FCC Approves Pandora’s Purchase of South Dakota Radio Station

Last week, we learned that Pandora was awaiting FCC approval of its purchase of the KXMZ-FM radio station out of Rapid City, S.D. Yesterday (May 4), the FCC gave Pandora that go-ahead.

“Pandora is radio, and the acquisition of KXMZ would qualify Pandora for the same RMLC license under the same terms as our competitors,” Pandora’s director of public affairs Dave Grimaldi said in a statement (via Billboard). “This move makes sense to us beyond the licensing parity alone.”

Pandora purchased the South Dakota station back in 2013 for a reported $600,000. However, a law prohibiting radio stations with more than 25 percent foreign ownership from broadcasting in U.S. was standing in Pandora’s way. While FCC Chairman Tom Wheeler was supportive of the online music-streaming service’s efforts, the American Society of Composers, Authors and Publishers objected, as the purchase would afford Pandora lower royalty rates.

As it stands, Pandora is obligated to turn over 1.85 percent of its revenue in royalties, however, following ASCAP's settlement and the FCC's approval of its newly acquired radio station, Pandora will reduce that rate to 1.7 percent.

FCC responded to ASCAP’s qualms, saying, “With respect to ASCAP’s allegations regarding Pandora’s motivation in acquiring the station, the Act does not require us to examine the business rationale.”