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Shared service agreement issue not black and white

Optimized-ResourceSharing (2)In a struggling industry, one of the crutches some television stations have used to remain afloat has been the shared service agreement, where one or more stations in the same market share management, advertising services, and editorial or office space. Late last week, the Justice Department made a filing with the FCC calling for tighter restrictions on these agreements.

The filing comes less than a month after watchdog groups, such as Free Press, Public Knowledge, the United Church of Christ Office of Communication and the Institute for Public Representation, lobbied the FCC to crack down on agreements where stations share management, or where one of the stations sells 15 percent or more of the advertising time of the other, reported The proposal would also ban situations in which stations use the same facilities, one station negotiates retransmission for the other, and one station provides the majority of the news or revenue for both stations.

Generally, a larger station will pick up operations for a smaller, struggling station within a given market. reported that the FCC could possibly apply ownership rules, which would make it so that two stations could not be commonly owned. The LA Times’ Joe Flint wrote:

“Such a move would likely ground the practice to a halt. In many markets, FCC rules already limit a company from owning more than one or two stations. If partnerships counted against ownership caps, it could have major ramifications as previous arrangements likely would not be grandfathered.”

Bob Papper, industry vet and emeritus distinguished professor of journalism at Hofstra University, said he’s torn on the issue. “You’ve got consumer groups on the one hand saying this is terrible because we’re eliminating newsrooms and eliminating editorial voice, and you have industry on the other side saying this is saving newsrooms,” he said. But it’s not that simple.

In some cases, there are a number of combinations where one station operates one or two stations that never ran news in the first place. This means that the proposed sharing agreements would actually add new outlets, Papper explained. “If the new combined news operations added people and did a good job, then the community is probably ahead,” he said. On the other hand, he noted, there have no doubt been cases where a viable newsroom was shut down in order to make more money.

“I worry about blanket rules, I guess, because the world just tends not to be that simple. And so what do I think the FCC should do? I think what they have done, which is basically nothing, is indefensible,” he said. “I mean, they have sat on the sidelines and watched this all happen for years, and there hasn’t been a peep out of them.” If the FCC cracks down and weak news operations become casualties, it’s a disservice to the community. Papper believes the best way to approach it is on a case-by-case basis, where each sharing agreement would be evaluated on its benefits to the community and to each station’s viability as a news resource.

The future of shared service agreements between stations is unclear. But what is clear is that the issue needs to be weighed and rules put into place that are neither too restrictive nor too relaxed. “The problem is they’ve [FCC] done nothing. And there is some tendency for pendulums to move from one radical position to another,” Papper said. “The pendulum has been no regulation and no direction. If they swing to the other direction, we’re going to end up with minimal logic.”



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