Savoy and Fox agreed that SF Wisconsin "shall at all times use
its best efforts" to operate each of the stations as an affiliate of the Fox television network.
Fox Broadcasting Company, which runs the network, is under common ownership with Fox.
  5.  In conditionally granting the assignment of WLUK-TV, Green Bay, to SF Wisconsin,
the Commission addressed the allegations raised in that proceeding by NBC, which asserted
that Fox's interest in the Savoy-Fox venture should be deemed controlling or, at the least,
attributable, and that the alien ownership in the venture exceeded the statutory benchmark of
25 percent.  The Commission found that the locus of control of SF Wisconsin rested with
Savoy, and not with Fox.  See id. at 36-39.  Yet, it also found that the cumulative effect
of "Fox's myriad interlocking interests in and relationships to" the venture did not "squarely
fall" within past Commission cases, including NBC, Inc., 6 FCC Rcd 4882 (1991), which SF
Wisconsin had cited in support of its contention that Fox's interest be considered
nonattributable.  BBC License Subsidiary, FCC 95-179 at 42, 43.  Accordingly, the
Commission granted the Green Bay application subject to the resolution of its outstanding
rule making proceeding relating to attribution, Review of the Commission's Rules Governing
Attribution of Broadcast Interests (Attribution Review), 10 FCC Rcd 3606 (1995).  That
proceeding seeks, inter alia, to determine the treatment of multifaceted interests in a licensee.
Id. at 3609.  Until that rule making is concluded, the Commission noted, it would deem
Fox's interest in SF Wisconsin to be nonattributable.  The Commission also conditioned the
grant of the applications upon the recently completed inquiry into Fox's alien ownership,
deferring until then the issue of the venture's compliance with the alien ownership
benchmarks of Section 310(b)(4).  See Renewal of license for WNYW-TV, New York, New
York, File No. BRCT-940201KZ; see also Fox Television Stations, Inc., FCC 95-188
(released May 4, 1995), Fox Television Stations, Inc., FCC 95-313 (released July 28, 1995).
Finally, in granting the Green Bay application, the Commission acknowledged the pendency
of the applications now before us, noting that "[t]o the extent the issues and record are the
same, our conclusions will apply with equal force. . . ."  BBC License Subsidiary, FCC 95-
179 at n.27.  "To the extent the issues or record are not the same," the Commission added,
"our decision here does not establish precedent for those pending applications."  Id.
  6.  Thereafter, on June 20, 1995, the staff sent a letter of inquiry to SF Multistations, the
parent company of the proposed licensees here.  That letter requested, in essence, the
chronologies of specific events relating to both Herwitz's and Cunningham's departure from
the employ of Fox and their commencement of employment with the Savoy-Fox venture.
We also expressly inquired as to whether Herwitz's roles in Savoy-Fox were a condition of
Fox's investment in the enterprise.  The June 22, 1995 response from SF Multistations states
that in the summer of 1993, Herwitz and Fox's chairman and chief executive officer Chase
Carey "talked about him [Herwitz] pursuing opportunities both outside of Fox and within the
company. . . .This was a continuing dialogue that culminated in a decision in late 1993 that
Mr. Herwitz would leave Fox."  The hiring of Herwitz was not, Carey states in his
declaration, "a condition to Fox's investment in the SF Broadcasting entities."  According to
the June 22, 1995 letter, Herwitz left Fox on December 10, 1993, nearly three months after
Fox's initial September/October 1993 discussions with Savoy regarding the formation of a
joint venture and Carey's recommendation to Savoy principals that they hire Herwitz.  The
letter also states that in the intervening period between leaving Fox and commencing
employment with the Savoy-Fox venture in mid-March 1994, Herwitz was making "informal
inquiries about possible television station acquisition opportunities . . . in anticipation of the
possibility of SF Broadcasting being organized."
  7.  With respect to Cunningham, the other former Fox employee slated to work for Savoy-
Fox, Cunningham states in a declaration attached to the June 22, 1995 response that he left
Fox on November 4, 1994, and commenced employment with the new venture four days
later as senior vice president and chief financial officer, but not as an "elected officer."
Cunningham further states that he was recruited for the Savoy-Fox positions by Herwitz and
Savoy principal Howard Bass.  "No employee of Fox participated in my recruitment for SF
Broadcasting," he continues.  Finally, Cunningham states that he did not assist in any of the
venture's activities while employed by Fox and that there are no understandings or
agreements, oral or written, relating to his future employment with Fox.  As to which
individuals in the venture dictate hiring determinations, both Herwitz and Savoy principal
Lewis Korman state in their declarations, filed in conjunction with the June 22 letter, that
that task rests with the directors with respect to senior executive positions, and with Herwitz
and each station's management with respect to other positions.  "It is not currently
contemplated that any other Fox employees will be working with SF Broadcasting," Herwitz
and Korman both also state.  However, they add, "SF Broadcasting does not intend to
exclude current or former Fox employees from consideration when making hiring decisions."
  8.  Now before us are the applications of SF Multistations, a Savoy-Fox enterprise whose
ownership largely mirrors that of SF Wisconsin and whose governance does so completely.
