WASHINGTON—During a major Senate hearing on broadcast ownership caps, witnesses and U.S. Senators generally agreed that local journalism faces serious challenges that threaten local communities and the larger democratic system but had widely divergent views on whether the elimination of broadcast ownership rules would address the problem.
U.S. Senator Ted Cruz (R-Texas), Chairman of the Senate Committee on Commerce, Science, and Transportation, convened a full committee hearing on Feb. 10 that examined the Federal Communications Commission’s current broadcast media ownership rules for over two hours with four major expert witnesses, including NAB president and CEO, Curtis LeGeyt.
In opening remarks at the hearing, which was titled “We Interrupt This Program: Media Ownership in the Digital Age,” Senator Cruz highlighted the fact that a rapidly changing media landscape has raised many questions about the ongoing relevance of the ownership rules
“It is understandable why Congress placed limits on broadcast media ownership intended to prevent a monopoly on programming and viewpoints,” Cruz said. “Indeed, for much of the last century, holding a broadcast license was often called a license to print money with limited competition, station owners commanded massive audiences and steady profits, but that era has passed. Cable and satellite ushered in 24/7 news, while the internet and mobile technologies unleashed a wave of streaming services, news and entertainment sites and social media flooding American screens with endless content and fragmenting what were previously universal audiences. Today, broadcasters are fighting to stay competitive against media and tech companies with national and often global reach,” raising important questions about whether those rules are “still relevant” or need to be rolled back, eliminated or reformed.
Ranking Member Sen. Maria Cantwell, (D-Washington) highlighted the importance of local news and the ongoing crisis in local journalism but appeared less sympathetic to the idea that eliminating ownership caps would address the problem.
After noting the rise of AI could also accelerate the ongoing decline in local journalism, she pointed to the recent layoffs at the Washington Post and noted that the number of local journalists has declined from 40 per 100,000 people in the U.S. in 2002 to only 8 today.
“I'm here to fight for local journalism,” she said, adding, however, that broadcast industry consolidation could actually reduce the diversity in local news. “If the Nexstar Tegna deal goes through, a single company will control 265 stations capable of reaching 80% of all the television households, more than double the current cap…To me that is not more local voices, that is fewer," she said.
“Changes to the cap do not address the real structural problem, and they risk reducing the diversity of local voices without solving the underlying problems of economics,” she concluded.
In his prepared testimony to the hearing, NAB's LeGeyt highlighted the importance of local broadcast news in providing live-saving information during severe weather events.
“During recent crippling winter storms across vast swaths of the country, and during devastating floods in both Texas and Washington State, it was local broadcasters – not global streamers or national pay-TV channels – that remained on the ground and on the air in those communities, providing life-saving information to their viewers,” LeGeyt said. “And beyond times of emergency, broadcasters are delivering the fact-based, most-trusted journalism that keeps your constituents and communities informed and connected.”
“Unfortunately, this local journalism is facing growing financial pressure,” LeGeyt added, arguing that ownership rules have severely restricted broadcasters’ ability to compete against big tech companies who do not face national ownership caps and have siphoned off billions in ad revenue from local media.
“Fewer than half of TV stations now report that their local news operations are profitable. Facing ever-rising news production costs and declining ad revenues, some broadcasters are simply unable to continue maintaining their own separate news operations,” he said. “Without modernizing these ownership rules, local television news – the last bastion of truly local journalism in many communities – will suffer the same fate as thousands of local newspapers.”
In testimony to the Committee Chris Ruddy, CEO of the cable news network Newsmax argued that ownership rules need to be retained ensure the diversity of local news and to prevent local broadcasters from abusing their power in retransmission consent negotiations with pay TV operators. The market power of larger station groups like Nexstar have already hurt consumers by forcing operators to raise pay TV video process and made it harder for independent media companies to compete with larger media conglomerates, he said.
