Free Press report critical of media consolidation and FCC

A new report from the media watch dog group Free Press accuses the Federal Communications Commission of turning a blind eye toward media consolidation in the television industry.

The study -- “Cease to Resist: How the FCC’s Failure to Enforce Its Policies Created a New Wave of Media Consolidation” -- scrutinizes several major TV station owners including Sinclair Broadcast Group and Nexstar and says they are using “shady tactics” to build “national media empires.”

“Companies are swallowing up stations at an alarming rate, often through deals that violate the law,” said S. Derek Turner, author of the 44-page report. “If the FCC doesn’t start enforcing its rules, the damage to local competition and viewpoint diversity will be overwhelming and irreversible.”

Free Press takes issue with broadcasters controlling multiple stations in the same city through what’s known as local marketing agreements or shared service agreements. Free Press calls these arrangements nothing more than “covert consolidation” that skirts the spirit of the FCC’s TV ownership rules that limit ownership of local stations in a market.

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“The FCC must reform its ownership attribution rules to better reflect the realities of the broadcast TV market and the stated purpose of these rules,” the report said.

Free Press singled out Baltimore-based Sinclair as the most aggressive in using local partnerships or “shell companies” to control more stations. “In nearly every single instance, the only asset a shell company owns is the license itself. Sinclair almost always owns 100% of these stations’ physical assets.”

Sinclair’s growth strategy has been a sore point for media activists for years but the company has always countered that it is following the regulations to a tee. In a Wall Street Journal article Monday, Sinclair Chief Executive David Smith said, “I can walk right up to that line and look right at that line,” and added that he has “no hesitation about doing that—philosophically, intellectually or otherwise.”

Free Press fears that more consolidation means less diversity in news coverage.

“Stations in the same market air the same content, often with the same on-air personalities and production teams, you can literally change the channel and find the exact same news,” Turner said.

Free Press urged Tom Wheeler, who will soon be the new chairman of the FCC to “end the dishonest practice of covert consolidation.”


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