Gannett’s TV deal for Belo worries media watchdogs
Gannett Co.’s proposed acquisition of Belo Corp. is the latest in a slew of deals in the television industry.
Last week, Media General acquired Young Broadcasting to create a company that will own 30 TV stations in 27 markets. In April, Sinclair Broadcast Group acquired Fisher Communications for $373 million.
Gannett’s $2.2-billion deal -- $1.5 billion in cash and the assumption of about $700 million in debt -- will give it 43 stations in markets reaching about one-third of the country. Gannett, already one of the larger owners of TV stations, will now become the biggest independent owner of stations that carry CBS and NBC content.
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There are many factors driving the consolidation in the broadcast industry. By owning more stations, a company has leverage to negotiate better deals with content suppliers and the pay-TV distributors that carry their signals.
Also, owning more than one station in the same market allows a broadcaster to spread expenses across multiple outlets and gives it more clout with local advertisers.
However, media critics fear that the continued consolidation means there will be a lack of diversity in content.
“We’ve seen time and again that media consolidation means fewer journalists and less diversity on the public airwaves,†said Craig Aaron, president of Free Press, a media watchdog. “This increasing concentration of ownership — coupled with covert consolidation that combines formerly competing newsrooms — is failing local communities.â€
The Gannett-Belo deal will require approval from the Federal Communications Commission. Gannett owns a newspaper in Louisville, Ky., where Belo owns a newspaper. FCC rules prohibit combined ownership of newspapers and televisions in most markets.
Some companies have waivers to own both newspapers and TV stations. Gannett owns a paper and a station in Phoenix but will now need another waiver because after this deal closes it will own Belo’s two TV stations there.
“We don’t need yet another media merger; we need strong ownership rules that protect and promote local journalism,†said Aaron.
ALSO:Gannett strikes deal to acquire Belo Corp.
Media General merges with Young Broadcasting
Follow Joe Flint on Twitter @JBFlint.
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