Forum Seeks Waiver for Purchase of Fargo, Duluth FOX Stations

Note: The author is employed by a competitor to KQDS-DT but strives to cover broadcasting industry news on this website in a fair and neutral way. He was employed by WDIO when the article was first published and began working for Gray Television in late 2022. (He also worked for KQDS-DT from 2007 to 2010). The statements and views expressed in this posting are my own and do not reflect those of Gray Television.

Forum Communications has asked the FCC to approve a rare waiver of ownership rules so that it can acquire the FOX affiliates in Fargo and Duluth, adding to its existing Fargo ABC affiliate.

The proposed transaction was filed with the FCC on Jan. 21, nearly two months after Forum first announced its plans to buy KVRR/15.1 (Fargo) and KQDS-DT/21.1 (Duluth) from the Kunin family’s Red River Broadcast Corp. and KQDS Acquisition Corp. An asset purchase agreement filed with the FCC lists the purchase price as $24 million, subject to adjustment.

Forum also owns ABC affiliate WDAY-TV/6.1 (Fargo), among other holdings.

Ownership rules prohibit a company that owns a full-power TV station ranking in the top four from buying a second top-four, full-power station, but a 2017 change gave the FCC discretion to allow top-four combinations in some limited cases. The change faced a legal challenge but was eventually upheld by the U.S. Supreme Court.

This proposed transaction is different than the process other companies have used in dozens of markets to combine “big four” affiliations by placing the second affiliation on subchannels or low-power TV stations, which are not subject to ownership rules. Such combinations include Gray TV’s full-power NBC affiliate KVLY-TV/11.1 and low-power CBS affiliate KXJB-LD/30.1 in Fargo, with the CBS affiliation and KXJB callsign having been moved from its former full-power license (now Major Market Broadcasting’s KRDK-TV/4.1).

In this case, Forum is seeking a waiver for a purchase of the full-power KVRR license. It appears the only other such transaction ever approved was Gray TV’s purchase of Red River’s Sioux Falls NBC affiliate in 2019.

A 56-page, partially-redacted exhibit attached to the application to transfer KVRR’s license touts Forum’s history of journalism dating back to the 1870s in print, the 1920s on radio, and the 1950s on TV.

“The aspect of the proposed transaction whereby Forum seeks to own and operate two top-four-ranked stations in the same market would result in a number of important public interest benefits to the Fargo DMA [Designated Market Area] in particular. Forum respectfully submits that…the numerous, tangible public interest benefits that would flow from its acquisition of KVRR(TV) — including a substantial furtherance of localism and the promotion of competition — far outweigh any theoretical harms.”

Comprehensive exhibit to application to transfer KVRR license

Though the change would result in the four major network affiliations being held by just two owners in the market, Forum asserts that its purchase of KVRR would actually foster increased competition and innovation because it would allow Forum to better compete with Gray. Forum says the combination would result in the companies competing on a “comparatively even footing.”

Forum says the November 2021 ratings “show an uncharacteristically competitive race for number one among the top three full-power stations in the DMA” but says KVRR’s strong performance “appears to be a seasonal anomaly almost certainly attributable to Fox’s NFL football.” Specific ratings data is redacted from the document.

Forum also submitted an economic analysis prepared by BIA Advisory Services which concludes that “the competitiveness of the advertising marketplace and the provision of services to the population of Fargo, North Dakota, will be improved” if the transaction is approved. The analysis notes growing competition for advertising revenue with “Big Tech” companies and says Google alone has more estimated revenue in Fargo than all local TV stations combined, with TV getting just 8.5% of the revenue in the Fargo market in 2020 — about five percentage points lower than the national average.

The exhibit says KVRR has the smallest of the three TV newsrooms in the market with just two field reporters and is thus forced to fill much of its local newscasts with national content.

“Forum does not propose consolidating newsrooms and repurposing of existing newscasts. Rather, Forum intends to maintain two different news products — that is, Forum anticipates that WDAY-TV and KVRR(TV) would each retain their own unique news identity,” the document says.

KVRR would add an hour-long midday newscast, a half-hour newscast at 5:30 p.m., early evening half-hour newscast on weekends, and expand its Friday and Saturday 9 p.m. newscasts to an hour. It may also add some programming that currently airs on the WDAY-DT3 “WDAY’Z Xtra” channel, including Dom Izzo’s sports talk show from 9 to 11 a.m. weekdays.

While newsrooms may not be consolidated, the document says Forum does plan “to obtain cost-saving efficiencies through streamlining of certain limited operational matters, such as traffic, master control, engineering services, and business administration.”

The exhibit indicates that Forum plans to make capital investments in KVRR that would not be made if the station is not sold.

READ: Comprehensive exhibit to application to transfer KVRR license

The deal would include KVRR satellites KBRR/10.1 (Thief River Falls-Grand Forks), KNRR/12.1 (Pembina) and KJRR/7.1 (Jamestown). WDAY also operates satellite WDAZ/8.1 (Devils Lake-Grand Forks). The six transmitters all operate from different sites; Forum’s filing did not specify if new simulcasts would be added on any of the satellite stations but such a move could expand coverage of ABC and FOX in various rural areas of the market.

The sale of KQDS-DT, which also includes seven translators, does not require a waiver since Forum does not own any broadcast outlets in the Duluth market. The documents filed with the FCC do not give any indication of Forum’s plans for Duluth.

Forum also owns dozens of newspapers, including The Forum in Fargo-Moorhead and the Duluth News Tribune. The 2017 ownership changes included elimination of newspaper-TV cross-ownership rules.

The Forum and Red River stations compete with Gray TV NBC/CBS combinations in both Fargo and Duluth and a Hubbard Broadcasting ABC affiliate in Duluth.

Timing of the FCC’s decision on Forum’s request is unclear because it is so rare. In the Sioux Falls case, the process took 16 months and a decision appeared to have been forced by an appeals court ruling that temporarily put the 2017 ownership rule changes on hold.