San Joaquin Communications Corporation: The long fight
The history of McClatchy's television undertakings was altered significantly in the 1970s by a problem that had been present nearly from the start. Like in Fresno, McClatchy had filed in 1948 to build a TV station on channel 10 in Sacramento, where it published The Sacramento Bee and owned radio station KFBK. Unlike in Fresno, however, a competing applicant applied for channel 10 after the FCC freeze was lifted. Sacramento Telecasters objected to an initial decision by an FCC hearing examiner favoring McClatchy's proposal for the Sacramento station on grounds that McClatchy already owned too many mass media outlets in the city and that the decision ran counter to FCC policy favoring diversification of media ownership.[16][17] The FCC agreed with Sacramento Telecasters in October 1954 and awarded it the construction permit for KBET-TV,[18] though McClatchy exhausted its appeals until February 1958.[19]
In 1964, McClatchy acquired KOVR, a station in Stockton that also served Sacramento.[20] The transaction had attracted scrutiny for potentially creating a "monopoly of news", and a court challenge to McClatchy's ownership of the station was filed in 1969 and abandoned in 1971.[21][22]
When KMJ-TV's broadcast license came up for renewal in November 1974, San Joaquin Communications Corporation (SJCC), a company led by R. W. "Duke" Millard and owned by local investors, filed a competing application to establish a channel 24 station with the FCC. SJCC contended that McClatchy had "great concentration of control" and was "a monolithic media giant" as a result of its newspaper, radio, and television holdings in Fresno. A group representing local Mexican Americans also objected to the KMJ-TV license; McClatchy defended its community service record and expressed confidence that KMJ-TV's license would be renewed.[23] The United States Department of Justice Antitrust Division also lodged a petition with the commission asking it to order the breakup of McClatchy's Fresno media holdings due to the dominance of The Bee, the main daily newspaper, and the radio and television stations.[24] As evidence, federal attorneys noted that the Bee–KMJ combination commanded 80.4 percent of the advertising revenue in Fresno media as of 1972.[25]
While the FCC accepted a citizens' agreement with the Mexican American group in July 1975,[26] and it dismissed the Justice Department opposition in 1976,[27] the SJCC application continued to simmer as attitudes on cross-ownership of mass media entered the national spotlight. In response to a federal appeals court ordering divestitures of such combinations, in 1977, McClatchy proposed to trade KOVR to Multimedia, Inc. for WFBC-TV in Greenville, South Carolina; SJCC opposed the deal and refused to rescind its petition to deny, contributing to its cancellation after a year in pending status.[28][29]
In April 1978, ten days of hearings were held comparing the record and proposals of McClatchy's KMJ-TV and those of San Joaquin Communications Corporation. SJCC officials sought to highlight that the public service activities of KMJ television were influenced by the KMJ radio stations and McClatchy itself, while McClatchy defended its viewership and record by noting that channel 24 was the most-watched station in most time periods and that it enjoyed a comparatively favorable reputation.[30] More rounds of hearings were held in Washington, D.C., and Fresno during 1978, with technical and antitrust issues at play.[31] SJCC charged that McClatchy had aggressively investigated the backgrounds of its members and went as far as to destroy taped conversations about the topic.[32] Representations about transmitter sites and finances and the possibility of upgraded KMJ-TV transmitting facilities overlapping with those of KOVR were also discussed in the marathon sessions. Dayle Molen, whose coverage of the hearings appeared in The Bee, noted that for the teams of attorneys from Washington, "Their principal recreation was sampling the cuisine of various Fresno restaurants."[33]
