FCC Commissioner Ajit Pai on a proposal to tighten up on the use of joint sales agreements and shared services agreements: "If the FCC effectively prohibits these agreements, fewer stations in small-town America will offer news programming, and they will invest less in newsgathering. And the economics suggest that there likely will be fewer television stations, period."
FCC’s Pai: JSAs, SSAs Vital To TV’s Survival
FCC Commissioner Ajit Pai said the agency is going about reforming its local TV ownership rules all wrong.
Instead of figuring out how to relax the rules, the Republican regulator said in a speech at a Media Institute luncheon Thursday, the FCC is debating whether to tighten them by counting stations operated under joint sales and shared services agreements as owned stations under the current ownership caps.
“I have no doubt that those advancing this proposal have the best of intentions,” he said. “But if their efforts succeed, I fear that the effects will be quite negative, especially in smaller markets.
“As broadcasters’ share of the advertising market has shrunk in the digital age, television stations must be able to enter into innovative arrangements in order to operate efficiently. JSAs and SSAs, for example, allow stations to save costs and to provide the services that we should want television broadcasters to offer.”
The crackdown on JSAs and SSAs is part of a Media Bureau proposal that has the backing of Chairman Julius Genachowski and his two fellow Democrats on the commission.
Pai cited examples of so-called virtual duopolies created through JSAs and SSAs in Wichita, Kan. (DMA 66), and Fort Smith, Ark. (DMA 101), that have benefited broadcasters and their viewers.
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“For stations in markets like these, the choice isn’t between JSAs or having both television stations operate independent news departments.
“Rather, the real choice is between JSAs and having, at most, one television station continue to provide news programming while the other does not.
“If the FCC effectively prohibits these agreements, fewer stations in small-town America will offer news programming, and they will invest less in newsgathering. And the economics suggest that there likely will be fewer television stations, period.”
“Losing these stations would be terrible for American media consumers. For unlike some, I don’t see broadcasting as a faded relic of the past. Broadcast television remains a critical part of the media landscape.”
Comments (10)
Ellen Samrock says:
February 7, 2013 at 4:38 pm
Mr. Pai, for the most part, seems to ‘get it’ as far as understanding the realities of broadcasting and concerns of broadcasters both radio & TV. Let’s hope he and Commissioner McDowell can be strong advocates for television broadcasters during the painful repacking process.
Angie McClimon says:
February 7, 2013 at 4:53 pm
In smaller markets, it makes sense. However, I’m not a big fan of companies that buy stations and instantly spin them to another station in an SSA.
Brad Dann says:
February 8, 2013 at 8:45 am
It’s how Broadcasters have been forced to operate under the current rules. Sure it would be better to just allow more than one station per market, but not allowed today. And any proposal to do so raises the hue and cry that diversity of voices will be diminished, ALL from people who have never worked at or owned a broadcast property in ANY market. We have 500+ channels of programming plus the internet, notice how many newspapers are putting video reporters online? Lack of independent voices is from 1934 and has simply been repeated since then with no consideration of the change that has taken place and will continue in the Media marketplace
Tanya Pavluchuk says:
February 8, 2013 at 9:42 am
“And the economics suggest that there likely will be fewer television stations, period.”
Exactly what the FCC’s looking for……..
Michael Castengera says:
February 8, 2013 at 3:03 pm
I fear that’s correct.
Maria Black says:
February 8, 2013 at 10:01 am
Isn’t there a YouTube video with a bunch of different news anchors saying the same script about one story? Because they got the story from AP or something? How is it that now, when you can essentially get the same peice of news and the same script, no one is crying about “reducing diversity”? Those agreements are a way to avoid going under for many TV stations, and I agree, those people whining haven’t ever worked at or owned a broadcast property in any market. If people are so worried about a lack of diversity, they should consider the other mediums that are used today to deliver news and shut up.
Michael Castengera says:
February 8, 2013 at 3:02 pm
You’re using footage of stations using the same script/clip for a stupid human interest story as an idictment of news everywhere? When you can show that the news station in your town is reporting verbatim the news from my town, you might have a point, but as it stands, you don’t.
Mark Annas says:
February 8, 2013 at 10:54 am
If left up to Ajit Pai, the small broadcast companies will disappear. Large broadcaster companies (e.g. Sinclair, Nexstar…) are already getting around the rules by starting another company that “runs” a 2nd and 3rd station in markets….and so, the big will get bigger and the small will get crushed…..not to mention the station employees that lose their jobs when JSAs and SSAs happen…and having worked in broadcasting for over 20 years, I “get it”….and don’t like what I see.
Don Richards says:
February 8, 2013 at 1:05 pm
SpotGal is dead on. Unrestrained JSAs, SSAs and other ownership/management vehicles that allow one entity to control multiple stations (regardless of how many related or unrelated corporations are involved) will just lead to a world of 4-5 mega broadcasting companies controlling all of the stations in small markets. There are several small/medium-sized markets today where two of the “Big Three” plus 1-2 of the “Small Three” are controlled by one entity. The more we move in that direction, the more we will move toward the TV version of what Clear Channel did to radio (everything gets centralized and there is no local decision-making). At some point the real question is going to be asked; are we regulating broadcasting to create the greatest ROI (be it operating profits, sale multiples, or both), or are we regulating broadcasting to insure that we have a wide and diverse ownership that is locally-focused. It may be that broadcasting is not destined to be the kind of investment that VC and private equity drool over. Maybe it’s a business that will only be valued by people who love broadcasting (and have figured out how to make a few bucks doing it).
Ellen Samrock says:
February 8, 2013 at 1:58 pm
It’s ridiculous to take a one-size-fits-all approach to JSAs & SSAs. Not all stations use them as a dodge to avoid hiring staff while fattening their bottom line. Many small market TV stations simply could not afford to stay on the air without agreements like these. It may be that an economic litmus test similar to the one the FCC uses for closed captioning requirements should be used. Stations whose revenues are below a certain dollar amount are eligible to use JSAs & SSAs and stations above that amount are not.