Local TV News & Joint Services Agreements

By Danilo Yanich, PhD
University of Delaware

According to the Federal Communications Commission’s (FCC) Notice of Inquiry for the 2010 Quadrennial Review of Broadcast Ownership Rules (NOI), there were 1,130 commercial television stations with 450 owners in 1996. In 2010, there were 1,302 commercial television stations and 303 owners, representing a 33 percent drop in the number of owners. In addition, the FCC reports that there are 175 television station duopolies, which include owners with “attributable local marketing agreements” in the 210 Nielsen television markets. These local marketing agreements (variously known as shared services agreements or joint service agreements) are arrangements among stations in the same television market in which they share news-gathering resources, video, and/or marketing and management activities. Although the earliest of these arrangements date as far back as 2000, in the midst of national and global economic instability, increasing numbers of local television news stations have signed these agreements. Purportedly, these agreements are expected to help relieve some of the economic burdens that are shouldered by local stations in gathering news content or other activities.

The FCC regulates the broadcast industry based on three principles---diversity, competition and localism. The implementation of the shared service agreements, whether they involve simply sharing video to sharing news-gathering resources to overall management of the station, has implications for each of the fundamental principles. How will these agreements affect, if at all, the construction of the newscasts? What effect, if any, will such constructions have on diversity, competition and localism in local television markets? What effect, if any, do these agreements have on the nature of news? To this point, there had been no systematic content analysis of local news content to examine the issue.

In October 2009, a Shared Services Agreement (SSA) among three of the five television stations in Honolulu, Hawai’i went into effect. As a result of the SSA, three stations, KIVE, KHNL and KGMB combined their news operations as a new entity entitled Hawai’i News Now. Even before the SSA became a reality, there were serious concerns expressed by local citizens regarding the effect such an arrangement would have on the diversity of news in the market. Media Council Hawai’i (MCH), a local non-profit organization, filed a complaint and a request for emergency relief with the Federal Communications Commission to stop the implementation of the agreement. MCH contended that the SSA would negatively affect the content, diversity and competition of the Honolulu television market. The SSA owners argued, on the other hand, that television news in the DMA would be improved.

This research, Local TV & Shared Services Agreements: Examining Content in Honolulu, essentially tested those propositions. It was a content analysis of the daily newscasts of all five of the television stations in the Honolulu DMA and a comparison of their newscasts before and after the Shared Service Agreement went into effect. What was the result of the analysis? The short answer is that the implementation of the Shared Services Agreement had a profound effect on the local news broadcasts in the market. The most significant finding is that two stations that were part of the three-station SSA group simply duplicated their newscasts through the mechanism of a simulcast.

By any measure, the shared services agreements that have been concluded among the owners of television stations in the same market change the operation of the stations that are part of the agreement. That is their intended goal. Aspects of the stations--news, marketing, advertising, etc.—are shared among the parties to achieve some operational economies of scale. My research was an empirical examination of the news programming outcomes of such an arrangement in one market. The findings speak directly to the issues raised by the FCC concerning the quadrennial review of media ownership rules that it postponed from 2010 to this year. The research, although applied to only one DMA, has significant implications for the information that the FCC requires to make any decisions about media ownership. In short, a more expansive content analysis across other DMAs is essential to that review.