On February 28th, a conference sponsored by the National Association of Broadcasters (NAB) was held at Nationals Park in Washington D.C. The conference brought together hundreds of local broadcast station executives, featuring panels and fireside chats with notable figures such as Sen. Ted Cruz and FCC commissioner Nathan Simington. However, amidst the conference, executives also engaged in discussions about an ongoing dispute between the owners of local TV stations and their network partners.
The dispute revolves around the negotiation of streaming deals for local TV stations. While the studios and actors are currently battling over how streaming revenue should be divided, local TV station owners affiliated with networks like ABC, CBS, Fox, and NBC are also grappling with a similar issue. The question at hand is who should have the authority to negotiate with the owners of streaming multichannel video services: the well-known network brands or the owners of local affiliates that serve specific markets?
In response to this dispute, a new organization called the Coalition for Local News has emerged. Comprised of owners of over 600 local stations, the Coalition aims to bring attention to the need for changes in how streaming deals for local TV stations are negotiated. Their push is centered around the importance of local news coverage that these stations provide to their communities, arguing that removing the rights of station owners to negotiate streaming deals will ultimately harm the news quality in these local markets.
Michael O’Brien, senior VP for the E.W. Scripps Company, a member of the Coalition with approximately 61 TV stations, emphasizes the urgency of the issue, stating, “The time is now as fast as everything is evolving. And we have to have this one voice protecting our most important assets, which is covering our local communities with our news departments.”
Related Post
The Coalition’s launch comes after recent public attention was drawn to the dispute. In February, Fubo and Hulu experienced the disappearance of local stations for certain customers. Fubo announced that it would be dropping local CBS stations, instead opting to stream a national feed of CBS without local news and syndicated programming. In the following weeks, Hulu’s live TV service also lost stations owned by Sinclair and Nexstar during a similar dispute. Additionally, in late 2021, ABC and all Disney-owned channels went dark on YouTube TV, causing frustration among ABC affiliates.
While new deals have since been reached to end these blackouts, the underlying regulations leading to these disputes remain unchanged. Currently, cable and satellite TV providers must negotiate carriage of local stations directly with the owners of those stations. However, there is a “streaming loophole” that allows virtual multichannel video providers (vMVPDs) to negotiate with network owners instead, leaving local stations with a “take it or leave it” deal.
Some local TV executives argue that network owners are using the bargaining power of local stations to secure better deals for their other channels or properties. They believe that the ability to negotiate for all their stations gives network owners an advantage, even if it comes at the expense of the interests of local stations.
The Coalition for Local News is specifically focused on the importance of local news programming provided by these stations. They stress that local news content is unique and cannot be replicated by national feeds. O’Brien explains, “It’s not only serving our communities and keeping people safe — like when I was in my basement last night with the tornado sirens — It’s holding business leaders and public leaders accountable.”
Changing the rules surrounding streaming negotiations will require either a policy change by the FCC or Congressional action. Senator Maria Cantwell has already urged the FCC to take action on the matter. The potential change would shake up the growing pay-TV business. Platforms like YouTube TV and Hulu with Live TV continue to add subscribers, while traditional cable and satellite providers are losing them. It would also impact the streaming strategies of network owners.
For vMVPDs, local broadcast stations play a crucial role in providing entertainment programming, live sports, national and local news, and syndicated shows that cannot be streamed. Perry Sook, CEO of Nexstar, highlights the importance of local stations, stating, “And so not unlike traditional cable, where we are the most-watched channels in the bundle, why would that be different in a virtual universe? And so we know we have value. And I think individually and collectively, we will recognize that value and are not willing to sell at a discount or to sell on an à la carte basis.”
The Coalition for Local News aims to ensure that local TV stations have a say in the negotiations regarding their content and streaming deals. They believe that without a voice in these discussions, it becomes challenging for stations to execute their strategies and effectively serve their communities.
