Thursday’s unanimous ruling by the U.S. Supreme Court upholding the FCC’s 2017 changes to ownership rules could allow more consolidation within local TV markets.
The portion of the rule change that allows cross-ownership of newspapers and broadcast outlets received a lot of press, but the provision that’s more likely to impact local TV markets is the elimination of the “eight voices” rule and a return of a process to allow common ownership of two top-four TV stations.
The “eight voices” requirement prohibits transactions if they would leave a TV market with fewer than eight owners of full-power TV stations, including non-commercial stations. However, failing station waivers had already provided a workaround to the rule.
The “top four” rule says that a company that owns one top-four station cannot buy a second top-four station in the market. Companies have been able to work around that rule by moving affiliations to subchannels or low-power stations, which are not covered by ownership rules.
The FCC’s 2017 rules change laid out a process for groups to seek an exception to the top-four rule. As regular readers may recall, Gray TV’s Sioux Falls operation was the only one to ever get approval to merge two top-four stations before an appeals court threw out the FCC’s rule change in 2019.
(Jessica Rosenworcel, who is now the FCC’s Acting Chairwoman, had spoken out against the decision to allow the Sioux Falls combination.)
Fletcher Heald & Hildreth’s CommLawBlog explains that the Supreme Court ruling does not immediately restore the 2017 rule changes, but that they may take effect soon.
One pending deal that could benefit from the court ruling is Gray TV’s proposed acquisition of some Quincy Media stations, since Gray had been seeking failing station waivers to buy CW affiliate KDLH/3.1 (Duluth) as well as stations in the Fort Wayne and South Bend markets. The waivers may no longer be necessary once the “eight voices” rule is eliminated.
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