FCC To Vote To End Sharing Agreements

[Big Country News 435]

Here in the Abilene/Sweetwater and San Angelo DMAs, This would damage the whole system. Nexstar owns KTAB/KRBC and KSAN/KLST; Bonten owns KTXS/KTXE under a satellite agreement; and I even think KXVA/KIDY have agreements for sales and what not. Both markets thrive on agreements, and taking them away would lessen the news options. The Nexstar stations have totally separate newscasts, and although you many hear some of the same news, it's mostly different. KXVA/KIDY may have the same graphics, 'studio', and music, but the news product is completely different. KTXE just satellites KTXS, but that's to be expected.

 

My markets would crumble if this went through, and I'm sure others will too.

[lugnuts6 89]

sanewsguy, I meant Shield Media , thanks for the correction

[T.L. Hughes 751]

 

Here in the Abilene/Sweetwater and San Angelo DMAs, This would damage the whole system. Nexstar owns KTAB/KRBC and KSAN/KLST; Bonten owns KTXS/KTXE under a satellite agreement; and I even think KXVA/KIDY have agreements for sales and what not. Both markets thrive on agreements, and taking them away would lessen the news options. The Nexstar stations have totally separate newscasts, and although you many hear some of the same news, it's mostly different. KXVA/KIDY may have the same graphics, 'studio', and music, but the news product is completely different. KTXE just satellites KTXS, but that's to be expected.

 

My markets would crumble if this went through, and I'm sure others will too.

 

Considering these are two separate markets, I'm not sure if it would have any significant effect for anyone. The Nexstar examples are simply SSAs, the Bonten and London stations aren't. It hasn't been completely determined if they will vote to ban SSAs also, just the joint sales agreements. If JSAs are banned, shared services agreements would continue in the interim until the FCC decides whether to vote on restricting them.

 

In reply to an earlier post, aren't there cases where a JSA is indistinguishable from an SSA, LMA or a combination of an JSA and one of the two other agreements, where the station operated under a joint sales agreement alone had their operations merged with another station?

 

Also, it might be possible that if a station under a sharing agreement were to be sold under a ban, to say that the station would end up as spectrum bait or a small broadcaster is debateable. Isn't the spectrum auction really targeting larger markets, rather than the medium and smaller ones? Also, what if the ban encourages companies that are structured similarly to say, Gray Television, to pop up (i.e., station groups that focus more on mid-market and small market stations) that wouldn't otherwise have a chance to acquire stations because these station supergroups (i.e., Sinclair, Nexstar, etc.) have gobbled them all both outright and through sidecars?

[sanewsguy 509]

 

Also, it might be possible that if a station under a sharing agreement were to be sold under a ban, to say that the station would end up as spectrum bait or a small broadcaster is debateable. Isn't the spectrum auction really targeting larger markets, rather than the medium and smaller ones? Also, what if the ban encourages companies that are structured similarly to say, Gray Television, to pop up (i.e., station groups that focus more on mid-market and small market stations) that wouldn't otherwise have a chance to acquire stations because these station supergroups (i.e., Sinclair, Nexstar, etc.) have gobbled them all both outright and through sidecars?

 

The one thing I will say positively about the proposed ban is that maybe Alchemedia and Huntington Broadcast Management may actually have a chance to finally acquire some stations...

[ATLNEWS46 6]

 

Here are some examples of low DMAs (125 or higher) with three news operations:

 

127: Bakersfield, CA (KGET, KERO, KBAK/KBFX)

140: Medford, Oregon (KOBI, KTVL, KDRV)

147: Sioux City, Iowa (KTIV, KCAU, KMEG/KPTH)

150: Odessa-Midland, Texas (KMID/KPEJ, KOSA, KWES)

173: Rapid City, South Dakota (KOTA, KEVN, KNBN; KELO's news is repeated from Sioux Falls)

 

 

An SSA is a Shared Services Agreement. Under an SSA the operations of one station are outsourced to a competing station. For instance, an SSA can cover engineering services, news production, and/or management [but NOT programming]. The licensee retains the station's license, though the third party often takes ownership of the station's assets.

