L.M. Communications is asking the Federal Communications Commission to waive its local radio ownership rules as part of a proposed $550,000 acquisition of two Lexington-area FM stations that would expand the family-owned broadcaster’s cluster beyond the agency’s current FM ownership limit.
The deal would see L.M. acquire classic country “Hank 105.5” WLXO and Americana “The Hound 96.1” WZNN from Clarity Communications. L.M. already owns five stations in the Lexington-Fayette, KY market: hot AC “Hits 106.3” WCDA, classic hits “Kiss 96.9” WGKS, classic rock WBVX, R&B “107.9 The Beat” WBTF, and sports station WLXG (1300).
Because the Lexington market has 38 full-power radio stations, FCC rules allow a single owner to hold up to seven commercial stations, but no more than four AMs or four FMs. While the acquisition would keep L.M. within the overall seven-station ownership cap, it would increase the company’s FM holdings from four to six, requiring a waiver of the FM subcap.
In its filing seeking a waiver to the limits, L.M. argues the transaction would improve competition rather than diminish it by strengthening a locally owned broadcaster against much larger rivals.
The company says iHeartMedia currently generates 56% of Lexington radio revenue, compared to L.M.’s 19%. Acquiring the two Clarity stations would increase L.M.’s estimated market share to 26%, but iHeart would remain the dominant operator by a wide margin, with Cumulus Media continuing as the third-largest group at 13%.
L.M. says a waiver “will strengthen the stations’ local service and enhance L.M.’s ability as a locally-owned and operated broadcaster to compete against larger, better-funded national broadcast competitors.”
The company also emphasizes its local roots. Headquartered in Lexington, the Lynn Martin-led company says its ownership and management team live in the community and have operated local stations there for more than 45 years. It argues the acquisition would give WLXO and WZNN access to expanded local management, sales and programming resources while increasing news, weather, sports coverage and community involvement.
L.M. singles out WZNN as a station that has struggled competitively, noting it has consistently ranked among the market’s lowest-rated FMs and operates with technical coverage limitations that reduce its reach across the Lexington market.
The filing also notes that the two companies already have an established business relationship. Under an existing shared services agreement, L.M. provides Clarity with certain back-office and administrative functions and is authorized to sell up to 15% of its stations’ advertising inventory. L.M. says taking the next step toward common ownership would allow those operations to be fully integrated, eliminating redundant costs while creating greater economies of scale. The company says those efficiencies would further reduce expenses, allowing it to devote additional resources to local programming and offer advertisers broader marketing opportunities.
The request is the latest in a growing series of radio ownership waiver filings as broadcasters press the FCC for greater flexibility while the agency continues its review of local radio ownership rules. Earlier this year, the Commission approved waivers for transactions in Fort Myers, FL and San Francisco, and earlier this week Draper Media sought similar relief with its proposed acquisition of five stations in the Salisbury-Ocean City, DE market.
Like other broadcasters seeking regulatory relief, L.M. also argues Lexington’s competitive landscape has fundamentally changed since the FCC adopted the current ownership rules nearly three decades ago. Its waiver request points to streaming services, podcasts, satellite radio, internet audio, social media and other digital platforms as increasingly important competitors for both listeners and advertising dollars.
As a result, L.M. says radio broadcasters no longer compete primarily against one another, but against national and global digital companies with far greater scale and financial resources. It argues a modest waiver of the FM subcap would better reflect today’s marketplace without materially reducing competition or programming diversity in Lexington.
If approved, the transaction would mark Clarity Communications’ exit from station ownership in the Lexington market.