Key Points
- A coalition of civil rights groups urged the FCC to block broadcast station deals by Nexstar, Gray Media and Sinclair, citing excessive local TV consolidation.
- The groups argue the transactions would violate ownership caps, weaken local news and reduce competition in affected markets.
- They warned further consolidation would raise retransmission fees, increasing cable and satellite costs for consumers.
A coalition of civil rights groups have fired off a letter to the Federal Communications Commission (FCC) urging the agency to block a series of transactions from major broadcast television station owners.
The groups say the transactions proposed by Nexstar Media Group, Gray Media and Sinclair over the past few months will result in an extreme amount of local television consolidation and result in lower local news commitments to the detriment of the communities those stations serve.
The letter was signed by nearly two dozen civil rights organizations and industry advocate groups, including the NAACP, LGBT Tech, the National Action Network (NAN), the National Black Justice Collective, the National Hispanic Media Coalition (NHMC), the National Urban League and the National Newspaper Publishers Association (NNPA).
The groups specifically called out Nexstar’s $6.2 billion proposed acquisition of TEGNA; Gray Media’s desire to acquire television stations being divested or swapped by Allen Media Group, Block Communications and Sagamore Hill; and Sinclair’s proposed takeover of the E. W. Scripps Company. The total number of TV stations affected by those proposed or pending transactions is 151, according to an analysis by The Desk.
The organizations contend that the transactions would put some owners, including Nexstar and Sinclair, over a specific cap that limits the reach of local TV station owners to no more than 39 percent of the American viewing audience — something that Nexstar, Sinclair and others already overcome by entering into local marketing agreements with companies like Mission Broadcasting and Deerfield Media that own TV broadcast licenses on paper.
None of the companies are seeking to use shell companies as part of their transactions. Instead, each of the three is seeking direct ownership of the 151 local TV stations in question — something the groups note would be a violation of current federal ownership rules if those transactions are granted by the FCC.
For years, broadcasters have pushed for an easing of ownership rules with the goal of consolidating their operations, which they say is necessary to ensure they can compete long-term against streaming services and other digital media platforms owned by major technology firms like Google, and Amazon.
Many of those broadcasters contend that consolidation will allow them to make further investments in local news and community-oriented programming, which will help them fulfill the public service obligation of their FCC-issued licenses.
But the civil rights organizations contend that the opposite typically happens when broadcasters are allowed to grow larger.
“The FCC’s public-interest standard requires protection of localism — the bedrock that ensures communities have access to news and information about their civic institutions, emergencies, and public affairs,” the groups wrote. “But experience shows that when a single broadcaster controls multiple top stations in a market, the incentives shift sharply away from robust local news.”
Among other things, the outcome of local broadcast mergers and acquisitions resulted in one or more local newsrooms winding down their independent editorial operations and consolidating into that of co-owned or operated stations; the increased use of regionalized news hubs and “must-run” content; and greater duplicative news content across stations that formerly competed with each other, the groups said.
“The Commission’s own findings in past merger reviews make clear that these effects are not speculative — they are the predictable outcomes of excessive horizontal consolidation,” the letter said.
The organizations also complain that increased consolidation will concentrate power among a few broadcasters, who have charged cable and satellite operators more for their local programming. Those higher distribution fees are passed on to consumers in their bills, and is the leading cause of rising cable and satellite prices. Some streaming services, like YouTube TV and Sling TV, have been afflicted by similar practices over the past few years.
That trend will only get worse if broadcasters are allowed to amass more local stations, which will likely be used as bargaining chips to drive up the cost of carrying their channels on cable and satellite, the groups warn.
“Households, particularly low-income and minority viewers who rely on cable or satellite bundles for access to local broadcast channels, will pay more as a direct result of these acquisitions,” the groups said.
Overall, the merger and acquisitions proposed by Nexstar, Sinclair and Gray fail the FCC’s multi-prong test to determine whether they are in the public interest because they will lessen competition, detrimentally impact local news coverage and result in higher fees for cable and satellite companies, the groups assert.
“Measured against these criteria, the proposed acquisitions do not pass,” the groups warn. “They would create extreme concentration, contradicting decades of FCC precedent; reduce local news output at a time when local journalism is in crisis; raise costs for consumers; and constrict opportunities for diverse ownership.”
The full letter is available to view by clicking or tapping here.
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