For Crossownership Relief, Think Small

Among the questions I routinely ask station group heads, particularly those in companies that also publish newspapers, is whether the FCC ought to jettison its ban against owning newspapers and TV stations in the same market. The answer is invariably yes.

But then when I ask whether you would take advantage of the deregulation to put together newspaper-broadcast combos, the answer is a shrug of the shoulders. They don’t much care anymore.

On paper, combining the resources of a newspaper and station to bolster their traditional businesses and to tackle digital media makes sense. But for whatever reasons it has rarely worked out. The strategy has fallen out of favor. Media General, you may have noticed, just spun off all its papers, having abandoned the search for cross-media synergy.

So, I was surprised by the answer I got from David Bradley when I interviewed him for Executive Session posted this Wednesday. Bradley is CEO of News-Press & Gazette, an owner of small-market newspapers and stations, and head of the Independent Television Group, an informal group of similar companies.

Like the publisher-broadcasters that operate in major markets, Bradley is all for getting rid of the crossownership ban. “It’s an antiquated rule,” he said.

But unlike the bigger companies, he would take advantage of the opportunities that elimination of the rule would open up. “[W]e could combine resources and provide better overall in-depth coverage of what’s going on in the community. It’s better to have one strong operation versus two operations that have limited resources.”

If the rule goes, he said, he would anticipate that NPG and other members of the ITG would buy, sell and swap assets to create new newspaper-TV combos where they could. “I think there would be open season for that. It would be a way for a lot of these smaller markets to be successful….”

Bradley knows of what he speaks.

NPG’s flagship newspaper is St. Joseph News-Press, in St. Joseph, Mo., where the company is based. Unable to buy a full-power station in the market because of the rule, it acquired a low-power station, KNPN, and a Fox affiliation to go with it.

The station is now producing two-and-a-half hours of news a day — an hour at 7 a.m. and half-hours at noon, 5:30 p.m. and 9 p.m.

“We have a converged newsroom,” Bradley said. “We have about a 45-person newsroom for the newspaper and there’s probably eight or 10 people over on the TV side. They exchange information and they both contribute to a common website and we have had the TV people write stories for the newspaper and the people on the paper side do stories and take video for the television station.”

Because it was able to tap its newspaper resources in St. Joseph, NPG was able to put another full-service TV station on the air.

So what’s so wrong about that? The FCC should be encouraging such initiative rather than discouraging it by maintaining the “antiquated” crossownership ban that puts superior full-power TV stations out of the reach of small-market newspaper owners.

The FCC currently has an open rulemaking that has proposed relaxing the rule in the top 20 markets. But all that would do is allow the beleaguered Tribune Co. to hang on to its the newspaper-TV combos it has in several markets under waivers of the rule or, perhaps, spin off some of the papers to cross-town broadcasters. (The Chicago Tribune reported last week that News Corp. was interested in the Tribune and the Los Angeles Times even though it has stations in both markets, but News Corp. denied  it.)

The FCC is proposing little relief outside the top 20 markets, where NPG and other members of the ITG operate. The agency appears determined to keep the rule in full force for most of the country until the last newspaper folds.

The position is especially surprising given that the FCC own June 2011 study “The Information Needs of Communities” could find no justification for the rules after looking at all the evidence.

“First, it is easy to see how newspapers and TV stations merging operations could lead to efficiencies and improved business models that might result in more reporting resources and therefore help reach the policy goal of enhanced ‘localism,'” the study concludes. “On the other hand, it is also easy to see how such mergers could simply improve the bottom line of a combined company without actually increasing the resources devoted to local newsgathering in a community.

“Therefore, we are not persuaded that relaxing ownership rules would inevitably lead to more local news, information or reporting or that it would inevitably lead to less.”

In the face of such ambivalence, I don’t see how the FCC can perpetuate the rule in any market, be it New York or St. Joseph, Mo. I don’t see how any court could let it stand. Talk about arbitrary and capricious.

What’s equally perplexing is that there appears to be no constituency for the crossownership ban, other than a few liberal advocacy groups like Free Press. For years, Sen. Byron Dorgan (D-N.D.) and Rep. Maurice Hinchey (D-N.Y.) championed the rule. But Dorgan left the Senate in 2011 to become a lobbyist and Hinchey is retiring at the end of this Congress. The FCC’s own in-house nut on the subject, Michael Copps, left the agency last January.

(Of course, if it turns out that Rupert Murdoch is interested in the Tribune and Times, you can bet that there will be renewed interest in crossownership among Hill Democrats. They will do whatever they can to frustrate his media ambitions.)

Bradley says that the ITG is not a lobbying organization. It’s more of a club where executives with similar businesses and concerns can sit around and share ideas.

But if he and other members are really interested in operating newspapers and TV stations in the same market, I would urge them to get their act together, pool their resources and do what they can to make their voice heard in Washington. As small operators in small markets, they should get a sympathetic reception on the Hill and at the FCC.

The FCC ownership rulemaking including crossownership, should soon be ripe for action.