FCC Approves Gannett/Belo, Tribune/Local TV Mergers

But Signals it May Take Close Look at Economics of Spin-offs, Sharing Agreements

As expected, the FCC's Media Bureau Friday approved the mergers of Gannett with Belo and Tribune with Local TV station groups, but with a pledge to give all such deals close, case-by-case public-interest inspection, and a caution that the FCC is not looking just at whether a deal does not violate its rules, but whether it is affirmatively in the public interest.

The FCC points out that it is also looking at "economic effects of, and incentives created by, a proposed transaction taken as a whole." That gives it room to deny spin-offs in deals involving sharing agreements, even if those do not technically violate ownership limits.

The merged Gannett/Belo will have to spin off KMOV St. Louis to an independent third party with which Gannett does not have a sharing agreements, but the other spin-offs are OK. Tribune and all its spin-offs, in the cases of both deals to comply with FCC ownership limits--were approved.

“In issuing these decisions, the Bureau stresses that Congress’ statutory command is that station transfers must serve the public interest, said "Media Bureau chief Bill Lake  in a statement. "We remind stations and interested parties that our public interest mandate includes giving careful attention, on a case-by-case basis, to the economic effects of a transaction and its consistency with the Commission’s policies under the Act taken as a whole, including our policies in favor of competition, diversity, and localism.”   

The FCC has yet to weigh in on the two other major deals before it, Sinclair/Allbritton and Media General/young Broadcasting, but the chairman appeared to be signaling they would be vetted under that case-by-case standard.

The commission spelled out its case for not simply signing off on deals that involved no technical violations in a couple of graphs (29 and 30) in the Gannett/Belo order, which it referred to in the Tribune order as well. The graphs advise the following:

"Public Interest Petitioners stress that the Act requires a finding that a transaction serves the public interest, not merely that the transaction does not violate our rules and shares particular factual elements with other transactions previously approved relating to our attribution and control analysis.  We find force to that contention.  The parties to this transaction have relied on an expectation, generated by prior decisions in the broadcast context, that conformity of individual elements of the transaction to our rules and to other transactions previously approved would warrant approval here. 

"At the same time, of course, Congress’ express statutory command is that license transfers must satisfy the “public interest, convenience, and necessity,” a standard that is always informed by regulatory standards, but which necessarily involves, as our licensing decisions have long noted, the use of a “case-by-case” approach.   Nor is the public-interest standard limited to the goals established by the core antitrust laws.   That is why applicants and interested parties should not forget that our public interest mandate encompasses giving careful attention to the economic effects of, and incentives created by, a proposed transaction taken as a whole and its consistency with the Commission’s policies under the Act, including our policies in favor of competition, diversity, and localism."

Despite that recognition of public interest petitioners' concerns, the decisions did not sit well with some of them.

"The FCC has ignored runaway media consolidation for too long," said Free Press president and CEO Craig Aaron. "There was no good reason to let that trend continue with these mega-mergers. These kinds of deals shutter newsrooms and silence competing viewpoints, harming local service, diversity and competition in media markets across the country."