The federal government has rules in place to limit local TV station ownership. But those rules could be relaxed — or revoked — under the Trump administration.
This comes as consolidation efforts are playing out across the country. The corporate owner of ABC 10 News in San Diego recently rejected a takeover bid by conservative-leaning Sinclair Broadcast Group. And the latest acquisition effort by Nexstar Media Group would give the company three San Diego TV stations.
KPBS’s Amita Sharma spoke with 10 News alum Lee Swanson and Point Loma Nazarene University School of Journalism Director Dean Nelson about how changes in TV station ownership rules might affect local news. The conversation has been edited for length and clarity.
Dean, in its refusal of Sinclair’s hostile takeover bid last month, 10 News owner EW Scripps Company said it’s open “to evaluating opportunities to enhance shareholder value.” How do you read that statement?
Nelson: There are a lot of people who think it’s a signal of what is called a poison pill. The poison pill is to keep that hostile takeover from happening. The shareholder price of the shares would go down so that the current shareholders would buy more, and they would increase their ownership, which would elevate the price of the company. It's a drastic way to go because it's risky in that shareholders invest in things so that they can make more money. If they keep Sinclair from buying the station, is it possible that they ultimately won't make as much money as they could? On the one hand, this is about journalism. But on the other hand, it's actually about capitalism. This is the way the economy and big corporations work in America.
I’ll add here that I asked a company spokeswoman this week if Scripps would entertain a higher offer than the $7 per share Sinclair initially offered. I was told, “We don’t engage in speculation.”
Lee, as you know, the largest TV station owner in the country — Nexstar Media Group — owns two San Diego stations KUSI and Fox 5. It’s now in the process of trying to acquire a third — KFMB, the local CBS affiliate — by buying rival media company Tegna. If the deal goes through, what would be the impact of one company owning three stations in the same market on local journalism?
Swanson: First of all, they're doing this because the audience is diminishing. And they want a larger piece of a smaller pie so that they can keep their revenue up. You can't fault them for that. But they're also cutting jobs, mostly in newsrooms. And in the case of Nexstar, they have a particular political point of view, and they want to express that through their stations. I don't care if it's liberal or conservative or what it might be. That's not the way journalism ought to work. And for them to have a plurality, at least, of the ownership of the market's stations, there aren't enough voices. You need more voices. You need as many voices as you can get to express the facts and opinions in controversial stories.
Dean, the Federal Communications Commission’s Local Television Rule limits a single entity’s ownership to two stations per market. The commission also has the 39% rule. Explain that rule. And what’s the point of both rules?
Nelson: The purpose is to address Lee's concern, which is just having dominant voices on media outlets. The 39% rule isn't about how many stations you can own. The 39% rule in the FCC is how much of the market do you actually influence. For any station, whether it's Sinclair or Nexstar or whomever, to have the voices that control maybe 39% or more of a particular market, is against FCC rules. Now, what the FCC is saying, and I think there's actually some truth to it, is that those FCC rules don't matter anymore, given the internet. I look at my students at Point Loma Nazarene University and they aren't getting their news from broadcast. They're getting their news from YouTube. They're getting it from Instagram. They're getting it from influencers that they're following. And so the FCC is saying, it's a shrinking market so why are we holding on to laws and regulations that were big and important when there were only three or four big broadcast outlets.
So do you see those rules changing?
Nelson: I don't know how soon, but I definitely see them changing.
Lee, Paramount is attempting a hostile takeover bid of Warner Bros. Discovery which owns CNN. Are the failed Sinclair takeover bid for 10 News’ owner EW Scripps and the right-leaning Nexstar’s acquisition of a third local TV station all part of the same story of what’s happening to journalism?
Swanson: I think so. As we talked about, the audience is shrinking, and so the revenues are down, and they're looking for ways to stay relevant. And the companies are buying up more and more and merging more and more. And we're not getting the television journalism we're accustomed to. And the viewers are going elsewhere. And the potential Paramount combination of owning CNN, Paramount already has CBS, and if those two are merged, then the gloves are off. The whole market, the whole situation changes. You have fewer journalists, There are just fewer people out there reporting. The more these organizations merge. And in terms of local news, the first place they look to cut when they buy a station is in the newsroom. And there are layoffs and firings, and they're trying to do the same amount of news with fewer people, and the quality suffers.
But for the journalism that remains after acquisitions like this, is it as objective as it would have been had the acquisition not taken place?
Swanson: Probably not. In the case of Nexstar or Sinclair, they have a particular bent, and they're trying to express that, or they are expressing that through their stations. There may be two sides to every story, but there's only one set of facts. And the fact is we have to get the facts out. And if they want to skew those facts, then viewers aren't getting a fair and objective presentation of the issue.
