Connoisseur Media has requested that the FCC allow Connoisseur Media Holdco, Inc. to exceed the 25% limit on foreign ownership.
Connoisseur is asking the FCC for a declaratory ruling to permit up to 100% aggregate indirect foreign ownership (equity and voting) of CM Holdco and to allow two organizations in the Cayman Islands and a citizen of the United Kingdom to be involved in the ownership of the holding company and the licenses it controls.
The approval would allow two transactions to proceed. The first would have Falcon CM Holdings LLC, which holds 29% equity in the holding company parent Connnoisseur Cos LLC covert some of the notes it holds into equity giving it a total of 47.5% interest in the holding company. Because two of Falcon CM’s members are organized outside the United States, an increase in Falcon CM’s equity interest in Connoisseur Cos would result in an increase of indirect foreign equity interests.
The second transaction would enable certain former executives, shareholders, or investors of Alpha Media to convert their warrants to acquire additional equity in Connoisseur Media Parent LLC when the company reaches certain valuations. The warrant holders currently hold a collective 8.75% stake in Connoisseur Media Parent LLC and should the warrants be exercised their foreign ownership stake would increase from 4.49% to 8.57%.
Connoisseur says overall should the transactions be granted, the indirect aggregate foreign ownership interests in CM Holdco could rise from the present level of 20.37% of equity and 0% voting to between 30.50% and 34.38% of equity and 0% voting. The petition specifically requests for Oliver Price to hold a 100% indirect, non-controlling voting interest in CM Parent by virtue of his position as an uninsulated member of CM Broadcast Management LLC and for Falcon Strategic Partners V (Cayman) LP and Falcon Strategic Partners V (Cayman 2) LP to each increase their indirect interests in CM Holdco up to a non-controlling 20.0% equity interest and a 20.0% deemed voting interest.
Connoisseur finally notes that because the FCC previously granted a petition for declaratory ruling permitting up to 100% aggregate foreign investment by the same principles in Alpha Media and that Jeff Warshaw will continue to hold de facto and de jure control of CM Holdco and the FCC broadcast licenses it controls it is in the public benefit.
