NAB Compromise Would Allow Some JSAs

In an effort to head off an all-out FCC ban on joint sales agreements, the National Association of Broadcasters rolled out a detailed compromise proposal on Thursday that would allow some JSAs to continue.

The proposal essentially asks the FCC to carve out an exemption from the blanket ban on JSAs that the agency is widely expected to adopt as soon as March 31.

The exemption would protect JSAs that broadcasters can show provide public interest benefits and meet a series of specific tests intended to limit one station from using a sharing agreement to control one or more additional TV stations in the same market.

Under one key test in the NAB proposal, a brokered station in a JSA deal would be required to retain control of at least 85% of station programming and keep at least 70% of the brokered station’s net advertising revenue.

In addition, the NAB proposal would require the licensee of the brokered station to retain “ultimate control over rates charged for advertising” and to retain an “option to hire its own advertising sales staff or retain other sales services,” said NAB President/CEO Gordon Smith in a letter today to FCC Commissioner Mignon Clyburn.

Also under the NAB proposal, it would be up to the broadcaster who wants to continue an existing JSA—or create a new one—to “demonstrate clear and specific public interest benefits,” Smith said.

Clyburn, who is considered the swing vote on the JSA issue, could not immediately be reached for comment.

Among the specific public interest benefits that Smith suggested that the FCC consider worthy of an exemption are whether a JSA promotes one or more of the following:

·      Enhanced local news, weather, and emergency information, public affairs, sports, and/or entertainment programming;

·      Diversity of ownership opportunities for new entrants in broadcasting, including women and minorities;

·      Additional programming for niche or traditionally underserved audiences, including racial and ethnic minorities, speakers of foreign languages, children, religious group and senior citizens;

·      Capital investments and technical improvements that improve service;

·      Additional multicasting, mobile, online or other services;

·      Prevents a struggling station from laying off personnel, particularly of news staff, or cutting back on local programming and services;

“And/or such other unique public interest benefits identified by JSA participants and approved by the commission,” Smith said.

“The commission can establish an enforcement mechanism and deadlines to ensure that specified benefits are delivered to the public, and require the attribution of JSAs that do not comply with applicable standards,” Smith said.

FCC Chairman Tom Wheeler has proposed barring immediately the formation of new JSAs in which the broker station sells 15% or more of the ad time of the brokered station. Broadcasters with existing JSAs would have two years to unwind, unless they can persuade the FCC to give them a waiver to continue a particular station combination, under Wheeler’s plan.

In his letter today to Clyburn, Smith said a waiver policy would “not strike the appropriate balance, as reliance on waivers creates far too much uncertainty due both to their arbitrary nature and the commission’s complete discretion as to whether to act on them at all.”

“We appreciate your desire to find a balance between the commission’s concerns about de facto control and the fact that many existing and potential JSAs lead and will lead to increased diversity and localism,” Smith said.
 
Wheeler had no comment, according to an agency spokesman.