SBS vs. Emmis In Los Angeles ????

According to Radio and Records magazine, in response to last week’s $25 million Emmis suit against Spanish Broadcasting System over SBS’s flip of KXOL/Los Angeles from Spanish Contemporary to a bilingual “Hurban” format as “Latino 96.3,” SBS has sent a letter to FCC Chairman Kevin Martin seeking FCC intervention over what SBS claims are anticompetitive practices on Emmis’ part.

SBS leases space for its transmitter on an Emmis-owned tower, and Emmis says the lease agreement requires SBS to notify it of any format change 45 days before the flip, with “details as to the proposed new format.” That information would give Emmis the opportunity to object should the new format conflict with either of its L.A. stations and gives it the right to terminate the lease agreement at any time. While SBS admits that it agreed to the contract, it questions the legality of the clause and says the Emmis agreement is its only tower lease that includes such a condition.

In the letter, SBS attorneys say, “The Emmis complaint is an attempt to usurp programming decisions from KXOL and to illegally neutralize KXOL’s responsibility as a broadcast licensee.” While SBS acknowledges that format issues aren’t the FCC’s usual purview, it argues that Emmis’ actions conflict with established commission policy regarding licensees’ control over their stations.

“By distorting and then enforcing the anticompetitive language in the lease agreement, Emmis is doing nothing less than exercising direct control over KXOL’s programming policies,” SBS says. “Licensee ‘control’ is at the heart of the commission’s regulation. It cannot allow this sort of bullying to compromise a licensee’s responsibility.”

SBS maintains that no real format change under the terms of the lease has taken place, on the grounds that KXOL remains a Spanish-language outlet, though SBS does acknowledge that KXOL changed its music to “appeal directly to the same demographic targeted by Emmis’ Power 106.” But it also says whether a format flip occurred or not is irrelevant, focusing instead on asking the FCC to declare unenforceable the parts of the lease agreement that give Emmis any control over KXOL’s programming.

Industry insiders speculate that SBS has requested a change from the Emmis tower at the FCC already. This approach could be effective to break the contract and hopefully not have to pay the penalties for a contract breach, using the anti-competitive, First Ammendment rights and minority trump cards.