Dave Lougee: we can't buy any more stations because we bought too much, and shame on the FCC for preventing us from buying more

[Rusty Muck 4362]

Per Deadline, with some cozy revisionist history on the failed Standard General (and Apollo Global Management) takeover of Tegna to boot.

Quote

“We don’t imagine a scenario where for us there’s going to be any specific M&A opportunities in the broadcast space” during the current FCC/Administration setup, Lougee said. The FCC’s ownership cap, which bars any single owner from controlling stations collectively reaching more than 39% of U.S. households, “is effectively a constraint around our neck.”

 

There is “tremendous frustration in the ecosystem, and appropriately so, about an incredibly antiquated regulatory structure that has been doubled down on by this particular chair, and I guess I would say this Administration as well,” Lougee continued. “The lack of reality of that” will become apparent soon, he predicted. Smaller groups, especially those that are “over-leveraged or don’t have the balance sheets,” the exec added, could “start to go under in a few years,” which will “accelerate changes in the regulatory system.”

 

As far as how Tegna is coping with the regulatory climate, Lougee said local TV M&A is “off the table” for the near term. But he noted this fall’s election, which will be closely watched by those in the local TV business. “You tell me what the outcome of the election is and then I’ll start to triangulate that, but we might as well just wait to see and then, depending on which party’s in power, we’ll start to triangulate under that party,” he said.

I find it hard to have sympathy for groups like Nexstar, Sinclair and Tegna that bought stations for the sake of buying them with zero strategy or consideration. Just because you took advantage of companies that didn't want to exist anymore like Belo, McGraw Hill, Allbritton, LIN and Tribune didn't make the future any brighter.

 

The problem facing local television is the same crisis facing newspapers and commercial radio and public radio, and no amount of deregulation the likes of Dave Lougee and Perry Sook are openly coveting right now won't be able to paper over it. All you'll get are larger dinosaurs with bigger, more oppressive debt loads.

[mrschimpf 2233]

When I saw this in my RSS I had to laugh; if Soo Kim was any good at business he could've easily made this deal pass FCC muster but he got greedy, and now he has to lay in his terrible bed of misfit ABC affiliates and a Bootheel duopoly in a dead market.

[MediaZone4K 1872]

The nerve of the government for preventing companies from monopolizing the public airwaves so an oligopathy of companies can't control the flow of information to the public

 

Pardon my lack of knowledge. So local station owners can't broadcast to more than 39% of Americans, but the national television networks can? Is it legally okay for networks to do so because they don't own all stations they broadcast on?

Edited June 7 by MediaZone4K

[GoldenShine_10 62]

I know Rand Paul has proposed a bill that removes all caps to the ownership rules. If that ever passed...

 

As far as the Tegna ownership level, I think they are at about 32% with the UHF discount. That means they still have a bit of room to make moves, but there are no good options available that don't blow past the cap since they focus on larger markets - something like acquiring Graham or Hearst.

 

In the Speculatron, I created a thread wondering what could happen if the caps were all eliminated and companies could go to 100%.

Edited June 7 by GoldenShine_10

[Rusty Muck 4362]

8 minutes ago, GoldenShine_10 said:

I know Rand Paul has proposed a bill that removes all caps to the ownership rules. If that ever passed...

Rand Paul can propose all he wants but there's a good chance it doesn't see the light of day, particularly should the Senate remain in 50-50 Democrat hands.

 

I don't think people appreciate just how much Sinclair permanently poisoned the well against further media consolidation among the left with their "dangerous to our democracy" stunt. This about-face by the FCC did not happen overnight.

[GoldenShine_10 62]

2 minutes ago, Rusty Muck said:

Rand Paul can propose all he wants but there's a good chance it doesn't see the light of day, particularly should the Senate remain in 50-50 Democrat hands.

 

I don't think people appreciate just how much Sinclair permanently poisoned the well against further media consolidation among the left with their "dangerous to our democracy" stunt. This about-face by the FCC did not happen overnight.

 

I know Sinclair has been basically blacklisted ever since. No one has wanted to do business with them and now they are in a deep financial hole after being "forced" into cable after terrible behavior with the FCC.

 

Even in a free market, any company would be foolish to deal with them.

[tyrannical bastard 3764]

Broadcast TV is likeky long past its chance to be broken up by the government.

 

When Ma Bell (AT&T) was broken up into the RBOCs, it only took 20 years for many of them to merge back together as....AT&T.  By then, cellular phones were a regular part of life and customers had options.  Nowadays, the very POTS that comprised phone service is a rarity that has been largely replaced by VOIP and cellular.

 

At least we still have competition in TV, even if it's the same three owners and many markets.  The stations are going to have to start falling before anyone intervenes.  I think on the internet end we could start seeing some regulation since the content pool is getting smaller.

