NAB: Mega-MVPDs Have Unfair Advantage

The association tells the FCC that it’s obligated to overhaul its station ownership rules. “Local television ownership combinations and shared services agreements are vital in today’s competitive marketplace to maintain stations’ financial viability.”

The NAB says television station groups are at an unfair advantage in the wake of the FCC’s approval of increasing numbers of cable mergers creating giant entities, while retaining caps on the number of stations broadcasters may own.

This, in addition to growing competition from the internet, means “broadcast TV stations struggle to compete in a video marketplace dominated by consolidated pay TV providers that dwarf in scale and scope even the largest local broadcast television companies,” the NAB said in a letter to the FCC.

The solution, it suggests, is for the commission to overhaul its ownership policies. “Local television ownership combinations and shared services agreements are vital in today’s competitive marketplace to maintain stations’ financial viability and their concomitant ability to provide high-quality, high-cost programming, including local news, sports, weather and emergency information, 10 especially as the high cost of producing local news continues to rise,” NAB wrote.

It continued: “As of last fall … AT&T/DirecTV had a market capitalization of $201 billion and Verizon had a market cap of $182 billion, while TV station group owners such as Media General, Scripps and Nexstar had market caps of $1 billion each. Aside from the giant telcos, the largest cable operator (Comcast) had a market cap 142 times larger than these broadcasters, and the combined Charter/TWC/Bright House an estimated market cap 72 times larger.”

NAB said this “regulatory disparity has produced an increasingly severe competitive disparity, as local stations are prevented from achieving even a fraction of the economies of scale and scope that their MVPD competitors enjoy. In fact, the broadcast television industry today is so diffusely owned that many stations — especially those in smaller markets — struggle to compete effectively and continue to serve their audiences.”

Current ownership rules, NAB says, “severely constrain the ability of broadcast stations to compete for viewers, advertising dollars and investment capital.”


In addition, NAB said, broadcasters are also facing ever-increasing competition from online and multichannel options that has “fundamentally changed how consumers access information and entertainment, and resulted in both consumers and advertising dollars moving away traditional outlets.

“Given the unprecedented competition for viewers and advertisers in today’s video marketplace, including from consolidated MVPDs and online services and outlets, the commission is obligated … to repeal or significantly relax its local ownership restrictions impacting broadcast TV stations. Indeed, the commission has consistently recognized in contexts other than broadcast ownership that the ‘Internet is America’s most important platform for economic growth, innovation [and] competition….’ “

NAB concluded: “The commission has no legal or public policy basis for ignoring the ‘most important’ competitive platform in the U.S. economy and retaining asymmetric regulations competitively disfavoring local broadcast TV stations and their video services offered free to all consumers.”

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Brian Bussey says:

June 7, 2016 at 10:00 am

the biggest challenge to broadcasters is their own corporate bean counters who think it makes sense to gut newsrooms and run paid programing in daytime . Who cares what Comcast’s market cap is ? If broadcasting was so bad why did Comcast spend all that money to buy NBC Network and its O&O stations.? Broadcasters have spent the last decade laying off hard working folks who sacrificed their health and wellbeing bringing news to the communities they served to consolidate into these giant broadcasting groups with centralized back office operations with questionable service at best. The retirement age in a Broadcast TV station is about 55. How this is legal amazes me to this day. The larger cable companies need to get broken up. They are all too big. Operational efficiencies have not resulted in lower costs to the subscriber. Subscriber costs continue to rise.

Ron Burrus says:

June 7, 2016 at 10:35 am

Well said. While we are at it – lets help matters by adding even more commercials so that the breaks are longer and even less effective for our advertisers. Last time I checked, advertisers were still pretty important in the equation but are getting less exposure and increasingly poor service from stations.

Julien Devereux says:

June 7, 2016 at 3:08 pm

Well said, both of you. But the bigger issue is consolidation in television. It worked so well for Cumulus radio and the former Clear Channel, didn’t it? Well, no. iHeart has over 21 billion dollars in debt and has only made interest payments and refinancing that haven’t budged the needle on the principal debt at all. Cumulus is in dire straits and both are right on the edge of having to file bankruptcy. Why not throw TV and newspaper companies under the bus, too so a very few people can walk away with bulging pockets, just like the Mays family?