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Jon Lafayette

Mission Broadcasting Terminates Agreement To Buy WADL Detroit

WADL Detroit offices.

Mission Broadcasting has sent a letter to Adell Broadcasting terminating Mission’s agreement to purchase WADL Detroit for $75 million.

The Federal Communications Commission approved the WADL license transfer, but imposed a number of conditions that made the deal unpalatable to Adell and to Nexstar Media Group, which helped finance the deal and would have run the station under a series of management agreements.

The FCC imposed its conditions after ordering Mission to sell WPIX New York, because it would be under the “de facto control” of Nexstar under a similar set of agreements.

Also Read: Owner of WADL Detroit Urges Mission To Close Station Purchase

“The FCC order expressly prohibits Mission from entering into certain of the sharing agreements and mandates material modifications to certain of the sharing agreements,” Mission CEO Dennis Thatcher said in the letter. “The FCC order likewise constitutes an order that prohibits the consummation of the sales of the purchase asset contemplated by the purchase agreement because it imposes conditions on consummation that were not contemplated.”

Mission also issues a statement regarding WADL. 

"Mission is very disappointed that Detroit’s television viewers will not receive the high-quality programming and public service that Mission’s ownership of WADL would have brought to the market. However, Mission felt compelled to take this action taking into account the Media Bureau’s recent decision to 'approve' Mission’s purchase only if Mission complied with a number of conditions which fundamentally rewrote the terms of the transaction. In light of the termination of the purchase agreement, Mission is also notifying the FCC today that it rejects the agency’s conditions and will not close the transaction."

Mission would have made WADL a The CW affiliate. Terminating the deal leaves Nexstar without a Detroit affiliate for its CW network next season. 

Mission cited a clause in its purchase agreement with Adell that says the deal can be terminated if conditions were placed on FCC approval.

But Adell Broadcasting CEO Kevin Adell, who built WADL, said he believes Mission broke the agreement.

“I think they violated the contract because they didn’t use their best effort” to get the deal past the FCC, Adell said.

He added that when he talked to Mission president Dennis Thatcher, Perry Sook, CEO of Nexstar and former Nexstar president Tom Carter, “They never told me the severity of their problem with the FCC,” Adell said. “So before I signed the contract it was really fraudulent inducement.”

Adell did not say whether he planned to sue Mission or Nexstar.

“I had a deal to sell the station for $75 million,” he said. “I wasted a year of my time and legal fees. I'm kind of tired of Perry Sook.”

Adell said that Nexstar and Mission still have two problems now that the deal to acquire WADL has fallen through.

The first is finding an affiliate for The CW in Detroit, which has been at several stations, including WADL, in the past few years.

Adell said there are no full-power stations left in the market for The CW to turn to. Being on a digital multicast channel is no good because those aren’t rated by Nielsen, which makes it hard to sell advertising. Also, the sports that Nexstar has acquired for The CW won’t look good in standard definition on a digital channel.

“I believe the need is still there,“ Adell said. “He needs the station and he needs to clear Detroit by August 31.” 

If Nexstar still thinks it can find a way to buy WADL, “the price isn’t going to be $75 million,” he said. 

The other problem for Nexstar and Mission is that the conditions the FCC put on the acquisition have disappeared because the deal was terminated.

Those conditions will make it difficult for Mission to buy more stations and have Nexstar run them. 

“Any time Mission goes to buy a station down the road, those six conditions are going to come up,” Adell said.

The conditions might also threaten the “sidecar” stations Mission already owns that are managed by Nexstar, he added.

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