TV-newspaper crossownership

Rep. Greg Walden, incoming chairman of the House Energy and Commerce Committee, introduced a bill Dec. 7 that would eliminate the FCC ban on a single entity owning both a broadcast station and a daily newspaper in the same market. Walden called the ban on such crossownership, enacted in 1975, a “relic of the disco era” ill-suited to a struggling media industry.

House Judiciary Committee Chairman Bob Goodlatte (R-Va.) on Thursday tore into the FCC’s just-released updated media ownership rules that retained the ban on newspaper-broadcast crossownership. In a statement, Goodlatte said the FCC had “overreacted” and that it was “likely to harm the objectives of smaller media outlets eager to compete.”

With a couple of important exceptions, the major publisher-broadcasters have spun off legacy newspapers holdings into separate companies or simply sold them. The moves have been driven by investors and trustees tired of seeing earning and margins dragged down by publishing, and management’s inability to achieve any kind of cross-media synergy. One of the bigger blows came in 1975 when the FCC banned new same-market newspaper-broadcast combinations to prevent the publishers from becoming too powerful. Things have changed a little since then, but the prohibition remains.

Journalists have been writing nonstop this week about how the resignation of President Richard Nixon — 40 years ago today — changed Washington and the American landscape. Add the media landscape to his legacy list. The FCC’s media ownership rules, which were shaped during the Watergate scandal, are currently under review. The crossownership rule won FCC approval in 1975 after Nixon resigned, but his shadow hovers over the regulation.

Allowing station and newspaper combinations, the National Association of Media Brokers contends, would “be a step forward to enhancing public service without any meaningful impact on diversity.”

The Wall Street Journal is reporting that the commission is withdrawing a proposal to relax its long-standing ban on owning multiple media outlets in the same market. More than a year ago, then-FCC Chairman Julius Genachowski circulated a draft item that would have  paved the way for smaller TV stations to own newspapers, a change pushed by the struggling newspaper industry. Now under Chairman Tom Wheeler, the commission said it has taken the old item off the table while it reassesses the issue. WSJ subscribers can read the article here.

Former Tribune exec Wilson’s Dreamcatcher Broadcasting is buying WNEP Wilkes-Barre/ Scranton, Pa., and WTKR-WGNT Norfolk-Portsmouth-Newport News, Va., The deal is necessitated by Tribune’s need to spin off the recently purchased stations because it owns newspapers in those markets. It will operate them, however, under shared services agreements.

In joint comments, Free Press, Common Cause, the Institute for Public Representation, the National Hispanic Media Coalition, the Office of Communication of the United Church of Christ Inc., NABET-CWA and The Newspaper Guild-CWA say the FCC should deny the proposed sale because it violates the commission’s newspaper-broadcast crossownership rule or the television duopoly rule.

It looks like the FCC’s long-delayed multiple ownership proceeding won’t be decided this summer. The commission has asked for public comment on the report submitted by the Minority Media and Telecommunications Council addressing the likely impact on minority ownership of broadcast stations of allowing more media crossownership.

Newspapers may not be the radioactive investments they were a few years ago, but they’re still not attracting droves of buyers. Still, regulators at the FCC  insist on limiting the pool of potential newspaper acquirers. The FCC does this through the so-called “cross-ownership” ban that prohibits the owner of a TV station from owning a newspaper in the same market. While the FCC is moving to loosen the ban, even the proposed revision will keep some major players from bidding for newspapers.

FCC officials say they are clarifying its proposal permitting TV-newspaper mergers in the top-20 markets to make it clear that it will not encompass stations that are ranked among the top four in the ratings or sometimes dip into fifth place in the ratings. Such a change would dash any hopes Rupert Murdoch has of buying the Tribune Co.’s  Los Angeles Times. Murdoch owns Fox O&O KTTV in Los Angeles that sometimes finishes fourth and sometimes fifth behind Univision’s KMEX.

The FCC’s outdated newspaper-broadcast crossownership prohibition prevents broadcast companies from investing in newspapers at a time when local journalism needs to be bolstered. It is time for the FCC to provide much-needed relief to the newspaper industry, which has labored under this ownership ban for far too many years.

In a conference call by Free Press and six other groups, they criticize the commission for moving too quickly to OK TV-newspaper crossownership in the top 20 markets, saying such a move is likely to decrease minority and female ownership. “Too few controlling too much undermines the promise of democracy,” said Rev. Jesse Jackson, president of the Rainbow PUSH Coalition.  

While big broadcasters are largely ambivalent about creating TV-newspaper combinations in large markets, NPG’s David Bradley says he and other small operators are interested in creating them in small markets. Unfortunately, the FCC is only interested in allowing such combos in large markets. How does that make any sense?

In a blow to broadcasters, the Supreme Court Friday declined to review a lower court ruling blocking an FCC decision that would have loosened regulations and allowed firms to own both newspapers and television stations in the same market.

At a time when the traditional media is under profound economic, technological and competitive pressure, television stations and, to a greater degree, newspapers need more room to breathe, not less. Repealing the crossownership restriction would be an important step in this process.

While the FCC’s rule prohibits ownership of both a broadcast station and a daily newspaper in the same area, the FCC defines a “daily newspaper” as one that is published at least four times a week. With recent decisions by several papers to cut back publication to three days a week, they become exempt from the FCC’s ownership restrictions, and expands the pool of potential buyers to include those most likely to be interested in taking on such an asset — local broadcast station owners.

The Newspaper Association of America noted that the FCC’s proposed update of media ownership rules is nearly identical to the proposal put forth by the agency in 2007.

In remanding the relaxed 2008 version of the 35-year-old broadcast-newspaper cross-ownership rule to the FCC for another look, the U.S. Appeals Court said the agency’s decision to allow common ownership in large markets had “failed to meet the notice and comment requirements” in reviewing the rule as required by law. The court also affirmed the TV duopoly rule and other local owneship limits.