Tuesday, April 01, 2014YOUNGSTOWN, Ohio – The Federal Communications Commission voted Monday to “close a loophole in its TV ownership rules,” the agency said – action that has direct ramifications for WKBN, WYTV and WYFX, the three commercial TV stations here jointly operated by LIN Media LLC.
The FCC, in a 3-2 vote along party lines with Democrats holding the majority, banned so-called Joint Sales Agreements, or JSAs, which enable one TV station in a market to sell advertising time on another station that it does not own. Such agreements circumvent FCC rules that prohibit joint ownership of TV stations in small and medium-sized markets.
In this market, WKBN and WYFX are owned by LIN but WYTV has a separate owner, essentially in name only, who has a shared-services agreement with WKBN. As a result, the former WYTV studio on Shady Run Road is empty and all of its operations are housed in WKBN’s headquarters, where it shares administrative, sales, engineering, production and news personnel as well as broadcast equipment.
“Parties to existing TV JSAs will have two years to come into compliance with the applicable local ownership limits,” the FCC said. “Waiver requests, considered on a case-by-case basis, must show that strict compliance with the rule is inconsistent with the public interest.”
The FCC also voted, as part of its 2014 review of media ownership rules, to ask for additional comment “on whether commercial television stations should be required to disclose shared-service agreements and how best to achieve disclosure.”
Advocates of joint-sales and shared services agreement argue these arrangements enable TV stations to cut costs and provide more local news coverage. The National Association of Broadcasters condemned the FCC’s actions in political terms, describing Monday’s actions as not in the public interest, “arbitrary and capricious.”
Said Dennis Wharton, NAB executive vice president of communications, in a prepared statement, “For a decade, Republican and Democratically-controlled FCCs have approved JSAs, which allow free and local TV stations to survive in a hyper-competitive world dominated by pay TV giants. That model is now declared illegal, based on the arguments of pay TV companies whose collaborative interconnect advertising sales practices make JSAs seem pale by comparison.”
The FCC ruling is expected to be appealed through the courts.
Sen. Jay Rockefeller, D-W.Va., who heads the Senate Commerce Committee, hailed the FCC’s action. “I thank the FCC for answering my call to rein in the misuse of broadcast television sharing agreements, which has threatened the integrity of the FCC’s media ownership rules,” Rockefeller said in a statement.
LIN Media LLC, the owner of WKBN/WYFX, announced March 21 (READ STORY) that it has entered into a merger agreement with Media General Inc.
LIN bought WKBN/WYFX in May 2012 from New Vision Television, which purchased the local stations in 2007. Two other entities previously operated the stations. WKBN-TV was founded by the Williamson family, whose patriarch, Warren P. Williamson Jr., established Youngstown’s first commercial radio station, WKBN-AM, which today is operated by Clear Channel Radio.
WYTV’s shared-services agreement with WKBN took effect in December 2008, following the TV station’s sale to a figurehead company aligned with New Vision.
MORE:
Local TV stations defeated in FCC rules on joint ad sales, retransmission fee talks
Copyright 2014 The Business Journal, Youngstown, Ohio.
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