Saying that it would be "detrimental to the public interest," a federal administrative law judge has rejected an agreement that would allow RKO General to sell Los Angeles station KHJ-TV to Westinghouse Broadcasting and Cable.
The $313 million deal, proposed last November, would have settled a lengthy dispute between RKO and Fidelity Television, a group of prominent Southern California investors, over the ownership of KHJ-TV, Channel 9, which has suffered in its ratings.
Under the settlement reached by RKO and Fidelity, which is based in Norwalk, Calif., RKO General would have withdrawn its license renewal application for KHJ-TV at the Federal Communications Commission, leaving Fidelity as the sole applicant for the license.
If the FCC approved Fidelity's application, the company immediately would have transferred the license to Westinghouse Broadcasting. RKO would have gotten $212 million from Westinghouse, which also would have paid $95 million to Fidelity's 52 shareholders plus a payment for certain liabilities Fidelity incurred. Fidelity shareholders include William G. Simon, who once headed the Los Angeles division of the FBI; actress Donna Reed; restaurateur Maude Chasen, and producer Mervyn LeRoy.
In his strongly worded 14-page ruling, Judge Edward J. Kuhlmann said that approval of the agreement "would only create an unwarranted delay at a very crucial moment" in the continuing proceedings to determine RKO's qualifications to hold licenses for 13 other broadcast properties.