514412

research-article2014
JMQXXX10.1177/1077699013514412Journalism & Mass Communication QuarterlyYanich

Media Economics
Journalism & Mass Communication Quarterly
2014, Vol. 91(1) 159­–176
Duopoly Light? Service © 2014 AEJMC
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DOI: 10.1177/1077699013514412
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Danilo Yanich1

Abstract
The United States is in the middle of a debate about media ownership with clear lines
of demarcation. The industry claims that regulation is burdensome, unnecessary, and
disruptive of market mechanisms. Media reformers counter that relying only on the
market can be detrimental to the public interest. This research revealed that service
agreements among stations in the same television market have a profound effect on
the content of local TV news as station managers and owners achieve economies of
scale in the use of anchors, reporters, scripts, and graphics/video.

Keywords
local news, ownership, policy

Introduction
The United States is in the middle of a crucial policy debate about media ownership.
The lines of demarcation are clear. On the one hand, the media industry claims that
regulation is burdensome, unnecessary, and, most importantly, disruptive of market
mechanisms that should dictate how the media are organized. On the other hand,
media reformers argue that a reliance only on the market to produce information has
resulted in its treatment as a commodity, to the detriment of the public interest.
Therefore, fundamental information that the audience needs about public issues to
function as citizens is compromised, so much so that we engage in a “politics of
illusion.”1
Although there have always been various views on the topic, media ownership
received intense attention when the Federal Communications Commission (FCC),

1University of Delaware, Newark, DE, USA

Corresponding Author:
Danilo Yanich, School of Public Policy and Administration, University of Delaware, Graham Hall, Newark,
DE 19711, USA.
Email: dyanich@udel.edu

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160 Journalism & Mass Communication Quarterly 91(1)

after completing a mandatory review, adopted rules in 2003 that relaxed broadcast
ownership limits. To say that the rules were controversial would state the case mildly.

It was not a routine set of rule changes, but a striking change in the structure of the media
system. The decision opened up cross-media ownership in the same market, inviting
newspapers and broadcasters to operate under one roof in every major city. It also
permitted a substantially increased media concentration in local and national television
markets, tilting market conditions to favor larger firms and conglomerates.2

The response to the rule changes was overwhelmingly negative. Not only did the
FCC receive over 750,000 messages from citizens, over 99% of which opposed the
rule changes, but the opposition also occurred across the political spectrum, including
the National Organization of Women, the U.S. Conference of Catholic Bishops, and
the National Rifle Association.3 Arguably, the most important step was taken by the
Prometheus Radio Project that sued the FCC in the Third Circuit Court of Appeals.
The Court stayed the implementation of the rules, finding that they would cause irrep-
arable harm.4 Since the ruling, the issues of media ownership, regulation, and markets
have been intensely debated by the media industry, media reform groups, the govern-
ment, and the public through successive reviews of media ownership rules. The
required review of the rules in 2006 was postponed until the following year, and it only
stirred up more controversy by modifying a thirty-two-year-old ban on media cross-
ownership. That issue has still not been settled and is in litigation. As of July 2013, the
2010 mandatory review is still in the decision-making process.
Bennett has summarized the effects of media concentration on public information:

1. Dominance by fewer players in local and regional markets distorts advertising

rates, forcing small, independent outlets to quit, sell out, or change their for-
mats—resulting in less diversity in music, news, and minority affairs
programming;
2. The interests of corporate image and self-promotion mean less critical cover-
age of the media industry in general and parent companies in particular;
3. News content shifts to infotainment formats due to the entertainment focus of
owners and the economic efficiencies of soft news, “reality programming,”
and human interest features;
4. News is regarded less as a public service commitment or a prestige builder for
the parent company, and it becomes just another product line in the race for
profits; and
5. Innovation in packaging and branding disguises declining information diver-
sity and content distinctiveness.5

The flashpoint of this clash of views is starkly evident in the Shared Services
Agreements (SSA)6 that have occurred in almost one-half of the television markets in
the United States. These agreements are implemented among television stations in the
same market in which everything from advertising sales to entire news operations

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Yanich 161

come under the control of one entity. To the media industry, these agreements are nec-
essary to achieve economies of scale to secure the survival of stations that face grow-
ing competition from other news sources, such as the Internet. Media reformers claim
that these agreements violate both the spirit and the letter of the laws that limit media
ownership—that they are “covert consolidation.”
This research examines the impact these agreements have on the content of local
news in markets with stations that have adopted this practice, by conducting a content
analysis of the newscasts in eight television markets in which there is, at least, one of
these types of agreements in operation. Do the stations in these arrangements function
as separate entities? What effect, if any, do these agreements have on the content of
news? Do the stations achieve economies of scale? If so, how?

