Federal regulators rolled back a series of decades-old regulations Thursday in a move that will make it far easier for media outlets to be bought and sold — potentially leading to more television broadcasters, newspapers and radio stations being owned by a small handful of companies.
A major beneficiary of the deregulatory moves, analysts say, is Sinclair Broadcast Group Inc., the conservative broadcasting company seeking to buy Tribune Media Co. for $3.9 billion.
The regulations, eliminated in a 3-2 vote by the Federal Communications Commission, were initially put in place in the 1970s to ensure that a diversity of voices and opinions could be heard on the air and in print. But now those rules represent a threat to small outlets that are struggling to survive in a vastly different media world, FCC Chairman Ajit Pai said.
"Few of the FCC's rules are staler than our broadcast ownership regulations," Pai said. By eliminating them, he said, the FCC "finally drags its broadcast ownership rules to the digital age."
One long-standing rule repealed Thursday prevented companies from owning both a daily newspaper and a TV station in the same media market. Another rule blocked TV stations in the same market from merging with each other if the combination would leave fewer than eight independently owned stations.
The FCC also took aim at rules restricting the number of TV and radio stations any media company could simultaneously own in a single market.
That helps pave the way for Sinclair to acquire Tribune Media.
Sinclair, which already is the nation’s largest TV station group owner, has a reputation for injecting conservative commentary in local news.
If the Tribune Media deal goes through, Sinclair would end up with a total of 223 TV stations serving 108 markets, including 39 of the top 50, that cover about 72% of U.S. households. It would gain a presence in the top three TV markets: KTLA in Los Angeles, WPIX in New York and WGN in Chicago.
"This has a huge impact," Andrew Schwartzman, an expert on media law at Georgetown University, said of the FCC vote. He said it will "reduce or eliminate" the need for Sinclair to sell off many stations in order to receive regulatory approval for the deal.
(Tribune Media was formerly Tribune Co., which owned the Los Angeles Times before spinning off its newspapers into a separate company in 2014.)
The FCC vote is the latest to ease regulations for the broadcast industry. It came the same day the agency approved the deployment of Next Gen TV, a new broadcast standard that is ultimately expected to lead to improved audio and video quality on over-the-air television, as well as targeted advertising. And it came a month after the FCC voted to stop requiring broadcasters to operate a physical studio in the markets where they are licensed.
The National Assn. of Broadcasters welcomed Thursday's vote.
"These rules are not only irrational in today's media environment, but they have also weakened the newspaper industry, cost journalism jobs and forced local broadcast stations onto unequal footing with our national pay-TV and radio competitors," the trade group said in a statement.
Critics of the FCC repeal effort argue that the decision will lead to the concentration of power in the hands of a dwindling number of media titans.
"Instead of engaging in thoughtful reform," Democratic FCC commissioner Jessica Rosenworcel said, "this agency sets its most basic values on fire. As a result of this decision, wherever you live, the FCC is giving the green light for a single company to own the newspaper and multiple television and radio stations in your community. I am hard pressed to see any commitment to diversity, localism or competition in that result."
This week, Senate Democrats called on the FCC's inspector general to launch an investigation of the agency over concerns that its impartiality with respect to Sinclair had been "tainted."
"This merger would never have been possible without a series of actions to overturn decades-long, settled legal precedent by Chairman Pai," Sen. Maria Cantwell (D-Wash.) and 14 other lawmakers said in a letter. The letter added that Pai has "signaled his clear receptiveness to approving the Sinclair-Tribune transaction and in fact paved the way for its consummation."
The FCC didn't immediately respond to a request for comment. Sinclair declined to comment.
In his remarks Thursday, Pai said it was "utter nonsense" that his agency's decisions on media ownership would lead to a company dominating local media markets by buying up newspapers and radio stations.