LYNCHBURG NONCOMPETE FIGHT NOT OVER YET!
In February of 2005, Centennial Broadcasting purchased WLNI, Lynchburg’s radio talk station, from its owner, Gary Burns. Centennial paid Burns an extra $25,000 for agreeing to not operate a talk radio station in the Roanoke-Lynchburg market for five years. Guess what? Later in 2005 Burns bought a music station (WBLT – 1350 AM) in Bedford County. Afterwards, when Centennial Broadcasting bought a nearby Roanoke station (WLEQ – 106.9 FM) and turned it into an oldies music station, Burns concluded that event changed the market’s needs and he converted WBLT into a sports-talk station.
Centennial filed suit against Burns for violation of the non-compete provision contained in the purchase agreement for WLNI. The U. S. District Court in Lynchburg found Burn’s actions to be in violation of the non-compete and that ruling was upheld late last year by a federal appeals court. End of story….right? Wrong!
It appears that Burns brought the matter to the attention of the Federal Communications Commission (FCC) which issued a ruling on May 8 favorable to Burns. The commission found the non-compete agreement violated rules that give broadcasters the right to evaluate their market and select appropriate programming. The FCC levied a $8,000 fine against Centennial (the FCC’s base fine for unauthorized control) and ordered Centennial to petition the U. S. District Court in Lynchburg District to dissolve its previously issued injunction against Burns.
The lesson of the story: Courts may not have the final say when non-competes impact federal regulatory agencies, like the FCC.