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A $3.25 million station deal announced last week offers a surprisingly useful illustration of the peculiar state of broadcast television regulation.
Sinclair has agreed to acquire four stations from Howard Stirk Holdings that it already operates under a shared services agreement (SSA). If the FCC approves the deal, WGWG-TV Charleston, KHSV-TV Las Vegas, WGWW-TV Anniston and WSES-TV Tuscaloosa will go from separately owned stations Sinclair already helps operate to stations Sinclair simply owns outright.
Four modestly valued stations changing hands would ordinarily barely register against the industry's multibillion-dollar consolidation story. But this transaction points toward something larger. After decades in which broadcasters developed increasingly elaborate arrangements to capture some of the operational and economic benefits of stations they could not directly own, the FCC is dismantling some of the ownership restrictions that helped make those arrangements useful in the first place. The next consolidation wave may therefore look considerably different from traditional M&A: before broadcast groups buy one another, many may simply start buying more of the stations they already run.
How (Not To) Own A TV Station
Broadcast ownership has accumulated a uniquely dense collection of acronyms, each describing a slightly different way for separately licensed stations to share programming, sales or operations.
A local marketing agreement (LMA), often called a time-brokerage agreement, lets one broadcaster program portions of another station's schedule and sell the related advertising. A joint sales agreement (JSA) covers advertising sales. A shared services agreement (SSA) is broader, encompassing services such as news production, engineering, facilities, technical support and administration. The FCC defines SSAs broadly to include arrangements through which separately controlled stations provide or collaborate on station-related services.
Then there are the so-called sidecars — not an official FCC classification so much as industry shorthand for separately owned companies that hold station licenses while maintaining extensive contractual relationships with larger groups. Sinclair has long had such relationships with companies including Howard Stirk and Cunningham Broadcasting; Nexstar has similar arrangements with firms like Mission Broadcasting, White Knight and Vaughan Media.
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