FCC Eliminates UHF Ownership Discount

[The Frog 392]

Federal regulators tightened limits on owning television stations by eliminating the practice of only counting part of some stations’ audience, a move opposed by broadcasters including 21st Century Fox Inc. and Sinclair Broadcast Group Inc.

 

The Federal Communications Commission in a 3-to-2 Democratic-led party-line vote on Wednesday abolished the 30-year-old UHF discount. Under the eliminated discount, the agency counted only half of households in a TV station’s local area, when judging ownership against the limit of reaching 39 percent of U.S. TV households.

 

Groups that exceed the limit as a result of the change needn’t sell stations, but must comply in future transactions, meaning future deals could result in sales to conform with the regulation. Companies over the limit without the discount include Tribune Media Co., Ion Media Networks Inc. and Univision Communications Inc., the FCC said.

 

http://www.bloomberg.com/news/articles/2016-09-07/regulators-tighten-tv-station-ownership-curb-by-cutting-discount

[IndyNewsOpens 83]

Get ready for some station sales, is all I have to say.

[A3N 996]

Get ready for some station sales, is all I have to say.

Those over the cap will be grand-fathered in. However, it's the prospects of acquiring new stations for those over the cap that will be hampered.

[IndyNewsOpens 83]

Those over the cap will be grand-fathered in. However, it's the prospects of acquiring new stations for those over the cap that will be hampered.

 

Exactly. Some of these companies are big accquirrers (I cannot think of a better word) so that's why I said that.

[ColumbusNewsFan 217]

So the big question after this is who is under the cap as of today?

[NEOMatrix 1295]

Raycom and Gray are definitely under the cap. I think that Scripps might be, too.

[Thundershock MN 169]

So the big question after this is who is under the cap as of today?

If memory serves me correct Ion, Univision and Tribune were the only groups over the cap with the UHF Discount. They will be grandfathered at their current limit(s). Everyone else was/is under the cap (even without the UHF discount) although a few of them might be butting up to the cap now.

[NowBergen 485]

If memory serves me correct Ion, Univision and Tribune were the only groups over the cap with the UHF Discount. They will be grandfathered at their current limit(s). Everyone else was/is under the cap (even without the UHF discount) although a few of them might be butting up to the cap now.

 

Ion as well.

[CircleSeven 1944]

Full FCC order.

 

Wouldn't be surprised if the big station groups try to lobby to raise that cap..

 

Sinclair is one of them. From their Q2 results call last month:

“We’re not optimistic about a change from the FCC,” said COO David B. Amy during Sinclair’s 2Q earnings teleconference with industry analysts earlier today.

 

“We have been ... focused on ... Congress," he said. "We were successful last year in getting JSA relief, and that’s where we’re spending a lot of our time, surgically going after relief. Specifically, our next target is the [national ownership] cap."

 

CEO David Smith weighed in, saying: “We’ve spent a lot of time with key members of the House and … the Senate, both parties, right at the top of the echelon, and I can say with some degree of comfort that each time we meet with them their typical response is we need to fix this, this is obviously a mistake, tell us what you want us to do and how can we help you.

 

“There is a broad sense that the broadcasting industry is grossly over-regulated, and the rules need to be thrown aside. So I think once the election’s over, regardless of who’s in office, we’re going to go back at it, and I think there’s a chance next year you may see something happen.”

[Rusty Muck 4159]

The UHF discount rule was rendered obsolete with the 2009 digital switchover. Why it wasn't drastically revised or scrapped back then is a head-scratcher to me.

[elfuego35 89]

Full FCC order.

 

Wouldn't be surprised if the big station groups try to lobby to raise that cap..

 

Sinclair is one of them. From their Q2 results call last month:

 

Yea, 'cause all we need is an epic collapse of Broadcast TV because 1-2 ownership groups owns 70% of the stations.

 

Does Sinclair see what happened to Cumulus and iHeartMedia once the FCC deregulated radio ownership limits? Those companies are able to own hundreds of stations... but the companies are on the verge of bankruptcy because of their high debt loads related to the purchase of said amount of stations.

[Samantha 2876]

Yea, 'cause all we need is an epic collapse of Broadcast TV because 1-2 ownership groups owns 70% of the stations.

 

Does Sinclair see what happened to Cumulus and iHeartMedia once the FCC deregulated radio ownership limits? Those companies are able to own hundreds of stations... but the companies are on the verge of bankruptcy because of their high debt loads related to the purchase of said amount of stations.

 

And that could be some of the more active buyers of recent years, like SBG, down the line.

[mardek1995 200]

I still hold the argument that if they wanted to do that, they should've done so by 2009-2010, not now! Now they shouldn't grandfather anything over the cap!

[Rusty Muck 4159]

Does Sinclair see what happened to Cumulus and iHeartMedia once the FCC deregulated radio ownership limits? Those companies are able to own hundreds of stations... but the companies are on the verge of bankruptcy because of their high debt loads related to the purchase of said amount of stations.

Until the private equity firms that control Cumulus finally forced him out, Lew Dickey was lobbying for the FCC to remove any remaining market caps in the radio industry (rumors abounded at the time that Dickey wanted to buy CBS Radio, which was otherwise impossible because of the market percentage caps).

 

Lew Dickey makes Perry Sook look conservative and pensive by comparison.

 

Meanwhile, iHeartMedia is hanging on by dumb luck and favorable bankruptcy judges in San Antonio. They claim to be this big digital streaming success story that can hold lavish concerts and award shows multiple times a year, but it's a house of cards that's $22B in debt.

[CircleSeven 1944]

Let's not forget the fact that Sinclair had every intention to use this outdated loophole to buy even more stations.

