In February the stock price at Pandora tumbled to a low of $14.62 per share. Today it's back up to $17.99 on news that revenue continues to grow and losses continue to diminish but the fact is the company continues to be as much of a money pet as Spotify. Still, it's worth is just under 4 Billion dollars. The GDP of the entire state of South Dakota is 34 Billion for comparison. So they couldn't buy the entire state, but certainly most of Rapid City itself.
On May 4th the FCC granted Pandora Media permission to buy KXMZ from Connoisseur Media, LLC The sticker price was $600,000 dollars. I believe this is the first time a dot com has bought a radio station.
This was opposed by BMI, ASCAP, SESAC, musicFIRST, SAG-AFTRA, and NAB just to name a few. They had a collective histrionic shit-fit actually. The reason is that it will (possibly) enable Pandora to pay royalties at a lower rate. But they did manage to put together three cogent objections:
- Pandora may have failed to disclose all parties that will hold an interest in KXMZ
- Pandora may not have complied with the FCC’s foreign ownership limits
- Pandora’s publicly stated goal of lowering the their royalty payment indicates they won't operate KMXZ-FM in a way that serves the public interest.
The FCC’s 20% foreign ownership limit for broadcast licensees is a less flexible. According to ASCAP, Pandora used shareholder addresses to determine their citizenship. This might not pass the muster. ASCAP requested a statistical survey be performed. However, such a requirement opens the door to applying that same requirement to all media owners. It'd doubtful that this would occur without unintended casualties. ASCAP may find NAB on the other side of this issue.
The third complaint is just ASCAP giving Pandora the finger. Pandora was clear as to their goal of reducing their royalty costs. But their plan is to just pay royalties at the same rate as terrestrial broadcasters. They are not arguing for special rates, the lowest rates, or changing existing rates. They are attempting to enter the same level playing field as radio broadcasters under the existing rules. Why is that a problem?