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Editorial: Come Together

If the FCC is serious about not pushing broadcasters into the tar pits in its rush to make smooth the path of wireless broadband, it will not stand in the way of a Media General/Meredith merger that will help create a stronger broadcast ownership group.

The proposed $2.4 billion pairing announced last week will create the third-largest network affiliate owner with 88 stations in 54 markets, but still within FCC local ownership and national reach rules when it is done, which is what the FCC should focus on.

The combined company has promised to spin off, trade off, or otherwise come into compliance with the FCC’s local ownership rules (its 30% total audience reach is well under the FCC’s 39% limit)—though whether the FCC still needs to be limiting broadcast groups ability to scale up in a world of cable and Internet giants is the subject of another editorial.

Beyond that, the merger should not have any issues with the FCC or the Justice Department, which both must OK the deal. The goal, Media General chairman Stewart Bryan III said last week, was to create profitable growth. The FCC should be interested in prompting growth, and profit, too, which is the only way broadcasters can stay in business to deliver all that local news and programming.

To be a streamlined and efficient media buy these days, as execs for the two companies pointed out last week, you need to be a streamlined and efficient organization with the scale to deliver across multiple platforms.

Wireless broadband may be the FCC’s medium of choice, but Washington still invests the vast majority of its political dollars in the reach of local broadcasting when it wants to get someone re-elected. In fact, one of the “synergies” Meredith was looking to get out of the deal was to be able to better capitalize on all those 2016 political ad dollars.

Meredith and Media General both said right out front their new company would be a platform for continued media consolidation, a term not usually music to a Democratic regulator’s ears. But the FCC should not be surprised that broadcasters need to create scale and find economic synergies to compete with MVPDs and over-the-top video while they ponder what kind of business they will have post-incentive auction and while still subject to decades-old ownership regs—particularly when the FCC appears determined to reduce their negotiating leverage in retransmission consent negotiations.

Media General CEO Vince Sadusky said the new company would be better positioned in a highly competitive and evolving market. We know, that’s what media companies planning to merge always say. But this time around, it has the benefit of being true.