Covert Consolidation Hall of Shame
Covert consolidation is even more pervasive than we realized. When Free Press launched ChangetheChannels.org last month, the site’s interactive map featured 80 markets where two or more stations entered into resource-sharing agreements and, in essence, merged their news operations. These agreements may not technically qualify as mergers under FCC rules because broadcasters claim they are not transferring control of the license, but the effect is the same: increased profits for station owners at the expense of competition and independent, local journalism.
A close investigation of leads submitted by activists from across the country has uncovered even more instances of covert consolidation. We now have evidence that more than 100 markets are suffering from particularly harmful local media consolidation. Although it is unfortunate that covert consolidation has a wider reach than we initially thought, it’s encouraging to know that this issue resonates with you, our allies on the ground, and that you share our concerns for the state of local journalism in your communities. You can see all 22 recently added markets on our covert consolidation map:http://www.savethenews.org/changethechannels#!/recent
Let’s take a look at some of what we’ve found. You may have noticed a few repeat offenders on the map. So have we. That’s why we’ve created a “Covert Consolidation Hall of Shame” to highlight those companies that routinely engage in covert consolidation of news operations. The companies highlighted below account for seven new cases of covert consolidation and include a “rent-to-sell” duo, a serial monopolist and the birth of a “virtual triopoly.”
Newport Broadcasting-High Plains Broadcasting
Let’s begin with a familiar duo: Newport Broadcasting and High Plains Broadcasting. The two companies make two new appearances on the covert consolidation map: in Fresno, Calif., and San Antonio, Texas. As in the four other markets where Newport and High Plains have joint operations, “rent-to-sell” tactics once again give Newport operational control of media properties it is not allowed to own under the FCC’s media ownership rules. In fact, Newport was initially forced to sell these stations to come into compliance with FCC regulations.
Both Fresno and San Antonio involve the most severe form of covert consolidation: Shared Services Agreements. These contracts are particularly harmful to local news because they often lead to newscasts produced by a single consolidated newsroom airing the same news on multiple stations.
Nexstar Broadcasting
Last week we told you about Nexstar Broadcasting’s hypocritical antitrust lawsuit against Granite Communications for their “actions to monopolize advertising sales in Fort Wayne, Ind.. We’ve since identified four additional instances of covert consolidation involving Nexstar in Billings, Mont.; Rochester, N.Y.; Springfield, Mo.; and Wichita Falls, Texas. That’s the total (four) number of markets in which Granite operates. The new additions affect eight television stations, bringing Nexstar’s total reach to 35 stations across 18 markets.
New Vision Television-PBC Broadcasting
A tip from a concerned citizen in Topeka, Kan., led to our top prizewinners for most harmful new addition to the covert consolidation map. Three of Topeka’s top four stations (KSNT, KTKA, KTMJ) are now operated by one company: New Vision Television. To bypass FCC rules prohibiting any one company from owning that many stations outright in a single market, New Vision entered into a Local Marketing Agreement with PBC Broadcasting that gives it control of the local ABC, NBC and FOX affiliates in Topeka. Making matters worse, the Topeka triopoly was fully operational before the FCC approved the sale of KTKA. Rather than wait for FCC approval, New Vision took the reins at KTKA through a sharing arrangement PBC had in place with the station’s previous owner.
It turns out New Vision and PBC have formed identical partnerships in Youngstown, Ohio, and Savannah, Ga., a fact the FCC ignored when it approved the sale of KTKA. The situation in Savannah is especially egregious because New Vision also entered into a “joint content and marketing agreement” with the Savannah Morning News. Not content to control the local ABC and Fox affiliates there, New Vision also controls the only daily newspaper in Savannah. As part of the new partnership, New Vision announced that the two television stations and the Morning News will “co-locate in the same building” and have “joint weather and news coverage.”
This degree of power concentration is so harmful to communities that the American Cable Association called it a “virtual triopoly” in its petition to deny the sale of KTKA to PBC. As a broadcast license holder, New Vision is charged with serving the public interest. Given that there is only one other independent station in town, there is little incentive for New Vision to do so or to be held accountable to viewers.
Nominate Future Hall-of-Shamers
Unfortunately it’s not surprising that so many markets have been added to the covert consolidation mapising. Companies are quietly merging their news operations through resource-sharing agreements all over the country, sometimes unbeknownst to the communities in which they operate and are required to serve. Later this year, the FCC will begin its quadrennial review of the media ownership rules as mandated by the Telecommunications Act of 1996, and you can bet broadcasters are readying their lobbying machines for the fight.
They will resort to the same tired arguments for additional relaxation of the rules: namely, that sharing resources allows them to maximize efficiencies in tough economic times, and that they will invest any savings in more local journalism. We know both of these claims to be false. The FCC’s “Information Needs of Communities” report found profits for television stations increased an average of 26 percent over the last year, thanks in part to an increase in political advertising revenue following last year’s Supreme Court decision in Citizens United. Moreover, we found only one instance — in Knoxville, Tenn. — in which covert consolidation led to an increase in staff levels. In most markets, covert consolidation led to layoffs and a decrease in the amount of independent, locally produced news.
The good news is that the media reform community is also gearing up for the fight, and Free Press is leading the way with the Change the Channels campaign. Our growing database tracking these deals is key to shining a light on the ways in which covert consolidation is altering our media landscape. We can’t do it without you; keep the tips coming, and help us document what covert consolidation looks like in your community. We have developed a new toolkit to help you do just that; you can download it here. The more evidence we have, the more pressure we can put on the FCC to strengthen its rules and prevent covert consolidation from destroying local TV news.