Local TV News Content and SSA

The availability of information about public concerns has significant consequences in
localities, and there is an expectation by the public that information about these issues
will be available through their local media. There was a strong relationship between
community integration and local media such that the “use of local news in newspapers
was a somewhat better predictor of community knowledge and participation but local
television news had a decided edge in local political interest.”7 Further, when that
information is lacking or there are gaps in access to that information, voter turnout
may be reduced.8 In fact, there is substantial evidence that demonstrates the impor-
tance of local news content to local political and economic outcomes.9 Gentzkow,10
however, presents an argument that television has reduced voter turnout over time.
As media organizations have increasingly been subsumed in larger corporate enti-
ties that have no experience with news, the tension between news as a public service
and as a product has been exacerbated. News divisions are increasingly seen as another
profit/loss node.11 As a result, the production of news is subject to a calculus that treats
information as a commodity,12 and that treatment has an effect on the nature of news
and public affairs programming in local places.13
Local television news remains the critical information source about their localities
for the American public. Even in the age of the Internet, almost eight of ten Americans
report that “on a typical day” they get their news from a local television station.14 Even
with that finding, the viewing of local television news is skewed toward older audi-
ences. However, local news producers report that their online usage has increased
dramatically.15 Even with the change in viewership, local broadcast TV advertising
revenue was the highest in 2012 since 2008, and revenues through 2016 are projected
to increase.16 Much of the increase in 2008 and 2012 was due to political advertising
during the presidential elections. Further, almost two-thirds of the public identified
local television news as their dominant local news source, significantly more than any
other entity.17 Not only do Americans watch local television news, but they also believe
it more than any other news source. From 2002 to 2012, the credibility ratings of news
sources across the board, such as the Wall Street Journal, the New York Times, CNN,
and Fox have significantly fallen—from a national average of 71% to 56%.18 However,

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162 Journalism & Mass Communication Quarterly 91(1)

the credibility rating for local TV news has remained between 65% and 70% during
that period, in 2012 outpacing, for example, the Wall Street Journal, 58%, and the New
York Times and Fox News, both at 49%.19 Indeed, the seminal study of the information
needs of communities concluded that, “In many ways, local TV news is more impor-
tant than ever.”20 Further, even though local newscasts comprise about 15% of broad-
cast time, they account for almost 50% of station profits.21
According to the FCC, between 1996 and 2010, there was a 15% increase in the
number of commercial television stations in the United States and a 33% decrease in
the number of owners of those stations.22 The FCC also reported that there were 175
television station duopolies, which include owners with “attributable local marketing
agreements” in the 210 television markets in the United States.23 These agreements are
arrangements among stations in the same television market in which they share news-
gathering resources, video, and/or marketing and management activities. They take on
several forms. Local News Sharing agreements (LNS) involve multiple stations that
pool and share journalists, editors, equipment, and content. In Joint Sales Agreements
(JSA), a licensed station sells some or all of its advertising time to another station in
return for a fee or a percentage of the revenues. A Local Marketing Agreement (LMA)
occurs when the owners of one station take over the operation of another station, includ-
ing programming and advertising. In a SSA, the stations combine newsroom assets and
personnel, and share facilities and administrative functions.24 Although these arrange-
ments date as far back as 2000, in the midst of national economic instability, increasing
numbers of local television news stations have signed these agreements. They are now
operative in 111 of the 210 television markets in the United States.25 Purportedly, these
agreements are expected to help relieve some of the economic burdens that are shoul-
dered by local stations in gathering and presenting news content. The implementation
of these SSA agreements, whether they involve sharing newsgathering resources or
overall management of the station, has implications for each of the fundamental prin-
ciples on which the FCC regulates the broadcast industry—diversity, competition, and
localism. That is especially important because the FCC is in the process of making
decisions about media ownership that it has postponed since 2010.
One factor that may help explain the movement toward SSAs may be the debt that
many television owners face. Despite positive revenue reports, “local television sta-
tions remain less than attractive takeover targets”—due to the “enormous debt that
many station owners took on when they purchased properties in boom times.”26
Specifically, in 2010, only about six full-power stations were sold as the debt reduced
stations’ market value. “Instead of outright sales, more stations entered into joint and/
or shared services agreements with former competitors.”27 However, since 2011, there
has been a significant movement toward consolidation through outright purchase.28
Another factor that makes SSAs (rather than purchase) a reasonable economic
strategy from the media firms’ perspective is the continuing uncertainty about media
ownership rules that have been under review by the FCC. After postponing the 2010
proceeding, on December 22, 2011, the FCC finally released a Notice of Proposed
Rulemaking that indicated that it would look more closely at service agreements:

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Yanich 163

Instead of focusing on attributing certain named agreements (e.g., JSAs, LMAs, SSAs,
LNS agreements) as we have in the past, should we adopt a broader regulatory scheme
that encompasses all agreements, however styled, that relate to programming and/or
operation of broadcast stations?29

The FCC’s intention to examine services agreements is directly attributable, in part,

to a decision it rendered in November 2011 in which it allowed an SSA to continue in
the Honolulu, Hawai’i, television market. There are five stations in the market that
deliver daily news broadcasts, and, in August 2009, the owners of three of the stations
announced the implementation of an SSA in which the control of the stations would
come under Raycom Media’s management to “creatively and successfully address the
impact of the negative economy and to secure the future of all three television stations
in Hawai’i.”30 The news operations were combined and one-third of the stations’
employees were dismissed.31 The CEO of Raycom articulated the economic reasons
for the action:

The purpose of the shared services agreement is to not only secure the future of KHNL,
KFIVE, and KGMB, but to operate them more efficiently and effectively without
diminishing the quality of news and other programming provided to our customers in
Hawai’i. The economic reality is that this market cannot support five traditionally
separated television stations, all with duplicated costs.32