To bolster his point, Ruddy noted that “last year, Newsmax delivered five times the rating of NewsNation,” yet Nexstar’s market power forced operators in retrans negotiations “not only to carry NewsNation, but to pay license fees higher than that paid to Newsmax.”
Ruddy also dismissed LeGeyt’s argument that ownership caps have produced an "existential crisis” that threatens the future of broadcasting. He stressed that larger station groups remain very profitable, with Nexstar reporting $1.8 billion in earnings before interest depreciation and amortization of $1.8 billion in 2024, Tegna producing $813 million in EBITDA and Sinclair seeing $800 million in EBITDA.
“The broadcast industry has not [offered] the Senate…any data that proves that they're in crisis,” Ruddy said. “If you look at…the top seven TV station groups all made pretty much in excess of $500 million in EBITDA in 2024. They're inventing this because they know they can make billions of dollars by waiving the rule, and it doesn't serve the public interest, competition or the diversity of voices that the public would like, especially with local news.”
Nor will eliminating the ownership rules necessarily produce more investment in local journalism, Ruddy argued. “We know that after Nexstar merged with Tribune, profits surged while employment dropped from 16,193 employees to 12,142 – a 25% decrease – in just one year,” he said. “In 14 markets, Nexstar now operates two highly rated stations but has combined their local newsrooms to cut costs. In its proposed merger with Tegna, Nexstar projects more than $300 million in immediate cost savings, including $135 million from increased retrans fees and $165 million from local station savings—typically that’s achieved through newsroom consolidation.”
“Newsmax is not alone,” in opposing changes in ownership caps. said Ruddy.
“CPAC and the National Religious Broadcasters have both filed objections with the FCC, warning that lifting the cap would harm consumers and suppress diversity of viewpoints," he said.
In contrast Thomas Johnson, former General Council at the FCC and currently Partner and Co-Chair of Issues and Appeals, at Wiley Rein LLP, argued that the FCC should eliminate the rules.
“In my view, all of these prescriptive rules are outdated and ought to be repealed, and chief among these is the national television broadcast ownership cap,” Johnson said.
Johnson also provided extensive legal arguments supporting the idea that the FCC has the power to raise or eliminate the cap.
“As General Counsel, I defended the agency's bipartisan consensus that the agency has legal authority to eliminate that rule, and I continue to believe so today,” he said. “The Court of Appeals here in D.C. looked at the language in the 1996 act and concluded that it was, `only the starting point from which the commission was to assess the need for further change.’ If Congress intended to eliminate that discretion, the court reasoned, “it need only have enshrined the cap in the statute itself,’” which it didn’t.
Johnson said that his firm represents Nexstar but said he was not speaking on the broadcaster’s behalf.
In his testimony Steve Waldman, president, Rebuild Local News, which works to strengthen local journalism highlighted a crisis in local journalism.
“On average, two newspapers close every week in the United States,” he said. “3,500 have shut down in the last 20 years, and perhaps most importantly, in the last 20 years, there's been a 75% drop in the number of local journalists. That's in print, TV, digital, and the consequences for communities are really alarming. Studies show that areas with less local news have more corruption, more government waste, less civic involvement, less volunteering.”
Waldman said his group had not taken a position on whether local ownership caps should be repealed but stressed that eliminating the caps wouldn’t necessarily necessarily increase investment in local news.
“I actually have some sympathy for both of these arguments,” over the ownership rules, he noted. “Local TV news is incredibly important in some places, it's the only thing left. We really agree that this ought to be looked at through the prism of whether or not it helps local news. On the other hand, there really is a lot of evidence that consolidation has gone in the other direction and actually hollowed out some newsrooms. So my advice would be to look at that question through the prism of whether it's good or bad for local news, and specifically look at whether it maintains or increases or reduces the number of local reporters and editors, not the number of hours, because if you have less local reporters and more hours, what you actually have is more superficial local news or more copying” of news.
The full hearing can be viewed below:
