As the final four teams prepare to battle it out in March Madness, it’s a sure bet that sports fan are waiting to see what else the tournament has in store this season. With coverage, updates, and analysis, it’s also a pretty sure bet that these fans are tuning into ESPN – the station that has become the sports authority. But did you know that the testosterone filled station is owned by a company that producers princesses fairytales – Disney? Did you know Disney also owns ABC, Marvel, Pixar, and Touchstone. Part of what’s known as the “Big Six” – Comcast, News-Corp, Disney, Viacom, Time Warner, and CBS – account for 90% of media ownership across the states.
The process of consolidation through mergers and acquisitions, has led to media conglomerates – few companies owning all of the media outlets.
Many argue that media consolidation hurts competition by blocking out new media companies. According to Senator Wellstone, media give people access to a wide variety of opinions, analyses, and perspectives and it holds concentrated power accountable to people. With only a few companies controlling all the media the two functions of media (listed above) are compromised. Specifically related to advertising, a combination of media also leads to monopoly over audience and advertisers.
Today, the Federal Communication Commission (FCC), an independent US government agency responsible for controlling media regulation, will vote to make TV station’s joint sales agreements (JSAs) subject to current ownership rules. The commission will also vote on a rule that prohibits two or more of the top four TV stations in a market from jointly negotiating agreements with pay TV providers.
Tom Wheeler, FCC Chairman, cited that the considered changes were motivated by evidence that suggested the rules that protect competition diversity and localism have been circumvented.
JSAs are an arrangement many see as a loop hole around the limits on owning no more than two TV stations in a market. With endorsement from the Department of Justice, the FCC is now moving ahead with the rule “that if the owner of one station in a marketing sells 15 percent or more of the advertising time for another, then it will be deemed to have ownership interest in the station.”
Broadcasters are fighting back. Gordon Smith, president and CEO of the National Association of Broadcasters, says, “The real loser will be local TV viewers. This proposal will kill jobs, chill investment in broadcasting, and reduce meaningful minority programming and ownership opportunities.”
Stations that do have JSAs will have two years to dismember deals. However, stations can apply for a waiver in which JSAs will be examined on a case by case basis to determine if public interest is served by keeping the agreement.
Additionally, as part of the 2014 review, the FCC will propose to keep the ban on owning more than two TV stations, but question whether the cross-ownership ban between TV, radio, broadcast, and newspapers should be lifted.
However, while the five commissioners of the FCC will all vote on the issue, the ultimate decision may be left in the hands of just one, Democratic commissioner Mignon Clyburn. The issue has split the five down party lines with the GOP commissioners, Ajit Pai and Mike O’Rielly speaking out against the proposal. In order to advance the ruling, Wheeler will need the favor of both democratic commissioners.
While the commissioners are deciding, we are left wondering to what degree will these rules affect our media markets? Will Clyburn’s decision trend toward more or less regulation?
Tell us what you think. Should the FCC approve the JSA rule? Are media conglomerates affecting the free flow of information to society? Or has the Internet made possible enough independent outlets?
IMC Hawks Blog 