RELATED PERSON TRANSACTIONS

9 Months Ended

Sep. 30, 2011

RELATED PERSON TRANSACTIONS

RELATED PERSON TRANSACTIONS

5. RELATED PERSON TRANSACTIONS

David, Frederick, Duncan and Robert Smith (collectively, the controlling shareholders) are brothers and hold substantially all of the Class B Common Stock and some of our Class A Common Stock.  Since the end of our last fiscal year, we engaged in the following transactions with them and/or entities in which they have substantial interests.

Related Person Leases.  Certain assets used by us and our operating subsidiaries are leased from Cunningham Communications, Inc., Keyser Investment Group, Gerstell Development Limited Partnership and Beaver Dam, LLC (entities owned by the controlling shareholders).  Lease payments made to these entities were $1.2 million and $1.5 million for the three months ended September 30, 2011 and 2010, respectively.  Lease payments made to these entities were $3.3 million and $3.8 million for the nine months ended September 30, 2011 and 2010, respectively.

Bay TV.  In January 1999, we entered into a LMA with Bay Television, Inc. (Bay TV), which owns the television station WTTA-TV in Tampa/St. Petersburg, Florida market.  Our controlling shareholders own a substantial portion of the equity of Bay TV.  Payments made to Bay TV were $0.5 million for each of the three months ended September 30, 2011 and 2010 and $1.7 million and $1.2 million for the nine months ended September 30, 2011 and 2010, respectively.  We received $0.1 million and $0.4 million for the three and nine months ended September 30, 2010 from Bay TV for certain equipment leases, which expired in 2010.

Cunningham Broadcasting Corporation.  We have options from trusts established by Carolyn C. Smith, the mother of our controlling shareholders, for the benefit of her grandchildren that will grant us the right to acquire, subject to applicable FCC rules and regulations, 100% of the capital stock of Cunningham or 100% of the capital stock or assets of Cunningham’s individual subsidiaries.  As of September 30, 2011, Cunningham is the owner-operator and FCC licensee of: WNUV-TV in Baltimore, Maryland; WRGT-TV in Dayton, Ohio; WVAH-TV in Charleston, West Virginia; WTAT-TV in Charleston, South Carolina; WMYA-TV in Anderson, South Carolina; WTTE-TV in Columbus, Ohio; and WDBB-TV in Birmingham, Alabama.

In addition to the option agreement, we provide programming under LMA’s to Cunningham for airing on WNUV-TV, WRGT-TV, WVAH-TV, WTAT-TV, WMYA-TV, WTTE-TV and WDBB-TV.  In February 2011, Cunningham purchased the FCC license for WDBB-TV.  We have an LMA with WDBB-TV, which our counterparty assigned to Cunningham in conjunction with Cunningham’s purchase.

We made payments to Cunningham under the LMAs and other agreements of $4.1 million and $4.4 million for the three months ended September 30, 2011 and 2010, respectively.  For the nine months ended September 30, 2011 and 2010, we made payments to Cunningham of $12.5 million and $13.2 million, respectively, related to the LMAs.

Our Bank Credit Agreement contains certain cross-default provisions with certain material third-party licensees.  As of September 30, 2011, Cunningham was the sole material third-party licensee.

Atlantic Automotive Corporation.  We sold advertising time to and purchased vehicles and related vehicle services from Atlantic Automotive Corporation (Atlantic Automotive), a holding company which owns automobile dealerships and an automobile leasing company.  David Smith, our President and Chief Executive Officer, has a controlling interest in, and is a member of the Board of Directors of Atlantic Automotive.  We received payments for advertising time totaling less than $0.1 million for each of the three months ended September 30, 2011 and 2010.  We received payments for advertising time of $0.1 million and $0.2 million for the nine months ended September 30, 2011 and 2010, respectively.  We paid $0.4 million and $0.2 million for vehicles and related vehicle services from Atlantic Automotive during the three months ended September 30, 2011 and 2010, respectively.  For the nine months ended September 30, 2011 and 2010, we paid fees of $1.0 million and $0.5 million, respectively, for vehicles and related vehicle services.

Thomas & Libowitz P.A.  Basil A. Thomas, a member of our Board of Directors, is the father of Steven A. Thomas, a partner and founder of Thomas & Libowitz, P.A. (Thomas & Libowitz), a law firm providing legal services to us on an ongoing basis.  We paid fees of $0.1 million to Thomas & Libowitz for each of the three months ended September 30, 2011 and 2010.  For each of the nine months ended September 30, 2011 and 2010, we paid fees of $0.4 million to Thomas & Libowitz.