The SSA was officially challenged by a local nonprofit organization, Media Council
Hawai’i (MCH). MCH, represented by the Georgetown University Law Center, filed
a complaint and request for relief with the FCC on October 7, 2009. MCH’s filing was
the only formal challenge that the FCC has received from a community group in any
of the television markets in which SSAs are in effect.
MCH contended that the SSA between Raycom and MCG Capital would result in
“an unauthorized transfer of control in contravention of the Communications Act and
FCC rules.”33 Further, MCH stated that these actions

would harm the members of Media Council Hawai’i and the general public by reducing
the number of independent voices providing local news from four to three, and by
substantially reducing competition in the provision of local news and the sale of
advertising time.34

On November 25, 2011, the Media Bureau of the FCC rejected MCH’s complaint
against Raycom.35 However, it made its ruling on the technical question regarding
whether Raycom acquired control of a new license and it added the caveat that

Further action on our part is warranted with respect to this and analogous cases . . .
whether the actions taken by the licensees in this case, or analogous actions by other
licensees, are consistent with the public interest.36

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164 Journalism & Mass Communication Quarterly 91(1)

Research Question
The purpose of this research was to examine the content of the local television news-
casts in eight television markets in which SSAs and/or LMAs were implemented.
There were two research questions and they addressed the economies of scale that the
managers of the SSAs cite to justify the arrangements. First, the SSA managers point
out that the arrangements provide the opportunity to disseminate the same content
across various “platforms,” thereby reducing the cost of production relative to the
number of opportunities to broadcast that content. Therefore,

RQ1: How were the stories that were presented on the newscasts distributed across
the stations in each market?

The economies of scale extend beyond the use of platforms. They are also reflected
in the use of production resources that affect the bottom line of the cost of presenting
news, specifically the use of anchors, reporters, scripts, and video.

RQ2: The second research question was: What is the distribution of anchors,
reporters, story scripts, and video/graphics in the stories that were presented on the
broadcasts of the SSA/LMA stations?

Method
The method for this research was content analysis.37 It is a method that produces a
systematic and objective description of information content. The analytical method
used was the chi-square measure of association. Content analysis has been used exten-
sively over time to examine local television news.38

The Television Markets

This research focused on SSAs and/or LMAs in which the stations shared the news
function because, by definition, they affected the production of the newscasts. At the
time that the sample was drawn, the universe of television markets in which SSAs
were operative was fifty-five. The existence of these agreements was confirmed by the
author’s research using various data sources, including phone calls to the stations. The
randomly drawn sample comprised eight television markets in which thirty-seven sta-
tions regularly produced local newscasts. The markets ranged in size (as measured by
the number of television households in the market) from number 17, Denver, Colorado,
to number 146, Wichita Falls, Texas, and collectively comprised over four million
television households.
The markets represented a variety of ownership and management profiles. For
example, Denver, Colorado; Des Moines, Iowa; Burlington, Vermont; and Columbus,
Georgia, each had only one consolidated management structure in the market, and

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Yanich 165

there were at least two stations in each of the markets that were not a party to a services
agreement (a condition called independent in this research). However, the remaining
four television markets in the sample each had some combination of two SSAs or
LMAs or duopoly. In Jacksonville, Florida, there was an SSA (two stations) and a
duopoly (two stations), leaving only one independent station in the market. In Dayton,
Ohio, two separate LMAs involving two stations each left only one independent sta-
tion in the market. The phenomenon was most pronounced in Peoria, Illinois, and
Wichita Falls, Texas, where there was no station in either market that was independent
of an SSA or LMA arrangement.

The stations in the sample.  The stations in the sample consisted of every station in the
television market that regularly delivered a daily local newscast.

The sample of broadcasts. The sample of broadcasts for this research consisted of a

constructed week of broadcasts during which the SSAs were operative in the television
market. A constructed week consisted of the newscasts of a particular day gathered over
an extended period of time. For example, the Monday of the first week and the Tuesday
of the second week were in the sample, and so on until the broadcast week was con-
structed. The broadcast week was limited to Monday through Friday to eliminate the
possibility of weekend sporting events that might have preempted newscasts.
The broadcast content for this research was acquired from DirecTV. Due to the
technical nature of the capture and archival process that DirecTV used, the exact same
constructed week could not be used for all eight markets. The capture of broadcasts
had to occur in a sequence to accommodate that technical process. However, the date
to begin capture was randomly determined. That day was Wednesday, May 4, 2011.
The first market in which broadcasts were captured was Dayton, Ohio. The Dayton
broadcasts were those on Wednesday, May 4; Thursday, May 12; Friday, May 20;
Monday, May 30; and Tuesday, June 7. That same approach was applied to the other
markets. Because DirecTV could only capture the broadcasts of six markets at one
time, the constructed weeks for the two remaining markets began immediately after
the first six were completed. The broadcasts of Wichita Falls, Texas, and Jacksonville,
Florida, began on June 5 and June 6, respectively. The fact that different constructed
weeks were used in the analysis was consistent with the research questions because the
comparisons across stations only occurred within the television markets.