 

Edited June 7 by tyrannical bastard

[ABC 7 Denver 1651]

2 hours ago, tyrannical bastard said:

Broadcast TV is likeky long past its chance to be broken up by the government.

 

When Ma Bell (AT&T) was broken up into the RBOCs, it only took 20 years for many of them to merge back together as....AT&T.  By then, cellular phones were a regular part of life and customers had options.  Nowadays, the very POTS that comprised phone service is a rarity that has been largely replaced by VOIP and cellular.

 

At least we still have competition in TV, even if it's the same three owners and many markets.  The stations are going to have to start falling before anyone intervenes.  I think on the internet end we could start seeing some regulation since the content pool is getting smaller.

 

And you can see how well SBC has done as AT&T Mobility. Cell service still largely relies on POTS and ISP provide the data services (coming from a former Lumen Network Eng ) We've seen consolidation, but companies like Lumen Technologies, Comcast, Dish, Charter, Cox, Frontier, Altice USA, and several hundreds of other LECs wouldn't exist without the AT&T breakup.

[carolinanews4 347]

19 hours ago, MediaZone4K said:

Pardon my lack of knowledge. Local station owners can't broadcast to more than 39% of Americans, but the national television networks can? Is it legally okay for networks to do so because they don't own all stations they broadcast on?

 

Let me see if I can help you here. The rule is that a single entity can't own full-power broadcast licenses that combine to cover more than 39% of the country. (There are some nuances here like the UHF discount, duopolies, Class A stations, etc. But that is the basic rule.) The broadcast networks are subject to this same rule. Their O&O stations can't reach more than 39%. 

 

What is not covered in that 39% is programming reach. The broadcast networks, and syndication programmers for that matter, can set up agreements to have their programming broadcast by stations covering 100% of the country. So NBC Prime or Live with Kelly & Mark don't have a limit on their national reach. But NBC and ABC can't directly own stations that reach more than 39% of the country. 

Hope that helps!

Edited June 7 by carolinanews4
typo

[mre29 1437]

47 minutes ago, carolinanews4 said:

Let me see if I can help you here. The rule is that a single entity can't own full-power broadcast licenses that combine to cover more than 39% of the country. (There are some nuances here like the UHF discount, duopolies, Class A stations, etc. But that is the basic rule.) The broadcast networks are subject to this same rule. Their O&O stations can't reach more than 39%.

 

I still don't understand why it's 39% and not an even 40%. Did someone hate round numbers?

 

[MediaZone4K 1872]

4 hours ago, carolinanews4 said:

 

Let me see if I can help you here. The rule is that a single entity can't own full-power broadcast licenses that combine to cover more than 39% of the country. (There are some nuances here like the UHF discount, duopolies, Class A stations, etc. But that is the basic rule.) The broadcast networks are subject to this same rule. Their O&O stations can't reach more than 39%. 

 

What is not covered in that 39% is programming reach. The broadcast networks, and syndication programmers for that matter, can set up agreements to have their programming broadcast by stations covering 100% of the country. So NBC Prime or Live with Kelly & Mark don't have a limit on their national reach. But NBC and ABC can't directly own stations that reach more than 39% of the country. 

Hope that helps!

Thank You!

3 hours ago, mre29 said:

 

I still don't understand why it's 39% and not an even 40%. Did someone hate round numbers?

 

Exactly.  

[carolinanews4 347]

5 hours ago, mre29 said:

 

I still don't understand why it's 39% and not an even 40%. Did someone hate round numbers?

 

 

The number was a compromise between Congress and the White House back in 2003. In June of that year, the FCC relaxed ownership rules to allow a 45% audience cap. Congress didn't like it and wanted to pass a measure to roll back the FCC's decision. President Bush said he would veto it. So the White House and Congress began negotiating and in November 2003, they settled on a compromise of 39%.

 

That's the official record. But the scuttlebutt was that CBS and FOX were both at 39% and so instead of forcing them to sell stations, which could have begun a lengthy legal fight, Washington chose 39% to get it wrapped up. 

[Weeters 1860]

I don't have to like what Lougee is saying, but I don't disagree with it. I am quite concerned that some of these smaller groups and/or solo owners will start to go under, simply because they do not have the resources the big ones have. Resources that range from disaster recovery (look at how Tegna propped up KHOU when their facility flooded, then look at what happened with WINK under the same scenario) to engineering resources to shared services like graphics or Traffic or Master Control.

 

Like I have said before, I believe this is precisely the argument that's going to make things start to change, and whether that change is good or bad is up for debate. 

