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Study: Media Mergers Boost Local News

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(Image credit: Klaus Vedfelt/Getty Images)

A new Gray TV-backed study concludes that media consolidation increases news output.

One of the knocks on broadcast mergers is that consolidation in ownership leads to consolidated newsrooms and a reduction in investment in news.

But a study from economist Mark Fratrik of Gray's 93 TV markets found that in markets where stations were permitted to join forces, as was the case with Gray's 2018 purchase of Raycom Stations, their news output increased "far more" than markets without consolidation.

That study buttresses Gray's long-standing arguments that the FCC should deregulate local station ownership limits, including allowing small-market combos. 

The study also follows an op ed for Multichannel News written by FCC Chairman Michael O'Rielly back in July asserting that the FCC's small-market consolidation policies that he supports can lead to greater news coverage and using Gray TV stations as an example.

The study included the following takeaways:

1. "In markets where a consolidation of local broadcast stations occurred, total news output increased at those stations by almost 28%, while in other markets without any consolidation, the total news output grew less than 18% over the same period. 

2. "In small markets (those ranked between 101-210 by population according to Nielsen Media Research) the rate that news output increased with consolidation was more than double that of small markets without any consolidation. 

3. "In very small markets, if Gray TV obtained an additional pre-existing Big Four affiliation, local news output increased nearly 40%. 

4. "Google earns more local advertising revenue than all commercial television stations in the United States combined, and Facebook is getting closer every year.

5. "BIA Kelsey, a leading advertising analyst, now forecasts that 2020 local broadcast advertising nationwide will be down nearly 13% compared to 2018, the last year impacted by political spending."