 

A JSA is a Joint Sales Agreement. In a JSA a station sells the other station's ad inventory. This can raise prices for television advertising in the market.

 

In an LMA, or Local Marketing Agreement, the functions of a JSA and SSA are combined, and the third party station also programs the entire other station's ad time. LMAs were banned in 1996 with all pre-existing LMAs being grandfathered. For instance, WOIO and WUAB entered into an LMA in 1994 under which Malrite (WOIO's owner) ran WUAB, and WUAB's news department was extended to produce the newscasts for WOIO. Quite a few LMAs became actual duopolies around 2000, including that

 

 

Columbus (WRBL, WTVM/WXTX, WLTZ) and Macon (WMAZ, WGXA, WMGT, WRWR) have at least 3 operations.

[hathawaynson2 38]

Here in the Abilene/Sweetwater and San Angelo DMAs, This would damage the whole system. Nexstar owns KTAB/KRBC and KSAN/KLST; Bonten owns KTXS/KTXE under a satellite agreement; and I even think KXVA/KIDY have agreements for sales and what not. Both markets thrive on agreements, and taking them away would lessen the news options. The Nexstar stations have totally separate newscasts, and although you many hear some of the same news, it's mostly different. KXVA/KIDY may have the same graphics, 'studio', and music, but the news product is completely different. KTXE just satellites KTXS, but that's to be expected.

 

My markets would crumble if this went through, and I'm sure others will too.

I'm quite curious what would happen with KTKA if the SSA Agreement with KSNT ended?

[CircleSeven 1944]

Well you know Harry Jessell is not happy about Wheeler's annoucement. And you know he's been preaching against his plan from his previous editorials. But in his weekly editorial today, he states that if he follows through with his plan, he puts it "you can bet affected broadcasters will march straight to court."

 

Anyone think that this could go into legal action? Some probably would do it (probably Sinclair), but I doubt many companies are going to shell out more of their dollars for a legal fight, should it ever occurs.

[sanewsguy 509]

 

Anyone think that this could go into legal action?

 

Absolutely, this could be potentially damaging to their business. Yes, legal costs can be high but I think it's money well spent, especially if the ruling is in their favor.

[GoldenShine9 1509]

Do any broadcasters actually endorse the move? I know there were Block vs. Sinclair on the UHF discount issue...

[Breaking News 802]

I'm sorry but there should of been a block on how many stations you could do with all these joint agreements, ssa etc...However so many broadcast operators such as Sinclair, Nexstar have abused so much with all their loopholes this has gotten out of hand.

 

I do wonder about the Allbritton deal & Sinclair and I do hope it doesn't go through and wonder what going to happen with the Birmingham, Ala stations because Sinclair already owns those CW/MyTV stations and will obtain (if the deal goes through) ABC 33/40. I wish Scripps would step in on that deal.

[Thundershock MN 169]

Ugh, I have held off posting on this for a couple days to avoid an extremely long diatribe. Anyway, I still have to rant a little and get some of this off my chest.

 

Weeters said it best with the "be careful what you wish for" line up thread. This idea that buyers are going to magically appear to invest in television, a mature and contracting industry, boggles my mind. There are very few people lining up for those small market stations. A lot of those stations would just disappear before someone would make the investment in them to keep them as a going concern.

 

Although, I have posted on my annoyance of the FCC's inaction. This still does nothing for me. Much like the "UHF Discount uproar" this is patch job to placate some people. I fail to understand why the FCC doesn't just say we are effectively "blowing up the old ownership rules and starting from scratch." I'm pretty sure 2014 is the year for the next quadrennial review for ownership rules as 2010 was the last review...even though that review is still ongoing. The ownership rules haven't kept up with the changes in the industry going unchanged (with minor exceptions) for well over a decade now. So, why the hell are we debating small points? Yes, JSA/SSA's need to be addressed and some rules surrounding them defined. And, the UHF discount should be addressed as well. But, so do other elements of the ownership rules. The whole set of rules needs to be addressed not just small subsets within.

