Media Rule Rollback by FCC Could Mean Buying Spree for TV Stations

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The Federal Communications Commission that is led by Republicans is moving quickly to undo the roadblocks to more consolidation amongst media companies, which potentially could unleash a number of deals amongst newspaper, television and radio owners attempting to compete better with today’s online media.

Chairman of the FCC Ajit Pai disclosed on Wednesday plans to ask the regulator for media and communications on November 16 to eliminate a ban of 42 years of cross-ownership of a TV station and newspaper in any major market.

Those changes would make it much easier for media companies to purchase more TV stations within the same market, or for local stations to sell advertising time jointly.

This move, as well as other expected changes in media rules from the FCC, could introduce a new period of media consolidation that would help TV stations and newspapers that are struggling, but limit media voice diversity.

Pai cited increasing competition in advertising from online sites such as Facebook and Google as the reason for rolling back rules for media ownership and helping newspapers that continue to struggle.

Large media companies including Nexstar Media Group and Tegna Inc. have cited these rule changes as being motivating to them to look for opportunities to expand.

In the short term, the decision might also allow another company, Sinclair Broadcast, which is attempting to gain approval for its proposed acquisition for $3.9 billion of Tribune Media, to avoid certain divestitures to get it approved.

On Friday, the National Association of Broadcasters said that eliminating regulations that are outdated and unnecessarily hobble broadcast stations at a local level will be beneficial to consumers in many communities across the nation.

Free Press, the advocacy group, criticized the proposal by Pai saying that it ignores how many decades of runaway consolidation in media has significantly harmed independent voices and local news.

A spokesperson for TV broadcaster Tegna, which was known formerly as Gannett prior to a spin off in 2015 of its newspapers, said it expects to be a disciplined and strategic consolidator during this most pivotal time of regulatory change.

CEO at Nexstar Perry Sook through a prepared statement said that the change would allow broadcasters in local markets to make more investments in programming content locally, news sources, reporting capabilities and our people.

One analyst on Wall Street said that a rollback of regulatory rules would mean more consolidation would be seen at a local level, where TV groups or TV stations would buy the local newspapers.

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