Local marketing agreement

In U.S. and Canadian broadcasting, a local marketing agreement (or local management agreement, or LMA) is an agreement in which one company agrees to operate a radio or television station owned by another licensee. In essence, it is a sort of lease or franchise.

Under Federal Communications Commission (FCC) regulations, the licensee still holds complete legal responsibility for the station, including fines for profanity outside of safe harbor hours, even though they are not operating the station. An LMA must also include the entire station's facilities (studio and all), as the FCC prohibits subleasing of only the frequency rights or transmitter plant.

Sales agreements

Occasionally, "local marketing agreement" may refer to the sharing or contracting of only certain functions, in particular advertising sales. This may also be referred to as a local sales agreement (LSA) or a joint sales agreement (JSA). In the U.S., JSAs for radio stations are counted toward ownership caps; however, TV station JSAs are not counted towards ownership caps, although the FCC is considering changing this.

Controversy

Though the FCC ruled in 1999 that stations under LMA's are counted toward the ownership cap in a given market, the agreements have been criticized because they could allow a company to circumvent FCC rules on how many radio or television stations they can control in any one market and have encouraged the FCC to investigate and regulate LMA's. Broadcasters counter that these "virtual duopolies" have prevented stations from going dark, thereby benefiting the communities they serve.

In a 2005 Canadian dispute, Rogers Communications and Newcap Broadcasting had a joint sales agreement pertaining to CHNO-FM in Sudbury, Ontario, but community interests and the lobby group Friends of Canadian Broadcasting presented substantial evidence to the Canadian Radio-television and Telecommunications Commission that in practice, the agreement was a de facto LMA, going significantly beyond advertising sales into program production and news gathering. LMAs in Canada cannot be implemented without the CRTC's approval, and in early 2005, the CRTC ordered the agreement to cease.

In 2008, the Filipino Associated Broadcasting Company leased its airtime to the Malaysian broadcaster Media Prima Berhad (through the local subsidiary MPB Primedia, Inc) in a similar fashion to an LMA — with MPB Primedia providing programming, and ABC handling news programming and operations. Soon afterward, ABC, MPB Primedia, and Media Prima were sued by rival media company GMA Network, Inc. for attempting to use the partnership to skirt laws requiring domestic ownership of broadcasters. In response, ABC's media relations head Pat Marcelo-Magbanua reiterated that the network was a Filipino company which was self-registered and Filipino-run. The concerns became moot in 2010, when Media Prima announced it would divest its ownership in TV5 to the Philippine Long Distance Telephone Company's broadcasting subsidiary MediaQuest Holdings, Inc.

See also

• Concentration of media ownership