Free Press Disappointed in FCC Decision to Allow More Media Consolidation
WASHINGTON -- On Friday, the Federal Communications Commission approved Gannett’s acquisition of Belo and Tribune’s acquisition of Local TV. The two deals involve the sale of nearly 40 stations in cities including Cleveland, Dallas, Denver, Louisville, Norfolk, Va., Phoenix, Portland, Ore., Seattle and St. Louis.
Free Press had asked the FCC to prohibit in each transaction the sale of several stations in cities where Gannett and Tribune will control multiple TV stations and other news outlets; these deals run afoul of the FCC’s media ownership limits in those markets. Both Gannett and Tribune have boasted about how they’ve skirted these FCC rules by using shell companies to hold the licenses, a practice Free Press has documented extensively in its filings and in an October report, Cease to Resist: How the FCC’s Failure to Enforce Its Policies Created a New Wave of Media Consolidation.
On Monday, the Department of Justice prevented one piece of the Gannett deal from moving forward, forcing the company to divest KMOV-TV in St. Louis over concerns about competitive impacts in the local advertising market. But the DoJ has not blocked any other part of either transaction.
Tribune's deal also puts its national audience reach well above the 39 percent cap that Congress set a decade ago, but quirks in the FCC's rules could allow Tribune to discount that figure based on out-of-date technical allowances for UHF stations. The FCC is considering changes to these UHF rules, but may still allow Tribune to take advantage of them.
Free Press President and CEO Craig Aaron made the following statement:
"The FCC has ignored runaway media consolidation for too long. There was no good reason to let that trend continue with these mega-mergers. These kinds of deals shutter newsrooms and silence competing viewpoints, harming local service, diversity and competition in media markets across the country.
"Gannett and Tribune use shell companies, shady arrangements and accounting tricks to keep total control over broadcast licenses they can't hold in their own names. They brag to investors and Wall Street analysts about how they can dodge the FCC's cross-ownership limits and get away with it.
"This fiction hasn’t fooled other government agencies. The DoJ recognized that Gannett and other big broadcasters are really in control of their so-called sidecar companies, and the Securities and Exchange Commission sees that the big station groups control the shells’ finances and day-to-day operations.
"The FCC needs to scrutinize the use of shell companies and sharing agreements in general, and should reconsider and review these deals too. It needs to fix its rules now, and throw out the rubber stamp that's making America’s media system less local, less diverse and less accountable to the people in hundreds of communities. It’s time for the agency to tighten its rules, close these loopholes and start promoting local journalism and real news."
