Local marketing agreement

From Wikipedia, the free encyclopedia
Jump to: navigation, search

In U.S. and Canadian broadcasting, a local marketing agreement (or local management agreement, abbreviated as an LMA) is an agreement in which one company agrees to operate a radio or television station owned by another licensee (the "junior" partner). In essence, it is a sort of lease or time-buy.

Under Federal Communications Commission (FCC) regulations, a local marketing agreement must give the company operating the station (the "senior" partner) under the agreement control over the entire facilities of the station, including the finances, personnel and programming of the station. Its original licencee still remains legally responsible for the station and its operations, such as compliance with relevant regulations regarding content. Occasionally, a "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), management services agreement (MSA), joint sales agreement (JSA), or a shared services agreement (SSA). JSAs are counted toward ownership caps for television and radio stations.[1][2] In Canada, local marketing agreements between domestic stations require the consent of the Canadian Radio-television and Telecommunications Commission (CRTC), although Rogers Media has used a similar arrangement to control a U.S.-based radio station in a border market.

The increased use of sharing agreements by media companies to form consolidated, "virtual" duopolies became controversial between 2009 and 2014, especially arrangements where a company buys a television station's facilities and assets, but sells the license to an affiliated third-party "shell" corporation, and operates it under a sharing agreement. Activists have argued that broadcasters were using these agreements as a loophole for the FCC's ownership regulations, that they reduce the number of local media outlets in a market through the aggregation or outright consolidation of news programming, and allow station owners to have increased leverage in the negotiation of retransmission consent with local subscription television providers. Station owners have contended that these sharing agreements allow streamlined, cost-effective operations that may be beneficial to the continued operation of lower-rated and/or financially weaker stations, especially in smaller markets.[3]

In 2014 under chairman Tom Wheeler, the FCC began to increase its scrutiny regarding the use of sharing agreements by television broadcasters to evade its policies; on March 31, 2014, the commission voted to make joint sales agreements count as ownership if the senior partner sells 15% or more of advertising time for its partner, and to ban coordinated retransmission consent negotiations between two of the top four stations in a market. Wheeler has also indicated that he also plans to address local marketing and shared services agreements in the future. The change in stance also prompted changes to then-proposed acquisitions by Gray Television and Sinclair Broadcast Group, who disclosed intents to shut down acquired stations entirely and consolidate their programming onto digital subchannels of company-owned stations, rather than use sharing agreements to control them.

Background[edit]

The first local marketing agreement in North American television was formed in 1991, when Sinclair Broadcast Group purchased Fox affiliate WPGH-TV in Pittsburgh, Pennsylvania. As Sinclair had already owned independent station WPTT (now MyNetworkTV affiliate WPMY) in that market, which would have violated FCC rules which at the time had prohibited television station duopolies, Sinclair decided to sell the lower-rated WPTT to the station's manager Eddie Edwards, but continued to operate the station through an LMA (Sinclair eventually repurchased the station – then assigned the call letters WCWB – outright in 2000, after the Federal Communications Commission began permitting common ownership of two television stations in the same market, creating a legal duopoly).[4]

In 1999, the FCC modified its media ownership rules to count LMAs formed after November 5, 1996 that cover more than 15% of the broadcast day toward the ownership limits for the brokering station's owner.[5] Even still, the related joint sales and shared services agreement structures became increasingly common during the 2000s; these outsourcing agreements proliferated between 2011 and 2013, when station owners such as Sinclair and Nexstar Broadcasting Group began expanding their portfolios by acquiring additional stations in an effort to drive scale as well as to gain leverage in retransmission consent negotiations with cable and satellite television providers.

Uses[edit]

Consolidation[edit]

The most common use of an LMA in television broadcasting is to create a "virtual duopoly", where the stations operated under the agreement are consolidated into a single entity. The operations of the stations can be streamlined for cost-effectiveness through the sharing of resources, such as facilities, advertising sales, personnel and programming.[6] Many broadcasters who engage in the practice believe that such agreements are beneficial to the survival of television stations – especially in smaller markets, where the overall audience reach is considerably less than that of markets that are centered upon densely populated metropolitan areas – where the cost savings achieved through the consolidation of resources and staff may be necessary to fund a station's continued operation.[6][7]

Sharing agreements may also be used as a loophole to control television stations in situations where it is legally impossible to own them outright. For instance, FCC regulations only allow a single company to own more than one full-powered television station in a given market if there are at least eight distinct station owners, and also prohibits the ownership of two or more of the four highest-rated stations (based on total day viewership) in a market. An LMA or similar agreement does not affect the ownership of the station's license, meaning that they do not require the approval of the FCC to establish, and the two stations are still legally considered separate operations from a licensing standpoint.[7] Both Tribune Broadcasting and the Gannett Company were required to use shared services agreements as a similar loophole to take control of certain stations in their respective purchases of Local TV and Belo, as they did not have exemptions to the FCC's newspaper cross-ownership restrictions in the affected markets. For Tribune, the situation is only temporary, as the company is in the process of spinning off its newspaper arm as an independent company.[8][9]

Broadcasters could also collect carriage fees for the stations they operate under sharing agreements on behalf of their owner, often bundling its carriage agreements with those of stations they own outright. This can, especially in LMAs between two stations affiliated with the "major" networks, allow the broadcaster to charge higher fees for retransmission consent to television providers for carrying the stations, which could result in smaller cable companies not being able to afford the higher fees imposed. Cable television providers have also advocated barring sharing agreements between television stations for this particular reason. In the United States, the FCC no longer allows broadcasters to collude with one another in negotiating retransmission consent fees.[3][6][7]