Unit of observation.  The units of observation for this research were the individual stories
that appeared on the broadcasts. Initially, the stories were distilled from the twenty-five
types of broadcast units that were coded. These broadcast units included twenty-one
story types and four broadcast units. Those units not included for analysis were promos
for the station/network, the weather segment, the sports segment, and commercials. The
professional literature regarding the construction of a newscast recognizes that the
sports and weather segments are structural features of the broadcast.39 They are always
included in the newscast, and, as a result, they are not subject to the news selection
calculus that is applied to all other stories. They are always “in” the broadcast. And,

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166 Journalism & Mass Communication Quarterly 91(1)

even within the segments, the “in-or-out” decision model is less stark than that used for
the general news outside of the segments. In general, the sports segments on local tele-
vision news deal with the day’s scores or activities of whatever sport is in season and
not with in-depth sports reporting. The coding revealed a total of 2,55540 separate sto-
ries that were broadcast across the stations. The stories were distilled from the 4,725
broadcast units that were presented. In addition to the stories (n = 2,555), the distribu-
tion across the other broadcast units was station promotions (n = 895), commercials (n
= 746), weather segments (n = 338), and sports segments (n = 191).
The broadcast content was coded by five communications students who were
trained to use the coding protocol. A test for inter-coder reliability revealed that agree-
ment among the major content variables had a range from 69% (story type) to 98% for
the appearance variable with an average of 84%. Given the assumptions inherent in
these indices, the Cohen’s kappa scores for the same variables were generally lower
than the agreement scores, averaging .77. The kappa scores for each of the variables
met the generally accepted criteria of, at least, “fair to good agreement beyond chance”
(.40-.75), and several of the kappa statistics above .75 reveal “excellent agreement.”41
Importantly, the very high kappa scores were achieved for the most crucial variables
regarding whether or not the same story appeared across the stations.

Findings
The FCC’s Notice of Inquiry regarding media ownership that it issued in 2010 specifi-
cally addressed the question of ownership structures within television markets. An
increasing number of those structures now involve agreements among stations that are
not ownership arrangements, but they stipulate a set of conditions in which the parties
share fundamental aspects of the operation of the station.
The stated purpose of the agreements was to achieve economies of scale in the
production and distribution of news. That was to be accomplished by using two
approaches. First, the production of news was consolidated as previously competitor
news operations were combined into one entity. Second, the news that was produced
by that entity was presented on the newscasts of the combined stations. The crucial
question was how those practices affected the newscasts in the television market.
The analysis reveals that the implementation of SSAs and LMAs had a profound
effect on the local newscasts in the markets. The effect was evident in the distribution
of stories across the stations and in the use of shared resources, such as the anchor, the
reporter, the script, and video/graphics for the story. The distribution of stories was
operationalized as the proportion of stories that were duplicated on the broadcasts of
the stations that had implemented a services agreement (either SSA or LMA) or were
part of a duopoly. That is, the same story appeared on each station’s newscast.

Sharing Platforms
By definition, the duplications did not occur on the nonjoint operating agreement sta-
tions in the markets. However, there may have been stories that, on their merits, would

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Yanich 167

100

80

60

40

20

p=<.05 SSA/LMA 2ndLMA/Duop

Figure 1.  Percentage of duplicated stories on the SSA/LMA/duopoly stations.

SSA = Shared Services Agreements; LMA = Local Marketing Agreement.
p < .05.

have been broadcast on all of the stations in the market and that proportion would temper
the duplicated distribution across the SSA/LMA stations. The analysis showed that only
7% of the stories were broadcast on all of the stations in the market. Therefore, the dupli-
cation was significantly an SSA/LMA/duopoly phenomenon. There was a statistically
significant difference across the DMAs (DMA refers to television market as defined as
Dominant Market Area by Nielsen Research) in that distribution (p ≤ .05).
The proportion of duplicated stories on the SSA/LMA/duopoly stations was above
50% in six out of the eight markets (Figure 1). However, there was also an overall pat-
tern to the duplication rate. In general, the duplication rate among service agreement
stations was less prominent in the markets in which there were nonjoint operating
agreement stations. For example, the highest proportion of duplicated stories occurred
in Dayton, where there were two LMAs and only one independent station. The LMA
between WRGT and WKEF resulted in a 98% duplication rate, and the rate for second
LMA between WDTN and WBDT was 35%. In Peoria, where there were no nonjoint
operating agreement stations, the SSA proportion of combination stories was 78%; the
LMA’s proportion was 59%. In Jacksonville, with one independent station, the SSA
proportion of combination stories was 64%, but the duopoly in the market produced a
simulcast so the proportion of combination stories for that arrangement was 100%.
That said, the market that did not follow that trend was Wichita Falls. There were no
nonjoint operating agreement stations in the market; however, the duplication rate for
the SSA between KFDX and KJTL was only 30%. The second SSA between KSWO
and KAUZ duplicated very few stories. In the opposite direction, Denver, where there
were three nonjoint operating agreement stations, also appeared against the trend
where its one LMA had a duplication rate of 71%.

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168 Journalism & Mass Communication Quarterly 91(1)

On the other side of that equation, in general, the markets with, at least, two non-
joint operating agreement stations saw lower duplication rates among its service
agreement partners. For example, Des Moines, Burlington, and Columbus (smaller
markets in the sample) had substantially lower rates. The SSA in Burlington between
WFFF and WVNY duplicated 58% of their stories, and the SSAs in Des Moines and
Columbus had duplication rates below 50%
These findings show that, for the most part, SSA and LMA stations took advantage
of the arrangement to present stories on a combination of their stations. Given the
nature of the agreements, these results could be expected.

