Report: Wheeler Putting Brakes On SSAs

Washington sources say the FCC chairman is studying what to do about station sales involving sharing arrangements and postponing action on pending transactions in the meantime.

FCC Chairman Tom Wheeler has put a hold on station sale applications that include shared services agreements that allow broadcasters to set up sidecar companies to control key aspects of multiple TV stations in the same market — until he decides how he wants to handle sidecar deals in the future, Washington communications attorneys say.

Station transactions that include shared services and related joint sales agreements have been routinely approved by the agency in the past.

An FCC spokesperson declined to comment on the rumored hold.

Wheeler announced his intent to beef up agency scrutiny of sharing arrangements during a town hall meeting in Oakland, Calif., earlier this month.

He said he wanted to “do things differently going forward on what were called these shell corporations” in recent FCC decisions approving Gannett’s purchase of Belo and Tribune’s acquisition of the Local TV LLC. In both of those deals, the FCC approved the formation of new SSAs.

But in the Gannett-Belo merger ruling, the FCC also cautioned that it has an affirmative obligation to insure that every deal serves the public interest.

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“That is why applicants … should not forget that our public interest mandate encompasses giving careful attention to the economic effects of, and incentives created by, a proposed transaction taken as a whole and its consistency with the commission’s policies under the [Communications] Act, including our policies in favor of competition, diversity and localism.”

One pending deal that could be affected by the hold in Sinclair Broadcast Group’s $985 million purchase of Allbritton Communications. It includes sharing arrangements involving stations in two markets — Harrisburg, Pa., and Charleston, S.C.

Wheeler has been holding his cards close to the vest on what sorts of changes he is considering. “Stay tuned,” Wheeler said in response to a recent query by TVNewsCheck for details.


Comments (5)

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Brian Bussey says:

January 23, 2014 at 9:49 am

mergers only happen to lay people off. that’s called efficiency. All those newly created VP’s don’t take pay cuts when they hire 4 people to do their work for them. Meanwhile, all the news casts look the same and the graphics all come out of a warehouse in tupelo. We are becoming the McDonalds of late news.

Maria Black says:

January 23, 2014 at 10:15 am

Considering the amount of station sales last year, maybe he should just come out and say it instead of this “rumor” garbage. Since they green-lighted all the other consolidation crap, they should just let this one with Sinclair slide so they don’t get tangled in a legal quagmire, and then apply the changes even and fairly across the board.

Tim Pardis says:

January 23, 2014 at 12:13 pm

This is good news. A thriving democracy depends on multiple and diverse viewpoints. Recent media mergers and SSA’s may be good for the “bottom line” but are antithetical to the vital role media plays in a democracy.

    Diane Tryneski says:

    January 23, 2014 at 2:03 pm

    So having 3 TV news departments covering the same house fire or car crash, instead of 2, makes a “thriving democracy?” Because, unless it’s sweeps, that’s all you get. A lot of cities used to have a morning and an after newspaper too. A diverse media goes beyond just local television. Telling the same stories in a different order than your competitor doesn’t make you diverse.

    Tim Pardis says:

    January 23, 2014 at 4:20 pm

    I would argue that coverage of the same house/building fire, school bus crash, shooting of a poor minority in a bad section of town by the “Eyewitness News,” “On your Side” or “Taking Actions, Getting Results” news franchises is exactly the reason these stations continue to hemorrhage ratings. It is easy “scanner” news that does not require a lot of investigation or investment. But, that is good for the bottom line, is it not? The Communications Act established the Public Interest Standard for broadcasting; not the Bottom Line Standard for media corporations.

    What I am talking about is when a half dozen media companies own a majority of stations across the country (high percentage of total population) which gives them the ability to propagate a particular point of view to a massive audience (David Sinclair anyone?). Doubling or tripling that presence in a single DMA only increases that power.

    And, as a previous poster already pointed out, this type of consolidation usually leads to a loss of jobs. But that, too, is good for the bottom line which seems to be the only standard our society values.


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