Operation on behalf of a third-party owner[edit]

Although the majority of LMAs involve the outsourcing of one television station's operations to another, occasionally, a company may operate a station under an LMA, JSA or SSA even if it does not already own a station in that market. One example occurred in December 2013, when Louisiana Media Company (owned by New Orleans Saints and New Orleans Hornets owner Tom Benson) entered into a shared services agreement with Raycom Media to run the former company's Fox affiliate in New Orleans, Louisiana, WVUE-DT; while Louisiana Media Company retained the station's ownership and license, other assets were assumed by Raycom, which owns stations in markets adjacent to New Orleans (including Baton Rouge, Lake Charles and Shreveport) but not within New Orleans itself. Benson had received offers from Raycom and others to buy the station, but was not prepared to sell WVUE outright.[10][11]

Foreign control of broadcast outlets[edit]

See also: Border blaster

LMAs can also allow companies to control foreign stations from outside of their respective country; Canadian media company Rogers Media uses a joint sales agreement to operate Cape Vincent, New York radio station WLYK as a station targeting the nearby Canadian market of Kingston, Ontario, where it owns CKXC-FM and CIKR-FM. Rogers owns a 47% stake in WLYK's licensee, Border International Broadcasting.[12][13]

Similarly, Entravision Communications Corporation controls XHDTV-TDT, a Tijuana, Mexico-based station owned by Televisora Alco, which operates as an English-language station serving the border market of San Diego.[14]

Effects of LMAs[edit]

WBFF/WNUV studios in Baltimore; WBFF owner Sinclair Broadcast Group operates WNUV, which is owned by Cunningham Broadcasting.

Public interest organizations have disapproved of the use of LMAs for virtual duopolies that circumvent the FCC's rules due to their effects on the broadcasting industry, particularly the results of consolidation through the irregular use of LMAs.[6][7] In markets where duopolies are not legally possible, a company may elect to form one by purchasing a station's "non-license" assets (such as their physical facilities, programming rights, and other intellectual property), and selling the license itself to a third-party "sidecar" company, which in turn, enters into an LMA or a similar agreement with the senior partner. The FCC only recognizes ownership of television stations by the ownership of their license and facility ID, and not by the ownership of these "non-license" assets; this means that the senior partner becomes the de facto owner of the station, but the sidecar (which is, in some cases, tied to the purchaser) is still the legal owner.[6][7][15] Although the FCC determines a sidecar firm to be an independent entity from the company using it to outsource station operations for licensing purposes, the Securities and Exchange Commission does not make such a designation, requiring reports on sidecars to be included in a broadcaster's financial statements.[16][17]

Both Sinclair Broadcast Group and Nexstar Broadcasting Group became infamous for their frequent use of sidecars as part of their expansion and consolidation tactics, partnering with companies like Cunningham Broadcasting (whose stock assets are largely controlled by the family of Sinclair founder Julian Smith), Deerfield Media, Mission Broadcasting, and even each other in the case of a virtual duopoly in Harrisburg, Pennsylvania between Sinclair-owned CBS affiliate WHP-TV and Nexstar-owned CW affiliate WLYH-TV, and a former virtual duopoly in Rochester, New York between Nexstar-owned CBS affiliate WROC-TV and Sinclair-owned Fox affiliate WUHF (in the wake of Sinclair and Deerfield's purchase of ABC affiliate WHAM-TV, this particular arrangement ended in January 2014).[6][7][18]

While not to the same, wide extent as Sinclair and Nexstar, Raycom Media has a similar business relationship with American Spirit Media in markets such as Toledo, Ohio,[19] Gray Television is affiliated with the sidecar Excalibur Broadcasting—owned by former Gray executive Don Ray,[20] and Granite Broadcasting operated virtual duopolies in Fort Wayne, Indiana and Duluth, Minnesota with the sidecar Malara Broadcast Group. In 2014, it was announced that the Granite/Malara stations would respectively be sold to Quincy Newspapers and SagamoreHill Broadcasting, with Quincy operating SagamoreHill's stations under an SSA – although in Fort Wayne, Granite's NBC station WISE-TV will be sold to SagamoreHill, leaving Quincy with Malara's ABC affiliate WPTA—an effective reversal of the structure of this duopoly.[21]

Effects on programming[edit]

The stations partnered through a sharing agreement may also consolidate their programming operations: local newscasts on the junior partner in the LMA, if it operated a separate news department before the LMA's formation, may be rescheduled or scaled back to prevent direct competition with newscasts airing on the station acting as the senior partner (the actual amount of news programming featured on the brokered station varies depending on how the outsourcing agreement is structured as well as how the brokered station is programmed; in the United States, it is common for a brokered station in an LMA, SSA or JSA that is affiliated with Fox, a minor network such as The CW or MyNetworkTV or is operated as an independent station – to air fewer hours of local news programming than a brokered station affiliated with a "big three" network, such as ABC, CBS or NBC, and have their newscasts air outside of common news timeslots; for example, a weekday morning newscast on the brokered station may air from 7–9 a.m. instead of 5–7 a.m. or 5–9 a.m.), or the stations may even simulcast newscasts in certain timeslots. The stations may either retain separate news productions (differentiated by on-air branding, anchors, or overall format), or share a single joint brand.

