The FCC last week approved two television "Shared Services Agreements," here and here, each between the proposed Buyer of a television station and a company that owns another television station in the same market. In each case, the existing owner would sell advertising time for the station being purchased, as well as provide a loan guaranty for the funds necessary for the purchase of the station. And the station already in the market would receive from the purchaser of the new station an option to purchase the station in the future, if that purchase is permitted under some future set of multiple ownership rules. It is interesting that these decisions were released in the same week as the FCC issued two requests for public comment on the multiple ownership rules (see our post here).
These decisions probably mark the outside limit of what two stations can do in a television market where they cannot be co-owned without triggering multiple ownership concerns. In the radio world, such agreements would not be possible to the same extent. A radio licensee who provides sales services for another station in the same market, where more than 15% of the advertising time on the station is sold pursuant to such an agreement, would result in an "attributable interest," meaning that such services could only be provided to a station that could be owned under the multiple ownership rules.
Even in the television world, it is not clear how long such agreements will be allowed. There is currently pending an FCC rulemaking proceeding asking if Joint Sales Agreements in television should be allowed to continue if they are between two stations which cannot be commonly owned under the FCC ownership rules. In many television markets – particularly smaller television markets – these agreements have allowed some stations to survive and provide service to the public when the economics of the situation probably would not have allowed a wholly independent station to survive (or to provide much in the way of local service). But sometimes these distinctions between markets are overlooked, as the FCC tends to look at larger markets when making decisions, as these markets are most visible, while overlooking the economic impact of their decisions on stations in smaller markets.