Indeed, except for certain features of the preferred stock and the slightly larger percentage of
equity owned by Fox, the initial ownership of SF Multistations and its subsidiaries is
identical to that of SF Wisconsin.  The SF Multistations preferred stock, unlike SF
Wisconsin's, has two classes, each entitling the holder to six percent dividends and
redemption rights in accordance with a formula tied to the annual growth rate of the value of
the stations.  Like the SF Wisconsin preferred stock, the SF Multistations preferred carries
no voting rights and is not convertible.  As for equity contributions in SF Multistations,
Savoy will purchase all of the Class A voting common stock for $64 million, or 53 percent,
of the $121 million in equity needed to finance the acquisition of the three Hawaii television
stations, the Mobile station, and the New Orleans station.  Fox will contribute the remaining
$57 million, or 47 percent of the equity, through its purchase of Class B nonvoting common
stock and all of the nonconvertible preferred stock.  In contrast, the contributions made to SF
Wisconsin by Savoy constituted 55 percent of the equity, while the contributions of Fox
constituted the remaining 45 percent.  The future ownership rights of Fox in SF Multistations
also vary slightly from those it holds in SF Wisconsin.  Here, Fox can convert its nonvoting
stock to voting stock, and thereby obtain negative control of the venture, commencing upon
the third anniversary of the formation of SF Multistations rather than three weeks prior to
that three-year date as set forth in the SF Wisconsin Stockholders Agreement.  As it did in
BBC License Subsidiary with regard to SF Wisconsin, the applicants here assert that Fox's
interest in SF Multistations should be deemed noncognizable because the stock it holds in that
entity entitles Fox to no present voting rights.
                       PETITIONS TO DENY/DISCUSSION
  9.  NAACP opposes the SF Multistations New Orleans application on three grounds.  They
are:  (1) Fox's interest should not be exempt from attribution; (2) the alien ownership of the
Savoy-Fox venture does not comport with Section 310(b) of the Communications Act; and
(3) Burnham, the current licensee of WVUE(TV), is an "EEO violator" and thus unqualified
to sell the station.  For reasons that follow, we deny NAACP's petition and grant the SF
Multistations applications.  However, with respect to the attributable status of Fox's
investment in SF Multistations, we will condition our grant upon the outcome of the pending
rulemaking on attribution, Attribution Review, 10 FCC Rcd 3606.  And, with respect to
alien ownership, we find that the venture complies with 25-percent benchmark of Section
310(b)(4).
Standing
  10.  Under Section 309(d) of the Act, any party-in-interest is entitled to file a petition to
deny.  An affidavit from a person stating that he or she views the station or resides in the
station's service area is sufficient to establish standing to challenge the application on viewer-
related issues.  Similarly, an organization may establish standing if it provides such an
affidavit from one or more members who are local residents or viewers, and those persons
state that the group represents them.  NAB Petition for Rulemaking, 82 FCC 2d 89, 98-99
(1980).
  11.  Accompanying the petition to deny here was a declaration made under penalty of
perjury, the equivalent of an affidavit, see 47 C.F.R. 1.16, from Shirley Porter, the
president of the New Orleans Branch of the NAACP.  She stated that she is a resident of the
viewing area of WVUE-TV and regularly watches the station.  The declaration was dated
December 2, 1994.  Burnham maintains that the declaration is "flawed," because it is dated a
week prior to the petition's date of December 9, 1995 and because it contains only the
statement that Porter "subscribes" to the petition to deny, not that she had actually read the
petition.  We find the declaration valid.  An affidavit or declaration under penalty of perjury
must establish that the declarant has personal knowledge of the facts set forth in the petition.
See 47 U.S.C. 309(d).  To subscribe to a petition, as did Porter, clearly is to attest to it, or
to affirm it and its contents as true.  Moreover, that Porter subscribed to the petition a week
prior to its final form does not, without more, undermine her knowledge of the facts
contained therein.  Accordingly, we find Burnham's allegations without merit and find that
NAACP's petition is properly supported so as to entitle it to standing as a party-in-interest.
Attributable status of Fox
  12.  First, NAACP urges the Commission to find that Fox's multiple interests in the Savoy-
Fox venture render Fox in control of and/or holding a cognizable interest in SF
Multistations.  The interests cited by NAACP include:  Fox's former employees serving in
prominent roles; Fox's extensive broadcasting experience versus that of Savoy; Fox's
approval rights over certain corporate actions; Fox's participation in selecting the board;
Fox's substantial equity contribution; Fox's future ownership and voting rights in the
venture; and Fox's commonly owned Fox television network affiliating with WVUE(TV), as
well as with the other SF Multistations television stations.  As noted above, these same
allegations were raised by NBC in BBC License Subsidiary and fully addressed by the
Commission in that proceeding as the predicate for conditioning the grant of WLUK-TV to
SF Wisconsin.  Accordingly, we shall not revisit those matters here.  We will, for the same
reasons stated in BBC License Subsidiary, condition our action upon the resolution of the
attribution rule making proceeding, Attribution Review, 10 FCC Rcd 3606.
  13.  Additionally, NAACP points to the by-laws of SF Multistations and its subsidiaries
which permit the board of directors to designate one or more of its members to serve on an
executive committee.  Under the by-laws, the executive committee may "exercise all the
powers and authority of the Board of Directors. . . ."  See Amended and Restated By-Laws
of SF Multistations at Article III, Section 10.  Even if, as NAACP suggests, the lone board
member selected to serve on that committee were Herwitz, and he were to wield the
substantial powers and authority bestowed upon that committee, we note that the two Savoy
principals on the three-member board would have to exercise their control in delegating those
powers to him.  Thus, we find that Savoy's ultimate control of the venture is not
compromised by this provision.