 

 

 

 

[ABC 7 Denver 1651]

19 minutes ago, Weeters said:

I don't have to like what Lougee is saying, but I don't disagree with it. I am quite concerned that some of these smaller groups and/or solo owners will start to go under, simply because they do not have the resources the big ones have. Resources that range from disaster recovery (look at how Tegna propped up KHOU when their facility flooded, then look at what happened with WINK under the same scenario) to engineering resources to shared services like graphics or Traffic or Master Control.

 

Like I have said before, I believe this is precisely the argument that's going to make things start to change, and whether that change is good or bad is up for debate. 

 

Dude, environmental disaster recovery have been a reasonable possibilities for decades! Are you saying that it's somehow more likely because of the climate crisis? I'm not sure it's going impact stations in isolation. Many cities will need investment to rebuild.

[mer764KCTV5 126]

7 hours ago, Weeters said:

I don't have to like what Lougee is saying, but I don't disagree with it. I am quite concerned that some of these smaller groups and/or solo owners will start to go under, simply because they do not have the resources the big ones have. Resources that range from disaster recovery (look at how Tegna propped up KHOU when their facility flooded, then look at what happened with WINK under the same scenario) to engineering resources to shared services like graphics or Traffic or Master Control.

 

Like I have said before, I believe this is precisely the argument that's going to make things start to change, and whether that change is good or bad is up for debate. 

 

 

 

 

When KHOU's studios flooded, it actually used some of the space from KUHT in the Melcher Center for Public Broadcasting until KHOU got new studios in 2019 because Channel 11's previous/flooded studios was inundated and wasn't available. 

[Weeters 1860]

17 hours ago, ABC 7 Denver said:

 

Dude, environmental disaster recovery have been a reasonable possibilities for decades! Are you saying that it's somehow more likely because of the climate crisis? I'm not sure it's going impact stations in isolation. Many cities will need investment to rebuild.

No, what I'm saying is that the megagroups have resources that the smaller ones do not, and the megagroups are better situated to rapidly deal with stuff like disaster recovery as a result. Stations that don't have the same resources (i.e. WINK) get stuck pointing a camera at a laptop while their transmitter wails in the background. Even when WVUE flooded during Katrina, they had WALA to fall back on.

 

9 hours ago, mer764KCTV5 said:

When KHOU's studios flooded, it actually used some of the space from KUHT in the Melcher Center for Public Broadcasting until KHOU got new studios in 2019 because Channel 11's previous/flooded studios was inundated and wasn't available. 

They briefly used the KUHT control room before WFAA brought in their production truck, and eventually they rented fiber to run their shows entirely out of a secondary production control room at WFAA. Master Control was rapidly moved to WFAA as well. KUSA also did some stuff for them as the WFAA setup was patched together. The only thing they did with the KUHT equipment was switch cameras in the first few days, everything else was done from Dallas or Denver. They only used the KUHT cameras until the WFAA truck showed up, and they only used the WFAA cameras until they pulled their studio cameras (which were moved to the second floor as the building started to flood) out of the old building. The Dallas arrangement continued for many months until they got a trailer built out to "Tegna specifications" and brought production back locally. Save for the first day or so when they used the KUHT control room, all KUHT did was provide studio space.

[mer764KCTV5 126]

18 minutes ago, Weeters said:

They briefly used the KUHT control room before WFAA brought in their production truck, and eventually they rented fiber to run their shows entirely out of a secondary production control room at WFAA. Master Control was rapidly moved to WFAA as well. KUSA also did some stuff for them as the WFAA setup was patched together. The only thing they did with the KUHT equipment was switch cameras in the first few days, everything else was done from Dallas. They only used the KUHT cameras until the WFAA truck showed up, and they only used the WFAA cameras until they pulled their studio cameras (which were moved to the second floor as the building started to flood) out of the old building. The Dallas arrangement continued for many months until they got a trailer built out to "Tegna specifications" and brought production back locally. Save for the first day or so when they used the KUHT control room, all KUHT did was provide studio space.

That's probably what I was meaning, they used the some of the space from KUHT. I didn't say anything that Channel 8 did anything else other than give the allow to the studios.

[GoldenShine_10 62]

One other issue is that no one is available to be acquired for them unless they either make an acquisition that blows past the cap (i.e., one of the networks), or at least requires serious application of the UHF discount (i.e., Hearst, Graham) given their focus is on medium to large markets mainly. 

[tyrannical bastard 3764]

I think station groups small and large could be vulnerable.

 

Small groups could be vulnerable because they lack the resources that the larger groups have. 

 

And the large groups could be vulnerable simply because they have grown so big that if they should fail, their failure would have a catastrophic impact on the communities they serve.

[Megatron81 222]

Nothing changes unless broadcast group fails or maybe say O&O wants to be bought and there are no buyers that is when the government will start moving in my opinion.