Deregulating TV Station Ownership Won’t Fix The Industry’s Problems — It’ll Make Them Worse

LocalProximity
Written By Tim Hanlon

As we anticipate a new Republican-led Federal Communications Commission (FCC) under the next federal administration, there’s growing talk of loosening the rules on local TV station ownership to allow further consolidation in the industry. Supporters argue that permitting TV broadcasters to own more stations will help these companies survive in a challenging media landscape, as they consolidate resources to compete against the digital giants eating into traditional ad revenues. But this belief rests on a shaky foundation. Increasing ownership limits and reducing regulations will do nothing to solve the industry’s existential issues; in fact, it will amplify the very weaknesses that threaten the future of local TV.

The radio industry’s experience with deregulation serves as a cautionary tale that local TV executives and policymakers would do well to heed. When the 1996 Telecommunications Act deregulated radio ownership, the FCC hoped it would invigorate local stations, allowing them to pool resources and weather a changing media environment. What actually happened was a cascade of mergers that created a smaller number of increasingly larger national conglomerates while gutting local news and content. The largest companies acquired vast numbers of stations, often at the expense of local diversity and original programming, cutting jobs and homogenizing content. Fast-forward to today, where the largest radio industry players now struggle with onerous (often bankruptcy-inducing) debt, softening ad revenues and declining relevance — clear indicators that consolidation and deregulation do not guarantee long-term stability.

The parallels for local TV are striking. In the same way that radio consolidation slashed local content, increased TV ownership limits will undoubtedly lead to widespread cost-cutting and reduced local programming, undermining one of the primary advantages local TV has over digital media. Instead of supporting communities with regionally relevant content, increasingly larger station groups will face pressure to maximize profitability through “economies of scale” — axing local news departments, hubbing stations’ operations, and adding less expensive syndicated programming. The result? Viewers lose access to diverse perspectives, and communities lose the local reporting they depend on for issues like weather emergencies, school board elections, and city council decisions.

Advertisers, too, will be negatively impacted by this shift. Marketers and their agencies turn to local TV precisely because it offers something digital advertising lacks: a way to authentically connect with communities in a more personal, relevant manner. As station groups merge and content becomes increasingly standardized, the unique local flavor that attracts advertisers will fade, making broadcast TV a less compelling option for businesses looking to build local relationships. Such consolidation will actually weaken TV stations' value to advertisers, as the appeal of local focus erodes under the weight of cost-cutting and nationalized content strategies.

Moreover, the adverse effect on journalism and local news reporting cannot be overstated. Local TV station news departments play a vital role in maintaining a well-informed citizenry, covering stories that may not attract national attention but profoundly affect residents' daily lives. When consolidation forces budgets to be slashed and newsrooms to be closed, these stories go untold, leaving viewers with fewer resources to stay informed. This has already happened in radio, where the shift from local to national programming has led to an overall reduction in community news coverage. For local TV, an industry already struggling to maintain news budgets, the increased consolidation will only accelerate the loss of local journalism, diminishing the industry’s civic role at a time when trusted information sources are needed most.

Proponents of deregulation argue that consolidation will enable stations to leverage economies of scale, streamline operations, and reinvest in innovative new offerings. But there’s little reason to believe this will actually happen, if current broadcast TV station group behavior is any indication. Instead of reinvesting savings into local journalism, broadcast groups have prioritized maximizing shareholder value and servicing the massive debt loads that come with consolidation, often at the expense of the local content communities rely on. Sinclair Broadcast Group’s recent consolidation of its Tulsa station’s newsroom (now hubbed out of its sister station in Oklahoma City) is a stark example.

If local TV truly wants to address its existential challenges, a deregulatory approach that encourages size and rewards scale is unlikely to provide the answers. The problems facing local broadcast television — declining ad revenues, MVPD cord-cutting/never-ing, CTV streaming — are structural; increased consolidation will not address these core issues, nor will it revive a legacy linear business model severely undercut by on-demand digital and streaming media. What the local TV industry needs is not more deregulation, but a strategic reinvention of how to better leverage and digitally translate its unique local market presence into its own competitive marketplace advantage.

Increased consolidation and deregulation will undoubtedly enrich a handful of large companies and private equity firms in the short term — but viewers, advertisers, and individual communities will ultimately pay the price. Local journalism will be sacrificed, community engagement will decline, and local TV’s distinctiveness will erode. Without regulations to ensure diversity and accountability, there’s a real risk in turning the local television landscape into a national media monoculture that offers little more than generic content and syndicated programming. In the end, the push for deregulation will likely do nothing more than hasten the industry’s decline, undermining the very elements that once made local TV an indispensable part of American communities.

Tim Hanlon

Tim Hanlon is the Founder & CEO of the Chicago-based Vertere Group, LLC – a boutique strategic consulting and advisory firm focused on helping today’s most forward-leaning media companies, brands, entrepreneurs, and investors benefit from rapidly changing technological advances in marketing, media and consumer communications.

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