Redundant staff members are often laid off as part of the consolidation process, and the merger may reduce the number of unique editorial voices in a market; a seemingly separate newscast on one station in the duopoly may ultimately consist of repackaged news content from the other station. This in particular is one of the caveats of pushes to ban outsourcing agreements by media consolidation critics, who also suggest that LMAs result in a decreased amount of local news coverage on the brokered station.[6][7][7][22]

How the stations may be consolidated vary depending on the agreement's structure, for example:

  • In Evansville, Indiana, Mission Broadcasting acquired then-independent station WTVW (now a CW affiliate) in 2011 with its former owner Nexstar Broadcasting retaining operational duties under an SSA. WTVW consolidated news operations with ABC affiliate WEHT, for which Nexstar traded WTVW to Mission in exchange for acquiring WEHT from Gilmore Broadcasting Corporation, and had its newscast output reduced through the reductions of its weekday morning newscast from four hours to two and its 6 p.m. newscast – except on Sundays, where it remained one hour – from one hour to 30 minutes (leaving only a two-hour morning newscast, half-hour noon and 6:30 p.m. newscasts and an hour-long newscast at 9 p.m.). Both stations were then folded into a shared news operation branded as Eyewitness News.[23][24]
  • In 2009, Raycom Media (owner of Honolulu-based NBC and MyNetworkTV affiliates, KHNL and KFVE) announced it would take over the operations of the local CBS affiliate KGMB (then owned by MCG Capital Corporation), giving it control of three television stations in Hawaii. The deal was a complex arrangement which involved trading the non-license assets of KFVE (such as its call sign, programming, and network affiliation) for those of KGMB (placing the station under Raycom ownership, but using KFVE's license, signal, and virtual channel 5), and taking over KFVE (which moved to the channel 9 license owned by MCG Capital) under a local marketing agreement. Due to its nature, the swap was not a transaction that would require the intervention of the FCC, aside from the changing of call signs. The three stations were then folded into a shared news operation branded as Hawaii News Now. An estimated 68 positions from a total of 198 from the three stations would be eliminated as part of the agreement.[15][25] On November 20, 2013, MCG Capital filed to sell KFVE to the aforementioned American Spirit Media.[26]
  • In 2013, through its acquisition of stations from Newport Television, Nexstar and Mission Broadcasting formed a full-power virtual quadropoly in Little Rock, Arkansas that consists of two duopolies owned by the two companies respectively; NBC station KARK-TV and MyNetworkTV station KARZ-TV (owned by Nexstar), along with Fox station KLRT-TV and CW station KASN (owned by Mission, operated by Nexstar under a local marketing agreement). All four stations were consolidated into KARK's facilities; 30 employees were laid off as part of the consolidation.[27] Once KARK/KARZ took over the operations of KLRT/KASN, KLRT reduced its weeknight 5 p.m. newscast from one hour to 30 minutes (limiting it to the 5:30 half-hour) and dropped its 10 p.m. newscast, while adding a two-hour weekday morning newscast and retaining its existing hour-long newscast at 9 p.m.[27]
  • In October 2008, Tribune Broadcasting and Local TV consolidated the operations of their respective CW and Fox affiliates in Denver and St. Louis, resulting from a groupwide management agreement between both companies:[28][29] in Denver, CW affiliate KWGN-TV moved into Fox affiliate KDVR's facilities in the Speer neighborhood; while in St. Louis, Fox affiliate KTVI – despite being the senior partner in the LMA with CW affiliate KPLR – moved into the latter station's Maryland Heights studios. Both cities were (and still are) top-25 markets, making Denver and St. Louis the largest where any English-language stations were involved in an LMA; however, both cities had enough stations to allow a legal duopoly (this was not possible with KPLR and KTVI as both were among the four highest-rated stations in St. Louis at the time, ahead of ratings-challenged ABC affiliate KDNL-TV), and were large enough to support at least four television news operations (Denver had five and St. Louis had four news-producing stations prior to the formation of the LMA). KWGN and KPLR moved The CW's primetime lineup one hour later (to 8 p.m.) than the network-recommended timeslot, and shifted their evening newscasts to 7 p.m. (weekend editions of the evening newscasts were discontinued with the move; KPLR has since expanded its 7 p.m. newscast to Saturday and Sunday evenings) to avoid competing with KDVR and KTVI's 9 p.m. newscasts; KWGN retained its weekday morning newscast (which competes directly with KDVR's morning newscast), but canceled its 5:30 p.m. – and later, 11 a.m. – newscasts. In contrast, KPLR (which had run a primetime newscast for much of its history) eventually added hour-long midday and late afternoon newscasts.[30][31][32][33][34] The two LMA arrangements became legal duopolies in December 2013, once Tribune finalized its acquisition of Local TV.[35][36]
  • In 2010, the operations of Schurz Communications-owned NBC affiliate WAGT in Augusta, Georgia were taken over by Media General's ABC affiliate WJBF-TV. Both stations were consolidated into new, high-definition capable facilities constructed on the site of a former Barnes & Noble store, with studios for each station, and a third, shared studio. Despite the consolidation, the two stations aimed to maintain some autonomy from each other: both WAGT and WJBF maintain their own on-air identities, newsrooms, and sales departments within the facility. While the newscasts on both stations do share some "factual" video content, they are otherwise produced independently of each other. However, upon the consolidation, most of WAGT's managerial staff were dismissed and other employees were reassigned to different positions.[37][38][39]
  • In 2010, Nexstar announced a new joint news operation for its consolidated cluster in Utica/Rome, New York, which consists of Nexstar-owned Fox and MyNetworkTV affiliates WFXV and WPNY-LP, and Mission-owned ABC affiliate WUTR. Unlike the other examples, neither station had a pre-existing newscast at the time; WUTR's original news department was closed in 2003 by previous owner Clear Channel Communications as a cost-saving measure, and WFXV had never aired local news programming at all. Its slate included early and late evening newscasts on WUTR, an encore of WUTR's evening newscast on WPNY, and a 10 p.m. newscast on WFXV with a faster, younger-skewing format. The station's executive vice president, Steve Merren (who had come from NBC affiliate WKTV, which had the sole television news operation in the market prior to the formation of Nexstar's Eyewitness News operation) believed that it "[was] important that the community has another source of news. We have one newspaper and one news station and the community could benefit from another voice."[40][41][42]
  • In 2012, Sinclair Broadcast Group formed a virtual quadropoly in Mobile, Alabama between its existing duopoly of ABC affiliate WEAR-TV and MyNetworkTV affiliate WFGX and NBC affiliate WPMI and independent station WJTC (the latter duopoly was acquired as part of Newport Television's initial sale of its stations to Sinclair, Nexstar and Cox Media Group, and was sold to Deerfield Media). Unlike some examples mentioned above (particularly the Little Rock virtual quadropoly created through Newport's deal with Nexstar), neither duopoly has experienced any significant effects from the formation of the shared services agreement between the stations. WEAR/WFGX and WPMI/WJTC retain separate studio facilities, news departments and staff, and the senior partners of both stations even produce competing primetime newscasts for their respective duopoly partners (WJTC's 9 p.m. newscast is produced by WPMI and WFGX's 9 p.m. newscast is produced by WEAR).[43][44][45]