Sharing Scripts and Video/Graphics

The use of various “platforms” to present the stories was one aspect to consider in
examining the implementation of the service agreements. However, perhaps the most
important factor to gauge the economies of scale achieved by the agreements was the
use of particular resources that affect the bottom line—the personnel used to convey
the content of the story (anchors and reporters) and the content used to describe the
story (script and video/graphics). The use of resources was operationalized as the pro-
portion of stories that used the same anchor, same reporter, same script and/or the
same video/graphics on the newscasts of the stations that were parties to the service
agreements. The effect of these characteristics was varied across the markets and they
represented a cost to the station. The SSA and LMA stations took full advantage of the
access to these resources, particularly scripts and video/graphics. Across all of the
service agreement stations, the duplicated stories, on average, shared the same script
almost three-quarters of the time (73%) and the same video/graphics eight times out of
ten (80%). There was a statistically significant difference across the DMAs in the dis-
tributions (Figure 2, p ≤ .05).
In Dayton, with one independent station, the LMA between WRGT and WKEF
used the same script and the same video/graphics in almost all of the duplicated stories
(97% for each). As a result, the audiences for both of those newscasts saw the exact
same story presented in the exact same way. The second LMA in the market (between
WDTN and WBDT) shared the same script over half of the time (52%) and shared the
same video/graphics 80% of the time. In Peoria, where there is no independent station,
the stations in the SSA used the same script and the same video/graphics almost all the
time (95% and 91%, respectively). In addition, the LMA in market (between WYZZ
and WMBD) used the same script and same video/graphics almost as much (92% and
89%, respectively).
At the lower end of the spectrum for the use of these resources was the SSA (WAWS
and WTEV) in Jacksonville at 21% (script) and 47% (video/graphics). However, that
was tempered by the activity of the duopoly (WLTV and WJXX) in the market that
presented the same news as a simulcast on both stations. By definition, the result was
a use of the same script and same video/graphics 100% of the time.
In Columbus and Wichita Falls, the proportion of combination stories in both markets
was well below 50%, but when the stories were broadcast on the combination of stations,

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Yanich 169

100

80

60

40

20

0
LMA1 LMA2 SSA LMA SSA SSA SSA LMA SSA SSA Duop

Dayton Peoria Colum W.Falls Burl Dnvr D.Moin Jacksonville

p=<.05 % Same Script % Same Video

Figure 2.  Distribution of the use of same script/video on the SSA/LMA/duopoly stations.
SSA = Shared Services Agreements; LMA = Local Marketing Agreement.
p < .05.

they used the same script most of the time (90% and 80% for Columbus and Wichita
Falls, respectively) and the same video/graphics (86% and 89%, respectively).
In Burlington, about three-fourths of the combination stories used the same script
and four out of five stories used the same video/graphics.
In Des Moines, the SSA had the least effect on the use of these resources: just over
one-third of combination stories shared the same script and over half shared the same
video/graphics.

Sharing Anchors and Reporters

Scripts and video/graphics are two areas in which the effects of the services agree-
ments are played out. As in most labor-intensive enterprises, personnel represent a
critical factor in the cost calculus. For television stations, part of that cost translates
into the cost of anchors and reporters. Of course, there are other personnel costs for
stations, including producers, directors, news writers, graphic artists, and camera oper-
ators, but for this research, the use of anchors and reporters was the most visible rep-
resentation of those costs. For the stations that are parties to the service agreements,
this cost also offers another possibility to achieve economies of scale—using the same
anchors and reporters to present the stories across several stations’ newscasts. The

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170 Journalism & Mass Communication Quarterly 91(1)

100

80

60

40

20

0
Duopoly
LMA1

LMA2

LMA

LMA
SSA

SSA

SSA

SSA

SSA

SSA
Dayton Jacksonville Peoria W.Falls Burl Colum Dnvr D.Moin

p=<.05 % Same Anchor % Same Rprtr

Figure 3.  Distribution of use of same anchor/reporter by the SSA/LMA/duopoly stations.

SSA = Shared Services Agreements; LMA = Local Marketing Agreement.
p < .05.

stations did so for both anchors (on average 42% of stories) and reporters (on average
37% of stories). However, there was wide variation across the television markets
(Figure 3).
In Dayton, the LMA between WRGT and WKEF shared the same anchor for almost
all of the stories (97%) and shared the same reporter for just over one-third (37%) of
the stories. However, we must keep in mind that the LMA also shared script and video/
graphics well over 90% of the time. Therefore, for two-thirds of the stories, the LMA
stations just used another reporter to deliver the exact same script and video/graphics.
The second LMA in Dayton (between WDTN and WBDT) used the same anchor and
same reporter much less often (31% and 14%, respectively).
In Jacksonville, the SSA duplicated the anchor for almost two-thirds of the stories
(64%), but it only used the same reporter for a small proportion of stories (14%).
However, the duopoly in the market, with its simulcast of the news, used the same
anchor and reporter for 100% of its stories.
Columbus was the only other market in which the same reporter was used for well
over half (61%) of the stories.
By these measures, we see that the SSAs and LMAs had their intended effects
regarding the achievement of economies of scale. These measures focus on the spe-
cific aspects of the agreements that their managers said would underpin the combined

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Yanich 171

news operations—the use of multiple platforms and the shared use of resources. These
findings confirm that the SSAs and LMAs functioned as planned—they used the mul-
tiple platforms, and they shared the resources necessary to convey the stories. One
could expect those actions; otherwise, the stated economic purposes of entering into
the agreements would be moot. The obvious and unambiguous result was a reduction
in the number of separate news voices in the markets.

