FCC rules change may prompt local merger

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(Host) If the federal government eases rules on ownership there could be dramatic changes in the Vermont media market. The Federal Communications Commission will decide next month whether to lift the rule that now prevents a newspaper company from owning a local TV station. Experts say if the FCC changes the ownership rules, some Vermont media outlets could change hands.

VPR’s John Dillon reports:

(Dillon) Right now, federal rules prohibit a media company from owning a television station and a newspaper in the same market. That could change June 2, as the Federal Communications Commission moves to further deregulate the industry.

In Vermont, the Burlington Free Press is owned by Gannett Corporation. The Virginia based company owns 94 daily newspapers and 22 television stations. Industry observers speculate that if the cross ownership rules are lifted, Gannett may buy a TV station in the Vermont market.

Industry analyst James Marsh of SG Cowen securities in New York says Gannett is an aggressive company that’s constantly readjusting its holdings. Marsh says Gannett deals frequently with the Hearst-Argyle TV company, which owns 27 stations including WPTZ Channel 5 in Burlington and Plattsburgh.

(Marsh) “I’m sure the Gannett people and the Hearst people know each other well and I’m sure they’ve had conversations. It would surprise me if they haven’t. If Hearst can’t work out a deal with them, I’m sure Gannett will look to some of the others.”

(Dillon) Marsh says the FCC rule change will put more TV stations on the block.

(Marsh) “The typical model will be for monopoly newspapers to own one of the big three local news leaders in that market.”

(Dillon) Critics of the FCC proposal – including Vermont Congressman Bernie Sanders – are concerned that media consolidation could limit local news reporting. Gannett Vice President Tara Connell says if the FCC rules are lifted, the company would be in a mood to buy:

(Connell) “We’ve said for a long time that if the rule changes, we’d be interested in looking at properties for the right price, the right location, right circumstances.”

(Dillon) But Connell wouldn’t comment on whether the company is interested in any TV stations in the Burlington market.

(Connell) “We don’t discuss specific markets in those terms. It’s a rumor that’s out there. There’s lots of rumors that are out there.”

(Dillon) Critics of the media deregulation have urged the FCC to delay its scheduled June 2 decision. An official with WPTZ said he had no comment.

For Vermont Public Radio, I’m John Dillon.

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