FCC Nixing JSAs: Good News For Local Advertisers -- Or Bad?

TV Watch

A media critique by Wayne Friedman Friday, March 7, 2014

 

The Federal Communications Commission is strongly considering instituting rules that would give TV stations less marketplace leverage by curtailing Joint Sales Agreements(JSAs).

For years, many stations have been operating under such agreements, which allow one sales team to sell two stations or more in the same market to local advertisers.

JSAs have resulted in higher retransmission revenues from TV providers -- cable, satellite and telco companies.  They’ve also brought higher rates from advertisers.

Stations operating under these joint agreements don’t have to abide by the rules of station-ownership limits. Tom Wheeler, chairman of the FCC, wants to change this.  And that could, in effect, stop many of these joint agreements dead in their tracks.

Still, the FCC is looking to protect weaker stations. Under proposed rules, two of the top four stations in a market would be barred from banding together to negotiate rates for cable retransmission or advertising sales.

Stations have had a bumpy ride in local advertising sales over the last few years.   There’s bigger volatility in stronger and weaker years, with higher periods every two years from political and Olympic advertising sales, and lower periods in other years.

At the same time, joint sales agreements have helped big station groups lower operating expenses through greater efficiencies.

Stations will continue to argue that if it were not for the JSAs, many of them in smaller markets would not survive.

All this comes amid a massive recent run-up in the price for mega TV station deals. There has been growing interest in stations because of soaring retransmission revenues, increased advertising sales and lower operating expenses.

So what happens now? Will the marketplace shrink, with stations going dark, thus giving advertisers fewer local avails? Some might say huge bulks of local advertising time already go unsold, so  -- this would help the overall TV system.

At the same time, more complex paperwork and systems from soon-to-be-more-disparate station advertising sales groups will create more headaches.