TV industry awaits commission's Aug. 6 vote on eliminating cap on the number of TV stations a single entity can own FCC Poised to Hand Broadcasters Long-Sought Win in Abolishing Station Ownership Cap as Brendan Carr Probes Tension Between TV Groups and Platforms 2 hours ago LISTEN: Reba McEntire Revels in 50 Years of Making Music and Season 3 of NBC’s ‘Happy’s Place’ 22 hours ago LISTEN: ‘Scary Movie’ Gets a Second Wind in PVOD With Extended Director’s Cut 2 days ago Broadcast TV station owners have been stuck in media’s wilderness for most of the past two decades or so as the internet and streaming have defined the state of the art in television. But this year, independent broadcast TV station owners are being heard as they haven’t in years by crusading Federal Communications Commission chairman Brendan Carr, who has probed into areas of long-festering aggravation for station owners.
Carr is poised to bring broadcasters a long-sought victory by removing the “station cap,” or the FCC regulation that limits the number of U.S. TV stations that a single entity can own. The FCC is set to vote Aug.
6 on whether to eliminate the restriction, a regulatory principle that was first enacted for radio stations in 1941. Related Stories FrightFest Reveals Lineup, Sets Abner Pastoll’s ‘Nervous’ as Opening Film (EXCLUSIVE) 'Terrifier' Star David Howard Thornton Joins 'Behind the Mask II: The Return of Leslie Vernon' (EXCLUSIVE) Carr is also promising to push the commission’s agenda further into tensions around sports rights and the spread of major leagues and big-time teams to subscription-based streaming platforms a la Amazon Prime Video and Apple TV. Broadcasters and some in Congress see this as a violation of the letter of the law as spelled out in the Sports Broadcasting Act.
That’s the 1961 legislation that provides an antitrust exemption to the team owners in the NFL, NBA, Major League Baseball et al. to band together and negotiate media rights deals as a unit. Popular on Variety There’s industry speculation that Carr is paying close attention to broadcast TV issues because independent Big Four affiliate station owners can be allies in his high-profile regulatory jousts with Disney (owner of ABC) and Comcast (owner of NBC), among other media heavyweights.
Front and center for broadcasters is the FCC’s national station ownership cap. The commission is expected to vote on Aug. 6 to eliminate the restriction entirely, something broadcast station owners have sought for years.
The cap’s parameters have been adjusted numerous times over the past 85 years. In the mid-1990s the national limit was 12 stations total. Today, Nexstar owns more than 200 and Sinclair Broadcast Group is pushing 180.
Since 2012, the cap has been set at a total reach of 39% of U.S. TV households — but with a big caveat that allows companies like Nexstar and Sinclair significant wiggle room. The station cap, as it stands today, is a pillar of the lawsuit that eight state attorneys general filed to block the Nexstar-Tegna merger on antitrust grounds — and won a court-ordered injunction freezing the companies’ integration .
The station cap has stood for decades as an media ownership restriction rooted in First Amendment principles of fostering a diversity of voices and opinions on America’s airwaves. For a century, media law and regulatory policy has followed the gospel that this is best accomplished in a free-market environment by having a broad range of owners, to ensure that one company can’t dominate the airwaves on a national or near-national basis. The idea of localism, or the concept that local station ownership and management naturally aligns its interests with community mores and values, has been challenged over the past 30 years as TV and radio station ownership has steadily compressed into fewer hands.
At present, the FCC estimates there are about 1,400 commercial TV stations operating across the U.S., plus another 400 public TV and educational stations. Carr declined an interview request from Variety but he did address the cap issue on July 22 at an FCC press conference, saying it was an effort to give local stations “a fighting chance” in a changing market. “The national programmers — Comcast, Disney, Fox, Paramount — in a lot of ways I think a lot of them have amassed a tremendous amount of power over the last decade-plus.
I think things are out of balance and one of the reasons we’re doing this is to help bring balance back to the broadcast airwaves,” Carr said. He asserted that the cap was originally designed to protect local station owners from the market power of the Big Three (and then Big Four) networks, by putting limits on their ability to amass O&O stations. But these days, broadcast TV distribution is less important to Big Four owners, and that shift has had the reverse effect of making the cap a burden for the independent owners that it was designed to serve.
“The cap originally was it was designed to constrain the power of the national programmers. We didn’t want them to combine significant scale in the programming side with significant scale in the TV side and so you limited it,” Carr said. “What’s happened though is that the cap is no longer constraining the power of the national programmers but instead holding back locals.
The reason for that part is because the national programmers don’t rely in the same way anymore on ownership of TV stations to get their power. Instead, they go directly to consumers in ways that [are] unconstrained by any percentage limitation,” he said. “They have their own streaming services that can reach 100% of the population, their own apps that can reach 100% of the population.
They negotiate directly with the national virtual cable companies like YouTube TV. So now the national programmers have clear paths to 100% of the regulant market, but the ones that are supposed to benefit from 39% constraint are the ones still stuck with it. Now is the right time to move forward so we can give local broadcast TV stations a fighting chance of scaling up and competing and it has the knock-on benefit I think to bring some additional balance back to the broadcast airwaves.” Ending the ownership cap has been a long-stated policy goal of the National Association of Broadcasters , which represents most of the largest TV station owners in the U.S.
The NAB and other industry organizations say rules that govern how many TV stations a company can own in the U.S. — as well as limits on the ownership of multiple stations in a single market — are wildly outmoded at a time when broadcasters compete for viewers and advertising dollars with global giants such as Netflix, Google, Meta, Amazon, Apple and TikTok. “These FCC restrictions that were written for a time when broadcasters only competed against other broadcasters for advertising dollars, for audience, for programming rights.
They are outdated and they artificially impede our ability to compete,” says Curtis LeGeyt , president and CEO of NAB. “When you think about Netflix, Amazon, Google — these are global behemoths, not just with 100% national reach, but global reach. Yet, broadcasters are the only form of media with restrictions in place, preventing our ability to reach certain households.
So, we believe those rules are drastically outdated.” LeGeyt, a copyright and First Amendment attorney who worked on staff for Democratic Senator Patrick Leahy before joining NAB in 2011, asserts that local broadcast TV station newsrooms are essentially the last bastions of locally oriented newsgathering. Local newspapers and magazines have been particularly decimated by the cultural shift to online and social platforms. But running TV newsrooms comes at a high cost, starting with the labor of journalists and production staff as well as technology and equipment.
Broadcast owners and the NAB have argued for years that they need the benefit of having significant national scale to pay for local and regional journalism in...
