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Court OKs Local Media Consolidation

Move appears to let Tribune Company and some other media companies keep their TV stations

An appellate court panel Tuesday removed its hold on a 2007 Federal Communications Commission rule that let newspapers and broadcasters buy each other in a market.

But while lifting the hold, the three-judge panel of the 3rd Circuit Court of Appeals said it would continue to look at the rule’s legality.

The move appears to let Tribune Company and some other media companies keep their TV stations — and could further consolidate local media.

Until late 2007, the FCC had barred broadcasters and newspapers from buying each other in one market. Any broadcaster who bought a newspaper in the same market faced the choice of selling either the TV station or the newspaper. They also had to sell if a company’s ownership changes significantly.

Before the rule change, the most obvious example of its impact was when the Tribune Company was sold to an employee stock option plan and Sam Zell earlier in a leveraged buyout earlier in 2007.

Under the old FCC rules — in place since 1975 — the company had to choose: the Los Angeles Times or KTLA-TV in Los Angeles; Newsday or WPIX-TV in New York; the Chicago Tribune or WGN-TV in Chicago; the Hartford Courant or TV stations WTIC-TV and WTXX-TV in Hartford; and in south Florida either the Sun-Sentinel in Fort Lauderdale or WSFL-TV in Miami.

It subsequently sold Newsday — but has continued to operate the other stations and is challenging the FCC in a related court suit.

Later that year, the FCC agreed to change the rule, following long-time pressure from newspaper companies and some broadcasters who argued that the ban was antiquated. It reflected, they argued, a time when the only alternate sources for local news were the local newspaper and the local TV station.

In making the change, the FCC decided to generally allow combinations in the top 20 markets, but disallow them in smaller markets where there are few other alternatives for news.

Consumer groups and some FCC commissioners disagreed with the change, charging that newspapers and TV stations still provide the bulk of local news and are each other’s biggest competitors. They warned that letting a single company own a major local TV station and the local newspaper could give it too much control over local news.

They challenged the change in court, which shortly after put a hold on the rule change so it could consider the case.

Tuesday, consumer groups criticized the court’s latest ruling, while newspaper groups praised it.

 “We are disappointed,” said Free Press executive director Josh Silver in a statement. “Vibrant local news is vital for our democracy, and without competition, newsmakers and media are less accountable. Evidence suggests that merging newspaper and broadcast newsrooms hurts jobs and journalism. We hope the Federal Communications Commission will take decisive action to protect media diversity and to encourage competition in local news.”

John Sturm, president of the Newspaper Association of America, in an interview praised the ruling and called suggestions that eliminating cross ownership would lead to less news “baloney.”

“All the studies say combining properties doesn’t result in less local news,” he said.