FCC May Tighten Joint Sales Rules8/03/2004 09:23:00 AM Eastern
TV stations could soon find it harder to hire outside brokers to drum up ads.
Two stations in the same market would be considered commonly owned when they enter a joint sales agreement under a rule-tightening being considered by the Federal Communications Commission.
That means in markets with fewer than eight separately owned stations, joint sales agreements could effectively be banned because co-owned stations, or "duopolies," are forbidden in markets that small.
Under the typical joint sales agreement, a station owner authorizes a broker to sell some or all of its ad time in return for a fee or cut of the revenue. Last summer the FCC voted that radio joint sales agreements between same market stations would be considered duopolies. The change was less threatening to the radio industry, however, because FCC rules are more lenient toward multiple ownership of same-market radio stations.
The FCC said it has "tentatively concluded" that TV joint sales contracts allow the brokering station to have outsized influence over a small market’s ad prices, sale forces, and stations’ right to reject advertising.
The tighter rule could be implemented within six months, after the a round of public comment Because stations aren’t required to notify the FCC when joint sales agreements are signed, the FCC has no tally of how many are operating. More extensive local marketing agreements, which give the lead partner more say over programming and other core operations of the brokered station, have been considered to be duopolies since 1999.