Reaction and government action[edit]

In February 2001, Clear Channel Communications subsidiary Citicasters was fined $25,000 for its use of time brokerage agreements and litigation for unlawfully controlling Youngstown, Ohio area radio station WBTJ (101.9 FM, now WYLR); the company had also been the target of complaints for using KFJO (FM) to rebroadcast KSJO after it had nominally sold KFJO to minority-owned interests.[46][47][48][49]

In 2009, the Media Council of Hawaii complained to the FCC about Raycom's Hawaii News Now operation, stating that it would "directly reduce the diversity of local voices in a community by replacing independent newscasts on the brokered station with those of the brokering station." In response, the FCC stated it would begin to investigate into the matter.[7][15]

The FCC later began to consider potential changes to its duopoly rule to remove the LMA loophole; tabling a proposal that would make such agreements count the same as ownership.[50]

Gannett acquisition of Belo[edit]

Belo Tower in Dallas, Texas.

Gannett Company's 2013 acquisition of Belo Corporation was opposed by organizations such as the American Cable Association and Free Press, due to Gannett's plans to use LMAs and two shell companies owned by former Belo and Fisher Communications executives (Sander Media and Tucker Operating Co.) to dodge FCC newspaper cross-ownership restrictions in Louisville, Phoenix, Portland and Tucson. Although Gannett contended that the arrangements were legal, Free Press president Craig Aaron stated that "the FCC shouldn't let Gannett break the rules. Media consolidation results in fewer journalists in the newsroom and fewer opinions on the airwaves. Concentrating media outlets in the hands of just a few companies benefits only the companies themselves." The deal would have given Gannett a virtual triopoly in Phoenix, consisting of its NBC station KPNX, independent KTVK, and CW affiliate KASW. Tucson's KMSB and KTTU (Fox and MyNetworkTV respectively) were already operated by Raycom Media's CBS affiliate KOLD-TV under a shared services agreement established under Belo ownership, but Gannett would still handle advertising sales for the stations.[51]

In December 2013, the U.S. Department of Justice blocked Gannett from using an agreement with Sander Media to operate Kansas CBS affiliate KMOV alongside its own NBC station KSDK, and ordered Gannett to sell KMOV. Even though Gannett planned to operate KMOV separately from KSDK, the Department ruled the agreement to be a violation of antitrust law, as it would reduce competition for advertising sales.[52] Following the closure of the Belo purchase, Meredith Corporation announced a deal to purchase KMOV, along with KTVK and KASW. As Meredith already owned Phoenix CBS affiliate KPHO-TV, KASW was to be sold to SagamoreHill Broadcasting and operated by Meredith under an LMA.[8][51][53]

Sinclair acquisition of Allbritton[edit]

In December 2013, acting upon its proposed acquisition of Allbritton Communications, FCC Video Division Chief Barbara Kreisman sent a letter demanding information from Sinclair Broadcast Group on the financial aspects of its "sidecar" operations, and warned that "in three of the markets – Charleston, Birmingham and Harrisburg – the proposed transactions would result in the elimination of the grandfathered status of certain local marketing agreements and thus cause the transactions to violate our local TV ownership rules." It was asserted that the deal might only be legal if the affected stations were operated under shared services agreements.[54][55] Sinclair restructured the deal in March 2014, choosing to sell its existing stations in Harrisburg (WHP-TV), Charleston (WMMP) and Birmingham (WABM) and terminate an SSA with the Cunningham-owned Fox affiliate in Charleston to acquire the Allbritton-owned stations in those markets (WCIV, WHTM-TV, and WBMA-LD, while also creating a new duopoly between the ABC and CW affiliates in Birmingham), as well as foregoing any operational or financial agreements with the buyers of the stations being sold to other parties.[56][57]

In May 2014, Sinclair disclosed in an FCC filling that it was unable to find buyers for the three affected stations, requiring changes to its transaction.[58] In Harrisburg, Sinclair chose to retain WHP-TV, and divest WHTM to Media General.[59] However, in Charleston and Birmingham, the company proposed to shut down stations entirely so it could maintain legal duopolies; surrending the licenses for WCIV and the full-powered repeaters of WBMA-LD (WJSU and WCFT), and moving their ABC programming to Sinclair's existing stations WMMP and WABM respectively—which would shift their existing MyNetworkTV programming to digital subchannels.[58] After nearly a year of delays, Sinclair's deal to acquire Allbritton was approved by the FCC on July 24, 2014.[60]

