SBS Warns Programming Demands Could Jeopardize Bankruptcy Exit.

Spanish Broadcasting System is warning that efforts to delay its post-bankruptcy restructuring could threaten the very stations that Hispanic media advocates are trying to protect. Pushing back against calls for programming guarantees, SBS argues the court-approved plan to slash its debt load offers the best path to preserving its stations and their service to Hispanic audiences.

In a new filing, SBS urges the Federal Communications Commission to reject objections from the Hispanic Marketing Council, the Latin Advocacy Media Project and New York Latin music promoter John “Gungie” Rivera. The groups have raised concerns about what will happen to the broadcaster’s Spanish-language formats, local news and community programming when longtime CEO Raúl Alarcón’s controlling ownership gives way to institutional investors.

SBS contends that those worries are speculative and that prolonging the regulatory review could jeopardize the company’s ability to continue operating.

“The significant delay associated with any extended proceedings would materially impact the company’s ability to continue to operate as a going concern,” SBS says in the filing. The company argues such a delay would undermine the advocates’ goal of preserving its existing programming.

SBS says its bankruptcy court-approved restructuring will reduce debt by approximately 75% and provide a more viable capital structure. SBS argues without an agreement with creditors, it likely would have faced involuntary bankruptcy, potentially resulting in the liquidation of its broadcast assets. “Such an outcome would be counterproductive to objectors’ purported goal of maintaining SBS’s broadcast formats,” the filing says.

Rejects Programming Guarantees

The central disagreement is whether the FCC should require SBS to preserve its Spanish-language programming as a condition of approving the ownership transfer. Rivera has proposed a five-year commitment to Hispanic-targeted formats, along with protections for local staffing, news and public affairs programming. He also wants advance notice of format changes and company leadership with experience serving Hispanic audiences.

The Hispanic Marketing Council has urged regulators to examine how the ownership change could affect Spanish-language news, emergency information and community service. LAMP has similarly questioned whether the new owners will maintain the broadcaster's longstanding connections to Hispanic communities.

SBS rejects those proposals, arguing that the FCC has long left programming decisions to broadcasters rather than attempting to determine which formats best serve particular audiences.

“The Constitution, the Communications Act, and decades of bedrock precedent establish that the Commission has no place in dictating the format of broadcast stations,” SBS says.

The company cites a 1981 Supreme Court decision affirming the FCC’s policy of allowing market forces and competition to determine programming formats. SBS also opposes requirements concerning the experience or qualifications of its future board members and senior executives.

Yet SBS also notably doesn’t offer any commitment to maintain its current Spanish-language formats on its 22 stations across nine markets. Instead, it tells the FCC that concerns about possible future programming changes can’t justify blocking the ownership transfer.

Foreign Concerns Dismissed

SBS also disputes questions about the investment funds that would take control following bankruptcy. The restructuring would cancel existing shares and transfer ownership to creditors, with foreign investors initially holding about 64% of equity and 67% of voting interests. SBS is seeking authority for aggregate foreign ownership to reach 100%, however.

The company argues that critics misunderstand how investment funds are structured, noting that some funds are organized outside the U.S. for financial and tax reasons even though their managers are based domestically. It maintains that its proposed ownership arrangements are fully disclosed and consistent with FCC rules and precedents involving other broadcasters. SBS also rejects suggestions the transfer should undergo another national security review, saying no specific threat has been identified.

FCC Decision Pending

The dispute now presents the FCC with competing arguments about how best to protect the future of SBS’s stations. For the Hispanic media advocates challenging the transaction, the concern is whether those stations will retain their Spanish-language identity and community connections under new ownership.

But for SBS, the fundamental question is whether its stations can emerge from bankruptcy with a more sustainable financial foundation. “The facts and the law establish plainly that the public interest would be best served by upholding the bankruptcy court’s decision,” it argues.