Conclusion
The movement toward service agreements undoubtedly will continue. There are eco-
nomic incentives for such endeavors. In fact, the Coalition of Smaller-Market
Television Stations filed an ex parte comment with the FCC and met with FCC staffers
in December 2011 to press the case for the need for SSA.42 The record shows that these
arrangements have invariably resulted in a loss of jobs. In addition to the losses in
Honolulu, the SSA in Idaho Falls, Idaho, resulted in the loss of twenty-seven jobs.43 In
Providence, Rhode Island, fifteen jobs were lost when Citadel Communications imple-
mented an LMA with ABC affiliate.44 Such is the nature of mergers.
These arrangements can also result in conditions that turn the notion of a competi-
tive market on its head. One such situation occurs in upstate New York. In Syracuse,
the CBS (WTVH) and the NBC (WSTM) affiliates are parties to a shared services
agreement. In Utica, fifty-seven miles east of Syracuse, there is no CBS affiliate.
Therefore, the Syracuse station, WTVH, is granted a spot on the cable in Utica to oper-
ate in that market. The NBC affiliate in Utica is WKTV, and it is called upon several
times a month by the NBC affiliate in Syracuse (WSTM) to supply video and material,
generally for a local lead story. However, due to the SSA between the two Syracuse
stations, WSTM shares the material with the CBS affiliate (WTVH), which then
broadcasts back in Utica. In effect, then, the NBC affiliate in Utica is supplying con-
tent directly to its competition in its own market.45
There has been some suggestion that the development of services agreements,
whether Shared Services, Joint Services, Local Marketing or Local News, has, on the
whole, added news content to the market in which they were implemented. That is an
empirical question, not a philosophical one.
Empirically, we can look at the news operations of the stations that were parties to
the service agreements and determine whether or not they provided a newscast before
entering into the agreement. For the eleven SSA/LMA combinations examined in this
research, eight of them involved stations that each produced their own newscasts
before the agreement was implemented. In addition, the stations in the duopoly (in
Jacksonville) that was also part of this research each produced separate newscasts
before joining. Therefore, the result is that three-fourths (nine of twelve) of the agree-
ments included stations that produced separate newscasts before the implementation
of the arrangement.
Those who suggest that the arrangements add news to the market by broadcasting the
same newscast on a station that had not previously presented news stretch the logic of the
claim. It seems that simply showing the same news on another station is not a qualitative

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172 Journalism & Mass Communication Quarterly 91(1)

addition of information to the public. It is not more news. It is a broader distribution of

the same previously produced news. It is simply a logistical convenience.
Media firms are trying to create new economic models. E. W. Scripps President/
CEO Rich Boehne makes the case forcefully when he states that the model of free
content offered by local newscasts and newspapers is unsustainable. Scripps will
aggressively experiment with and create models that will take that “high-value pre-
mium content and derive much more revenue from it than we do today.”46 He contin-
ues that “we very much believe that local broadcast markets over time will
consolidate.”47 He is confident enough in that assessment that he makes the offer to
media firms to take over their news stations’ operations saying that “It is time to build
brands and take market share, mind share, audience share under a local brand when we
have the opportunity.”48
In large measure, the SSAs and LMAs examined in this research created the very
type of local brands that Boehne envisions. The SSA and LMA managers assiduously
advanced the news brand, most often with the same slogan and on the same website.
It is interesting to note, however, that the stations do not readily indicate the existence
of the services agreements, except by inference. On their websites, the “about us” sec-
tions do not typically offer any information about the arrangement. The inference
comes from the claim of the same news brand and the same slogan.
One might suggest that these service agreements could be seen as an arrangement
that is something less complete than duopoly—a “duopoly light.” However, these
arrangements may have a much more profound impact on local news content because,
unlike duopolies, the terms of these agreements specifically state the nature and extent
of the services and resources that will be shared. A service agreement that specifically
states that the news operation of one station will be shuttered and that its function will
be taken over by the acquiring station leaves no doubt about the result of the union. In
many ways, the service agreements expressly make manifest what duopolies might do.
That specification is fundamental to the arrangement. Otherwise, the implementation
of the agreement does not make economic sense.
Local television stations are private firms, and they have a fiduciary responsibility
to provide a return on investment for their owners. However, they conduct their busi-
ness using a public good—the electromagnetic spectrum. And that imposes public
interest responsibilities on the stations as well. Their newscasts are the most profitable
portions of their programming. Therefore, there has been the perennial balancing act
between what information the stations believe will “sell” and what information the
public needs for informed citizenship, although the types of information may not be
mutually exclusive. The examination of these television markets was prompted by an
interest in a particular approach to those fiduciary and public interest responsibilities.
As of April 2013, the FCC has delayed decisions regarding media ownership as part
of the Quadrennial Review. However, none of the studies that the FCC commissioned
to support that decision-making process examined the types of services agreements
that, by their stated intent, affect the structure of markets.
There is no doubt that the information landscape of the United States has changed
in the last twenty years. There are many sources of information. But, local television

