FCC Looks to Ban Some Shared Services Agreements

If it goes down, it could have a big impact on some TV station owners.

Owners such as Sinclair Broadcast Group would be forced to give up some properties it controls under a proposal by Federal Communications Commission Chairman Tom Wheeler, agency officials said.

Wheeler wants to ban, within a specified period, some shared-service arrangements that have let companies avoid a U.S. ban on owning more than one TV station in a local market, said two officials briefed on his plan. They asked not to be named because the proposal hasn’t been made public.

One official said companies including Sinclair, Lin Media and Nexstar Broadcasting Group Inc. would have two years to comply. The other said the duration was undetermined. Some arrangements may be allowed to remain, they said. Shannon Gilson, a spokesman for the FCC, declined to comment.

FCC restrictions could cost Sinclair “some or all” of the $154.2 million in revenue it generated from sharing arrangements in 2013, the broadcaster based in Hunt Valley, Maryland, said in a March 3 filing with the Securities and Exchange Commission. That would be much as 11 percent of Sinclair’s annual revenue.

It’s not fair to require companies to unwind sharing arrangements previously approved by the agency, Rebecca Hanson, a Sinclair senior vice president, said at a Feb. 24 meeting with FCC staff, according to a filing. Barry Faber, Sinclair’s general counsel, didn’t return a telephone call yesterday.

Stay tuned, this could have some major impact on the industry.

H/T Bloomberg