The FCC panel on small market financing hinged on a stable regulatory climate, to stabilize a financing regime that was already dicey before the economy turned sour. It was said that radio regulations are fine as they are, and the allowing small market TV duopoly and cross-ownership would be helpful. Mostly, small market radio operators do not want new rules imposed that are based on negative opinions about big broadcast consolidators.
Prescriptions from the group often echoed the large market panel. Allow TV duopolies everywhere. Allow cross-ownership, while there are still newspapers to cross-own. Bring back the minority tax certificate and in general, incentivize investment. Avoid a new radio performance royalty. Develop a critical second revenue stream for television broadcasters in the form or retransmission fees. Do not impose onerous new localism provisions and record-keeping drags.
One panelist, Terry Jones of minority investor Syncom, suggested relaxing foreign investment restrictions and another, Alta Communications’ Brian McNeill, suggested sensible tweaking of the attribution rules for both institutional and strategic investors.
McNeill provided the formula for what has befallen broadcasting, which was basically overleveraging + recession + new competition + fixed costs = big trouble. He said regulators need to do what they can to help broadcasters find their way back to solvency, which is mainly a matter of shedding debtload – otherwise it’s still a profitable business.
Patrick noted that 1980s drop in stations became the bankruptcy orphans of the 1990s and that they were saved by consolidation, and that this time around, at a minimum, broadcasters need a stable regulatory platform as they struggle with a slow recovery.
Jones was very interested in keeping the public interest in the foreground of any proceeding, and that means increasing diversity of ownership over protecting incumbents. But he noted that investment money was quite obviously moving away from traditional media.
Radio broadcaster Rick Peters was adamant about the need to view broadcasting as a calling and public interest as a mantra under which to do business. He does not want to be subjected to new regulation aimed at big consolidators. He also said consolidation is necessary in the new media climate, but for radio, the current local caps are sufficient.
