Small Market Consolidation

  • Small Market Consolidation
    Broadcasting & Cable reports that the FCC just issued a waiver for TV station duopolies in New Haven, CT and Asheville, NC. A duopoly is where one company owns two properties in a given media market, and are generally prohbited for TV stations by FCC rules. Waivers for the duopoloy rules can be granted in markets where there are more than eight owners or in cases where “one of the paired stations suffers either very low ratings, poor financial condition or inability to fetch a fair price from out-of-market buyers.”

    This waiver condition, however, is ignorant of how the poorer station comes to be in that situation. While one cause could be mismanagement, it can also be the result of anti-competetive practices on the part of other stations and companies in the market. This sort of situtation is very common with newspapers, where the owner of one paper may lower ad rates to such a point that they take a loss but also drive a competing paper out of business because they can’t compete nor afford to be in a loss-leading price war. Such tactics are also seen in radio–especially when a given owner has more than one leading station–and, of course, was pioneered in retail by Wal-Mart, which uses its economic might to afford losses in new stores in order to drive smaller competitors out of business. Of course, I’d have to do a little more research into these two markets and waivers to say for sure if it looks like such a situtation.

    These waivers come on the heels of the FCC granting Rupert Murdoch’s News Corp a second waiver in New York City last year, allowing the company to own two TV stations and a daily newspaper. The FCC is currently reviewing ownership rules under the auspices of a Media Ownership Working Group. As I expressed before, I’m suspicious of Powell’s objectives with this group, since he has gone on record as being very critical of ownership restrictions, believing that ownership does not affect diversity in broadcast.

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