The Federal Communications Commission has approved two of the year's biggest TV station deals involving the sale of nearly 40 stations: Gannett's $1.5 billion purchase of Belo and Tribune's $2.73 billion purchase of Local TV.
Once Gannett's deal closes, probably as soon as Monday, the company will own 42 TV stations and be the fourth-largest owner of major network affiliates, reaching about a third of the nation's TV households. Earlier this week, the merger was approved by the Department of Justice, with the requirement that the combined company to sell KMOV—Belo's CBS affiliate in St. Louis—to preserve competition in the market.
The deal between Tribune and Local TV creates the largest TV group in the nation, operating 61 stations and reaching 50 million TV households.
A number of cable companies and groups filed petitions urging the FCC to block or place conditions on the mergers. In a handful of markets where the deal puts the companies beyond ownership limits, the groups plan to spin off stations to a third company and maintain some control of the TV stations through shared service agreements.
"Gannett and Tribune use shell companies, shady arrangements and accounting tricks to keep total control over broadcast licenses they can't hold in their names," said Craig Aaron, CEO of Free Press, who criticized the FCC for allowing "runaway media consolidation … It needs to fix its rules now," he added.
The FCC began to look at shared service agreements as part of its regular review of media ownership rules. But for now, there is no specific rule that counts shared service agreements toward ownership limits.
In the meantime, the FCC warned broadcasters that they shouldn't take approval of shared services agreements for granted and that it would continue to scrutinize such deals in the future.
"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," said Bill Lake, FCC's media bureau chief.