  14.  Next, NAACP contends that Herwitz has "significant and unusual safeguards" in his
employment contract with SF Multistations which make it "extremely unlikely" that he would
be terminated.  We disagree.  It is true that the Savoy-Fox venture is contractually
committed under the Employment Agreement to pay Herwitz his three-year compensation if
terminated other than for cause or voluntary resignation.  But this obligation does not
preclude the controlling Savoy principals from terminating Herwitz.  Indeed, Section 4 of the
Employment Agreement contemplates the right to terminate Herwitz "for cause," as well as
"for any other reason."  Moreover, the existence of such protective provisions for executive
employees is a common business practice and does not signal abdication of control to that
employee.
  15.  Further, NAACP intimates that by finding Fox's interest in SF Multistations not
attributable, the Commission is facilitating the transition to such ventures of only the senior
managers of group owners, a class composed of few minorities.  The NAACP contends that
Commission approval, therefore, would adversely impact future minority ownership.  The
repercussions to minorities resulting from the treatment of interests in a licensee, such as
those held by Fox in SF Multistations and its subsidiaries, is a subject best addressed in
Attribution Review, a rulemaking proceeding in which the Commission can ascertain through
the comment process the far-ranging implications of any policy it adopts.  Our action here
permits acquisition of the five television stations, but is conditioned on the resolution of that
proceeding.  Accordingly, deferral of NAACP's arguments of adverse impact on minority
ownership to the attribution proceeding will permit and facilitate full discussion of NAACP's
concern.
  16.  NAACP's remaining allegations regarding Fox's attributable status largely pertain to
the SF Multistations June 22, 1995 response to the staff's post-BBC License Subsidiary letter
of inquiry.  In considering those allegations, we are guided by the Commission's directive in
BBC License Subsidiary that its conclusions in that case would apply "with equal force" to
this proceeding "[t]o the extent the issues and record are the same. . . ."  FCC 95-179 at
n.27.  We find that the issues of control and attribution are the same in both proceedings and
that the records, notwithstanding NAACP's intimations to the contrary, are materially the
same so as to also grant the applications here conditioned upon the outcome of Attribution
Review.  First, with respect to the chronologies submitted by SF Multistations, NAACP
states that the decisions to form Savoy-Fox and to install Herwitz as a director and president
of the venture were made while Herwitz was employed by Fox.  The record in BBC License
Subsidiary reflected that when Fox's Carey recommended Herwitz as a candidate for
president of the venture, he explained to Savoy's principals that Herwitz "would be leaving
the employment of Fox."  Thus, although not informed of the specific dates of those events,
the Commission in BBC License Subsidiary was cognizant of their sequence.  The inclusion
in the record here of specific dates for this sequence of events does not materially change the
records of the two proceedings.
  17.  NAACP also queries who was compensating Herwitz for his television station-
acquisition activities from December 10, 1993, when he left Fox, until March 17, 1994,
when he commenced employment with Savoy-Fox.  "Presumably," NAACP adds, "Mr.
Herwitz was not a volunteer."  No broadcaster approached by Herwitz, according to
NAACP, would share information about the sale of stations without knowing who he
represented.  NAACP's intimations that Herwitz was working on Fox's behalf lacks
specificity in that they are capable of supporting more than one plausible conclusion.  Such
allegations do not satisfy the pleading requirements of Section 309(d) of the Act.  See Arnold
L. Chase, 5 FCC Rcd 1642, 1645 (1990).  The record shows that during the three-month
period, Herwitz made "informal inquiries" about "possible" television station acquisition
opportunities.  It appears, therefore, that Herwitz, as president-elect of SF Multistations, was
engaged in preliminary and casual discussions in anticipation of his new duties.  Indeed, that
Herwitz's talks with broadcasters about possible purchases were only preparatory is borne
out by the fact that the definitive agreements for the purchase of Burnham television stations
by SF Wisconsin and SF Multistations were not executed until four and five months later.
Herwitz's exploratory talks with broadcasters about possible purchases indicate nothing more
than his commitment to assisting in the launch of the venture.  The NAACP, therefore, has
not demonstrated a change in the record.
  18.  NAACP also challenges what it characterizes as Carey's "conclusory statement" that
Herwitz's employment with Savoy-Fox was not a condition to Fox's investment in the
venture.  In support of this contention, NAACP argues that "[o]nly after [Savoy] principals
Mr. [Victor] Kaufman and Mr. [Lewis] Korman accepted the selection of Mr. Herwitz" did
Fox agree to invest in Savoy-Fox.  (Emphasis included.)  This chronology, standing alone,
does not persuade us that the hiring of Herwitz or of another Fox designee was a prerequisite
to Fox's equity contribution to the venture.  Finally, NAACP disputes Cunningham's
statement that no Fox employee "participated" in his recruitment, suggesting instead that
Herwitz, acting as Fox's "agent," tapped Cunningham for the Savoy-Fox position.  This
allegation is unsubstantiated and falls short of the threshold requirements of Section 309(d) of
the Act.  See, e.g., Bilingual Bicultural Coalition v. FCC, 595 F.2d 621, 629 (D.C. Cir.
1978).  In sum, therefore, we find that the record here differs from that in BBC License
Subsidiary only in its degree of specificity.  While this record contains specific dates of
certain events, our understanding of the sequence of those events in both proceedings is the
same.  Any differences, therefore, are not material.  Accordingly, in light of the
Commission's determination in BBC License Subsidiary, we shall condition our action in this
proceeding upon the outcome of Attribution Review.  There, the Commission shall determine
the attributable status of an investor holding multiple interests in a licensee.  In the interim,
Fox's interest in SF Multistations will not be deemed attributable.