 

Please don't misread me I don't intend to sound like a shill for the NAB (or, any other group.) But, way too much has changed in the last ten or so years not to overhaul the entire set of rules. Why not bump up the ownership cap a little from 39%? What about newspaper crossownership rules in light of how much has changed are the current rules really still beneficial? And, let's not forget we have that little incentive auction around the corner, too. That creates a whole new set of items that could enter the discussion. What about a VHF discount as an incentive to move? This was discussed and included in the discussion of the elimination of the UHF discount. What about RF "channel sharing" arrangements? And, on and on.

 

I realize there are too many groups to try to appease that this is all a pipedream. But, I just wish they could get comment from everyone (various interested parties & the public) and rewrite the rules to reflect the current environment. Everyone could easily give a little and get a little. Kind of a "Hey NAB, we are going to clamp down on JSA's, etc. But, we will bump up the cap to 42%." Or, "We really want you to partake in the auction so, how about some sort of VHF discount?" All these various groups pulling at the FCC could leave with a little something. The CTIA (& the FCC) might have more participation in the incentive auction furthering their broadband plans. The NAB would get elements of the cap relaxed. Public Interest Groups would see rules and clamps put down on JSA's. Etc., etc., etc. Nobody would really leave a "winner" which is beneficial to achieve a fair set of rules. But, alas we are stuck with the current half-assed patchwork of "fixes" that is somehow supposed to be progress and beneficial to all. Oh well, one can dream I guess.

[sanewsguy 509]

 

Ugh, I have held off posting on this for a couple days to avoid an extremely long diatribe. Anyway, I still have to rant a little and get some of this off my chest.

 

Weeters said it best with the "be careful what you wish for" line up thread. This idea that buyers are going to magically appear to invest in television, a mature and contracting industry, boggles my mind. There are very few people lining up for those small market stations. A lot of those stations would just disappear before someone would make the investment in them to keep them as a going concern.

 

Although, I have posted on my annoyance of the FCC's inaction. This still does nothing for me. Much like the "UHF Discount uproar" this is patch job to placate some people. I fail to understand why the FCC doesn't just say we are effectively "blowing up the old ownership rules and starting from scratch." I'm pretty sure 2014 is the year for the quadrennial review for ownership rules as 2010 was the last review. The ownership rules haven't kept up with the changes in the industry going unchanged (with minor exceptions) for nearly a decade now. So, why the hell are we debating small points? Yes, JSA/SSA's need to be addressed and some rules surrounding them defined. And, the UHF discount should be addressed as well. But, so do other elements of the ownership rules. The whole set of rules needs to be addressed not just small subsets within.

 

Please don't misread me I don't intend to sound like a shill for the NAB (or, any other group.) But, way too much has changed in the last ten or so years not to overhaul the entire set of rules. Why not bump up the ownership cap a little from 39.5%? What about newspaper crossownership rules in light of how much has changed are the current rules really still beneficial? And, let's not forget we have that little incentive auction around the corner, too. That creates a whole new set of items that could enter the discussion. What about a VHF discount as an incentive to move? This was discussed and included in the discussion of the elimination of the UHF discount. What about RF "channel sharing" arrangements? And, on and on.

 

I realize there are too many groups to try to appease that this is all a pipedream. But, I just wish they could get comment from everyone (various interested parties & the public) and rewrite the rules to reflect the current environment. Everyone could easily give a little and get a little. Kind of a "Hey NAB, we are going to clamp down on JSA's, etc. But, we will bump up the cap to 42%." Or, "We really want you to partake in the auction so, how about some sort of VHF discount?" All these various groups pulling at the FCC could leave with a little something. The CTIA (& the FCC) might have more participation in the incentive auction furthering their broadband plans. The NAB would get elements of the cap relaxed. Public Interest Groups would see rules and clamps put down on JSA's. Etc., etc., etc. Nobody would really leave a "winner" which is beneficial to achieve a fair set of rules. But, alas we are stuck with the current half-assed patchwork of "fixes" that is somehow supposed to be progress and beneficial to all. Oh well, one can dream I guess.

