Trump‘s Renewed Threat to Broadcast Licenses & The Media consolidation Landscape
Recent actions by former President Donald Trump and statements from within the Federal Communications Commission (FCC) have raised concerns about potential government intervention in broadcast content,specifically regarding criticism of political figures. This comes alongside a backdrop of ongoing consolidation within the local television industry and lobbying efforts to loosen ownership regulations.
The Core of the issue: License Renewals & “Responsible Use”
Trump, during a rally in Nevada on September 17, 2024, called for a review of the licenses of television stations airing content he deems unfair, specifically referencing ABC and its late-night host Jimmy Kimmel. he stated, “They better get their act together, and they better treat people fairly. If they don’t, we’re going to have to do something about their licenses.”
This echoes past rhetoric from Trump, who has frequently criticized media outlets and suggested using the FCC’s licensing power to influence coverage.The FCC is responsible for granting and renewing broadcast licenses, and traditionally, thes renewals have been largely procedural. However, the threat implies a potential shift towards using license renewals as leverage to control content.
An unnamed source close to Trump further clarified the position, stating, “responsible use of the airwaves doesn’t mean having the political language [the government] doesn’t want on there… Responsible use isn’t a political issue.” This statement suggests a belief that the FCC should enforce a standard of “responsible use” that aligns with the administration’s preferences, despite arguments that such a standard woudl inherently be subjective and politically motivated.
FCC commissioner Carr’s Position
Adding to the concerns, FCC Commissioner Nathan Carr has publicly expressed support for re-evaluating broadcast station ownership rules and caps. Carr has indicated he would support eliminating these longstanding regulations, potentially paving the way for further media consolidation. He has also suggested the FCC should be more active in ensuring broadcasters operate in the public interest.
Media Consolidation & Potential Leverage
The timing of these developments coincides with notable activity in the local television market. Companies like Nexstar and Sinclair Broadcast Group have been aggressively acquiring stations, increasing their market share.
* Nexstar currently owns approximately 30 ABC-affiliated networks across the U.S., representing about 10% of the over 200 stations the company owns in total. Nexstar announced on Wednesday, May 15, 2024, that its ABC-affiliated stations would preempt the airing of Jimmy Kimmel’s late-night show “due to the host’s statements.”
* Sinclair similarly announced it would preempt Kimmel’s show.
* Nexstar is seeking government approval for a $6.2 billion merger with Tegna.
* Sinclair is also exploring mergers for its broadcast TV station business, though no deal has been announced as of August 11, 2024.
These companies have historically been subject to federal limits on the number of stations they can own. Loosening these regulations would allow for even greater consolidation.
The Financial Pressures on Broadcast TV
The push for deregulation and consolidation is driven,in part,by the financial challenges facing the broadcast television industry. The rise of streaming services has led to a decline in pay-TV subscribers, impacting the lucrative “retransmission fees” that broadcast stations receive from distributors like Charter for the right to carry their signals. These fees are a significant source of revenue for companies like Nexstar,and dwindling pay-TV subscriptions directly affect their profits.
Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC. Versant would become the new parent company of CNBC under a planned spinoff.
This situation creates a complex dynamic where large media companies, facing economic pressures, are concurrently seeking regulatory relief and potentially vulnerable to political pressure regarding their content. The threat of license review, combined with the FCC’s consideration of deregulation, raises concerns about the future of self-reliant journalism and the potential for government influence over the airwaves.