Alien ownership of SF Multistations
  19.  Savoy is approximately 19 percent-owned by aliens, according to the venture's
March 8, 1995 response to the staff's letter of February 22, 1995.  Fox is 99-percent owned
by aliens, as recently determined in connection with the renewal of license of Fox's
WNYW-TV, New York, New York.  See Fox Television Stations, Inc., FCC 95-188,
released May 4, 1995.  In that case, the Commission also found that Fox's level of alien
ownership exceeds the 25-percent benchmark of Section 310(b)(4) of the Act, 47 U.S.C.
310(b)(4).  Id.  Consistent with the statute, Fox was afforded the opportunity to either
submit a showing as to why its existing ownership structure is in the public interest or, in the
alternative, to notify the Commission whether, how and when it intends to bring its
ownership structure into compliance with the statutory benchmark.  Id. at pars. 176-179.  In
the recently concluded second phase of the WNYW-TV renewal proceeding, the Commission
held that the unique equities of that case supported a determination that Fox's alien
ownership be designated as 24 percent for purposes of evaluating the Section 310(b)(4)
compliance of the parent of a licensee in which Fox invests, such as Savoy-Fox.  Fox
Television Stations, Inc. (Fox II), FCC 95-313 at 33-35 (released July 28, 1995).
However, Fox II did not address the total alien ownership in the Savoy-Fox venture.
  20.  At the outset, we note that Savoy is represented to hold 75 percent of "the common
stock equity" of both SF Wisconsin and SF Multistations, and Fox is represented to hold 25
percent of "the common stock equity."  The applicants assert that the ultimate parent
company of the ventures is Savoy, because its wholly owned subsidiary, Savoy Stations, Inc.
owns a controlling voting stake in both SF Wisconsin and SF Multistations.  Thus, they
argue, the foreign ownership of only Savoy should be considered for purposes of Section
310(b).  We disagree.  It is the aggregate level of alien ownership and voting control with
which we are concerned in evaluating compliance with Section 310(b).  The approach
suggested by the applicants would completely disregard Fox's voting level in the combined
Savoy-Fox entity, which indirectly wholly owns and controls the licensee, through its wholly-
owned and controlled intervening subsidiaries.  Therefore, we look to the total equity
contributions of each investor in the parent companies, including amounts paid in for
preferred stock.  We found in BBC License Subsidiary, FCC 95-179 at 45, that Savoy owns
55 percent of the equity in SF Wisconsin and Fox owns the remaining 45 percent.  In the
case now before us, Savoy holds 53 percent of the equity in SF Multistations and Fox owns
the remaining 47 percent, as determined above.  Control of each Savoy-Fox entity is
wielded by Savoy, which will initially hold all of the voting stock.
  21.  In challenging the level of alien ownership of SF Multistations, NBC argued that all of
Savoy's alien ownership, or 19 percent, must be counted.  This is so, NBC urged, because in
Wilner & Scheiner II, 1 FCC Rcd 12, 13 (1986), the Commission stated that a "multiplier"
is not employed in connection with equity interests held through controlling ownership links,
such as that held by Savoy.  Utilizing a multiplier would mean diminishing Savoy's 19-
percent interest by a multiplication factor equivalent to its percentage of equity holding in SF
Multistations, or 53 percent.  Fox's alien ownership, NBC asserted, could be discounted by
the multiplier, which may be properly used in calculating equity held in a licensee's parent
company through a non-controlling ownership chain.  Thus, whether Fox is ultimately
deemed to be 99-percent or 24-percent alien-owned, NBC contended that that amount should
be multiplied by the amount of equity Fox holds in SF Multistations, or 47 percent.
Consequently, even though the Commission has found in the second phase of the WNYW-
TV renewal proceeding that Fox will be deemed to be 24-percent alien-owned for purposes
of applying Section 310(b), under NBC's method the alien equity in SF Multistations would
total 30.3 percent, computed by adding Savoy's 19 percent to Fox's discounted ownership of
11.3 percent.  This level exceeds the 25-percent statutory benchmark for parent
companies.
  22.  Compliance with Section 310(b) is a two-pronged analysis, one pertaining to voting
interests and the second to ownership interests.  See 47 U.S.C. 310(b)(4); Wilner &
Scheiner I, 103 FCC 2d 511, 519 n.37 (1985).  Moreover, alien voting and ownership
participation in the affairs of U.S. broadcast licensees is evaluated at two levels:  the licensee
and the parent of the licensee.  Where the alien interests are held at the parent level, the
limits are more relaxed and the Commission enjoys the discretion to waive the limits, as it
did in Fox II.  The statutory limitation on alien participation in a licensee is 20 percent,
while the benchmark for a licensee's parent is 25 percent.  See 47 U.S.C. 310(b)(3), (4).
