Evidence is emerging that if station groups are allowed to scale up, they will become better broadcasters, pumping still more news and entertainment into the expanding TV ecosphere to the benefit of all — viewers and advertisers. FCC Chairman Ajit Pai is expected to move to loosen the ownership caps this year. Those opposed had better bring more to the debate than just theories about the inherent badness of bigness.
Sinclair, Nexstar Show How Big Can Be Better
I’ve been advocating for the easing of the national ownership cap on TV stations for the better part of two decades based on two basic principles.
One is that the burden of proof for a regulation — interference in the natural workings of the market — falls on the government, and I have yet to see it produce compelling evidence that a station group covering most or all TV homes would harm the public in any significant way.
The second is that scale can strengthen station groups financially and give them the resources necessary to bring more and better services to the public. In other words, big media is good. That’s anathema to liberals who believe big is bad in all things except government and who have worked for decades to keep the lid on station groups.
I will confess that for the better part of two decades I have taken the second point primarily on faith. But now I believe that my faith has been rewarded. Evidence is emerging that if station groups are allowed to scale up, they will become better broadcasters, pumping still more news and entertainment into the expanding TV ecosphere to the benefit of all — viewers and advertisers.
The prime example is Sinclair. Now right up against the FCC national ownership cap (39% of TV homes), the Baltimore-based group is doing things it could not possibly have done a decade ago.
As I discussed here a couple of weeks ago, it is building a national news organization that could one day take its place alongside those of the Big Four, CNN and Fox News (if it is allowed by the FCC to continue growing, of course).
It is doubling down on linear TV. It bought the Tennis Channel and revitalized it by using its clout to extend its cable reach. It has also launched Comet TV, Charge! and TBD, the last an attempt to reach elusive millennial viewers who may cotton to the idea of watching free TV.
Because of its size, Sinclair was also able to take the lead in developing ATSC 3.0, broadcasting’s best hope of reinvention and relevance in the next decade.
Without Sinclair driving the standards effort, and investing millions in it, I’m not sure that 3.0 would be nearly as far along or as capable as it is. As things now stand, the FCC will authorize the standard late this year and, soon thereafter, cutting-edge broadcasters (count Sinclair in) will put it on the air and offer new services and enhancements to old ones.
Broadcasting’s other great consolidator, Nexstar Media (also up against the cap), also supplies evidence on the value of bigness although not nearly as much as Sinclair. I suspect we will see more once it has fully digested Media General. It closed on that merger less than two months ago.
At the Borrell Local Online Advertising Conference in New York Monday, Nexstar’s Tom O’Brien outlined the many initiatives the company is undertaking to enhance spots sales with better measurement, Big Data and automated buying, and to exploit new distribution platforms like social, OTT and mobile apps.
A month ago, I wrote a story about how Nexstar is doubling the size the Washington bureau that it inherited from Media General from five to 10 persons. Those plans seem to be on course as it announced this week that it had hired a bureau chief, Bill Mondora, formerly of CBS Newspath.
Gray Television, the scrappy station consolidator that favors market dominance over market size (its biggest market is Knoxville, Tenn. [DMA 62]), is also using its increasing heft to raise its profile in Washington. I spoke to Bureau Chief Jacqueline Policastro about a story I am working on and was surprised to learn there were now six others in her crew.
And I got the impression from talking to her that the bureau would grow as her acquisitive station company did.
I should note that neither Nexstar nor Gray has national news ambitions. Their mission is to work for their stations, finding the local angle on national stories and keeping an eye on senators and House members representing the Gray markets.
Tegna is another one that bears watching. Reaching nearly a third of the country, it is developing its own entertainment programming, figuring it’s better than waiting for overpriced syndicated shows from Hollywood that are up against long odds. Its first big offering, T.D. Jakes, hasn’t made much of a dent in the Nielsens, but group is undaunted. It’s lining up some other innovative projects.
So, the evidence is piling up. As station groups get bigger they tend to do more — more entertainment, more news.
FCC Chairman Ajit Pai is expected to move to loosen the national and local ownership caps this year. He will face opposition at the FCC and in the courts from liberal media activists and perhaps broadcasters who fear being run over by the networks and consolidators like Sinclair and Nexstar.
But those opposed had better bring more to the debate than theories about the badness of bigness. They will be up against real-world experience.