 

I agree I think the rules need to be rewritten.

 

But why do you want stations to move to VHF? VHF sucks for DTV. UHF is the way to go. I think for JSAs, it needs to be case-by-case. And finally, the newspaper cross-ownership thing needs to be repealed. Since when did the FCC have authority over newspapers?

[GoldenShine9 1509]

Agreed about repealing the newspaper cross-ownership rule, it seems a minor detail. Maybe increasing the cap, say to 49%, is worth considering as a compromise? The big problem is the triopolies and quadropolies in medium to large markets created by shells.

[Thundershock MN 169]

I agree I think the rules need to be rewritten.

 

But why do you want stations to move to VHF? VHF sucks for DTV. UHF is the way to go. I think for JSAs, it needs to be case-by-case. And finally, the newspaper cross-ownership thing needs to be repealed. Since when did the FCC have authority over newspapers?

Yes, UHF is superior. I brought it up only as a suggestion for how compromise during rulemaking could help "satisfy" several parties/interests. By having a "VHF Discount" The FCC might get more participation in the incentive auction. Indirectly, the CTIA would be happy for the same reason. And, The NAB gets an ownership "discount" for stations after getting clamps put down elsewhere.

 

In principal I agree JSA's should be case-by-case. The only issue is that's essentially what we have now. I think defining some rules/guidelines around them would be helpful.

 

What I was attempting to get at was that if a little common sense was used a fair set of rules could be achieved. And, I think most here would agree that the rules could be tightened in places and loosened in others. Sadly, there are too many egos and interests involved to ever achieve this.

[CircleSeven 1944]

So the FCC drop this Public Notice earlier tonight.

 

It's basically saying the Media Bureau will further scrutinize AOL/TOC apps that includes any sort of sharing arrangements, including existing pending applications that are waiting for their greenlight.

 

Of course Commissioners Pai & O'Reilly stated their own response to the public notice.

[Samantha 2878]

 

So the FCC drop this Public Notice earlier tonight.

 

It's basically saying the Media Bureau will further scrutinize AOL/TOC apps that includes any sort of sharing arrangements, including existing pending applications that are waiting for their greenlight.

 

Of course Commissioners Pai & O'Reilly stated their own response to the public notice.

 

In addition, the Bureau Chief put out his own response which has an important statement of its own:

 

Parties interested in simplifying the review of their transactions should be benefited by knowing of this concern as they structure their deals. Similarly, parties with pending applications proposing these types of combinations will have the opportunity to amend those applications, if they wish, to simplify the review process.

[Samantha 2878]

The NAB has proposed an alternative plan to Wheeler's, and as you can guess, it's far more accommodating to current JSAs:

• Brokered licensee must program more than 85% of broadcast day
  
• Brokered licensee must keep 70% or more of ad sales revenue
  
• 20% of station value must be in the FCC license itself
  

[CircleSeven 1944]

Meanwhile, FCC Commissioner Mignon Clyburn may not be the "Lock" vote of the attribution proposal of the JSAs.

 

B&C states today that sources who were familiar with conversations this week between Commissioner Clyburn & the NAB, that Clyburn "is looking for a way to balance cracking down on bad actors who use the rules to skirt ownership limits and fostering sharing agreements that can boost diversity, particularly in rural markets where joint ownership of stations is disallowed but the need for some financial help is often greatest."

[Samantha 2878]

And now NAB president Gordon Smith says that the proposed JSA ban has already cost broadcasters "millions". With six days to go until the voting, the NAB is turning up the criticism dial.

[ns8401 846]

Regulators don't seem to be into companies crying poor because of the regulations. I don't really predict much effect from their whining about it.

[Thundershock MN 169]

And now NAB president Gordon Smith says that the proposed JSA ban has already cost broadcasters "millions". With six days to go until the voting, the NAB is turning up the criticism dial.

There is "some" truth to that as their stock values have fallen.

[CircleSeven 1944]

Wheeler explained his JSA attribution proposal . as they were talking about FCC FY2015 request before the House Appropriations Subcommittee earlier today.

