The LMA/option between Raycom and a subsidiary of MCG Capital that has created a three-station television cluster in Honolulu is under formal assault by Media Council Hawaii. Rules of engagement just released by the FCC show that many of the pertinent facts will be kept under wraps.
Raycom owns NBC KHNL-TV and CBS KGMB-TV in the DMA, and provides various services for MCG’s MNT KFVE-TV under an SSA. Raycom also holds a purchase option which it might exercise in the event that a future change in the rules would allow the trio to be co-owned.
The cluster has been under attack just about from the moment it was formed, with Media Council Hawaii arguing it puts too much power in the hands of one owner and diminishes the diversity of local news programming.
Raycom has maintained all along that it is providing certain services to MCG that are completely in line with what the FCC has allowed for years, and that MCG remains the party in control of management of KFVE.
Typically, local market agreements allow a broker to provide a significant amount of programming, as well as to provide support and administrative staff, sales and other services. The licensee must maintain ultimate authority for all decisions pertaining to the station, provide its own management personnel and maintain responsibility for all dealings with the FCC.
The FCC rules of engagement allow Raycom and MCG to keep certain categories of competitive information out of the light of day. It spells out which parties may have access to the information, and instructs them to keep such information confidential.
RBR-TVBR observation: What this means is that the FCC review of this sorta kinda triopoly is moving forward. In our non-lawyerly opinion, this has been somewhat of a gray area, so some regulatory certainty would be welcome.
We have heard it said in the past that in order to be able to LMA it, you’d have to be able to own it. However, we’ve seen many situations where it would appear some sort of LMA was struck precisely because ownership was legally impossible – in fact, this is one of them. So it would appear that the ability to own is not weighed when the FCC reviews such an arrangement.
On the public interest side, allowing a weak station to come under the wing of a stronger operator in the market may be the only way to keep it on the air. When that is the case, you’d have to argue that allowing the LMA, or SSA, or JSA or whatever it is being called in a particular situation, is a good thing. You can say diversity is diminished, but if the station goes belly up, diversity AND program choices are diminished. Take your pick.
However, on the competitive side, being able to combine stations under the overall management of one owner may be good for that one owner. It may not be so good for the other owners in the market that are now going head to head with a strengthened station cluster with more resources and more to sell.
We’d be interested in some reader opinion on this – the space to comment is right down there below this article.