And the Winner is..Sinclair! (Once Again)
By a party-line 3-2 vote, the FCC eliminated a 77-year old rule requiring local broadcast stations to maintain a physical presence in or near the community that they serve. The decision to completely gut the Main Station Rule has sparked controversy because like many rulings under Ajit Pai, the Trump appointed FCC Chairman, the big winner is the far-right Sinclair Broadcast Group.
So, what impact does this decision have on the future of local TV?
The original intent of the Main Station Rule, adopted in 1940, was to ensure that local broadcast stations who use the public airwaves would serve the local communities and that residents could have a say in their local broadcast operations.
According to the FCC’s October 24, 2017 press release, the decision to eliminate the Main Studio Rule was based on the fact that the public can access information from the broadcasters online public file and that community residents can interact with the local station through email, social media and the phone. The Commission also stated that requiring broadcasters to maintain a main local studio was “outdated and unnecessarily burdensome.”
The dissenting Commissioners felt that without a true local presence in their community, the residents would not be properly served especially in times of disaster. Also, eliminating the Main Studio Rule would reduce the number of voices on the air and that media conglomerates like Sinclair would move resources away from under-served communities.
The Good and the Bad of the Decision
Technology has changed over the past 77 years and the FCC was correct to believe that the Main Studio Rule, as it stood, was outdated and burdensome. It is hoped that the savings generated by this decision will be directed to improved programming, upgraded equipment, a higher level of newsgathering, and other services that benefit consumers.
Sinclair, the largest stations group, will stand to benefit the most by consolidating its media operations. In anticipation of the Main Studio Rule being eliminated, they have already been experimenting with outsourced local news, with mixed results. Most worrisome however, is that Sinclair has been known to require its local stations to air far-right leaning stories, and at the extreme, Sinclair with roughly 72% reach has the potential to become a powerful and wide-reaching propaganda arm for the President.
The Wal-Mart Analogy
It wasn’t long ago that every town had a local general store, but as time progressed, larger stores, such as Sears, JC Penney, and Wal-Mart started to take root in these towns. Protests would abound when a Wal-Mart moved in, as people feared that their town would lose its character. What happened was something else, consumers found lower prices, greater selection, higher quality goods, and jobs. Over time, the stores were accepted into the community.
Today many large brick and mortar chains are under threat from online retailers, most prominently Amazon.com. Without having to spend money on physical infrastructure, online retailers can sell goods to consumers for lower prices 24 hours per day without the consumer having to leave their home. The American consumer has generally adapted to the new way of doing business and appreciates the convenience of the online. Yes, jobs have been lost and businesses have closed, but thus far the US economy had remained resilient and with unemployment at a low level, and inflation almost non-existent, change has been accepted.
What does the Wal-Mart analogy have to do with the FCC’s elimination of the Main Studio Rule?
If you think of a small town local station as the general store and the consolidated media organizations as a Wal-Mart, the analogy starts to make sense. With technological advances there is less need for local studios, and a greater need for higher quality, better produced content. If done right, the community will embrace the improvements. If a media organization left or right tries to be heavy-handed there will be backlash. Wal-Mart made efforts in their community outreach, and I would expect Sinclair and their competition to do the same if they intend to be successful.
Longer term however, change is on the horizon. Younger populations are not watching live local news in the ways that older generations are. Millennials source their news through social media and the web, which over time will make local broadcast stations obsolete.
One cannot overlook the evidence that President Trump and his chosen FCC Chairman are making decisions that favor the far-right Sinclair Broadcasting. Based on his negative view of the mainstream press, Trump is working hard to create a powerful counter-balance to the mainstream media. Thus far there has been little resistance to their efforts, which are at times heavy-handed and are not always in the best interest the American people.
In this case, the FCC headed by Mr. Pai, is correct to remove this antiquated Main Studio Rule. While I believe the decision is sound, I do not believe the intentions were. However, this decision is likely to improve the quality of local content and benefit the American people.
A 20-year veteran media executive, Rob Silvershein’s success in today’s competitive media environment is a direct result of his unique experience spanning traditional, emerging, and entrepreneurial media platforms.