FCC limits on joint sales agreements[edit]

In January 2014 town hall meeting, FCC chairman Tom Wheeler disclosed that he planned to place more scrutiny on the use of LMA-style agreements and shell companies, stating that "there were a couple of references in a couple of recent decisions in which we've said that we’re going to do things differently going forward on what were called these shell corporations." Later that month, it was reported that the FCC had placed all pending acquisitions involving the use of shell companies on hold, so the Commission could discuss changes to its policies. Among the deals affected by this decision are the aforementioned Sinclair/Allbritton purchase.[61][62]

On March 6, 2014, the FCC announced that it would hold a vote on March 31 on a proposal to ban joint sales agreements involving television stations outright, making them attributable to FCC ownership limits if the senior partner sells 15% or more of advertising time of a competing junior partner station in the JSA; the ban applies to both existing sharing agreements under such a structure as well as pending station transactions that include a JSA. Station owners will be given a two-year grace period to unwind or modify joint sales agreements in violation of the policy; coordinated retransmission consent negotiations between two of the four highest-rated stations in a single market would also be barred under the proposal. FCC chairman Tom Wheeler also proposed an expedited process to review joint sales agreements on a case-by-case basis, granting a waiver of the rules if a broadcaster can prove a particular joint sales agreement arrangement serves the public interest.[63][64]

On March 12, 2014, the FCC Media Bureau released a notice that it would further analyze television station transactions that include sharing agreements, particularly those that include a purchase option that "may counter any incentive the licensee has to increase the value of the station, since the licensee may be unlikely to realize that increased value.” Under the new provisions, broadcasters must demonstrate in their transaction applications as to how such deals would serve the public interest.[65] The National Association of Broadcasters – which, along with station groups such as Sinclair Broadcast Group, have disapproved of the proposal to ban JSAs – presented a compromise proposal, in which the brokered licensee in a sharing agreement would retain control over at least 85% of the station’s programming, maintain at least 70% of ad sales revenue and “maintain at least 20% of station value in the license itself”.[66] FCC commissioner Ajit Varadaraj Pai was also opposed to the new rules on joint sales agreements, believing that they would discourage the ownership of television stations by minority-owned companies.[60]

On March 31, 2014, the FCC voted 3–2 to approve the proposed ban on joint sales agreements and voted 5–0 to approve the proposed ban on coordinated retransmission consent negotiations between two of a market's four highest-rated stations; for the JSA ban, the rule is effective June 19, 2014.[67] Under the restrictions, the FCC would rule on waivers to maintain select existing JSAs within 90 days of the application's filing. The FCC also began a request for comment on policies to address other agreements, such as shared services agreements.[2][3][68] The prohibition on television JSAs had been proposed as early as 2004, a year after the FCC voted to treat JSAs between radio stations as duopolies. Despite this fact, broadcasting companies have blasted the ban on JSAs since its proposal stage, accusing the Commission of using it as a move to push broadcasters into participating in a spectrum auction set to occur in 2015, and stating that the ban would place them at a disadvantage during retransmission consent negotiations with pay television providers.[69][70]

Shutdown of stations[edit]

The increased scrutiny being imposed by the FCC regarding local marketing, shared services, and joint sales agreements have led to more drastic measures by broadcasting companies attempting to use them in acquisitions; in 2014, two broadcasting companies declared intents to shut acquired stations down entirely and consolidate their programming onto existing stations through multicasting, rather than attempting to use sidecars and sharing agreements.[71][72]

In May 2014, Sinclair informed the FCC that it was unable to find buyers for WABM or WMMPMyNetworkTV stations in Birmingham, Alabama and Charleston, South Carolina that it planned to sell in its purchase of Allbritton Communications. In Birmingham, the company proposed surrendering the licenses of WCFT-TV and WJSU-TV—the two full-powered translators of ABC affiliate WBMA-LD, converting WABM into a full-powered translator of WBMA-LD, and moving its existing MyNetworkTV programming to a digital subchannel of WABM. Similarly, in Charleston, Sinclair planned to surrender WCIV's license and move its ABC affiliation and programming to WMMP. In both cases, Sinclair believed that its own stations had superior technical facilities than those of the stations it intends to surrender.[72][58] Sinclair can retain WBMA-LD as the FCC does not impose any ownership limits on low-power stations.[73]

On June 13, 2014, Gray Television announced that it would shut down six stations, consolidate their programming onto subchannels of Gray-owned stations in the same market, and sell the stations to minority-owned broadcasters—under the condition that they would operate them independently from other stations in the market, and without the use of any sharing agreements. All six of the stations were owned by companies other than Gray, but their non-license assets are either owned by Gray, or were operated by stations now owned by Gray under agreements. Gray will operate the affected stations under LMAs until the sales and consolidation are complete. Aside from one, most of the stations involved in these changes were related to Gray's acquisition of stations from Hoak Media. Three of these stations were immediately shut down the same day, while the remainder will remain operated by Gray in the interim while deals are negotiated.[71][74][75]

The six stations affected by Gray's move include:

Following the approval of Sinclair's purchase of Allbritton, commissioner Ajit Varadaraj Pai criticized the commission's decision to endorse Sinclair's plan; describing the three stations as being further "victims" of the crackdown against joint sales agreements, he stated regarding WCIV that "apparently the Commission believes that it is better for that station to go out of business than for Howard Stirk Holdings to own the station and participate in a joint sales agreement with Sinclair. I strongly disagree. And so too, I’ll bet, would consumers in Charleston."[60]

