By Dirk Smillie
Forbes
On the day after the Nov. 3 elections, television newscasts were focused on upset political victories in New Jersey and Virginia. Back in Washington, a different kind of politicking unfolded at the FCC, where television broadcasters argued for unprecedented rollbacks in ownership rules.
They did so as part of a "workshop"--the Obama FCC's new format for assembling policy scholars, industry bigwigs and regulators to hash out regulatory issues. The workshops are part of the FCC's quadrennial review to prepare for possible rule changes in 2010.
Last week's discussions buoyed the hopes of Susan Patrick, managing partner at media investment shop Patrick Communications.
A likely change, she says, is a lifting of rules that restrict common ownership of a daily newspaper and a TV or radio station.
"Newspapers are breathing their last breath," says Patrick, co-owner of 15 radio stations in Wyoming.
For broadcasters, a bigger change may be in the works: loosening station ownership rules.
The FCC allows an entity to own only two TV stations in the same market, based on complex demographic mandates. Changing these rules would boost small markets where only four or five television stations operate.
"These are places where many stations have abandoned news in favor of syndicated content. A small-market news operation can cost $300,000 a year," says Patrick, who didn't attend the workshop but closely followed it. "Those are the markets that need a broadcaster to be able to own more than two stations. You could own an ABC and a Fox, or an NBC and a CW. Economically you could spread costs and news functions across operations."
To erase any shadow of doubt, David Barrett, president of Hearst Television, put a fine point on the argument at the workshop. The ad recession is mostly permanent, not cyclical, and has wreaked financial devastation on local television stations.
Before the recession, the Boston TV market reeled in $500 million in revenue a year; this year, it's down to $300 million. Other industry reps described the hits real estate and consumer electronics advertising have taken. Car commercials, once the bread-and-butter advertising for local newscasts, have all but disappeared.
For local broadcasters to survive, Barrett suggested a twist on station ownership rules. Why not allow common ownership of multiple TV stations in a market on the condition that, collectively, they have no more than 30% of the audience?
Michael Copps, the only FCC commissioner to speak at the hearings, seems to be listening. Hardly a beloved figure among broadcasters, he's known as a merger bear, blasting broadcasters for chasing "elusive economies of scale" that "doomed so many companies over the past few years." Yet it could be Copps, of all people, who turns out to be broadcasters' savior.
Given the sad state of the ad marketplace, that wouldn't surprise Susan Patrick. "If any FCC is going to make rule changes like these," she says, "it'll be this one."
(Sadly, the unions that represent the employees of TV stations across the country were not present, or at least were silent. One wonders why there is no hue and cry? Are the people who've worked so hard for so long to create the programs, write, direct, shoot, edit, and broadcast the news, sports, and entertainment America has come to love going to go quietly away into history without a fight? Why? - BD)
1 comment:
As a member of NABET-CWA, I'm disappointed by the lack of involvement on issues such as this. More union involvement with the cross ownership and, more importantly, Shared Services Agreement with TV stations without FCC approval needs to be done in Washington. It's as simple as being more aware of these trends that will prevent unchecked power from being used by these "investment bankers". That's how the financial system nearly doomed America!
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