A Senate Commerce Committee hearing on media ownership laws was held today, featuring NAB President/CEO Curtis LeGeyt speaking in support of changes to the cap, while Newsmax CEO Chris Ruddy offered the opposing view.
Neither witness has been shy in their view about the potential for the FCC to change ownership caps. Currently, a limit of one ownership group being able to reach 39% of total U.S. households is in place, while a waiver has been granted to Nexstar Media Group to overstep that limit.
However, Nexstar Media Group is awaiting government approval to complete an acquisition of TEGNA, which would enable the company to reach 80% of total U.S. households.
NAB President/CEO Curtis LeGeyt spoke at the hearing, stating that it’s imperative that the regulations be updated to allow broadcasters the ability to compete with Big Tech.
“Without modernizing these ownership rules, local television news – the last bastion of truly local journalism in many communities – will suffer the same fate as thousands of local newspapers,” said LeGeyt. “Outdated ownership rules also limit broadcasters’ ability to provide viewers access to marquee sports and entertainment. Instead of subscribing to a new streaming service every time they want to watch a game, viewers overwhelmingly prefer to watch sports on broadcast TV.
“However, keeping broadcasters artificially small makes it harder to compete for increasingly expensive sports rights against our unregulated streaming rivals,” LeGeyt continued. “Broadcasting’s share of viewership is already less than half our streaming competitors. This decline will continue as premium sports content further migrates behind streaming paywalls.”
LeGeyt concluded by stating that “localism is a vital, but expensive, American value.”
“Competitively hobbled TV stations lacking sufficient resources will not provide quality local journalism, emergency information, valued sports and programming that your communities depend upon,” he shared.
Newsmax CEO Chris Ruddy offered the opposite side of the coin. He stated that it’s clear, from his standpoint, that the move is a negative one for consumers and the broadcast industry.
“The television industry’s messaging has become extreme — claiming consolidation somehow saves local news by cutting it, branding critics as radicals, and insisting that allowing two or three companies to own most stations is ‘deregulation’ and ‘competition,'” said Ruddy. “We know that after Nexstar merged with Tribune, profits surged while employment dropped from 16,193 employees to 12,142 – a 25% decrease – in
just one year. In 14 markets, Nexstar now operates two highly rated stations but has combined their local newsrooms to cut costs.
“In its proposed merger with Tegna, Nexstar projects more than $300 million in immediate cost savings, including $135 million from increased retrans fees and $165 million from local station savings — typically that’s achieved through newsroom consolidation,” continued Ruddy. “I am a common-sense conservative and a believer in free markets. But when the government grants a limited number of licenses in every market that marketplace is a closed one. That’s why the public has a right — and a duty — to ensure those licenses serve the public interest.”
The Newsmax CEO concluded his statements by sharing his opinion that the FCC does not have the legal authority to change any ownership caps, arguing that only Congress can alter any of the standards.
“Congress should insist that any decisions on consolidation or cap waivers be voted on by the full Commission, not quietly approved at the bureau level,” Ruddy said. “Let me be absolutely clear: the television industry is far too valuable to be handed over to a small number of conglomerates that are unaccountable to the public. Congress set the cap. Only Congress should change it — after careful review. Newsmax stands ready to participate constructively in that process.”
The statements from Chris Ruddy and Curtis LeGeyt come on the heels of President Donald Trump reversing his stance on the topic. After previously arguing against ownership limits being expanded, he shared that he now supports the move, urging regulators over the weekend to allow the acquisition by Nexstar Media Group as quickly as possible.
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