In a robotic argument, EU M&A regulators said Amazon can’t buy Roomba maker, iRobot. While we worry about AI robo-calling, the EU worries that self-Hooverers who can’t suck up to shoppers online will unleash an army of humans to sell superficial cyborg suckers door-to-door. As I laughed my ass off, I started thinking about LMAs.
Back when our best media was over-the-air TV, the smart people we elected and entrusted to protect us from harm thought people who can schedule episodic strings of Gilligan’s Island reruns could adle children’s minds with endlessly sequential banality. Worse, they worried that, unfettered, a local TV news programs could produce a segment about a pack of feral dogs that arranged garbage into a living space that looked suspiciously like a nativity scene and get people questioning religion.
So, the FCC took a hardline on hookups. They didn’t let you own too many TV stations. You also couldn’t own more than one station in a market. When bad regs happen to good business, normally prosaic people get creative. In 1991, Sinclair owned WPTT (Channel 22) in Pittsburgh; when they tried to buy WPGH (Channel 53), the FCC said, “Nyet.”
O.K. So, if we can’t own two stations, we will own one and contract to program the other, sell all the ads, and get the revenue. The operator paid the owner some money. That deal was called a local marketing agreement or, you guess it, an LMA.
It didn’t take long for lots of people to figure out the model. It took the FCC until 1999 to catch up. They updated their regs to say, if you program more than 15 percent of a station’s time, it’s your station. Of course, by then, TV wasn’t what it was. Cable was a bigger deal and the Internet was about to burst on the scene. Station ownership limits kept going up.
By 2013, these outsourced agreements were just about everywhere. TV was mostly consolidated. And, no surprise, TV was a lot less relevant than it was in 1991.
Which brings us all the way back around to EU M&A regs. They blocked iRobot. They also blocked Adobe buying Figma because, “Blah, blah, blah, harm innovation, blah.”
Adobe is 41 years not young. Their innovating days are dots in their rearview. The last new thing they did was shift from selling their software to selling their software as a service. Even that’s more than a decade old. Figma, “genius” was to make a service meant to design products or apps; not just ads.
They’re both staring down the barrel of AI creating designs just by saying, “Hey, make a social app that works like Twitter and looks like Instagram.” Bam! Bluesky.
It’s 1990 TV changed all over again. Companies who really want to consolidate will find ways to circumvent the regs. Regulators will play catch up. By the time they hop, skip, and jump over each other, the market they fought to roll up will have passed them by.
Consolidators find ways to stay one step ahead of regulation, so they can stay two steps behind actually having to innovate. It’s so LLaMe, I’m L-ing-MA off.
Charles Benaiah is the CEO of Watzan, a techy company for medical media. When he’s not running a media company, he reads about media, thinks about it, pull out what’s left of his hair dealing with it, and then he writes about it over on unCharles. Follow him on LinkedIn by clicking or tapping here.
The opinion reflected in this article is the author’s own and do not necessarily represent the viewpoints of TheDesk.net or its parent company, Solano Media LLC.
