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CommentaryCaps: So Now What?


June 2 was fun. Been in a cave for the past few months? Here’s the Cliffs Notes version to get you up to speed on what the FCC did:
*Entities can now own stations that cover 45% of U.S. audiences.
*The UHF discount (UHF stations are counted as having half the coverage of VHF stations in the same market) still exists for the time being (the Big 4 and potentially others might have to deal with a sunset at the end of the digital transition).
*Newspaper/TV station cross-ownership in markets with four separately owned TV stations (the top 150 TV markets) is permitted.
*Duopoly (ownership of two TV stations in the same market) will be prohibited between any market’s four top-rated stations (the top 100 TV markets).
*Triopoly (ownership of three TV stations in the same market) will be allowed in markets with 18 TV stations (the top five TV markets).

What Does This Mean To You?

Like everything that comes out of Washington, the new rules will be subject to judicial review. Implementation (the act of buying and selling) will also take a few years, and this will affect larger markets faster than smaller markets, but here’s our analysis:

Management: Right now you’re probably wondering if you’ll be doing the firing, or getting fired yourself. If you’re with a small group or independent, you might want to log on to Monster.com. You won’t be alone in this, though. Even management working for the big groups and network O&Os will be packing their bags. It’s philosophical—it has less to do with your station being bought, sold, or traded, and more to do with whether your management believes (and will continue to believe) in localization. If your station is less than 50 miles from a new “sister” station, and you’re in the smaller market, you might want to consider your “options.”

Engineering:Get ready for consolidation (that means layoffs). This won’t happen right away, as you’ll be needed for the convergence, but once you’ve gotten that duopoly, triopoly, or geographically spread-out centralcasting system up and running, how many engineers will your station need?

Operations: If centralcasting is in your station’s future, then you might want to dust off your résumé. While centralcasting systems are expensive, the return on investment will be much higher if more stations are connected to the system. It all depends on what “efficiencies” your owners are looking for as they buy stations (or buy your station). If there is a duopoly or triopoly in your future, you might want to polish that résumé once you’ve gotten the dust off it.

Production: Got news? Local programming? If so, then you might be OK. It will depend on whether your station will become part of a market’s duopoly, triopoly, or local marketing agreement (LMA). If so, the larger of the two or three stations might be tasked with all the production requirements, with a percentage of the production people at the other stations laid off.

Sales: If your station is part of a group of geographically spread out stations you’ll be fine, but if a duopoly or triopoly is in your future and you’re not your station’s best, you might want to look around.

Manufacturers: Initially, this will be a good couple or three years as stations are bought, sold, and traded and their equipment standardized, upgraded, or networked together. Plus we’ve got national elections and the Summer Olympics next year. Things are already starting to pick up in some sectors, so this should continue to build. The downside? There will be less people buying across the industry. Potentially, one person in New York could be buying for stations in each of the top 20 markets (which reach 45% of the country) or more if they own some UHF stations.

Viewers: We can’t forget them. Time will tell if these changes will pass the voice test (multiple voices and opinions in a market). If you were lucky enough to watch or listen to the hearing, you might have heard the protesters after the vote chanting “Nasty regulation of mass communication is the end of democracy.”

Let’s hope that as an industry we can prove them wrong.

msilbergleid@uemedia.com