FCC Chairman says sharing not a good thing
March 7, 2014 01:30
By Mike Cavender, RTNDA Executive Director
FCC Chairman Thomas Wheeler wants to put the brakes on television station sharing agreements, starting with Joint Sales Agreements. These are coming under more scrutiny as more and more consolidation among broadcasters is occurring.
JSAs allow one station to sell ad time for multiple stations in a market. Wheeler calls the JSA the “centerpiece” of the so-called “sidecar” business model, something that’s become increasingly popular as a result of some of the larger group purchases in recent years.
Wheeler says the net result of most of these JSAs is circumvention of the long-standing TV duopoly rule which has restricted owners to a single station in small and medium sized markets. He maintains these “sidecar” arrangements are neither fair nor transparent and he wants that to change. He’s asking Commissioners to vote at the end of the month on his proposal that JSAs would be “attributable” to the ownership group—meaning they would be treated just as if the stations were owned outright by the group. “(It) is simply recognizing reality,” Wheeler says.
The NAB says it’s “disappointed, but not surprised” by the proposal. NAB President and CEO Gordon Smith cautions “the real loser will be local TV viewers, because the proposal will kill jobs, chill investment in broadcasting and reduce minority programming and ownership opportunities.”
RTDNA has the same fears. Group news chiefs have told us these joint agreements have, in some cases, allowed smaller, less-profitable stations to actually continue providing local news and programming because they now have access to the greater resources of a bigger group. Indeed, our own RTDNA annual news surveys have shown no significant reductions in news staffs and programming among stations which operate under joint agreements.
However, effectively doing away with them through this proposal may ultimately change that equation. And in a time when the Commission is concerned about minority ownership and increasing competition, this proposal may well serve to deal a blow to both. If some stations can’t stand alone because of these restrictions, jobs may well be lost and news programming may well be diminished or even eliminated in some markets.
A better idea, we believe, would be to eliminate the TV duopoly rule altogether. That would significantly reduce the need for JSAs and SSAs (Shared Services Agreements) and the other kinds of financial arrangements that have developed in response to the current rules.
And while we’re at it, let’s reexamine some of the other restrictions impacting broadcasters that have helped develop these arrangements as “workarounds.” While the single-station ownership rule is primary among them, another regulation that needs to be reexamined is the 39% cap (which says no group can own stations reaching more than 39% of total TV households.) Then there’s the newspaper-TV cross-ownership prohibition. The Commission will be seeking public comment on that anachronistic ban. To a large extent, all these rules are rooted in the government’s concern that independent media voices be preserved and that a few major groups don’t control most of what we see, hear and read. But remember, these rules were born in a much different (and far less diverse) media universe.
The tremendous sea change in communications today—from technology to user habits—mandates a much more comprehensive and contemporary examination of what works and what doesn’t. For too long, broadcasters have been hampered by many restrictions which are woefully out of date and out of step with today’s media environment. What the FCC really needs now is to recognize that reality and act accordingly.