Local TV’s about to get less local
Today, the FCC is changing its rules so that local TV station owners can get much, much bigger.
The change will be challenged in court. But today’s vote is a long-sought victory for media moguls who are aligned with President Trump and the Republican Party.
It also represents a continued move away from genuinely local ownership of local news at a time when TV newsrooms are facing myriad pressures.
The vote is to repeal the national broadcast ownership rule, which currently bars a single company from reaching more than 39% of US TV households over the public airwaves.
It is expected to pass in a 2-1 vote, since FCC chair Brendan Carr has the support of his fellow GOP commissioner Olivia Trusty. The commission’s sole Democrat, Anna Gomez, will vote no.
“We couldn’t be happier,” Sinclair CEO Chris Ripley told investors last night, calling the rule “outdated” and applauding the FCC for taking the vote.
Sinclair is itching to buy more stations and get bigger. So are other station groups. Let’s take a step back here…
Ever since TV was invented, the US government has tried to promote localism, competition and diversity by limiting the number of stations that a single company can own. For almost as long, ambitious station owners have tried to get the government to loosen up.
Back in the 1980s, the FCC’s ownership “cap” was set at 12 stations reaching no more than 25% of TV households. In the ’90s — amid intense lobbying by station owners — Congress got involved, removed the 12-station limit, and raised the “cap” to 35%. If you’re interested, Congress.gov has an excellent report on all of this history.
The executive and legislative branches have tangled over this issue for decades. Carr and his allies are asserting that he can go ahead and remove the “cap” unilaterally. Lawmakers are saying he can’t.
When Carr announced last month that he was scheduling today’s vote, Sen. Ted Cruz said, “I am skeptical a change can be made absent an act of Congress.”
Several Democrats went further. Carr is “doing President Trump’s bidding” and circumventing Congress, Sen. Ben Ray Luján said. “The last thing that the American people need is just more consolidation and less diversity, especially when it comes to information and broadcasting and news,” Sen. Andy Kim said.
In advance of today’s vote, former House Majority Leader Tom DeLay wrote an op-ed for The Daily Wire about his role in setting the current 39% “cap” and said Carr “should ask Congress to pass a law giving him authority” to raise it. Since that’s not happening, legal challenges will ensue.
Carr has said the ownership rule is outdated in the Big Tech age. He has also pitched the repeal to Trump fans as a way to “restore balance to the broadcast airwaves.”
Gomez issued a statement yesterday countering Carr’s arguments. “Eliminating the cap does not free local broadcasters from economic pressure, it just changes who is doing the squeezing,” she said.
“The large station groups positioned to grow even larger under this decision are not local broadcasters, they are national companies that own local stations and increasingly dictate what airs on them,” Gomez continued. “Trading a squeeze from Big Tech for a squeeze from Big Media does nothing to protect the communities this cap was designed to serve.”
Here’s the part I am most intrigued about: Carr wants to replace the “cap” with a “case-by-case” review process, effectively giving his office more power to approve or reject station mergers and acquisitions.
Ars Technica reporter Jon Brodkin wrote that “this would make it easier for the FCC to pick and choose which station groups get to expand, potentially helping Carr achieve his goal of securing more positive news coverage for President Trump.”
You can watch the vote here when the FCC meeting begins at 10:30 a.m. Eastern…
Last week I was glued to Spokane’s local TV stations as wildfires forced widespread evacuations. Several stations provided impressive wall-to-wall coverage, but I kept coming back to KHQ, the NBC affiliate, finding its coverage to be the most comprehensive. Veteran anchorman Sean Owsley understood his role; tapped into his local roots and 30+ years of reporting; and helped his community through the crisis.
Later, I did some googling and saw that KHQ is locally owned by a family that also publishes the city’s newspaper. I don’t think that’s a coincidence.
The UK has given the OK to Paramount’s takeover of WBD. Regulators said they “had received assurances from the company over media diversity,” CNN’s Anna Cooban writes.
Earlier this summer, British culture minister Lisa Nandy said she was considering intervening, but she was apparently persuaded by Paramount’s assurances.
Paramount said the UK conclusions “further demonstrate the misguided and gerrymandered market definitions relied upon by the US state AGs in their antitrust complaint in California.”
This week’s industry conversation about Paramount–WBD has centered around David Ellison’s assertion that opposition to the deal stems from his potential ownership of CNN. There is lots of intrigue about Paramount’s PR strategy and who it’s meant to persuade. And there is a wide spectrum of opinion about the likelihood of a pre-trial settlement.
