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Monday, August 13, 2018

The Local TV Consolidation Race Is Here


Changes in decades-old broadcasting rules, combined with new types of competition in news and
entertainment, are creating a drama-filled free-for-all as local U.S. broadcasters consolidate.

According to Axios, here's why it matters: Consolidation will inevitably mean that fewer voices reach more people, but some in the industry argue it's the only way local broadcasting will be able to compete with big tech.

What they're saying:
"Scale matters when we are competing against massive pay TV conglomerates, Facebook, Apple and Netflix. If you want a healthy broadcast business that keeps the Super Bowl on free TV, that encourages local investigative journalism and allows stations to go 24-7 live with California wildfire coverage, broadcasters can’t be the only media barred from getting bigger.”  — Dennis Wharton, National Association of Broadcasters
Tribune Media announced last week that it has terminated its $3.9 billion merger agreement with Sinclair Broadcasting and that it has filed a lawsuit for breach of contract. The merger would have created the largest local broadcaster in America, but its collapse doesn't mean the industry will stop consolidating.

The back story: Many local broadcasters cite one key reason for their consolidation — The FCC's landmark decision last year to roll back old regulations that limited the ability of TV companies to own properties in the same market.

What's complicating many of these deals, however, is that the FCC has yet to determine the new limits on TV station ownership. Right now, there is a national cap limiting television groups (among all of their stations) to reaching no more than 39% of U.S. TV households.

Most sources Axios has spoken to believe that cap will be lifted above 50%, but they don't know what the exact limit will be, or when it will be passed and implemented. The FCC was supposed to vote on a new cap in July, but the vote has been pushed back, and will likely occur later this year.
The ownership rule will impact the entire local TV landscape, which is currently dominated by roughly a dozen companies.

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