FCC May Ban Or Limit Joint TV Ad Sales Agreements

The Federal Communications Commission is strongly considering a plan that would ban or limit joint advertising sales agreements at TV stations.

Currently, a strong TV station in a market can operate a weaker outlet in a joint sales agreement (JSA), in which  two stations are sold together to advertisers -- as well as jointly making retransmission deals with TV providers.

The new rule proposed will require the controlling station in a JSA to attribute the ownership if the dominant station sells 15% or more of the advertising time of another station in the same market.

Many TV providers, such as cable operators, applaud the move -- especially because JSA deals have resulted in higher retransmission deals. In response to the move -- pushed by FCC Chairman Tom Wheeler -- Charter Communications said: "The chief factor in rising cable rates for consumers is the increasing cost of programming. Broadcasters jointly negotiating retransmission consent agreements have contributed not only to increased rates for consumers but also the number and severity of programming blackouts. “

The new rule also would prohibit the top two of four stations in a market from jointly negotiating retransmission consent with another station.

Gordon Smith, president/chief executive officer of the National Association of Broadcasters, stated: “Two industries would benefit from today's proposal: Big cable companies who want less competition for advertising in local markets, and wireless companies who support punitive FCC actions that drive more TV stations into spectrum auctions."

A vote on the new rule is expected on March 31.



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