Panelists Offer Proposals, Queries for FCC Ownership Review
Panelists at the last of this week’s batch of media ownership workshops offered questions, proposals and measurements for the FCC to consider as it reviews the rules in 2010. President David Barrett of Hearst Television again floated a proposal for the commission to take into account several types of media when deciding whether to let TV stations combine. General Counsel George Mahoney of Media General suggested that the commission take into account the time stations devote to news coverage in measuring broadcast outputs. Two representatives of minority organizations said the FCC should keep diversity in mind.
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Panelists and senior commission staff spent a good deal of time discussing how much the downturn in the broadcast industry resulted from the recession and how much from considerations specific to the business. Moderator Bill Lake asked about the analysis at Tuesday’s workshop of a predecessor of his as the Media Bureau chief that the unwinding of broadcast consolidation is the new norm (CD Nov 4 p2). “How do we consider whether some of this current instability of the market is cyclical rather than structural” since “we don’t have the benefit of waiting for 10 years to see which it was?” Lake also asked. “How do we factor that uncertainty into the rules?”
Executives and minority-group representatives disagreed on whether deal-making will return to broadcasting once the economy recovers further. “A lot of these big transactions haven’t produced the kind of financial results that were expected” across many industries, Barrett said. “I think you are seeing some unraveling of those deals” after “a lot of companies in the go-go years took on too much debt and were not insulated from the cyclical downturn.” Deal-making seems set to return in “another wave of consolidation,” said Executive Director James Winston of the National Association of Black Owned Broadcasters. But “I don’t think this should be taken to mean that the regulations are somehow unnecessary,” said Policy Counsel Jessica Gonzalez of the National Hispanic Media Coalition.
Executives and advocates for minorities said broadcasting’s financial straits seem to stem from the economy and from long-term changes such as increased competition from other media. “The money in this industry follows the audience, and the audience has gone to a lot of scattered places, and we have to be mindful of that,” Barrett said. Mahoney said, “Competition is a vastly different thing than it was a year ago. You see these revenue declines in categories that are gone in the type of media we are talking about. … That tells you as a commission that the market really has changed.” Whatever the regulator does, it “ought not to exacerbate” things, said NAB General Counsel Jane Mago. Lake asked about the value of “bright-line” ownership rules. In practice, the current rules rarely are cut-and- dried, because “you have to be able to consider all of the circumstances” in reviewing a deal, Mago replied. “Bright- line rules have never been totally bright.”
Barrett’s solution is for the commission to allow common ownership of TV stations in a market as long as if together they don’t have more than 30 percent of the TV audience. It’s a proposal he’s made before and wants the regulator to reconsider now, he said. “The proposal is equally applicable in large markets and small markets,” Barrett added. “The proposal would not lead, I believe, to a wave of local media mergers.” Mahoney said he wants a complete repeal of restrictions on common ownership of a daily newspaper and a TV or radio station. “The ban is an anachronism” and “serious detriment to my industry,” he added. Mago agreed the ban is outdated but said twice that broadcasters “are not calling for an end to all ownership regulation.” They want rules to allow “reasonable combination of station ownership,” she said.
Minority-owned radio and TV stations face skepticism from banks reluctant to lend to new entrants because other stations have competitive advantages through common ownership, Winston said. “The goal that always received short shrift was the goal of diversity,” and last month’s public notice on the workshops didn’t mention minority ownership, he said. The FCC should ask whether “any of the commission’s ownership rules impede efforts to promote minority ownership” and about the need to change them if they have, he added. FCC ownership reviews have been “a broken process” and the last order, in 2007, didn’t take up minority ownership, Gonzalez said. She wants the commission to ask whether minority broadcasters have more diverse programming than others do and whether they cater to their communities’ needs.