Internationally[edit]

In a 2005 Canadian dispute, Rogers Media 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.[80]

In 2008, the Filipino Associated Broadcasting Company leased its airtime to the Malaysian broadcaster Media Prima (through the local subsidiary MPB Primedia, Inc) similar to an LMA – with MPB Primedia providing entertainment programming, and ABC handling news programming and operations. Soon afterward, ABC 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 subsidiary was a Filipino company which was self-registered and Filipino-run.[81] The concerns became moot in 2010, when Media Prima announced it would divest its ownership in the network to the Philippine Long Distance Telephone Company's broadcasting subsidiary MediaQuest Holdings.[82]

See also[edit]

References[edit]

  1. ^ "FCC Denies Waiver Bid, Rules Nassau Must End JSA". Radio Ink. MediaSpan Group. August 12, 2008. Retrieved December 27, 2013. 
  2. ^ a b Halonen, Doug (March 31, 2014). "FCC Puts Kibosh on New JSA Deals". TVNewsCheck. NewsCheckMedia. Retrieved March 31, 2014. 
  3. ^ a b c Halonen, Doug (March 31, 2014). "FCC Blocks Joint Retrans Negotiations". TVNewsCheck. NewsCheckMedia. Retrieved March 31, 2014. 
  4. ^ Klinenberg, Eric (January 9, 2007). Fighting for Air: The Battle to Control America's Media. Macmillan Publishers. pp. 101–105. ISBN 9781429923606. 
  5. ^ Lovelady, Steve (November 27, 2011). "TV Shared Services Agreements: Danger Ahead!". CommLawBlog. Fletcher, Heald & Hildreth PLC. Retrieved March 10, 2014. 
  6. ^ a b c d e f g McAvoy, Kim (June 9, 2010). "Virtual Duopolies Coming Under Fire". TVNewsCheck. NewsCheckMedia. pp. 1–2. Retrieved May 30, 2012. 
  7. ^ a b c d e f g h i Stelter, Brian (May 28, 2012). "You Can Change the Channel, but Local News Is the Same". The New York Times. p. A1. Retrieved May 30, 2012. 
  8. ^ a b Bachman, Katy (July 25, 2013). "Public Interest Groups, Cable Companies Oppose Gannett-Belo Merger". Adweek (Prometheus Global Media). 
  9. ^ Pawloski, Sarah J. (July 2, 2013). "Daily Press owner Tribune Co. to buy 19 TV stations, including WTKR". Daily Press. Archived from the original on July 7, 2013. Retrieved July 2, 2013. 
  10. ^ Walker, Dave (January 15, 2014). "Harry Connick Jr. may be a player in the 10 p.m. race between WWL, WVUE – both under new management". NOLA.com (NOLA Media Group). Retrieved January 22, 2014. 
  11. ^ Walker, Dave (November 20, 2013). "WVUE enters into shared-services agreement with Raycom Media". NOLA.com (NOLA Media Group). Retrieved November 20, 2013. 
  12. ^ "FCC 323 (Ownership Report for Commercial Broadcast Stations)". Federal Communications Commission. March 2013. Retrieved June 19, 2013. 
  13. ^ Venta, Lance (September 9, 2012). "WLYK Relaunches as Adult Contemporary". RadioInsight. RadioBB Networks. Retrieved March 9, 2014. 
  14. ^ "Permit to Deliver Programs to Foreign Broadcast Stations". Federal Communications Commission. January 8, 2009. Retrieved March 31, 2014. 
  15. ^ a b c Engle, Erika (August 20, 2009). "Execs explain TV swap, but some see it as blurry". Honolulu Star-Bulletin (Oahu Publications). Retrieved December 30, 2013. 
  16. ^ Verveer, Phil (March 6, 2014). "How the Sidecar Business Model Works". Federal Communications Commission. Retrieved April 2, 2014. 
  17. ^ Nicklaus, David (December 20, 2013). "KMOV ruling may slow use of TV station 'sidecar' deals". St. Louis Post-Dispatch (Lee Enterprises). Retrieved April 2, 2014. 
  18. ^ Daneman, Matthew (October 8, 2013). "WROC out, 13WHAM in on Fox". Democrat and Chronicle (Gannett Company). Retrieved December 27, 2013. 
  19. ^ "LIN spins Toledo TV to Raycom partner". Radio & Television Business Report. Streamline RBR. January 11, 2012. Archived from the original on January 11, 2012. Retrieved January 12, 2012. 
  20. ^ a b c Staff writers (August 2, 2013). "News-Press & Gazette Gets $12M For KJCT". TVNewsCheck. NewsCheckMedia. Retrieved August 4, 2013. 
  21. ^ Staff writers (February 11, 2014). "Quincy Buying Stations From Granite, Malara". TVNewsCheck. NewsCheckMedia. Retrieved February 11, 2014. 
  22. ^ Engle, Erika (December 17, 2010). "Following Five-0 proves beneficial for late news". Honolulu Star-Advertiser (Oahu Publications). Retrieved December 27, 2013. 
  23. ^ Newkirk, Jacob (November 22, 2011). "Big changes coming to News 25 and Local 7". Evansville Courier & Press (E. W. Scripps Company). Retrieved November 28, 2011. 
  24. ^ Newkirk, Jacob (November 29, 2011). "Nexstar announces anchors, expanded 'Local' news on WTVW, WEHT". Evansville Courier & Press (E. W. Scripps Company). Retrieved November 29, 2011. 
