Newsflash: More Media Consolidation On the Way… In a Sneaky Way

That’s the essential proclamation of a short story at in the wake of Bush signing into law the ominbus budget bill containing the “compromise” 39% TV ownership cap (that neatly lets CBS and FOX slip by with their previously-illegal number of stations). Well, sort of…. without the ‘sneaky part.’

But the story does reveal one little fact about the omniubs bill that so far I hadn’t seen covered elsewhere:

“[CBS and FOX] also will be protected under a safe harbor provision if they make an acquisition that leads them to exceed the 39% cap. The new rules give companies two years, rather than one, to divest stations to comply with the ownership limit. In addition, News Corp. and Viacom could receive an FCC waiver giving them an additional year to sell assets.”

Now, that’s a bit more than just raising the ownership cap, but a little less obvious. This little maneuver gives FOX and CBS (and the other networks) some breathing room to acquire more stations and strategize their next move — like lobbying Congress to raise the limit again in a year or so when the media ownership debate has blown over. It also allows them to buy up stations in larger and more valuable markets and then sell off less profitable ones in smaller markets to make up the difference, bumping over and under the 39% mark like a commuter negotiating the speed limit.

Thus, beyond letting CBS and FOX keep the stations they acquired mostly illegally, the new rule gives them and the other networks much more room to swap stations like baseball cards. More sales and purchases leads to more consolidation, and also leads to a quick decline in things like news quality as jobs get slashed at every turn to eek out a dollar more profit in the trade, or pay the freight for the inflated market prices that are likely to happen in a feverish trading frenzy.

So there’s yet another reason why the 39% compromise wasn’t a compromise at all. Congress might as well have let the FCC keep the new 45% limit it wanted, since the media monopolists can hit that limit and stay there for two years anyway… which is like an eternity in today’s media market full of perpetual mergers, acquisitions and spin offs.