 

The JSA talk is on the 45 min. mark of this vid.

 

But one of his statements had me rolling, as he talked about broadcasters who'd used JSAs to circumvent the FCC rules. He stated about one broadcaster.....

 

 

.....who buys a station that’s in conflict with the FCC’s ownership rules but “gives it to his mother and then agrees to operate it and take all of the cash from it, and then buys another station, gives it to his former financial manager, and takes all of the revenue from it.

 

“We have a situation where public company broadcasters are saying to the SEC ‘we have control of these stations’ and saying to the FCC, ‘Oh, no, that’s a different company,’ ”

:rofl!: HAHAHA!!! But the way he said it sounded so funny. Of course he didn't have to say the broadcaster by name but we know who's he's talking about.

[hathawaynson2 38]

Wheeler explained his JSA attribution proposal . as they were talking about FCC FY2015 request before the House Appropriations Subcommittee earlier today.

 

The JSA talk is on the 45 min. mark of this vid.

 

But one of his statements had me rolling, as he talked about broadcasters who'd used JSAs to circumvent the FCC rules. He stated about one broadcaster.....

 

 

:rofl!: HAHAHA!!! But the way he said it sounded so funny. Of course he didn't have to say the broadcaster by name but we know who's he's talking about.

So basicly, Sinclair and Nexstar are going to be forced to sell off unnecessary stations that they are not supposed to own after unwinding of the agreements?

[NEOMatrix 1295]

Agreed completely. Nexstar and Sinclair are the perfect analogies. Nexstar's use of it makes total sense for the most part (disagree with them wanting WEVV), but Sinclair does abuse it to control more stations for corporate greed and having more venues to use as his soapbox.

 

I see where you're coming from but I disagree. Smaller companies springing up and trying to run stations won't be good, because the smaller companies don't generally have deep pockets, so you get a poor quality product versus going into a larger market and seeing a much more professionally produced and higher quality product. They will go out of business faster because they don't have the cash to compete. What I'm trying to get at, is that the smaller companies don't generally invest in their stations while the larger ones do (this is debatable but it is a generalization).

 

KFMB is a great example. They are cheaply run and the chain owned stations generally put out a better product than them.

 

I go to smaller markets and am glad to return here or Austin, because the newscasts are more professional than in smaller cities where smaller groups own stations, and therefore do not invest much into the product. Also keep in mind these are usually starter markets where recent college grads generally start off.

 

Corporate ownership is good for the stations and beneficial to the public interest. They will give local entities airtime, you just need the cash to buy the time, because the equipment to put the signal out is not free and needs to be paid for somehow.

I don't believe that small ownership can harm a station. Look at WFMJ. It's a NBC station owned by the Youngstown Vindicator and it puts out more news and WAAAYYY less fluff than the WKBN/WYTV combo. Plus, WFMJ shows the most amount of news and currently has the only weekend morning news in the market. Oh, and did I mention that its the #1 news in all timeslots except noon despite being NBC? Goes to show that not all small owners are incompetent cheapskates.

[Samantha 2878]

 

I don't believe that small ownership can harm a station. Look at WFMJ. It's a NBC station owned by the Youngstown Vindicator and it puts out more news and WAAAYYY less fluff than the WKBN/WYTV combo. Plus, WFMJ shows the most amount of news and currently has the only weekend morning news in the market. Oh, and did I mention that its the #1 news in all timeslots except noon despite being NBC? Goes to show that not all small owners are incompetent cheapskates.

 

WFMJ has had the same local ownership for decades. In most cases local owners were rolled up like Katamari Damacy balls into small station groups, then medium station groups, then larger ones. To start from the top down, look at Media General: we can go Media General -> pre-LIN Media General -> Park Communications -> Southern Broadcasting (WBMG/WIAT), for instance.

 

In addition it is harder for local owners to find the necessary economies of scale to continue being competitive in local television. Chambers sold out this month, partly for that reason. Economies of scale have been a driving force behind the Great M&A Boom.