  23.  In Wilner & Scheiner, 103 FCC 2d at 521-24, and in Wilner & Scheiner II, 1 FCC
Rcd at 13, the Commission set forth a standard for calculating both alien voting and
ownership interests held in a licensee or its parent where such interests are held through
intervening entities.  We reaffirm that standard for the purpose of determining alien voting
interests.  That is, an investor holding in excess of 50 percent of the vote in a parent
company may not use the multiplier to dilute the percentage of its voting power.  Instead, its
alien voting interest flows, in whole, to the next tier entity.  Counting all of the controlling
shareholder's alien voting amount is appropriate, as the Commission stated in Wilner &
Scheiner II, because a majority interest conveys "actual control over the business which is
unlikely to be significantly attenuated through intervening companies."  1 FCC Rcd at 13.
  24.  This rationale, however, does not logically apply when determining compliance with
the second prong of the statute, the level of alien ownership.  For example, if an alien held a
20-percent equity interest in Company A and Company A, in turn, held a 40-percent equity
interest in Company B, but did not control Company B, the alien interest in Company B
would be calculated by multiplying the 20-percent alien equity interest in Company A by
Company A's 40-percent equity interest in Company B, resulting in an eight-percent alien
equity interest in Company B.  If, however, Company A held a controlling, 60-percent
voting and the same 40-percent equity interest in Company B, the full 20-percent alien equity
interest in Company A would be passed through to Company B.  Thus, Company B would
be deemed to be 20-percent alien-owned, rather than eight-percent alien-owned, because the
multiplier (40% x 20% = 8%) would not be utilized.  Such an approach, however, would
substantially overstate the alien interest where pure equity interests or capital contributions
are at issue.  Accordingly, we overrule Wilner & Scheiner II insofar as it established a
method of calculating alien equity ownership or contributed capital interests which directly
tracked that used to determine alien voting interests.  1 FCC Rcd at par 11-12.  For reasons
that follow, we now enunciate a different approach for calculating the amount of alien
ownership held in a licensee or its parent through intervening entities.
  25.  Equity alone, when divorced from its corresponding voting rights, if any, confers upon
each investor in the parent company of a licensee a level of beneficial ownership
commensurate with its proportionate share of the entire equity.  That is, we seek to
determine the pro rata equity holdings of the investors in a licensee or its parent separate
from the voting power assigned to those amounts.  As recently discussed by the Commission
in Fox Television Stations, Inc., FCC 95-188 at 37, the plain language of Section 310(b)
indicates Congress's separate concern with the scope of alien beneficial interest in a licensee
and its parent company.  Indeed, the statute limits the amount of capital stock which can be
"owned. . . or voted" by aliens.  47 U.S.C. 310(b)(3),(4)(Emphasis added.).  As the
Commission reaffirmed in Fox Television Stations, Inc., the benchmark restriction on alien
ownership interests are to be considered independently.  Id. at 37.  Given the statute's
discrete concern vis-a-vis alien ownership, we believe that employing a separate method of
calculation best suited to measure the level of ownership interest is appropriate.  Thus, in
calculating alien ownership of a licensee or its parent, a multiplier is to be used for each
investor, regardless of the amount of equity it holds.  The pro rata equity holdings of each
investor in the licensee or parent then are to be aggregated to determine whether the sum of
their interests exceeds the statutory benchmark.  Turning to the example cited above, the
percentage of Company B's equity capital supplied by Company A remains 40 percent even
if Company A controls Company B.  Thus, the percentage of that 40 percent equity capital
reasonably attributable to aliens is proportionate to the alien contribution to Company A.
The use of the multiplier (40% x 20%=8%) properly discounts the alien participation in
Company B.  We confine our conclusion that a pro rata "discounting" approach is
appropriate to alien equity, or capital contribution, determinations undertaken for purposes of
Section 310(b) analyses.

  26.  Applying that method to SF Wisconsin and SF Multistations, we multiply Savoy's own
19 percent alien ownership by the 55 percent and 53 percent equity contributions it has made
or will make to those parent companies, respectively.  Fox's level of alien ownership, which,
for the public interest reasons articulated in Fox II, FCC 95-313 at 35, we treat as 24
percent, is multiplied by the 45 percent and 47 percent equity it holds or will hold in SF
Wisconsin and SF Multistations, respectively.  The resulting products are then added for
each parent company.  Accordingly, for SF Wisconsin, the total alien ownership is
constructively 21.25 percent, a level within the 25-percent benchmark of Section 310(b)(4)
and, therefore, consistent with the public interest analysis set forth in Fox II.  For SF
Multistations, the total alien ownership is constructively 21.35 percent, also within the
benchmark.  Thus, the Savoy-Fox venture, as structured for the acquisition of WLUK-TV,
Green Bay, and for the acquisition of the three applications now before us, is in the public
interest under Section 310(b)(4) as applied in Fox II.
  27.  As for the venture's compliance with the alien voting interest, the other prong of the
statutory analysis, we note that both SF Wisconsin and SF Multistations also comport with
the 25% statutory benchmark.  Savoy reports that 19% of its equity is alien-owned.  Because
Savoy has issued only a single class of stock (common), see Amendment of March 8, 1995,
we assume that the level of alien ownership interest corresponds exactly with that of its alien
voting interest.  As for Fox, it reports that aliens vote 24% of its stock.  Thus, adding
Savoy's undiluted 19% voting interest to Fox's zero voting interest (Fox has no voting
interest in either SF Wisconsin or in SF Multistations) results in a 19% voting interest in
each of SF Wisconsin and SF Multistations, thereby complying with the statutory benchmark
of 25%.