  25. ^ Engle, Erika (August 18, 2009). "68 to lose jobs in local TV agreement, sources say". Honolulu Star-Bulletin. Oahu Publications. Archived from the original on August 21, 2009. Retrieved December 26, 2013. 
  26. ^ "FCC 315 (Application for Consent to Transfer Control of Entity Holding Broadcast Station Construction Permit or License)". Federal Communications Commission. October 2012. Retrieved July 26, 2014. 
  27. ^ a b Knable, Kate (January 29, 2013). "Almost 30 Lose Jobs at KARK, KLRT as TV Owners Consolidate". Arkansas Business (Arkansas Business Publishing Group). 
  28. ^ Jessell, Harry A. (September 16, 2008). "Denver, St. Louis To Get Fox-CW Duops". TVNewsCheck. NewsCheckMedia. Retrieved July 26, 2014. 
  29. ^ "Tribune and Local TV To Form Broadcast Management Company" (Press release). Tribune Company. December 20, 2007. Retrieved December 21, 2007. 
  30. ^ Ostrow, Joanne (March 18, 2009). "Channel 2 shuffles primetime". The Denver Post (Digital First Media). Retrieved July 26, 2014. 
  31. ^ "Fox31 boosts early-evening news to an hour". Denver Business Journal (American City Business Journals). January 6, 2009. 
  32. ^ Bachman, Katy (August 25, 2008). "CW's KPLR-TV Changes Times, Expands News". Adweek (Prometheus Global Media). 
  33. ^ Malone, Michael (February 27, 2009). "KPLR Launches Noon News". Broadcasting & Cable (NewBay Media). 
  34. ^ Pennington, Gail (September 3, 2010). "Off the LA freeway, Patrick Clark is back home at Ch. 11". St. Louis Post-Dispatch (Lee Enterprises). Retrieved July 26, 2014. 
  35. ^ "FCC OKs Tribune Co.'s agreement to buy Local TV Holdings". Crain's Chicago Business (Crain Communications). December 20, 2013. Retrieved July 26, 2014. 
  36. ^ "Tribune Closes Acquisition of Local TV Holdings" (Press release). Tribune Company. December 27, 2013. Retrieved July 26, 2014. 
  37. ^ Emerson, LaTina (December 2, 2010). "WBBQ, other stations to move to new locations". The Augusta Chronicle (Morris Communications). Retrieved December 5, 2010. 
  38. ^ Emerson, LaTina (December 30, 2009). "WJBF, WAGT negotiating with on-air personnel". The Augusta Chronicle (Morris Communications). Retrieved December 5, 2010. 
  39. ^ Greenwald, Arthur (July 26, 2012). "Facility Helps Duop TVs Keep Own Identities". TVNewsCheck. NewsCheckMedia. Retrieved September 11, 2013. 
  40. ^ Miner, Dan (March 31, 2011). "Local news coming to ABC and FOX in Utica and Rome". Utica Observer-Dispatch (Gatehouse Media). Retrieved March 21, 2014. 
  41. ^ Phillips, Marques (April 16, 2010). "Company has not had news since 2003". Utica Daily News (Townsquare Media). Archived from the original on April 20, 2010. Retrieved 21 March 2014. 
  42. ^ "Utica’s WUTR to Revive Local News Operation". CNYRadio.com. March 31, 2011. Retrieved March 21, 2014. 
  43. ^ Mitchell, Ellen (July 19, 2012). "Sinclair adds 2 more Gulf Coast TV stations to stable – WPMI and WJTC". AL.com. Alabama Media Group. Retrieved March 28, 2014. 
  44. ^ Blanton, Christopher M. (August 8, 2013). "WPMI to produce newscasts for WJTC...". Florida News Center (Press release). Retrieved March 28, 2014. 
  45. ^ Blanton, Christopher M. (July 31, 2013). "WEAR to produce new newscasts for WFGX...". Florida's News Center. Retrieved March 28, 2014. 
  46. ^ Citicasters Co. v. Stop 26 Riverbend, Inc. (PDF). Ohio Seventh District Court of Appeals. May 2, 2002. Archived from the original on February 15, 2012. Retrieved July 27, 2014. 
  47. ^ Korn, Alan (October 28, 2005). "Petition to Deny Renewal" (PDF). Media Alliance. Archived from the original on February 7, 2006. Retrieved March 22, 2014. 
  48. ^ Kava, Brad (May 8, 2001). "Biggest radio mogul bending rules to get bigger?". San Jose Mercury News (MediaNews Group). Retrieved March 22, 2014. 
  49. ^ "Notice of Apparent Liability for Forfeiture". In the Matter of Citicasters Co. Federal Communications Commission. February 13, 2001. Retrieved March 22, 2014. 
  50. ^ Halonen, Doug (March 5, 2013). "FCC's Pai: JSA Overhaul Plan Still In Play". TVNewsCheck. NewsCheckGroup. Retrieved March 6, 2013. 
  51. ^ a b Hatfield, David (June 13, 2013). "Little change on Tucson TV expected from Belo's sale to Gannett". Inside Tucson Business. Retrieved June 13, 2013. 
  52. ^ Eggerton, John (December 16, 2013). "Justice: Sander Can't Keep KMOV". Broadcasting & Cable. NewBay Media. Retrieved December 27, 2013. 
  53. ^ Staff writers (December 23, 2013). "Meredith Buying Three Stations from Gannett". TVNewsCheck. NewsCheckMedia. Retrieved December 23, 2013. 
