Gives media companies more tools to build scale
The broadcast industry is getting a boost now the federal register has published the FCC rules, upheld by the Supreme Court in an unanimous decision in April.
Effective as of Monday, the rule changes eliminates the newspaper/cross-ownership rule in place since 1975; the mandate eight television stations must remain after two to them merge; allowing the merger of two top-rated stations in a market on a case-by-case basis; and television/radio subcaps and JSA restrictions are also loosened.
Reinstated is the 2018 incubator program, one that’s sees an established broadcaster provide financial and operational support to new broadcasters in a way to boost minority ownership of television and radio stations.
The FCC – now split evenly between two Democrats and two Republicans since the departure of former FCC Republican chair Ajit Pai now must solicit public comment on the rules as part a review of the rules as mandated by Congress – including the TV station ownership cap, still at 39 percent and not affected by the Supreme Court ruling.
So far, the Biden Administration has not nominated a fifth person to join the FCC. As this space pointed out beforehand, any Democratic nominee could pose a problem as he or she must be approved by the Senate, no easy task given the 50/50 split meaning the commission could be at four members for some time and could hold up transactions, such as Gray’s proposed purchase of Meredith’s TV stations.
For the moment, the FCC rules from 2017 are now in the books but as this space noted before, don’t look for any wheeling and dealing anytime soon.
The news comes as media companies without broadcast TV stations are making deals. Last month, WarnerMedia announced a merger with Discovery Communications and Amazon announced the purchase of MGM as the industry continues to build scale against Netflix and other tech giants. Broadcasters had been lobbying Congress to deregulate their business even further as streaming is taking told with viewers as the main way to watch TV as the networks’ revenues continue to shrink and feeling they’re at a competitive disadvantage. Whether this comes during the Biden Administration remains to be seen.
One pairing being branded about is between ViacomCBS and Comcast’s NBCUniversal with the former operating Paramount+ and the latter running Peacock as both own stations in major markets, including Chicago. While any merger between the two companies would face tough anti-trust scrutiny from regulators, the FCC’s new rules on whether a duopoly between two stations in a market who are the four most-watched in a local market being handled on a case-by-case basis, could make the road a little easier – but it may have to wait until a Republican Administration takes over Congress and since most Republicans don’t like the way CBS’ and NBC’s news divisions cover politics, this won’t be a given.