Justice Department Backs FCC Plan to End TV Station Partnerships

NEW TODAY (The Deal) -- The Department of Justice of Friday provided some important support for a Federal Communications Commission plan to impose tough new restrictions on business partnerships that broadcasters have used to sidestep restrictions that bar a company from owning more than one TV station in a market.

In a filing with the FCC, the Justice Department said it favors restrictions on joint sales and shared services agreements between broadcasters.

FCC Chairman Tom Wheeler reportedly aims to address JSAs and SSAs at the commission's March 19 open meeting. Under JSAs, the larger station group helps the junior partner sell advertising time.

Under a SSA, the junior partner receives technical or back office support from the larger station. If approved, the new restrictions would put a damper on a strategy by TV station groups such as Sinclair Broadcast Group (SBGI), Nexstar Broadcasting Group, (NXST), Gray Television (GTN), LIN Television, Gannett, (GCI) and others to enter joint sales agreements or shared services agreements with other broadcasters in their markets as a way of being involved in operations of additional station in individual markets.

FCC rules currently prohibit ownership of two stations unless the market has at least eight stations held by different owners. That effectively bars TV duopolies in all but the largest markets. And in markets where duopolies are permitted, only one of the stations in the pair may be among the four top-rated.

Under Wheeler's proposed changes, any station owner that sells 15% or more of the advertising time in another owner's station through a JSA would have to count that station toward its tally of properties in that market. He also wants to forbid the creation of more JSAs that violate ownership rules and require existing ones to be terminated after two years.

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