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Yanich 173

news still holds a preeminent position as a news source for the public. The managers
of the SSA and LMA stations recognize that fact, most often through an economic
prism. That is understandable—media firms are businesses, first and foremost. The
SSAs and LMAs were implemented to increase the bottom line—to create economies
of scale in which the costs of the production and the dissemination of news are struc-
tured to increase profit. The question was, and will remain, what do we get, as a public,
from these endeavors.
This research has revealed that, to this point, the service agreements have a signifi-
cant effect on local broadcast news content for those stations that are parties to the
arrangement. Economies of scale dictate that production costs and cross-platform mar-
ketability will drive the news selection process. There are profits to be made in these
arrangements. Therefore, local television stations have returned to being valuable
commodities. Since 2011, Sinclair Broadcasting Group, Inc. (SBG) has spent nearly
$2 billion to acquire stations across the country, and it now controls 134 stations in
sixty-nine markets and reaches one-third of the television households in the United
States. But, this may be only the tip of the merger and acquisitions iceberg. Perry
Sook, president and chairman of Nextar Broadcasting Group, addressing investors in
late 2012, offered a vision of local television broadcasting future:

I would think that within two to five years, you’ll see the emergence of what I call three
or four super-groups. Those companies will continue to drive the business, while those
that are sub-scale will choose [to sell and] not be the house by the side of the road as the
parade passes by.49

The only way for these supergroups to emerge is the assumption of significant debt
and that will put even more pressure on the stations to achieve economies of scale. As
a result, we will see more content that makes that possible—infotainment that passes
for the news that a democracy requires for an informed citizenry.

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship,
and/or publication of this article.

Funding
The author(s) received no financial support for the research, authorship, and/or publication of
this article.

Notes
  1. W. Lance Bennett, News: The Politics of Illusion, 7th ed. (NY: Longman, 2007), xiv.
 2. Ben Scott, “The Politics and Policy of Media Ownership,” American University Law
Review 53 (3, 2004): 645-77.
 3. Harold Feld, “Changing the Channel: What the FCC’s Recent Decision on Media
Ownership Means for Independent Producers,” National Alliance for Media Arts and
Culture, December 11, 2007, http://www.namac.org/node/1239 (accessed March 28,
2012).

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174 Journalism & Mass Communication Quarterly 91(1)

 4. Prometheus Radio Project v. FCC, No. 03-3388, 2003 WL 22052896, at *1 (3d Cir.
September 3, 2003).
  5. W. Lance Bennett, News: The Politics of Illusion, 9th ed. (NY: Longman, 2012), 240.
  6. Depending on their characteristics, these agreements are variously called Joint Services
Agreements (JSA), Local Marketing/Management Agreements (LMA), and Local
News Sharing agreements (LNS). In this article, the term SSA is used to refer to all such
agreements.
  7. Jack M. McLeod, Katie Daily, Zhongshi Guo, William P. Eveland Jr., Jan Bayer, Seungchan
Yang, and Hsu Wang, “Community Integration, Local Media Use and Democratic
Processes,” Communication Research 23 (2, 1996): 179-209.
  8. Jackie Filla and Martin Johnson, “Structural Access to Local News and Civic Engagement”
(paper presented to the Midwest Political Science Association Annual Meeting, Chicago,
IL, April 20-23, 2006).
  9. Lisa George and Joel Waldfogel, “Who Affects Whom in Daily Newspaper Markets?”
Journal of Political Economy 11 (4, 2003): 765-85; David Stromberg, “Mass Media
Competition, Political Competition and Public Policy,” Review of Economic Studies 71 (1,
2004): 265-84.
10. Matthew Gentzkow, “Television and Voter Turnout,” Quarterly Journal of Economics 121
(3, 2006): 931-72.
11. See Victor Pickard, “Revisiting the Road Not Taken: A Social Democratic Vision of the
Press,” in Will the Last Reporter Please Turn Out the Lights: The Collapse of Journalism
and What Can Be Done about It, ed. Robert W. McChesney and Victor Pickard (NY: The
New Press, 2011), 175-84; Robert W. McChesney, “The Commercial Tidal Wave,” in The
Political Economy of Media, ed. Robert W. McChesney (NY: Monthly Review Press,
2008), 265-81.
12. James Hamilton, All the News That’s Fit to Sell: How the Market Transforms Information
into News (Princeton, NJ: Princeton University Press, 2004), 7.
13. Michael Yan and Philip Napoli, “Market Structure, Station Ownership, and Local
Public Affairs Programming on Local Broadcast Television” (paper presented at the
Telecommunications Policy Research Conference, Arlington, VA, October 2004).
14. Steve Waldman, The Information Needs of Communities: The Changing Media Landscape
in a Broadband Age (Washington, DC: Federal Communications Commission, 2011), 76.
15. Pew Project for Excellence in Journalism, The State of the News Media, 2013 (Washington,
DC: Pew Research Center for the People & the Press, 2013).
16. Pew Project for Excellence in Journalism, The State of the News Media, 2013.
17. Pew Project for Excellence in Journalism, The State of the News Media, 2009 (Washington,
DC: Pew Research Center for the People & the Press, 2009).
18. Pew Research Center, Further Decline in Credibility Ratings for Most News Organizations
(Washington, DC: Pew Research Center for the People & the Press, 2012), 2.
19. Pew Research Center, Further Decline in Credibility Ratings for Most News Organizations.
20. Waldman, The Information Needs of Communities, 13.
21. Pew Project for Excellence in Journalism, The State of the News Media, 2010 (Washington,
DC: Pew Research Center for the People & the Press, 2010).
22. Federal Communications Commission, Quadrennial Regulatory Review, FCC 10-92
(Washington, DC: Federal Communications Commission, 2010), 3.
23. Federal Communications Commission, Quadrennial Regulatory Review, FCC 10-92, 3.
24. Waldman, The Information Needs of Communities, 96.