EEO Matters
  28.  The allegations.  The NAACP contends that the licensee's 1992 renewal application
EEO Program Report indicates inadequate minority recruitment efforts during the last license
term.  It also argues that the licensee's minority employment from 1987 to 1993 was
"stagnant" and that the licensee failed to improve over time in accordance with Commission
policy.  Specifically, the NAACP notes that WVUE-TV's minority employment did not
increase, as indicated by annual employment reports from 1987 to 1993.  Those reports show
that WVUE-TV employed 25, 26, 26, 24, 24, 23, and 21 minorities, respectively, in those
years.
  29.  Furthermore, the NAACP accuses the licensee of discriminating against its only Black
news anchor by terminating him.  The NAACP attaches a discrimination complaint filed by
former anchor Warren A. Bell, Jr. on November 30, 1994, with the Equal Employment
Opportunity Commission (EEOC).  That complaint is pending.
  30.  Finally, the NAACP describes WVUE-TV's general manager's remarks before a
September 20, 1994, meeting of the New Orleans Association of Black Journalists
("NOABJ") as discriminatory.  Citing the minutes of the meeting prepared by the NOABJ,
the NAACP alleges that the general manager said that the station is unable to find Blacks
qualified to be anchors, that no Blacks are in "decision-making" jobs at the station, and that
only one of 10 anchors at the station is Black.  Also, the NAACP contends that WVUE-TV
has never had a Black producer or a Black on the assignment desk.
  31.  Acknowledging that it did not challenge the station's most recent license renewal,
which was granted on May 28, 1992, the NAACP states that it would have filed against the
renewal if at the time it had possessed the evidence it now possesses.  It requests that the
Commission investigate the station, require it to file for early renewal, dismiss the
assignment application or designate it for hearing and deny it.
  32.  Burnham argues that it is too late now for the NAACP to criticize its actions during
the old license term in "generalized, unsupported complaints."  Moreover, the licensee
contends that the real basis of the NAACP's petition to deny is Bell's  discrimination
complaint and not the station's overall EEO record.  Burnham denies that it discriminated
against Bell when it did not renew his contract.  It notes that it replaced the entire three-
member anchor team of which Bell was a part and that the other two members were not
minorities.  Regarding the station manager's remarks, Burnham disputes the accuracy of the
NOABJ's version and criticizes the minutes as not being "authenticated."  It also claims that
the minutes do not actually state that the general manager said what the NAACP claims he
said at the NOABJ meeting.  In addition, the licensee states that its current employees
include four Blacks in decision-making positions:  a department head, a news producer, a
sports anchor/reporter, and a director.
  33.  In a declaration under penalty of perjury attached to the NAACP's reply to the
Burnham's opposition, Bell states that he was present at the NOABJ meeting on September
20, 1994, and heard WVUE-TV's general manager's remarks.  He contends that the
NOABJ's minutes accurately reflect the remarks.  Bell also criticizes WVUE-TV's
employment of Blacks in upper-level positions.  He states that the Black news producer and
the Black sports anchor/reporter were hired after "questions were raised" about the non-
renewal of Bell's contract and that Blacks had not previously been employed in those
positions at the station.  He also contends that the Black director referred to by the licensee
is a "TV director" who "switches the program under the direction and supervision of a
Producer" and has no management duties.

  34.  Discussion.  We assess each of the NAACP's allegations under the standard set forth
in Astroline Com. Co. Ltd. Partnership v. FCC, 857 F.2d 1556 (D.C. Cir. 1988).  First,
with respect to each issue we must determine whether, assuming all facts alleged by the
NAACP to be true, it has set forth a prima facie case that grant of the assignment would be
inconsistent with the public interest, convenience, and necessity.  If we find that showing has
been made, we must then determine whether the evidence before us presents a "substantial
and material question of fact" that precludes us from determining that assignment of the
license would serve the public interest, convenience, and necessity without a hearing.  In
making that determination, we "may, and indeed must, weigh against the allegations of the
petition to deny the other evidence" before us and determine whether "there is a substantial
question of fact such that the totality of the evidence arouses a sufficient doubt on the point
requiring further inquiry."  Metropolitan Council of Metro NAACP Branches v. FCC, 46
F.3d 1154, 1159 (D.C. Cir. 1995) (citing Citizens for Jazz on WRVR v. FCC, 775 F.2d
392, 395 [D.C. Cir. 1985]).  In making that determination, "the balancing of disputed
proximate facts is a matter for [our] judgment."  Id.  We conclude that, with respect to EEO
issues, the NAACP's petition has not alleged facts sufficient to show that a grant of the
application would be prima facie inconsistent with the public interest, as required by 47
U.S.C.  309(d)(1).  See Astroline, 857 F.2d 1556 (D.C. Cir. 1988).  See also Heritage-
Wisconsin Broadcasting Corp., 8 FCC Rcd 5607 (1993); Dubuque T.V. Limited Partnership,
4 FCC Rcd 1999 (1989).
  35.  First, with respect to the licensee's EEO record during its last license term, the
Commission has never required that a licensee's employment of minorities continually
increase or that a violation of the EEO Rule occurs when the employment of minorities
remains relatively stable.  In any event, in 1992, the Commission thoroughly reviewed the
licensee's 1987-1992 EEO record and concluded that the license should be renewed without
condition.  The NAACP has advanced no reason to suggest that our conclusion was
erroneous.  Hence, we decline to re-open matters relevant to  the last license term.
