Regular readers know that media history is a regular part of this column. Today, let’s start in 1970, regardless of whether you were around or not. I was a teenager navigating high school but had already decided that I wanted a career in media. And it worked out!
The reason for choosing 1970 was a law passed by Congress and signed by the President that year called the Newspaper Preservation Act (Public Law 91-353). It’s a short read, but if you think concern about newspapers going out of business is an issue today, it was also an issue 50+ years ago.
The Newspaper Preservation Act declared that antitrust law didn’t apply to joint operating agreements (JOA) among newspapers in the same market, assuming one paper was doing well financially and the other was “failing.” Prior deals were now exempt from antitrust, and new ones could be entered into with the approval of the Attorney General. Why the NPA? The thought was to preserve multiple print editorial “voices” in local journalism. The law did not exempt things like predatory pricing, something I doubt any newspaper could pull off today.
History Repeats Itself: From Newspapers to Local TV
Yogi Berra once said, “It’s tough to make predictions, especially about the future.”
In 1970, newspapers were doing OK, still making money from subscriptions, display advertising, and want ads (remember those?). Many big markets had two papers, and perhaps one was “failing.” Who could have accurately predicted where the newspaper business would be in 2026?
Now fast forward to a different medium having problems in 2026: local television. The FCC’s Report and Order about what is known as the National Television Multiple Ownership Rule was approved last week, effectively eliminating the ownership cap for local TV.
Prior to this change, the national cap was 39% national aggregate reach, so DMAs like New York and Los Angeles counted far more toward the cap than Bowling Green, Kentucky.
Ownership Caps, the UHF Discount, and the 1970 Parallel
When I started in the broadcast business, one entity could own up to 7 AM, 7 FM, and 7 TV stations; however, to own seven TV stations, two had to be UHF. Analog UHF signals were considered inferior to analog VHF (channels 2-13), which was generally true.
When the cap was changed to a percentage, a “UHF discount” was included, counting UHF stations at 50%. In other words, the 39% national cap could be as high as 78% (!) if every station owned by a group was UHF. This was despite the change to digital TV, which made the UHF handicap meaningless.
The parallels to the 1970 Newspaper Preservation Act jump out, except that the FCC has the power to act unilaterally without the need for Congressional action (the way the FCC reads it). If you want proof of local TV’s current situation, read the comments submitted in January from a combination of the four major network affiliate organizations.
The affiliates talked about the dwindling revenue sources combined with both the obligation and need to serve local communities with quality news, weather, and involvement. It’s the 1970 newspaper business all over again.
From Network Compensation to Retransmission Fees
More history: from the early days of radio, local stations were paid “compensation” — in other words, they would run the network’s shows and, in return, get paid. This was the initial model for working with TV affiliates, giving local stations a second and consistent source of revenue. Later, the networks moved to no payment and eventually to “reverse compensation,” in which affiliates pay the networks. However, a new source of affiliate funds arrived in the form of negotiations with MVPDs, known to the public as cable TV.
If you still have cable service, you probably see a line on your bill for broadcast TV, which covers what the cable companies pay to local stations for retransmission consent.
The little guys (TV stations with limited audience appeal) can opt for “must carry,” in which case they appear on cable systems without any compensation, but if you’re a Big Four affiliate, your mantra is “pay me.” It was all part of the Cable Act of 1992, although the must-carry rules date back to the ’60s.
Streaming Disruption and What’s Left for Local TV
It was a good system for affiliates until streaming came along with vMVPDs, or virtual cable systems, such as YouTube TV and Hulu with Live TV. The laws and regulations didn’t anticipate these entities, so the networks negotiate directly with them, and the local stations get nothing or next to nothing.
Meanwhile, cable penetration is around 50% and dropping, so the fees from cable to local stations are declining. And ad revenue hasn’t kept up.
Of course, the affiliates had those great network shows all to themselves — that is, until they didn’t. “Catch the next episode of American Idol on ABC or stream it tomorrow on Hulu.” “Enjoy the NFL on CBS and streaming on Paramount Plus.” And with the vMVPDs, the networks may offer “white feeds” or “national feeds” with just their shows. You don’t get the local news or all those ads for personal injury lawyers.
All that’s left of unique content for local TV stations is localism, typically local news. And according to the FCC’s press release, this will still matter in most transactions. The Commission will use a “case-by-case” approach, analyzing localism, viewpoint diversity, and competition for specific transactions.
What Scale Means for Local TV’s Future
While it’s not clear to me that eliminating the ownership cap will make local TV any better, competing with behemoths like Netflix, Amazon, Apple, and the national networks — all of which have their own streaming services as well as owned-and-operated local TV stations — requires scale.
The average consumer may not like massive companies controlling lots of local TV stations, but closing the barn door after the horse has escaped won’t work. And new voices? Just check YouTube, Facebook, TikTok, or any podcast aggregator — you’ll find plenty.
It’s a new media world.
Let’s meet again next week.
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