The growth of joint-services agreements is occurring at a time of very rapid overall consolidation in the local broadcast industry. The last few months alone have seen the Tribune Company purchase most of Local TV’s stations, Gannett Company purchase Belo, Media General merge with New Young Broadcasting, and the behemoth Sinclair Broadcast Group purchase Fisher Communications. Industry executives have predicted that within five years or less, local broadcasting will be dominated by a three or four “super groups,” while smaller companies are swallowed up or go out of business.
Seeing double Or even triple. TV news outlets in 99 of the nation’s 210 television markets have some type of joint-services agreement under which they share resources, from reporters to video to entire programming lineups. (Danilo Yanich)
According to television news experts, such mergers and acquisitions can lead to more joint-services agreements via a self-perpetuating cycle: Acquiring new stations leads companies to take on debt. Debt, in turn, provides powerful incentive to cut costs in the newsroom. And joint-services agreements are tailor-made for that.
Media policy advocates fear that this cycle is reducing the number of voices among local broadcasters, which remain Americans’ leading source of local news. “Localism has suffered and the quality of our news and information has suffered,” says former FCC Commissioner Michael Copps about industry consolidation and the spread of joint-services agreements. “I don’t think we have the luxury of having another two or three years of dumbing down our civic dialogue, and expecting that the American people will be informed.”
On the other side of this debate are broadcasters, who argue—just as adamantly—that joint-services agreements have the opposite effect: improving both the quality and accessibility of local news. They note that the deals sometimes allow small stations without the capacity to produce their own local news to air news programming. During the recent recession, say broadcast industry groups, the agreements were sometimes lifelines for struggling stations. “We don’t see anything inherently bad about two stations sharing, for example, a helicopter,” says Dennis Wharton, a spokesman for the industry group National Association of Broadcasters (NAB). “Ultimately, if there’s a lessening of the standards viewers expect, they’ll be the final arbiters.”
In an address last February at the FCC Media Institute Luncheon, Ajit Pai, a current FCC commissioner, took a strong stance against the argument that stations should count these agreements toward media ownership limits in individual markets—a decision that would likely put an end to most joint-services agreements. “If the FCC effectively prohibits these agreements, fewer stations in small-town America will offer news programming, and they will invest less in newsgathering,” Pai said. “And the economics suggest that there likely will be fewer television stations, period.”
The NAB, meanwhile, contends that much of the opposition to joint-services agreements is driven by forces far less altruistic than media reformers concerned about diversity of ownership. Wharton, the group’s spokesman, says that paid TV companies such as cable and satellite TV providers have a major stake in the fight, and are seeking to weaken the viability of the broadcast industry. Paid TV giants, such as Time Warner, dish Network, and DirecTV, “want to get rid of competition that is free,” he says.
Broadcasters also argue that sharing resources saves jobs, although that case is harder to make. Jobs in TV news seem more tied to the overall economy than anything else. The number of jobs in local television news plummeted during the recession, but that number has sharply recovered recently. By 2012, according to Hofstra’s annual survey, local news set a record for full-time employment, with 27,653 jobs.
The inherent nature of the joint-services agreements, their critics say, is to reduce jobs. And now that the industry is booming again—with strong job growth and a rush of mergers and acquisitions—advocates argue that there is no longer any excuse to tolerate the agreements for reasons of economic necessity. And some of the agreements have indeed resulted in substantial job losses, according to news reports cited in studies by the University of Delaware: 68 jobs lost at the Hawaii stations; 27 jobs lost in an agreement in Idaho Falls, ID; 15 jobs lost in Providence, RI, for example.