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FCC Takes Lid Off National Station Ownership

It did so by restoring the 50% discount on the coverage of UHF stations in calculating groups' coverage. With the discount, a group can now blow past the nominal 39% cap and reach as many as 78% of TV homes.The FCC also said it will launch a rulemaking later this year to look at the national ownership cap in its entirely and consider raising the cap with or without the discount.
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In a move that is expected to trigger another wave of station consolidation, the FCC today voted to allow station groups to exceed the nominal ownership cap that limits groups to coverage of no more than 39% of U.S. TV homes.

It did so by restoring the 50% discount on the coverage of UHF stations in calculating groups' coverage.

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"This will have the effect of increasing the cap well beyond the 39% level established by Congress in 2004," said Democratic Commissioner Mignon Clyburn, who dissented in the 2-1 vote. In fact, she said, it will allow groups "to actually reach 78% of television households."

In one of its last actions last year, the FCC under Obama-appointed Tom Wheeler had eliminated the discount. Ajit Pai, appointed to succeed Wheeler in January, announced his intention to reverse the action last month. Ion Media and Trinity Broadcasting had asked the commission to reconsider the Wheeler FCC vote.

The FCC also said it will launch a rulemaking later this year to look at the national ownership cap in its entirely and consider raising the cap with or without the discount.

Groups opposed to media consolidation might take the FCC to court to block the action.It's under discussion, said Andy Schwartzman, of the Institute for Public Representation at the Georgetown University Law Center.

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"Today's disgraceful vote is a cynical political ploy to help large broadcast companies become larger, notwithstanding the lack of any sustainable legal rationale for doing so," he said.

The FCC action opens the door for mergers involving groups that are bumping up against the cap without the discount. Sinclair, Nexstar, CBS and NBC all lobbied the FCC to restore the discount.

The immediate beneficiary may be Sinclair Broadcast Group. It is rumored to be in talks to acquire all or most of Tribune Media. With the discount, it will be able to move ahead with any such plans.

Sinclair's coverage now stands at 38.6%. With the discount, it could grow to between 53.3% and 68% depending on the mix of UHF and VHF stations. The fewer VHFs, whose coverage is fully counted, the closer it can get to 68%.

The following chart shows the top 20 TV station groups ranked by their current coverage and show how big they could get if they buy only fully counted VHF stations (minimum actual cap) going forward or only discounted UHF stations (Maximum actual cap). Current actual and FCC coverage percentages come courtesy of BIA/Kelsey.

The numbers on the chart are all percentage except the last two columns.

OwnerActual coverageFCC coverage Headroom under 39% with discountMinimum  actual cap Maximum  actual capNo. of marketsNo. of stations
Ion Media 64.8% 32.4% 6.6% 71.4% 78.0% 56 62
Univision 44.1 23.2 15.8 59.9 75.8 25 59
Tribune Media 43.7 26.7 12.3 56.0 68.3 34 54
Nexstar Media 39.2 26.1 12.9 52.1 65.0 100 171
Sinclair Broadcast 38.6 24.3 14.7 53.3 68.0 83 169
CBS 37.7 24.6 14.4 52.1 66.5 18 30
Fox 36.8 24.3 14.7 51.4 66.1 17 29
NBC/Telemundo 36.1 19.4 19.6 55.8 75.4 20 28
Tegna 31.3 26.3 12.7 44.0 56.7 39 55
ABC 22.4 20.7 18.3 40.8 59.1 8 8
Hearst Television 18.7 13.2 25.8 44.5 70.3 27 34
EW Scripps 18.1 11.4 27.6 45.7 73.4 24 36
Raycom Media 15.5 10.7 28.3 43.8 72.1 43 73
Entravision 13.9 7.1 31.9 45.8 77.7 24 58
Liberman 11.2 5.6 33.4 44.6 78.0 10 10
Cox Media 11.1 5.9 33.1 44.3 77.4 11 15
Meredith 10.7 6.9 32.1 42.9 75.0 12 28
Gray Television 10.3 7.6 31.4 41.8 73.2 56 131
Graham Holdings 6.6 3.7 35.3 41.9 77.2 6 7

Clyburn blasted the FCC's action in a statement prior to her no vote and in a Q&A with reporters after the meeting.

She accused Pai of hypocrisy. While he professes the desire to eliminate outdated regulations, she said, he chose to snatch the UHF discount from "a regulatory crypt" to immediately allow the big to get bigger.

With its vote, she said, the FCC is "inviting all broadcast stations to actually distort the calculation of their national audience reach and take advantage of a loophole that allows owners to fail to count audience that the stations actually do reach."

Pai defended his action by saying that the UHF discount and the leveling of the cap must be considered in tandem and that they will in the rulemaking later this year. Pai pointed out that he made the same argument when the Wheeler FCC first proposed eliminating the discount in 2013 and when it actually went ahead and did it last year.

The FCC, however, may have a problem in adjusting the 39% cap. Fellow Republican FCC Commissioner Michael O'Rielly, who gave Pai the second vote he needed to restore the discount, reiterated his belief that the FCC lacks the authority to change the cap. Congress set the cap and only it can change it, he said.

