[BC] LMAs - How Far Can They Go?

[Larry Fuss]

> I know enough not to sign a contract that lacks a termination clause and
liquidated damages for foreseeable defaults.

This was in '93 when LMAs were still in their infancy.  The contract was
prepared by
an attorney, but I don't recall any specific clause relating to damages.

> Which is why the licensee should be required to provide all necessary
equipment for programming and transmitting; and should be required by
contract to comply with all rules and regs.

He was required to comply with the rules, but the new equipment was
purchased by
me when the station was moved into our facility.  All he had was a bunch of
junk
that was hardly able to keep the station on-air.

> As licensee, inspection and rules compliance is YOUR responsibility.
One of the two required "presence" employees should be inspecting on
a regular, routine basis.

True, but I'm 2000 miles away.  The presence employee was, as in the case of
most LMAs, busy playing radio and not paying attention to technical stuff.

> Isn't it more a question of quality of legal advice rather than market
size?

Not necessarily.  In small markets, you're often dealing with an owner who
may
not be accustomed to EVER doing anything by the rules.  The doofus mentioned
in
my first example just walked away as soon as the LMA was signed.  He even
went
and had the power turned off because he no longer wanted it in his name.  I
hurriedly arranged to have it turned back on.  When I reminded him that the
contract said that he as the licensee was responsible for the power and I
was
supposed to reimburse him, he said "we're gonna do it my way or not at all."
Since we had a pending transfer application on file, I hoped we could get
the transfer approved before anything drastic happened.  As it turned out,
that
was not a great idea.  But if I had walked away, my other in-market
competitor
would probably have ended up with the station.  So $4000 was probably a
small
price to pay.

> Doing due diligence BEFORE starting and having a good agreement with teeth
in the event of default drawn by a good communications lawyer is only 
prudent, and is what you will see in a large market. Apply the same to a
small market and it will work the same.

Contracts are only good as long as both parties abide by them.  When one of
the parties is a doofus, all bets are off.

Larry Fuss, President
Contemporary Communications LLC
9408 Grand Gate Street
Las Vegas, NV  89143
Phone 702-898-1554
Fax 208-567-6865
Cell 702-328-4669
larryfuss at cox.net