The increased use of sharing agreements by media companies to form consolidated and “virtual” duopolys became controversial between 2009 and 2014, particularly agreements in which a company buys the facilities and assets of a television station but sells the license to an affiliated “shell” company, which then enters into agreements with the owner of the facilities to operate the broadcaster on its behalf. Activists argued that broadcasters have used these agreements as a loophole for FCC ownership regulations, that they reduce the number of local media in a market by aggregating or fully consolidating news programming, and that they allow station owners greater leverage in negotiating retransmission approval with local subscription TV providers. The FCC also issued a request for comment on policies to make other arrangements, such as shared service agreements. [2] [3] [93] The ban on JSA television had already been proposed in 2004, a year after the FCC decided to treat JSAs between radio stations as a duopoly. Despite this, broadcasters criticised the ban, accusing the Commission of using it as a step to encourage participation in an incentive spectrum auction to be held in 2015, saying the ban would put them at a disadvantage in negotiations over consent to retransmission with pay-TV providers. [94] [95] At the January 2014 public meeting, FCC President Tom Wheeler announced that he planned to take a closer look at the use of AML-type agreements and letterbox companies, explaining that “in some recent decisions, there were some indications that we were doing things in terms of what these shell companies were called, will be done differently.” Later this month, it was reported that the FCC had put on hold all ongoing acquisitions involving the use of shell companies so the commission could discuss changes to its policies. The Justice Department prevented Gannett from using an agreement with Sander Media to operate KMOV, a subsidiary of CBS, in St. Louis alongside its own NBC station KSDK and ordered Gannett to sell KMOV. Although Gannett planned to operate KMOV separately from KSDK, the ministry decided that the deal violated antitrust law because it would restrict competition for advertising sales. [72] Following the completion of the purchase of Belo, Meredith Corporation announced an agreement for the purchase of KMOV with KTVK and KASW. Since Meredith would have a duopoly between KTVK and its Phoenix CBS subsidiary, KPHO-TV, KASW would be sold to SagamoreHill Broadcasting and operated by Meredith as part of an LMA. [12] [61] [73] Following the FCC`s review of the new station-sharing agreements on October 23, 2014, Meredith would withdraw this plan and instead sell KASW to Nexstar Broadcasting Group, which would operate the station independently of KTVK and KPHO. [74] In response to criticism of the virtual duopoly and sharing agreements, the FCC began to consider possible changes to address these gaps.
In March 2013, the Commission presented for the first time a proposal to consider joint sales contracts as goods. [83] The FCC`s increased scrutiny of local marketing, joint services, and joint sales agreements has led to more drastic measures by broadcasters attempting to use them for acquisitions. In 2014, two broadcasters stated their intention to completely close the acquired stations and consolidate their multicast programming on existing stations, rather than trying to use sidecars and sharing agreements or sell them to other parties who would take full responsibility for their day-to-day operations. [98] [99] Am 26. In February 2016, Media General obtained an injunction against Gray for violating the SSA and JSA, demanding that Gray return control of WAGT to Media General and prohibiting Gray from selling WAGT as part of the incentive frequency auction. The company accused Gray of using the frequency auction and the station sale to illegitimately terminate the agreements, as they were to last until 2020 and would have to apply to any future owner of WAGT. Gray attempted to block the injunction by arguing that his actions were necessary to comply with the FCC`s ban on joint sale contracts, but was dismissed. [126] [127] Media General regained control of WAGT on March 7, 2016. [52] Regulatory agreements are based on the renewal date of the owner`s licence and can range from one to six years […].