Small-market and lower-rated TV stations could be forced to cut news or even go out of business if the Federal Communications Commission makes it harder for them to hire outside brokers to sell ads, the National Association of Broadcasters told regulators Wednesday.
The NAB’s warning was included in the group’s comments on an FCC proposal to consider two stations in the same market commonly owned when they enter a joint sales agreement.
The change would mean that 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 another station in the market to sell some or all of its ad time in return for a fee or cut of the revenue. 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.
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.