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Comments (22) -

TVMN Nickname posted 2 months ago
Great idea. Really. I mean, let Gray, Nexstar, and Sinclair get even bigger. I can't see how that could be a terrible idea for consumers. Nope, not at all.
HopeUMakeit Nickname posted 2 months ago
and how the h3ll is this supposed to benefit tv viewers ?
newsbot Nickname posted 2 months ago
How do mergers in any field of endeavor benefit end users? Why is broadcast television uniquely considered sacrosanct?
timeshavechanged Nickname posted 2 months ago
Because in the license it indicates "serving" the public. Allowing Nexstar or Sinclair to own/operate 4 of 6 stations in Little Rock or Memphis destroys newsgathering in a market as they combine the news staffs and deliver sh*t news content.
newsbot Nickname posted 2 months ago
If there's an appetite for more news voices in a given market, more voices will emerge.
EricPost Nickname posted 2 months ago
No, this doesn't happen. In Chicago you have WBBM (CBS), WMAQ(NBC), WLS(ABC) and WGN as news power houses and throw in FOX32 WFLD you have five independently owned TV stations with a lot of news and you will find almost exactly the same coverage of the same stories on all stations. Even the two Spanish stations cover the same news stories. News isn't going out of its way anymore to find new stories or different stories, they are simply all running the same basic information for news with "light news" being the only difference.
T Dog posted 2 months ago
@EricPost I live in Chicago, and it is exactly as what you described. Don't think WGN needs a 6 p.m. news hour to show us the same stories shown hours earlier.
FreeRightsUSA Nickname posted 2 months ago
Pai is nothing but a tool for Sinclair and the Smith Family. This is not in the Public Interest to have most TV stations controlled by a few groups that are intent on operating on the cheap and pushign their own agenda. There is absolutely no technical need for this in the age of digital TV and high cable/satellite penetration. I sure hope there will be lawsuits. What is worse, not only tradiitonal UHF stations will apply, but those that broadcast digitally on UHF.
Megatron81 Nickname posted 2 months ago
Wrong the only tool was Mignon Clyburn who was a sheep to vote no she is clearly wrong doesn't believe in the free market just like you FreeRightsUSA. And the groups that opposed this ruling have no right to sue or block it since the discount is needed to helps the free market and is in the best in the publics interest fact and truth. This has been going on since the start of TV began it's a great day for everyone that the discount is back as it should be.
TVbroadcaster1 Nickname posted 2 months ago
This is stunningly corrupt. There is no justification for this that comports w/ the FCC's stated objectives and purpose. American consumers now must prepare for less local news, of a worse quality, coming from fewer voices.
Roger Thornhill Nickname posted 2 months ago
You people need to read the entire FCC news release. It says, "The Commission plans to take up both the question of the 39 percent cap and the UHF discount later this year." So reinstating the UHF discount is, at this point, a temporary measure. The next question is when will Pai and the commissioners lift the caps on JSAs?
Mark Shepherd localmediareboot.wordpress.com Nickname posted 2 months ago
You're right, Roger. It's temporary. But by the time the FCC takes up the issues later this year, several companies could reach nearly 78% of the country and they'd be grandfathered in.
Harry Jessell posted 2 months ago
Mark is correct. Once you take the lid off, you can't put it back on.
martelxo92 Nickname posted 2 months ago
Does anyone here really think that uncle Joe's TV station in Dirtland Mississippi has the resources to cover local news and events as they need to be covered? It's a different world now than when you cable guys were growing up. I think local news right now is not only competing with all the outside media competition but it's actually getting stronger than it was 10 years ago because of that competition. News gathering companies with more resources is a good thing. Unless you are a cable guy that was accustomed to having all your content given to you by broadcasters and resold to viewers.
RustbeltAlumnus2 Nickname posted 2 months ago
This is more evidence that broadcast TV's best days are in the distant past. As it has become clear that ownership consolidation provides more protection and benefits than potential harm, you know the industry is in trouble.
HopeUMakeit Nickname posted 2 months ago
I have never watched a Sinclair newscast but I have read they are trying to become the broadcast Faux News. A news channel with no interest in facts and lower creditability than the Comedy Channel. This is how the 1st world devolves into the third world. If I wanted to live in North Korea, I would buy a airline ticket.
newsbot Nickname posted 2 months ago
There's always the New York Times and the Washington Post, both owned by billionaire oligarchs.
Megatron81 Nickname posted 2 months ago
That is called FOX News not Faux News as you have claim so get it right but you get your news from MESSNBC fake news 24/7. And Sinclair plays it down the middle when it comes to local news since they own WWMT I doubt that you don't have a Sinclair own station where you live why you haven't ever watched a newscast from them just sayin.
GMRetiredTV Nickname posted 2 months ago
Look at the world of cellular phone service...AT&T ...Sprint...Verizon...T-Mobile..... 4 companies own this industry. TV ownership is nowhere close to the cell providers.
newsbot Nickname posted 2 months ago
This. The broadcast TV industry is nowhere near as consolidated as other media industries.
EricPost Nickname posted 2 months ago
More is almost always better, as research always bears out the more owners, the more competition the more service you get at less cost. Free market where its a TRUE free market is what we should be aiming for. Add to that, there is no technical reason to restore the UHF discount. If they want to put it back they should've made it a VHF discount in the digital TV world.
Megatron81 Nickname posted 2 months ago
This is a good thing for the public and free market brining back UHF discount Wheeler was wrong to get rid of the discount should have gotten sued for what he did. There is a lot of TV stations Sinclair, Nexstar, TENGA, Tribune although will be merger sometime this year, Meredith, Scripps, Gray etc. There aren't that many big TV stations out there other than Sinclair & Nexstar with over a 100 stations each.
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Ratings

Overnights, adults 18-49 for June 23, 2017
  • 1.
    0.9/4
  • 2.
    0.8/4
  • 3.
    0.7/3
  • 4.
    0.7/3
  • 5.
    0.5/2
  • 6.
    0.3/1
Source: Nielsen

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