Federal Communications Commission

"Under the terms of his LBO loans, Kluge was required to break up Metromedia and sell off the pieces to liquidate the debt in short order. It quickly became apparent, however, that it would not be feasible to peddle the assets quickly at premium prices. The problem was partly that poten¬ tial acquirers were constrained by Federal Communications Commission (FCC) limits on the number of stations they could own. Faced with pos¬ sible default on his loans, Kluge turned to the investment bank Drexel Burnham Lambert for a new financing package that granted him addi¬ tional time to complete the asset sales."

"Azcárraga and his partners invested first in San Antonio, the Texas city where he went to school and where his son was born. In September 1961, they put up $200,000 to acquire KCOR-TV (Channel 41), which had been founded in 1955 as the country’s first all-Spanish station and obtained most of its programming from TSM. Unfortunately for its founder, Raúl Cortez, it had never sold enough ads to be profitable. Fortunately for Don Emilio, Cortez—who had been resisting the idea of new shareholders—chose to throw in the towel just as the Mexican government’s complaints about TSM imports were reaching a climax. Close to the border, an affiliate station in San Antonio would be the perfect anchor for a string of acquisitions in the United States. Fouce and Noble took 20% each. Azcárraga kept the legal maximum of 20% in shares, but since his employees Anselmo and Kaufman took 35% and 5%, respectively, and since Noble was surely a front man for Don Emilio, he was in fact illegally controlling a majority of 80%. There were no objections from the powerful regulatory body, the Federal Communications Commission (FCC); this was, for the time being, too small a business to attract Washington’s attention."