 

This is what they said three years ago, at the height of the M&A craze:

Smith suggested Sinclair may not be done acquiring. He said the group still has

room under the ownership cap because the FCC counts a UHF station as a half.

"I think we can do a lot more, probably," he said. "We're at

18-20% the way the FCC calculates the number. We can double, theoretically, in

size and still not be at the 39% number."

 

A few months later, the FCC proposed to get rid of the discount.

[Eat News 4738]

Yea, 'cause all we need is an epic collapse of Broadcast TV because 1-2 ownership groups owns 70% of the stations.

 

Does Sinclair see what happened to Cumulus and iHeartMedia once the FCC deregulated radio ownership limits? Those companies are able to own hundreds of stations... but the companies are on the verge of bankruptcy because of their high debt loads related to the purchase of said amount of stations.

 

You can bet Byron Allen and friends are just waiting to grab up some bankrupt TV stations in the upcoming TV/ Radio Crash. it's gonna happen.....just wait....

[atlnews2 557]

You can bet Byron Allen and friends are just waiting to grab up some bankrupt TV stations in the upcoming TV/ Radio Crash. it's gonna happen.....just wait....

 

why Byron Allen ?

[Eat News 4738]

why Byron Allen ?

 

Why not?

[DirtyHarry 718]

http://www.bloomberg.com/news/articles/2016-09-07/regulators-tighten-tv-station-ownership-curb-by-cutting-discount

This is one of the rare times I agree with the Democrat majority on the FCC, however not all UHF's are created equal. A UHF with 200 kw is not the same as one with 1,000 kilowatts.

 

What is going to happen is more stations will get paired up and more bandwidth will be cleared out. A better way to do it would be to count the Big Four affiliates at the full amount, and all the independents and everything else at the half amount.

[CircleSeven 1944]

So look what's in the agenda for this month's FCC meeting:

Reinstating the UHF Discount – The Commission will consider an Order on Reconsideration to

reinstate the UHF discount used to calculate compliance with the national television audience

reach cap. (MB Docket No. 13-236)

And here's the fact sheet.

 

And here's what Pai had to say about the discount in his blog post:

7. UHF Discount. — Finally, we'll consider whether to restore the so-called Ultra-High Frequency, or UHF discount, which is related to the Commission's national television ownership cap. Last September, the FCC voted to eliminate the discount on a party-line vote. That decision has been challenged in the U.S. Court of Appeals for the D.C. Circuit. In my view, the FCC is likely to lose that litigation because it went about eliminating the UHF discount in the wrong way. So I'm proposing that we hit the reset button, returning the rule to the way it was up until last fall. And then we'll launch a comprehensive review of the national ownership cap, including the UHF discount, later this year.

So this is the same Ajit Pai who said that he wants to take the "weedwacker" and get rid of all the old outdated rules like the newspaper-broadcast crossownership rule. But he wants to reinstate an outdated rule that just nearly as old as the NBCO. That's pretty hypocritical.

 

But he also said that he will re-evaluate the national ownership cap later this year. And I stated this before, that they didn't need to bring back the discount. Let them lobby to raise the ownership cap. If they raise the cap, there's no need for the discount. And any changes to the cap has to be approved by both houses of Congress.

 

The democratic-led FCC gotten rid of it last year because it wasn't needed anymore. The UHF signals are far more superior than the VHF in the digital world. The only reason Pai wants to bring back this outdated loophole, is because it would open up the flood gates for more M&As. Who is getting tired of seeing the Heathens of Hunt Valley and Nexstar gobbling up everything but the kitchen sink? It's like what they both have right now is not enough. Insane.

[NowBergen 485]

The UHF discount has been obsolete for years between digital broadcasting and high penetration of cable/satelitte. There seems no other reason to re-instate it other than to enrich the already rich like David Smith and Perry Sook. That seems to be the goal since January - further enrich the top 1%. the FCC should be encouraging diverse ownership, not limiting it.

[TheOneManHerd 553]

The UHF discount has been obsolete for years between digital broadcasting and high penetration of cable/satelitte. There seems no other reason to re-instate it other than to enrich the already rich like David Smith and Perry Sook. That seems to be the goal since January - further enrich the top 1%. the FCC should be encouraging diverse ownership, not limiting it.

To be honest, I'd be perfectly fine with consolidation if the surviving companies were well run. But, of course, it's not.

 

To use another industry as an analogy; no one was too broken up when USAir was bought out by American; but imagine if it was cut-rate Spirit that bought them. Travelers would start worrying if the legacy carriers, already lagging in the service department, started getting gobbled up by carriers that charged $20 for carry-ons and provided little to no legroom. That's what's happening in local television. It's not the Lufthansas and Singapores of the industry gobbling up everything, it's the Spirits and Ryanairs.

[Eat News 4738]

FCC should be encouraging diverse ownership, not limiting it.

 

"Diverse ownership" needs to step up and start buying.

There are plenty of stations available with ownership opportunities for anyone who wants to invest.

 

There are rules....

No terrorist ownership...no commies...but otherwise buy all the stations you want.

 

Everybody else is buying.

[Rusty Muck 4159]

Who is getting tired of seeing the Heathens of Hunt Valley and Nexstar gobbling up everything but the kitchen sink? It's like what they both have right now is not enough. Insane.

Certainly not any and all Republicans. They just want a Putin-like iron fist on the news and a suppression of dissent.

 

Altji Paij is a brain-dead Republican hack who is a lapdog for the Smith clan. Who cares about hypocrisy when he can help pad SBG's coffers?

[GoldenShine9 1509]

Deep down inside, Sinclair probably wants to buy every company and own the entire broadcast airwaves.