Under current FCC rules, a single entity cannot own, control or operate more than one station in a market unless it is a larger market with more than 8 other independently owned stations; in those markets, it is possible for a single entity to own, control, or operate two stations, but only one can be among the top four ranked stations in the market (typically those are the NBC, CBS, ABC, and Fox broadcast affiliates in the market).
For a number of years, broadcasters have been entering into various "sharing" agreements whereby two separately owned stations agree that one of them will perform certain functions for the other. For example, one station might undertake responsbility for selling advertising for the other station, or for deciding what programming the other station will air, or for sharing certain services such as studios, news helicopters etc etc.
Where an agreement gives one station in a market control over a certain amount of the programming (or more) that another station in the market broadcasts, the two stations have long been considered commonly owned. However, if the agreement only gives one station control over a certain amount of ad sales or services, up until now those stations have been separately owned in the eyes of the FCC.
The new rule focuses specifically on joint sales (of advertising) agreements or "JSAs". Such agreements, if they exceed the threshold amount of ad sales, will result in the stations being consdidered commonly owned. Assuming that the two stations could not be commonly owned under the ownership caps (i.e., in smaller markets only one station and in larger markets two stations provided no more than one is a Big Four affiliiate), the stations could reduce the amount of ad sales or could terminate their relationship entirely. But if the stations have a shared services (as opposed to sales) agreement, such as an agreement to share news gathering and reporting personnel, studios, trucks and helicopters, etc., they will not be treated as commonly owned, although the FCC may consider a further change in its rules to address such sharing arrangements down the line.
The companies most directly impacted by this change in the rules are "group owners" of broadcast stations, such as Sinclair, Nexstar, Media General, Tribune, etc etc. These groups have been consolidating at a rapid pace and have been using a combination of sharing arrangements to avoid the FCC's rules. In many cases, the practices have revealed that the separate ownership (required to meet the ownership cap) is a sham -- arrangements whereby 100 percent of the advertising is sold by one of the stations on behalf of the other, whereby the money paid to buy the station is financed by the selling station who gets to keep virtually all of the revenues earned by the other station and has an option to buy the second station outright if doing so is ever allowed by the FCC.
While it is good that the FCC is cracking down on JSAs, no one should imagine for a moment that the broadcastsers won't be able to find ways under the current rules to continue to control more than one station in a market.
Finally, while the group owners don't like the fact that their arrangements are being scrutinized and may have to be reformed or abandoned, the networks have stayed silent. That is because, for the most part, the networks don't own multiple stations in a market at least not through these sorts of arrangements. To the extent the rules weaken the grip of the group owners, the networks will be happy because they would rather deal with weak, balkanized local affiliates than with powerful group owners with direct or indirect control affiliates around the country.
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