ELECTRONIC MEDIA MANAGEMENT - Ayo Menulis FISIP UAJY

ELECTRONIC MEDIA MANAGEMENT
234
owned in a market and on the total number that can be owned in the country
as a whole by a single person or entity.
Another ownership consideration has to do with the length of time a station
must be held by an owner before it can be sold. Cross-ownership rules
exist for newspaper-broadcast combinations.
Deregulation’s largest impact on changing the face of the broadcast industry
has resulted from the relaxation of the ownership rules. The oldest and
best known was the duopoly rule, which was designed to prevent a single person
or entity from owning more than one station in a market providing the
same class of service. Consequently, no individual or company could own
more than one AM, one FM, or one TV station in the same service area. This
media-concentration rule served its purpose for many years. But the decline
of AM’s competitive position in particular, and of radio’s profitability in general,
led to its reexamination.
THE PROGRESSION TO CONSOLIDATION, 1992–1996
On September 16, 1992, a new duopoly rule became effective. The change
allowed a single party to have up to three radio stations in the same market in
markets with fewer than 15 stations. However, the three commonly owned
stations could not exceed 50 percent of the total number of stations in the
market. No more than two of the three stations could be the same class of
service (AM or FM). In markets with 15 or more stations, a single entity could
own up to four stations, no more than two of which could be AM or FM. In
those markets, there was an additional requirement: the combined audience
share of the commonly owned stations could not exceed 25 percent.
Before the implementation of the new local ownership rules, many operators
who were experiencing financial or competitive strain had entered into
local marketing agreements (LMAs). Under an LMA, a station sells all or
some of its weekly broadcast schedule to another station in the market, which
uses the air time to broadcast content, including commercials, over the selling
station. When the new duopoly regulations were adopted, they were
accompanied by a new LMA requirement. It said that if an LMA exceeded 15
percent of the selling station’s weekly broadcast schedule, that station had to
be counted as an owned station for the station buying the time. For example,
if FM station A bought more than 15 percent of the time of FM station B, FM
station A could own no other FM station in the market because two was the
limit in the same class of service.
The ownership rule changes also affected the limits for the number of stations
that could be owned nationwide by a single party. The 1992 multiple
ownership rules increased the radio levels to 18 AM and 18 FM stations, and
a further increase to 20 AM and 20 FM stations was permitted thereafter.
The television multiple-ownership limit of 12 was unaffected by the 1992
changes. However, the television rule depended upon the percentage of TV
households reached nationally by commonly owned stations, with the upper
limit being 25 percent. Therefore, if a company owned five television stations
that covered 25 percent of the television households in the United
States, it could not own any more. Special variations of the rule allowed