FCC Looks the Other Way as a New Wave of Consolidation Devours Local TV Stations

Free Press released Cease to Resist: How the FCC’s Failure to Enforce Its Policies Created a New Wave of Media Consolidation. The report investigates how companies are using shady tactics to buy up TV stations and build new national media empires. The report comes as Sinclair Broadcast Group spearheads one of the largest waves of TV consolidation in history. The report also looks at tactics used by Gannett, Media General, Nexstar and Tribune.

Among the report’s key findings:

• In the first eight months of 2013, 211 full-power TV stations changed hands, the highest level in more than a decade, and the fourth-highest year on record in terms of deal value. The latest surge of consolidation is unique from prior waves in that it’s taking place in small and medium-sized markets and involves companies that are not household names.
• Sinclair Broadcast Group is leading the current wave of consolidation. In the past two years alone, Sinclair has closed or announced deals that will increase its holdings from 58 to 161 stations nationwide. These deals will more than double the number of markets Sinclair serves from 35 to 78, covering nearly 39 percent of the U.S. population.

The report also details how media companies are using shell companies to evade the Federal Communications Commission’s media ownership rules, making inefficient use of the scarce public airwaves and depriving communities of diverse viewpoints and in-depth news coverage. Sinclair controls or will control 46 stations nominally owned by a third party, with 40 of these stations’ licenses held by shell companies Sinclair created for the express purpose of evading the FCC’s ownership rules. The report also details recommendations to the FCC and incoming Chairman Tom Wheeler. Turner calls on Wheeler to deny the latest transaction deals, which Free Press and other groups have challenged, and to close the numerous loopholes in its ownership rules. The report also describes how the FCC can modernize its ownership rules to better reflect the capabilities of digital broadcasting. These changes would maximize efficient use of the public airwaves and promote greater competition and diversity in the local TV market.