The Slippery Slope
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The FCC approved Gray Television’s purchase of Red River Broadcast’s NBC affiliate KDLT Sioux Falls, despite the fact that Gray already owned ABC affiliate KSFY, in the same market.
While TV ownership groups look at this as a win and shows that the FCC might be letting groups by up more stations in a single market, others see it as a slippery slope.
Since Gray will be merging the two stations, you can expect that people will be losing their jobs.
One TV insider emailed FTVLive and brought up some good points:
This will be the first time the FCC has allowed a single company to own outright a duopoly of two of the four most popular stations in a market. I believe it will set a dangerous trend.
Yes, Sinclair and others have danced around that prohibition by setting up shell companies to own competing stations. This, however, is an approved outright purchase.
The reasoning is that Nextar's KELO controls more than half the television revenue and thus to be a sufficient competitor, an owner has to own more than one station. The fallacy of such school of thought is this: going forward Nexstar may decrease investment in KELO, shed market share and thus decrease revenue and no longer control such a large share of income.
In lobbying for approval Gray television promised to establish a news bureau in the capital of Pierre. That could involve sending an MMJ to Pierre at a cost of less than $50,000 a year.(salary, office, vehicle phone) Additionally they promised to buy a new weather radar system for the stations.
Really. That's all it takes?
Yes, there is more. Gray also promised to add 28 hours of news between the combined stations. Perhaps that simply means re-running existing newscasts in additional time periods or repositioning existing content fronted by a different anchor. (See the Charlottesville VA operation)
Bottom line. For the cost of adding an MMJ, buying a weather radar, repositioning some currently produced news content Gray essentially doubles their retransmission revenue and increases their ability too aggressively price their inventory.
Strikes me as a cheap trade-off. And pity the poor people of South Dakota who have even one fewer Independent News voice.
