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 time-buy.
Under Federal Communications Commission (FCC) regulations, a local marketing agreement must give the company operating the station 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, "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.
The most common use of an LMA in television broadcasting is to create a "virtual duopolies", 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.
Local marketing agreements also allow duopolies where they are not legally possible; FCC regulations only allow one company to own more than one station in markets where there are at least eight distinct broadcast television stations. As such an operational agreement does not transfer ownership of the station's license, this can allow a broadcaster to operate more than one station in a market, even where there are too few stations to allow one, or to allow one between the top two stations in a market (which is prohibited in all markets).
The consolidation of news departments through local marketing agreements between "major" network affiliates has also been criticized; 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 as well. There is also the issue as to whether LMAs result in an increased or decreased amount of news coverage; in local marketing agreements, as in formal duopolies, this varies depending on the duopoly's structure, for example:
- Local TV, the owner of St. Louis, Missouri Fox affiliate KTVI, entered into an LMA with Tribune Broadcasting-owned CW affiliate KPLR-TV in 2008. Prior to the formation of the LMA, KPLR only had a half-hour nightly newscast at 9 p.m. After the LMA was formed, KPLR significantly increased its weekly news output from 2½ to 15 hours through the expansion of its primetime newscast to one hour (which subsequently moved to 7 p.m. to avoid competing with KTVI's hour-long 9 p.m. newscast) and the addition of hour-long noon and 4 p.m. newscasts (the evening newscast was reduced to weeknights only after the move to 7 p.m. but this was partly due to The CW having a Sunday night lineup at the time, it was later expanded to weekends in 2012);
- In Evansville, Indiana, Mission Broadcasting acquired independent station WTVW in 2011 with its former owner Nexstar Broadcasting retaining operational duties under an SSA. WTVW consolidated news operations with recently acquired Nexstar station, ABC affiliate WEHT, and had its newscast output reduced from 34½ to 22½ hours each week through the reductions of its 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.).
- By contrast, when the operations of WAGT (the Schurz Communications-owned NBC affiliate in Augusta, Georgia), were taken over by Media General's ABC affiliate WJBF-TV, the stations aimed to create a more efficient operation through consolidation, while still allowing them to maintain separate on-air identities and competing news programming. A new facility was constructed to house both stations; while they are equipped with similar high definition production equipment, both stations maintain their own newsrooms, studios (along with a third that can be used for non-station specific productions), 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.
Newscasts on the junior partner in the LMA, if it operated a separate news department before the LMA's formation, that air in timeslots that compete with newscasts seen on the senior partner are sometimes cut back or cancelled entirely to avoid competing with one another (this is more common with LMAs and formal duopolies involving a Big Three affiliate and an affiliate of a smaller network such as Fox or The CW), in which the latter may have considerably fewer local news programming hours than the major network affiliate). The partnered stations may also establish a joint news operation: two separately branded newscasts with different on-air personalities may ultimately consist of exactly the same news content as each other, or the two stations may air newscasts under a single joint brand shared between the stations. However, 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 cost savings achieved through the consolidation of resources and staff may be necessary to fund a station's continued operation.
The practice of using shill companies as a loophole to form otherwise illegal duopolies through LMAs has also been a target of criticism. Sinclair Broadcast Group and Nexstar Broadcasting Group have frequently funded the acquisition of stations by a third-party company—such as Cunningham and Mission Broadcasting respectively—which are then taken over by a station they already own in the market under an LMA. While not to the same extent as Mission and Cunningham, Raycom Media has a similar business relationship with American Spirit Media, in which its stations are all operated by Raycom under shared services agreements.
Broadcasters can also collect carriage fees for the stations they operate under LMAs 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.
In February 2001, Clear Channel Communications subsidiary Citicasters was fined $25,000 for its use of time brokerage agreements and litigation to unlawfully control 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.
In 2009, public attention was brought to the issue of LMAs in Hawaii when 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. The three stations would also be folded into a shared news operation known as Hawaii News Now. As ownership of television stations is recognized by facility IDs and not by call signs or other intellectual property, the swap was not a transaction that would require the intervention of the FCC, aside from the changing of call signs. An estimated 68 positions from a total of 198 from the three stations would be eliminated as part of the agreement.
In the wake of the controversy, the Media Council of Hawaii complained to the FCC about the agreement, 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. The FCC has since considered potential changes to its duopoly rule to remove the LMA loophole; tabling a proposal that would make such agreements count the same as ownership.
In December 2013, acting upon its proposed acquisition of Allbritton Communications, FCC Video Division Chief Barbara Kreisman sent a letter demanding information from Sinclair 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. 
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. This policy does not appear to affect American border stations (which are outside the CRTC's jurisdiction) for which an LMA has been reached by a Canadian company; for example, Rogers currently operates WLYK in upstate New York (near Kingston, Ontario) under an LMA.
In 2008, the Filipino Associated Broadcasting Company leased its airtime to the Malaysian broadcaster Media Prima (through the local subsidiary MPB Primedia, Inc) in a similar fashion 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. The concerns became moot in 2010, when Media Prima announced it would divest its ownership in the network to PLDT's broadcasting subsidiary MediaQuest Holdings.
- "Virtual Duopolies Coming Under Fire". TVNewsCheck. Retrieved 30 May 2012.
- Stelter, Brian. "You Can Change the Channel, but Local News Is the Same". The New York Times. Retrieved 30 May 2012.
- Emerson, LaTina (2009-12-30). "WJBF, WAGT still negotiating with on-air personnel". The Augusta Chronicle. Retrieved 2010-12-05.
- "Facility Helps Duop TVs Keep Own Identities". TVNewsCheck. Retrieved 11 September 2013.
- "LIN spins Toledo TV to Raycom partner". Television Business Report. January 11, 2012. Retrieved January 12, 2012.
- Citicasters vs. WBTJ (Stop 26) Youngstown, Ohio
- A 2005 media-alliance.org petition to deny renewal of KSJO's FM license cites Biggest Radio Mogul Bending Rides to Get Bigger? B. Kava, San Jose Mercury News, May 8, 2001 to claim a KSJO FM simulcast on KFJO was used to exceed FCC limits on FM stations under common control.
- In the Matter of Citicasters Co. File No. 00-IH-0283 NAL/Acct. No. 200132080019/MG NOTICE OF APPARENT LIABILITY FOR FORFEITURE, US Federal Communications Commission, 2001
- "68 to lose jobs in local TV agreement, sources say", from Honolulu Star-Bulletin, August 18, 2009
- "Execs explain TV swap, but some see it as blurry", Honolulu Star-Bulletin, August 20, 2009
- "FCC's Pai: JSA Overhaul Plan Still In Play". TVNewsCheck. Retrieved 6 March 2013.
- "FCC Asks Sinclair to Revise Plans to Use 'Sidecar' Companies". Wall Street Journal. Retrieved 7 December 2013.
- "FCC Targets Sinclair Sidecar Deals In 3 Mkts.". TVNewsCheck. Retrieved 7 December 2013.
- CRTC Decision 2005-22
- Nerisa Almo (2009-01-05). ""TV5 Is a Filipino Company," Defends One of Its Executives". Philippine Entertainment Portal. Retrieved 2009-01-20.
- Revamped TV5 parades new programs and roster of stars at its trade launch retrieved via www.pep.ph 03-26-2010