  54. ^ Hagey, Keach (December 6, 2013). "FCC Asks Sinclair to Revise Plans to Use 'Sidecar' Companies". The Wall Street Journal (Dow Jones & Company). Retrieved December 7, 2013. 
  55. ^ Halonen, Doug (December 6, 2013). "FCC Targets Sinclair Sidecar Deals In 3 Mkts.". TVNewsCheck. NewsCheckMedia. Retrieved December 7, 2013. 
  56. ^ Eck, Kevin (March 21, 2014). "Sinclair Offers to Sell Stations Ahead of FCC Decision". TVSpy. Mediabistro. Retrieved July 26, 2014. 
  57. ^ "Sinclair Proposes Restructuring of Allbritton Transaction in Order To Meet Objections of the Federal Communications Commission". PR Newswire (Press release). Baltimore. March 20, 2014. Retrieved July 26, 2014 – via The Wall Street Journal. 
  58. ^ a b c Jessell, Harry A. (May 29, 2014). "Sinclair Giving Up 3 Stations To Appease FCC". TVNewsCheck. NewsCheckMedia. Retrieved May 30, 2014. 
  59. ^ "Media General Buying WHTM For $83.4M". TVNewsCheck (NewsCheckMedia). June 23, 2014. Retrieved June 23, 2014. 
  60. ^ a b c Eggerton, John (24 July 2014). "FCC Approves Sinclair/Allbritton Deal". Broadcasting & Cable. NewBay Media. Retrieved 24 July 2014. 
  61. ^ Halonen, Doug (January 23, 2014). "Report: Wheeler Putting Brakes on SSAs". TVNewsCheck. NewsCheckMedia. Retrieved January 24, 2014. 
  62. ^ Halonen, Doug (January 10, 2014). "Wheeler Vows To Take Closer Look at SSAs". TVNewsCheck. NewsCheckMedia. Retrieved January 24, 2014. 
  63. ^ Halonen, Doug (March 6, 2014). "Wheeler Moves To End Sharing Agreements". TVNewsCheck. NewsCheckMedia. Retrieved July 26, 2014. 
  64. ^ Yu, Roger (March 6, 2014). "FCC proposes to curb TV stations' joint sales deals". USA Today (Gannett Company). 
  65. ^ Halonen, Doug (March 12, 2014). "FCC To Scrutinize Station Sales with SSAs". TVNewsCheck. NewsCheckMedia. Retrieved July 26, 2014. 
  66. ^ Halonen, Doug (March 14, 2014). "NAB Proposes JSA Compromise Plan". TVNewsCheck. NewsCheckMedia. Retrieved July 26, 2014. 
  67. ^ "Media Bureau Announces the Effective Date of the Television Joint Sales Agreement Attribution Rule" (PDF). Federal Communications Commission. June 18, 2014. Archived from the original on July 27, 2014. Retrieved June 18, 2014. 
  68. ^ Johnson, Ted (March 31, 2014). "FCC Votes to Bar Stations from Jointly Selling Ad Time". Variety (PMC). 
  69. ^ Halonen, Doug (April 7, 2014). "FCC's Lake: FCC Not At War Over JSAs". TVNewsCheck. NewsCheckMedia. Retrieved April 7, 2014. 
  70. ^ McConnell, Bill (August 3, 2004). "FCC May Tighten Joint Sales Rules". Broadcasting & Cable (NewBay Media). Retrieved April 7, 2014. 
  71. ^ a b Marcucci, Carl (June 13, 2014). "Gray closes Hoak deal; completes refinancing". Radio & Television Business Report. Streamline RBR. Retrieved July 26, 2014. 
  72. ^ a b Eggerton, John (May 29, 2014). "Sinclair Proposes Surrendering Three Licenses to Get Allbritton Deal Done". Broadcasting & Cable (NewBay Media). Retrieved May 30, 2014. 
  73. ^ "Low Power Television (LPTV) Service". Federal Communications Commission. Retrieved 29 July 2014. 
  74. ^ Staff writers (November 20, 2013). "Gray Buying Hoak, Prime Stations For $342.5M". TVNewsCheck. NewsCheckMedia. Retrieved November 20, 2013. 
  75. ^ a b "Gray Retains Minority Media and Telecommunications Council as Exclusive Broker for Transfer of Former Shared Services Stations" (Press release). Atlanta: PR Newswire. June 13, 2014. Retrieved June 16, 2014 – via Gray Television. 
  76. ^ Jessell, Harry A. (November 26, 2012). "Gray Lines Up 2nd Station In Lincoln, NE". TVNewsCheck. NewsCheckMedia. Retrieved June 16, 2014. 
  77. ^ Korbelik, Jeff (June 12, 2014). "KSNB-TV to become NBC affiliate". Lincoln Journal Star. Retrieved June 16, 2014. 
  78. ^ Paxson, Ann Thomas (March 25, 2014). "Re: Prime Cities Broadcasting, Inc. Request for Dismissal of Group Application for Assignment of Broadcast Station License(s)..." (PDF). CDBS Public Access. Federal Communications Commission. Archived from the original on March 27, 2014. Retrieved March 26, 2014. 
  79. ^ a b Staff writers (May 1, 2014). "Gray Adds North And South Dakota TVs". TVNewsCheck. NewsCheckMedia. Retrieved May 2, 2014. 
  80. ^ "Broadcasting Decision CRTC 2005–22". Ottawa: Canadian Radio-television and Telecommunications Commission. January 31, 2005. Retrieved March 8, 2014. 
  81. ^ Almo, Nerisa (January 5, 2009). "'TV5 is a Filipino company', defends one of its executives". Philippine Entertainment Portal. Retrieved January 20, 2009. 
  82. ^ Godinez, Bong (March 26, 2010). "Revamped TV5 parades new programs and roster of stars at its trade launch". Philippine Entertainment Portal. Retrieved August 8, 2012.