An anonymous seller in the radio biz has come to RBR-TVBR with some concerning news about doing business in the marketplace with agencies of late. Feel free to comment and add to this, if you see this as a problem brewing, or not:
“There seems to be monopolistic antitrust violations taking place in media negotiations. For example agency negotiators are telling us big chunks of their budgets are being allocated as part of corporate upfront TV buys or some other package deals that violate all forms of competitive broadcast sales practices.. We can understand how this takes place when upfront network television and cable are negotiated. However, these practices are beginning to have major implications for other areas of the media industry. It means the big media guys, as a result of their upfront TV negotiations or whatever can command shares in other media segments far beyond their delivery. Frankly, these monopolistic packages are creating havoc for a lot of little media guys who work hard to serve the public good and to build their audiences.
Where is it said an upfront TV package would include local radio buys? For example, in one of these deals a radio network may be allocated a 50% share of an advertiser’s budget even though the network may only generate 25% of the target audience delivered by the medium. This results in their local competitors fighting over the crumbs left on the table—even though through hard work they may deliver the bulk of an advertisers target audience. Many stations and networks are unaware this is why they are receiving lower shares. It’s tough to compete with a thief when the government says it’s OK.
It’s a sneaky unethical and frankly should be an illegal way to do business. When I was at [XXXX] we had a strong network but monopolistic practices were never allowed. The government was very clear on this point and [XXXX] would immediately terminate a sales person if they used monopolistic techniques.
These monopolistic practices will force all media companies to continue to merge. How can anyone do business (particularly a local radio stations) if the big guy is allowed to unfairly take his business, through some monopolistic corporate upfront TV or whatever deal. How can the FCC approve and reapprove licenses for broadcast vehicles that conduct their business in this monopolistic manner. There is a simple solution, the FCC should contact the heads of the six major media silo’s to find out which media vehicles are using these monopolistic practices so the FCC can consider these practices when their licenses are up for renewal. If a person is carrying an illegal handgun we arrest them and send them to jail. What’s the difference between stealing with a gun or stealing with a monopoly technique? The monopoly generates a lot more money.