Uncertainty in cross-ownership land


When FCC Chairman unveiled his cross-ownership proposal, it looked like good news for combos in the top 20 markets, but we also noted its potential problems for similar pairings in the vast majority of markets outside of the elite group. It turns out we weren’t the only ones with questions: Multimedia company Media General is also waiting "for the FCC to provide clarity." Media General owns television/newspaper combos in Columbus GA, Florence-Myrtle Beach SC, Panama City FL and Tri-Cities TN-VA. Media General said that regulatory uncertainty has dampened trading, and also says that license renewals at network-affiliated stations have been slowed due to an FCC backlog of indecency complaints aimed at the networks. It notes that it is in favor of completely eliminating cross-ownership restrictions in all markets, not just the top 20, but warns investors that even as it might improve its competitive position by assembling such a pair, so might one of its competitors with adverse local effects to Media General’s business.

The rub comes from Martin’s comments to reporters that even as the rules are relaxed in big markets, in smaller markets with generally fewer media voices, the current restrictions would remain on the books and when waiver applications are before the commission in those locales, the presumption would be against approval. He said that would be the case for the Tribune pairing in Hartford CT. At the same time, Martin said that such pairs were grandfathered back in 1975 when cross-ownership was banned completely, so since this was a relaxation of the rule, he expected there would be even more of a presumption of approval for grandfathering this time around.

Tribune is facing additional questions in Chicago, where it has a newspaper, a WGN-TV and a powerful clear channel (in the old-fashion maximum power sense of the phrase) AM station, WGN-AM.

RBR/TVBR observation: Watchdogs have been trying to bust up existing cross-owned combinations, and they aren’t just issuing press releases. The FCC has been peppered with petitions to deny just about every time an applicable television license has come up for renewal. So what is the presumption, against waivers or for grandfathering? Stay tuned. (Note: For a Legal view see Washington Business Report section)