Stolz, Citing Colbert, Questions CBS Radio Spinoff.

CBS is pushing back against an attempt by California radio station owner Ed Stolz to use recent comments by “The Late Show” host Stephen Colbert about President Trump to derail the company’s sale of CBS Radio to Entercom. Stolz says the May 1 “Late Show” broadcast raises questions about whether CBS has the basic qualifications to hold a license and that the Federal Communication Commission must first investigate before it can decide whether to allow the company to transfer its 117-station radio group to Entercom.

The joke that Colbert told viewers about President Trump and Russian president Vladimir Putin suggested a sex act and that led to a number of complaints at the FCC. Agency chief Ajit Pai responded by explaining they had no choice but to review whether it violated federal rules regarding broadcast indecency or obscenity. “We have the rules on the books that I’m duty bound to enforce and I’m committed to enforcing them,” he said during a radio interview. But the FCC announced two weeks ago that after the Enforcement Bureau had reviewed the material and the complaints lodged against the Colbert broadcast that “there was nothing actionable under the FCC’s rules.” Not only did the TV show air after the 6am-10pm “safe harbor” period but CBS also bleeped out any offensive language and blurred Colbert’s mouth.

The question of the radio division’s sale remains, however, and CBS says “The Late Show” broadcast was protected speech and shouldn’t scuttle or delay the deal as Stolz is attempting to do. “The broadcast in question was not indecent, let alone obscene,” CBS told the Commission in a filing. “CBS bleeped and obscured Colbert’s mouth at the point where Stolz alleges that Colbert uttered an obscenity so that a viewer could not hear or even lip-read what he said. Thus, the allegedly obscene expression was never broadcast.” Stolz also alleged Colbert’s monologue constituted “fake news” to which CBS says the nightly routine “is comedic commentary on pop culture and current events.”

While potentially impacting CBS’ planned spinoff of its radio group, the company is for all practical purposes caught in the crossfire of a two-decades-old battle between Stolz and Entercom. The never-ending swapping of allegations and insults wrapped in the form of FCC filings and court cases began in 1996 when Stolz changed his mind about his $25 million deal to sell KWOD Sacramento (106.5) to Entercom. But his second thoughts came too late. Stolz has lost a series of appeals at the FCC and in various courts to regain control of KWOD and he’s currently challenging the agency’s approval of the transfer in court. Stolz filed a motion with the U.S. Court of Appeals in Washington asking it to overturn the June 2016 decision in which the Commission rejected his latest maneuver to retake KWOD’s license.

Stolz most recently has used the FCC’s review of whether Entercom should lose the license for CHR “107.9 The End” KDND Sacramento as the lynchpin for a new line of attack. Entercom was under scrutiny for its role in the ill-fated 2007 “Hold Your Wee for a Wii” contest, which led to the death of one of its contestants. Jennifer Strange, 28, died of water intoxication. But weeks before the case was to go to a hearing Entercom agreed to voluntarily turn in the license to end the investigation. And Chief Administrative Law Judge Richard Sippel rejected a request to enlarge the case and consider whether Entercom should lose the licenses for all the stations in its Sacramento cluster. By letting go of KDND it also meant Entercom would only need to find buyers for three Sacramento FMs in order to comply with ownership limits under its merger with CBS Radio.

Stolz has asked the Commission to review Sippel’s decision to greenlight that outcome, calling it a “clever move” by Entercom to “sidestep” the hearing process and avoid any economic penalty for its deadly contest. “Before the FCC lets Entercom get away, it needs to determine the economic consequences from the return for cancellation of the KDND license,” he wrote in a filing last month.

For its part, Entercom doesn’t seem particularly worried that Stolz’s ongoing efforts will sideline its acquisition of the CBS Radio stations. It makes no mention of his challenges in proxy statements to shareholders and has said it expects to close the $2.86 billion merger in the second half of this year.

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