Market shift leaves Nassau FM high and dry


When Nassau Broadcasting applied to acquire WWHK(FM), Concord NH from a subsidiary of Capitol Broadcasting Corporation, and set up a JSA during the interim period, the station was part of the Manchester NH Arbitron market. It soon became part of the newly-created Concord NH Arbitron market, where it is running cap problems. Nassau wanted the sale to go through based on the original market situation, and wanted to continue the JSA until a final decision was handed down on that matter. It lost its case once and it is now on appeal. Part of Nassau’s argument was that it should not be penalized for a change in a third party’s market definition. It also said it would lose benefit of the JSA with Capitol, and Capitol would suddenly have to start cold in the market with a standalone station and no established relationships with the advertiser community.

The FCC explained that there is a two-year rule on market definition changes, but that it only prevents a broadcaster from benefitting from such a change, which it may well have lobbied for with the appropriate third parties (BIA and Arbitron). It doesn’t work the other way, to the oversized broadcaster’s advantage (FCC also noted that Nassau was aware that the change in market definition was on the way). It further saw no public benefit to creating an oversized cluster in Concord, or to overlooking its attribution rule which counts the JSA’d station as if it were owned for cap purposes. It further noted that there was no merit to the contention that the business of WWHK and that of the two entities involved with it would suffer, calling it purely theoretical. The companies were ordered to take all steps necessary to come into compliance with FCC rules.

RBR/TVBR observation: Are these parties really arguing that one cannot operate a standalone FM profitably? Take that argument to its logical conclusion and it seems you’re left with one of two courses: brushing aside all local ownership caps by pretending that radio stations are competing not with each other but with all other media; or reverting to a much lower local ownership cap so that a standalone never has to go up against a market-dominant cluster.

We also are starting to wonder if the FCC is ever going to apply this stringent attribution test to television LMAs, JSAs, SSAs, TBAs and what have you. There is a cottage industry in de facto television duopolies out there that may become highly endangered the FCC gets such a notion.