Justice Department Takes First Step in Stopping Broadcasters from Using Shell Companies to Consolidate

WASHINGTON -- On Monday, the Department of Justice announced that it would require Gannett to divest TV station KMOV in St. Louis before it would consider approving Gannett’s acquisition of Belo’s 20 stations.

KMOV is the CBS affiliate in St. Louis. Without the divestiture, Gannett would have controlled two major network affiliates in this market. This would have violated the Federal Communications Commission’s broadcast ownership rules — and according to the DoJ, it would have harmed competition in the local advertising market.

Free Press Policy Director Matt Wood made the following statement:

“For too long, broadcasters have evaded the FCC’s ownership rules by creating shell companies to hold the licenses. The result is less local journalism, fewer voices and fewer viewpoints on the air. We’re pleased that the Department of Justice recognized some of the harms of Gannett's proposal in St. Louis and took the problem seriously.

“This is a great step, but there is far more for the DoJ and the FCC to do. The rest of the station acquisitions in the Gannett-Belo deal, and in several other transactions proposed by Tribune, Sinclair and others, deserve the same careful scrutiny and the same fate.

“The FCC must protect local news and stop these kinds of deals, even in places where the DoJ won't step in. The FCC should close the loopholes that have allowed companies to consolidate at viewers’ expense. And it must block the license transfers that involve sidecar companies established for the express purpose of skirting the rules.”