Too Much TV author Rick Ellis published this take yesterday: “Don’t let David Ellison convince you the Paramount merger opposition is all about politics.” He cites “very real business problems with this merger” that have nothing to do with CNN.
Zephyr Teachout, similarly, penned a piece for The Nation saying the state AG and Writers Guild lawsuits are “solid, textbook antitrust cases.”
“Antitrust law exists so that a free press and an open market never hang on the temperament of one well-meaning billionaire,” Teachout concludes.
Ellison said earlier this week that “we will win at trial.” Variety’s Brent Lang and Todd Spangler explored what might happen between now and then in a story titled “What Is David Ellison’s Breaking Point?”
This morning on “Squawk Box,” analyst Rich Greenfield said, “David Ellison needs to come up with a solution of a structural remedy or structural remedies that these AGs will accept, and there may be none.” Host Andrew Ross Sorkin’s reaction: “This has to get solved between now and Christmas,” given the “ticking fee” and other timeline factors.
Greenfield also popped up on Warner’s earnings call this morning, asking, “How much time do you think it would take to effectuate a split of the company if a deal didn’t happen?”
WBD CEO David Zaslav didn’t answer, instead reiterating his confidence that “this transaction will close.”
Meantime, “as long as we’re here, we’re going to be working hard every day to continue to honor Warner and HBO and Discovery and all the great assets,” Zaslav added.
A few minutes ago, Trump won a temporary stay of the court order requiring him to give the BBC his financial records by today as part of his defamation suit against the broadcaster.
The stay will remain in place while the judge, a Trump appointee, considers the president’s request to amend his complaint to nix claims about damage to his business — a change that could eliminate the basis for obtaining his financial records.
Remember, this all stems from Trump’s own claim that a brief bad edit to a BBC documentary caused “massive economic damage to his brand value” and did “direct harm” to his “businesses.” Now he’s trying to walk that back so that he doesn’t have to open his books. Politico’s Josh Gerstein wrote more about it here…
In other Trump lawsuit news, a federal judge in Florida seems poised to dismiss Trump’s Wall Street Journal suit — again. The Guardian’s Jeremy Barr attended a hearing yesterday in Florida on whether to toss the case, which had been recently refiled, and reported that the judge “seemed skeptical” of Trump’s legal arguments. The judge “did not issue a ruling from the bench,” but indicated his decision would come soon, and paused the discovery process in the meantime…
Back in the spring, we wrote about the battle between Fox and the NFL over the league’s desire to renegotiate its broadcast rights deals early. Fox responded with a “covert political pressure campaign reaching the highest levels of federal government, including the president,” something that Awful Announcing’s Drew Lerner chronicled in detail here.
Well, this morning Fox CEO Lachlan Murdoch “broke some major news” on his quarterly earnings call, Lerner wrote: Murdoch said Fox “will not be making any amendments” to its deal until the 2029–30 NFL season.
Folks are still processing what this means, but Variety’s headline reads, “Fox Appears to Block NFL’s Effort to Re-Do Massive Rights Deal.”
>> Fox also reported big revenue growth in Q2. Ad revenue increased “by a whopping 78% thanks to the World Cup and growth on Tubi,” TheWrap’s Kayla Cobb reports.
>> Versant shares are up more than 10% this morning after the company raised its full-year outlook.
>> WBD highlighted its streaming gains while overall revenue fell short of expectations, THR’s Tony Maglio reports.
>> I noticed that the WBD shareholder letter singled out CNN for praise: “Against a backdrop of heightened global news interest, total minutes spent across CNN platforms increased 19% year-over-year, while linear viewership grew by 24% as audiences increasingly turned to CNN for trusted journalism and real-time reporting.”
>> Bad news for indie music lovers: BrooklynVegan, AltPress, Revolver and Goldmine have all been “unceremoniously gutted” by their parent company, the Live Nation-owned Veeps. (Paste)
>> TikTok says a “moderator error” caused Perez Hilton’s disturbing live stream to stay online longer than it should have, EJ Dickson reports. (Wired)
>> Rockstar Games will premiere an “extended look” at “Grand Theft Auto VI” on August 27, at first exclusively on Netflix before later posting to YouTube. (The Verge)
>> This morning, A24 released the newest trailer for “Primetime,” starring Robert Pattinson as “To Catch a Predator” host Chris Hansen. (YouTube)
This edition of Reliable Sources was edited by Andrew Kirell and produced with Liam Reilly. Email us your feedback and tips here.