Pandora’s Publicity Stunt: Pandora bought  South Dakota terrestrial radio station minus the broadcast license.

Back in June of 2013 Pandoras Associate Chief Counsel Chris Harrison (Songwriter Enemy #1) wrote an article for The Hill that implied that Pandora had purchased a radio station in South Dakota. The idea was that they were somehow now equivalent to Clear Channel and deserved the same percentage of revenue deal for sound recordings that Clear Channel receives.  Never mind that much of Clear Channel’s content IS NOT MUSIC and terrestrial broadcast has enormous capital costs so percentages of revenues are not comparable.  THE REAL PROBLEM and why this is misleading is that Pandora did not own the broadcast license of this station.   Transfer of this license requires FCC approval and as far as we can tell it appears Pandora had not even filed for transfer of this license at the time of this announcement (we could be wrong but we can’t find evidence, glad to correct if we are wrong).  Do you really own a radio station without a broadcast license? It’s not really clear what it is that Pandora actually purchased.

A year later this broadcast license is not in the hands of Pandora. And indeed the foxes in the henhouse over at the  FCC (much to our surprise) rejected Pandora’s license.  There is a rule that a company must demonstrate it has less than 25% foreign ownership to own a radio station broadcast license and Pandora could not demonstrate this. However silly this rule may be, it’s still a rule, and Chris Harrison as an attorney with long experience in radio surely knew this.  Right?  So shouldn’t Congress and the SEC ask Pandora and Harrison if they intentionally misled Congress and investors?

Maybe they didn’t mislead investors and they really didn’t understand the requirements for purchasing a broadcast license.  But this implies that the top legal staff of Pandora is incompetent.  What does that say to investors?