  36.  Second, with respect to the complaint of discrimination against former employee
Warren Bell, it is the Commission's policy to defer action involving individual complaints of
discrimination to governmental agencies or courts established to enforce nondiscrimination
laws.  See Memorandum of Understanding Between the Federal Communications
Commission and the Equal Employment Opportunity Commission, (February 20, 1986).
Bell has a discrimination complaint pending with the EEOC, and we will defer to that
agency's findings on his allegations.  See Liggett Broadcast, Inc., 7 FCC Rcd 4520, 4525
n.3 (1992) (Liggett).  The mere pendency of Bell's complaint does not demonstrate that grant
of the instant application would be prima facie inconsistent with the public interest.
However, we note that the Commission will take cognizance of any final determinations
reached by government agencies and/or courts concerning complaints of employment
discrimination against broadcasters.

  37.  Third, the remarks by the station's general manager about minority recruitment and
the station's record of minority upper-level employment, even if accurately summarized by
the NAACP, fail to present a prima facie case that the station has discriminated against its
minority job applicants or employees.  In addition, the alleged remarks and minority
employment record, viewed along with the licensee's refutations, do not raise a material
question of fact that would warrant a hearing.  In this regard, the Commission has held that,
rather than examining each job category individually, it evaluates a station's overall
employment, including all upper-level job categories, in assessing a station's EEO
performance.  See Carolina Christian Broadcasting, Inc., 3 FCC Rcd 1907, 1909 (1988);
Miami Valley Broadcasting Corp., 86 FCC 2d 776 (1981).  The station's overall record,
which reflects employment of minorities in a variety of jobs, including jobs in the upper-
level job categories, raises no question of discrimination.  Consequently, we find that the
NAACP has failed to present a prima facie case against the assignment on EEO grounds.
  38.  Regarding Bell's argument in the NAACP's reply pleading that WVUE-TV hired
Blacks to fill certain jobs allegedly for the first time only after his complaint arose, there is
no evidence that the station hired the employees solely as a reaction to his complaint or that
it deliberately refused to hire Blacks prior to his complaint.  In addition, although Bell
criticizes the licensee for allegedly failing to give a Black "TV director" managerial duties,
there is no evidence that the director is misclassified or that the station is discriminating
against the director.  Consequently, we find that even if we considered the NAACP's petition
to constitute a prima facie case, which we do not, the petition and reply pleadings fail to
raise a substantial question of material fact warranting a hearing on EEO grounds.
  39.  Finally, the pleadings fail to present a "compelling reason" for requiring the early
filing of a renewal application by WVUE-TV on EEO grounds, inasmuch as no substantial
questions of fact are raised about whether Burnham discriminated against minorities or
intentionally misclassified a Black employee.  See WWOR-TV, Inc., 6 FCC Rcd 6569, 6574
(1991).  In addition, we will not require an early renewal application when the EEOC has
not yet ruled on a pending individual complaint of discrimination.  See Liggett, 7 FCC Rcd
at 4525 n.3.  Accordingly, we deny the request to require the early filing of a renewal
application and dismiss that portion of the NAACP petition that raises EEO issues against the
assignment of WVUE-TV.
  40.  After considering the information before us, we find that the NAACP has failed to
show that grant of WVUE-TV's assignment application would be prima facie inconsistent
with the public interest on EEO grounds.  We also find that the NAACP has failed to present
a substantial question of fact sufficient to warrant a hearing on the assignment on EEO
grounds.  Finally, we find that the NAACP has failed to present a "compelling reason" to
warrant our requiring Station WVUE-TV to file an early renewal application on EEO
grounds.  Consequently, we dismiss the EEO portion of the NAACP's petition to deny the
assignment of Station WVUE-TV.
                 REQUEST FOR CONTINUED SATELLITE EXEMPTION
  41.  SF Multistations seeks to acquire from Burnham television stations KAII-TV, Wailuku,
and KHAW-TV, Hilo, each of which operates as a satellite of KHON-TV, Honolulu.  In
Television Satellite Stations Review of Policy and Rules, 6 FCC Rcd 4212, 4215 (1991), on
reconsideration Second Further Notice of Proposed Rule Making in MM Docket No. 87-8, 6
FCC Rcd 5010 (1991), on further reconsideration Review of the Commission's Regulations
Governing Television Broadcasting, 10 FCC Rcd 3524 (1995), the Commission established
the requirement that all applicants seeking to transfer or assign satellite stations justify
continued satellite status by demonstrating compliance with the three-part "presumptive"
satellite exemption standard applicable to new satellite stations.  Alternatively, applicants
may demonstrate that there exist "other compelling circumstances" to warrant continued
satellite authorization.  The presumptive satellite exemption is met if three public interest
criteria are satisfied.  They are:  (1) no city-grade overlap between the parent and the
satellite; (2) service to an "underserved" area by the satellite station; and (3) no alternative
operator ready and able to construct or to purchase and operate the satellite as a full-service
station.  See Television Satellite Stations Review of Policy and Rules (Television Satellite
Stations), 6 FCC Rcd at 4212.  SF Multistations requests, without opposition, continued
satellite exemption status for the two stations, asserting that they presumptively qualify under
the Commission's three-part standard.  We find that while the satellite stations do not meet
all three of the presumption's criteria, compelling circumstances exist to warrant continued
satellite authority.
