Tuesday, October 20, 2009

More Shared Services Agreements, FCC and DOJ Alerted To Diversity And Anti-Trust Issues

Yet another pair of network affiliates will be teaming up to cut backroom expenses, this time in the Augusta GA DMA.

Media General’s ABC WJBF-TV will be in the lead role, handling sales, local news and other operations for Schurz Communications’ NBC WAGT-TV.

Meanwhile, a similar operation in Honolulu is dealing with opponents to the arrangement, who have taken the fight to Washington, D.C.

Meanwhile, back in Augusta, WJBF is upgrading its facility to handle operations for both stations. Schurz management will be on hand to handle programming other than local news, to handle regulatory matters and to provide ultimate oversight for WAGT.

Bill Stewart, VP/GM of WJBF, said, “We are honored to be selected by an outstanding company like Schurz Communications to provide these services, and we look forward to the continued growth and success of WJBF and WAGT as we work together to serve our local communities with news, weather, sports, programming and community projects. This agreement will benefit local viewers and advertisers of both of our stations and associated Web sites.”

Schurz’s Marci Burdick made it clear that economic conditions are what spurred this agreement. “We are very proud of the staff and management of WAGT and their commitment to their community. But it has become clear that the current economic conditions will only make it increasingly difficult to operate as we have in the past. We believe the new agreement allows the best of both companies to be leveraged for the benefit of viewers and advertisers.”

The Honolulu Shared Services Agreement (SSA) brought together Raycom’s NBC KHNL-TV and MyNetworkTV KFVE-TV with MCG’s CBS KGMB-TV. The agreement has been the subject of ongoing protest at the FCC, notably from the Media Council of Hawaii.

According to the Honolulu Star-Bulletin, Raycom has asked the FCC to stay out of a “private transaction” and claimed that the protest filed by MCH was based on inaccurate press reports and conjecture.

Protesters continue to complain, however. They note that the CBS programming and KGMB calls are going to swap with the MNT/KFVE pairing, in effect putting Raycom in direct charge of the two strongest properties while the remaining MCG presence oversees a weak little sister.

Fox's Los Angeles duopoly commenced a content-sharing arrangement with KNBC and KTLA in June, all four stations sharing photographers and assignment editors.

Now it's October and KCOP, the less famous half of Fox’s Los Angeles duopoly, has been relegated to nothing more than a “zombie station” with no true identity, writes Paul Rainey in the LA Times.

The station’s news operation has been taken over — lock, stock, news desk and teleprompter — by its duopoly partner, KTTV-TV Channel 11, the local Fox television affiliate, which itself has been hobbled by mass layoffs in recent months.

The pooling of broadcast news video, also known as Local News Service(LNS) sharing agreements, is a concept that has caught fire in recent months—but not without controversy—and is under way in several dozen markets, including all five of the nation’s largest DMAs.

“In these challenging economic times, we began discussions on how to be more efficient,” said Sharri Berg, senior VP of news operations for Fox Television Stations, which has 12 of its stations participating with local competitors in news-pooling arrangements. “The result was not only cost efficiency, but this gave us flexibility in directing our own unilateral resources. If we’re covering a local news conference, if a station wants to send a reporter, it’s their choice. LNS in no way constrains or dictates, but in fact gives stations more options.”

Many major station groups are taking part, including stations affiliated with and/or owned by the NBC Television Network, Tribune Broadcasting, Gannett Broadcasting, CBS Broadcasting, Scripps Television Station Group, McGraw-Hill Broadcasting and Sinclair Broadcast Group.

Philadelphia was the first market to begin the LNS venture in January 2009, after an agreement was announced between Fox and NBC Local Media for WCAU-NBC 10 and WTXF-FOX 29 to share video, following a trial run between the two news departments that began the previous summer.

The practice is not without critics, however, who argue that it decreases competition, costs jobs, blurs the individuality of stations and limits the ability to cover stories.

There’s no question about the financial benefits, however.

“We’ve got to be smarter businessmen,” said Steve Charlier, senior VP of news and operations at Tribune Broadcasting stations. “Our goal was to operate efficiently and improve content, and be able to grow, to put more bodies in the street, and have more content.”

In New York, WCBS 2, WNBC 4, WNYW5, WWOR 9, and WPIX 11 have combined their ENG crews under a Local News Service agreement. WABC 7, while not a signator to the LNS agreement, has purchase footage for stories their crews did not cover on a number of occasions.

The LNS pool feed arrangement was supposed to free up producers, writers, and ENG crews from routine, mundane, events like press conferences for more exciting feature, investigative, and other "enterprise" stories. In reality, LNS did not do that, instead the stations just used the LNS agreement to facilitate massive across the board layoffs.

Jill Geisler, faculty member at the Poynter Institute, is concerned about what she called "The hazards of pooling, including diluted coverage, missing contacts and stories in the halls of power, the potential proliferation of staged events, the fact that pooling may save money but not jobs—and that non-pool players may escape all these hazards."

According to RBR-TVBR, "there is nothing wrong with the Hawaii SSA, as far as we can see. If it’s in trouble, so is this new one in Augusta and every other SSA that cannot be converted into an acquisition due to local caps."

Stop Big Media says that the two companies are simply using the SSA as a tool to accomplish the formation of an illegal consolidation cluster and writes, “…to misquote Shakespeare, ‘A merger by any other name smells just as suspicious.’”

SBM points out that the ownership caps were put in place to make sure that there were many competing sources of news, with different viewpoints, available to the citizens of a given community.

Those are basically the arguments that Media Council Hawaii (MCH) has taken to the FCC and DOJ, saying that breaking up the combo “is necessary to protect Hawaii television viewers because when the Shared Services Agreement goes into force, there would be imminent danger of reduced competition, less local news coverage, less diversity of viewpoints and lower quality news programming.”

"It just seems intentionally to avoid the FCC's ... ownership rules, and the consequences are already becoming clear," said MCH President Chris Conybeare. "There are layoffs and less people covering the news, so diversity of opinion is lost."He added, "I think the holders of (broadcast licenses) are supposed to serve the local market and not offshore corporate interests. There might very well be antitrust implications."

Media Council Hawaii is officially protesting the arrangement at the FCC, and DOJ. MCH is being represented by the Institute for Public Representation at Georgetown University Law Center and is being supported in their complaint by NABET-CWA.

There is every reason to believe that the other unions representing broadcast employees will also support Media Council Hawaii in their efforts to stop the sread of Shared Services Agreements (SSA), Local News Service (LNS), and other entities designed to merge multiple TV station operations.

Stay tuned.

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