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Yanich 175

25. FreePress.net, “Change the Channels,” June 22, 2011, http://www.freepress.net/changeth-

echannels/markets (accessed April 17, 2013).
26. Pew Project for Excellence in Journalism, The State of the News Media, 2011 (Washington,
DC: Pew Research Center for the People & the Press, 2011).
27. Pew Project for Excellence in Journalism, The State of the News Media, 2011.
28. Rob Glum, Edmund Lee, and Andy Fixmer, “Sinclair on Prowl for More Stations as Deals
Mount,” Bloomberg, June 19, 2013, p. 2.
29. Federal Communications Commission, Notice of Proposed Rulemaking: 2010 Quadrennial
Regulatory Review—Review of the Commission’s Broadcast Ownership Rules and Other
Rules Adopted Pursuant to Section 202 of the Telecommunications Act of 1996 (Washington,
DC: Federal Communications Commission, 2011), 81-82.
30. TVnewscheck.com, “Honolulu Stations in Shared Services Deal,” August 18, 2009, http://
www.tvnewscheck.com/article/34810/honolulu
31. Dateline Media, Media Monitoring Report (Honolulu, HI: Dateline Media, 2010), 1.
32. TVnewscheck.com, “Honolulu Stations in Shared Services Deal.”
33. Angela Campbell, Complaint and Request for Emergency Relief Regarding Shared Services
Agreement between Raycom Media and MCG Capital for Joint Operation of Television
Stations KHNL, KFVE, and KGMB, Honolulu, Hawai`i (Washington, DC: Institute for
Public Representation, Georgetown University Law Center, 2009), 1.
34. Campbell, Complaint and Request for Emergency Relief, 2.
35. Federal Communications Commission, Memorandum Opinion and Order and Notice of
Apparent Liability for Forfeiture (Washington, DC: Federal Communications Commission,
2011), 5.
36. Federal Communications Commission, Memorandum Opinion and Order and Notice of
Apparent Liability for Forfeiture, 6.
37. Daniel Riffe, Stephen Lacy, and Frederick G. Fico, Analyzing Media Messages, 2nd ed.
(Mahwah, NJ: Lawrence Erlbaum, 2005), 23-39.
38. See Peter Alexander and Kevin Brown, Do Local Owners Deliver More Localism?
Some Evidence from Local Broadcast News (working paper, Federal Communications
Commission, Washington, DC, 2004); Steven Chermak, Victims in The News: Crime
and the American News Media (Boulder, CO: Westview Press, 1995); Frank Gilliam and
Shanto Iyengar, “Prime Suspects: The Influence of Local Television News on the Viewing
Public,” American Journal of Political Science 44 (3, 2000): 560-73.
39. Ralph Donald and Thomas Spann, The Fundamentals of Television Production (Hoboken,
NJ: Wiley-Blackwell, 2000); Clarence Jones, Winning with the News Media: A Self Defense
Manual When You’re the Story, 8th ed. (Holmes Beach, FL: Winning News Media, 2004),
http://www.winningnewsmedia.com/newscast.htm, 345 (accessed March 23, 2009).
40. The distribution of the stories across the eight television markets was, Denver = 412,
Dayton = 366, Jacksonville = 336, Des Moines = 329, Peoria = 272, Wichita Falls = 243,
Burlington = 374, and Columbus = 223.
41. Mousumi Banerjee, Michelle Capozzoli, Laura McSweeney, and Debajyoti Sinha, “Beyond
Kappa: A Review of Inter-rater Agreement Measures,” Canadian Journal of Statistics-
Revue [Canadienne De Statistique] 27 (1, 1999): 3-23.
42. John Eggerton, “Small TV Stations to FCC: We Need Shared Services Agreements,”
Broadcasting & Cable, December 21, 2011, http://www.broadcastingcable.com/
article/478240-Small_TV_Stations_to_FCC_We_Need_Shared_Services_Agreements.
php (accessed November 9, 2012).

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176 Journalism & Mass Communication Quarterly 91(1)

43. Chris Ariens, New Year Brings Change to Idaho Falls, January 2011, http://www.medi-
abistro.com/tvspy/category/idaho-fallspocatello (accessed October 18, 2011).
44. Jeff Derderian, “Exclusive: Layoffs at Channel 6 Start,” GoLocalProv, April 15, 2011,
http://www.golocalprov.com/business/exclusive-layoffs-at-channel-6-start/ (accessed
October 18, 2011).
45. Personal communication with knowledgeable source regarding station news practices who
requested that his or her identity be kept confidential, October 30, 2012.
46. Michael Malone, “Scripps CEO: Let Us Run Your News Operation,” Broadcasting &
Cable, December 8, 2010, http://www.broadcastingcable.com/article (accessed December
8, 2010).
47. Malone, “Scripps CEO: Let Us Run Your News Operation.”
48. Malone, “Scripps CEO: Let Us Run Your News Operation.”
49. Michael Malone, “The Rise of the Station-Super Groups,” Broadcasting & Cable, February
4, 2013, p. 12.

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