  42.  As to the first criterion, SF Multistations notes that there is no overlap of the city-
grade contour of the parent station, KHON-TV, with those of its satellite stations, KAII-TV,
Wailuku, and KHAW-TV, Hilo.  Second, SF Multistations acknowledges that KAII-TV
does not serve an "underserved" area as defined by the Commission in Television Satellite
Stations, but urges that we justify continued satellite exemption of KAII-TV on an ad hoc
basis.  As for KHAW-TV, Savoy-Fox demonstrates in its technical exhibit that the station
satisfies the second criterion via the "reception test."  That test deems an area as underserved
if 25 percent or more of the area located within the satellite's Grade B contour, but outside
the parent's Grade B contour, receives four or fewer services other than the service provided
by the satellite.  Id. at 4215.  The exhibit indicates that there is receipt of four or fewer
services in 93 percent of that portion of KHAW-TV's Grade B contour located outside the
Grade B contour, thereby constituting an underserved area.
  43.  Finally, SF Multistations asserts that the third criterion "should already be deemed
satisfied" because it is purchasing satellites KAII-TV and KHAW-TV and parent station
KHON-TV as a "package."  The purchase of a currently authorized parent-satellite
combination does not exempt the buyer from the requirement that it demonstrate that the
conditions warranting satellite status under the three criteria "prevail at the time of transfer
or assignment."  Id. at 4215.  In this regard, SF Multistations submits a letter from Brian E.
Cobb, a founding partner of Media Venture Partners, which is a nationally recognized media
brokerage and appraisal firm.  Cobb, who is serving as broker in the sale of KHON-TV and
its satellites, states that his firm would not list KAII-TV and KHAW-TV as stand-alone
stations because they are "poorly marketable" and because he would "not be comfortable
brokering properties that would damage the well being of the buyer."  As support for these
conclusions, Cobb asserts the following reasons:  (1) the market's significant number of
competitors; (2) the satellites' failure to reach critical population areas within the market with
a Grade B signal; and (3) the lack of available network affiliations.  First, Cobb points out
that there are nine operating television stations licensed to Honolulu, a quantity he states is
large for a DMA market with fewer than 400,000 television households.  Because Honolulu
is the dominant population, retail and financial center for the area, he notes that the outer
markets are served by the Honolulu licensees via their satellite stations.  Ten full-service
television stations serve as satellites of the Honolulu stations.  "To be successful" as stand-
alone stations, Cobb asserts, these satellite stations would have to serve all of the major cities
in the market.  Here, KAII-TV and KHAW-TV do not cover Honolulu with even a Grade B
signal.  "Thus," Cobb contends, "their coverage is clearly inferior to the other stations with
which they would have to compete."  Even with increased coverage, Cobb states that the
satellite stations would have no prospect of garnering affiliation agreements with any
meaningful compensation from any of the existing networks.  The "chance of survival" as an
independent, Cobb adds, "would be slim."  Thus, Cobb concludes that in order for KAII-TV
and KHAW-TV to survive and to provide service to their communities, they must continue to
operate as satellites of a viable facility.
  44.  With respect to KHAW-TV, Savoy-Fox is entitled to a presumptive satellite exemption
and we shall grant it continued satellite status.  As for KAII-TV, although it fails the second
criterion of the three-part presumptive standard, we believe that there are "other compelling
circumstances" to warrant continued satellite authority.  See Television Satellite Stations, 6
FCC Rcd at 4215 n.23.  In a recent staff action granting continued satellite authority for
other stations also in Hilo and Wailuku, Hawaii, it was noted that Hawaii's geographical
constraints and limited population outside of Honolulu constitute such compelling
circumstances.  See Letter to Tak Communications, Inc. and KITV Argyle Television, Inc.,
from Barbara Kreisman, Chief Video Services Division (dated April 20, 1995).  Specifically,
the eight islands comprising the state of Hawaii are separated by large expanses of water and
mountainous terrain.  As a result, the nine stand-alone stations in Hawaii, all licensed to
Honolulu, serve the islands through a structure of satellite stations.  Indeed, the 11 other full-
power television stations in Hawaii are satellite stations.  Thus, the termination of continued
satellite status to KAII-TV could deprive Wailuku of service which would not otherwise be
provided by a stand-alone operation.  Given Hawaii's unique situation, as well as KAII-TV's
satisfaction of the first and third criteria of the standard, we find that the continued operation
of that station as a satellite would also be in the public interest.

                                CONCLUSION
  45.  We find that the applicant is otherwise fully qualified and that a grant of the
applications would serve the public interest.
  46.  Accordingly, IT IS ORDERED that the petition to deny filed by NAACP IS DENIED,
to the extent discussed above, the petition to deny filed by Vincent Bruno IS DENIED, and
the petition to deny filed by NBC IS DISMISSED.
  47.  IT IS FURTHER ORDERED that the applications for assignment of licenses of
KHON-TV, Honolulu, Hawaii, and its satellite stations KAII-TV, Wailuku, and KHAW-TV,
Hilo, of WALA-TV, Mobile, Alabama, and of WVUE(TV), New Orleans, Louisiana, ARE
GRANTED subject to:
     1. the resolution of the rulemaking proceeding relating to attribution rules, Attribution
     Review, 10 FCC Rcd 3603 (1995).
  48.  IT IS FURTHER ORDERED that the alien ownership condition placed upon the grant
of the assignment of license of WLUK-TV, Green Bay, Wisconsin, in BBC License
Subsidiary L.P., FCC 95-179 (released April 27, 1995), IS REMOVED.
                                                     FEDERAL COMMUNICATIONS COMMISSION
                                                     William F. Caton
                                                     Acting Secretary