Two commercial U.S. radio groups — one large, the other small — are the latest to lobby the FCC to eliminate its local ownership rule and allow more consolidation within markets.
These are just the latest in a series of such visits by representatives of U.S. radio companies. The meetings took place last Wednesday and were reported in ex parte filings.
Both companies reiterated arguments they have made in the past. But there is a sense that FCC action may be drawing near, thanks to a sympathetic Republican majority and the recent elimination of the 39 percent ownership cap on broadcast television stations.
Collin Jones, executive vice president of corporate strategy and development at Cumulus Media, met with legal advisors and staff members representing Chairman Carr, Commissioner Trusty and Commissioner Gomez.
According to his filing, Jones told them the need to eliminate the rule is “urgent.” He pointed out that the local ownership caps have remained unchanged since 1996 but the competitive landscape around broadcast radio has “completely transformed,” featuring services that didn’t exist then including streaming music, podcasting, satellite radio, social media, “ubiquitous” digital devices and “dominant” digital advertising platforms.
“In this competitive environment, the ability of radio station groups like Cumulus to gain greater local scale is crucial,” Jones wrote in the summary.
“Given the continuing downward trajectory of industry revenues, radio station groups must be able to achieve increased economies of scale and spread their operating costs, including the cost of quality local programming, across more outlets, the ownership of which will allow broadcasters to offer a wider array of programming to appeal to more listeners and attract more advertisers.”
He said “artificial” limits on radio broadcasters’ scale “also significantly harm the ability of station groups to attract necessary investment.”
[Related: Music Groups Say Caps Aren’t to Blame for Radio Homogenization]
Also meeting with FCC officials that day — and getting some face time with the chairman — was John Zimmer, the president of Zimmer Radio of Mid Missouri, owner of 10 stations. Representatives of the NAB joined him for part of the time.
“Given the transformation of the media and advertising markets over the past 30 years, the restrictions placed on broadcast radio stations but not their competitors now threaten the financial viability of many local stations and impair their ability to serve their communities, especially in mid-sized and small markets like the ones where Zimmer Radio operates,” he wrote in his filing.
He said competition from other audio sources that did not exist in 1996 “has significantly reduced the time spent listening to local radio stations, and thus the size of the audiences I can ‘sell’ to advertisers.”
Also, he continued, digital advertising platforms now dominate local ad markets. And Zimmer said the local advertising base, especially in small markets, has shrunk.
“The big box stores such as Walmart and online retailers like Amazon have displaced the local retailers and other businesses that formerly advertised on local radio stations. Their national replacements do not. As a result, the ad revenues of local radio stations have declined significantly over time, and stations in small and mid-sized markets earn only a fraction of the revenues earned by stations in the largest markets.”
He told the FCC representatives that “enabling smaller broadcasters to gain local scale would allow them to spread the cost of quality programming across more outlets, use their additional outlets to offer new and different types of programming to attract more listeners, and thus earn more advertising revenue.”
And Zimmer asserted that “no radio broadcaster would use additional stations to duplicate programming but would offer diverse formats to attract new listeners and grow their audiences.”
These comments become part of the FCC record as it continues its 2022 quadrennial review of media ownership rules.
[Related: More Radio Groups Seek Market Waivers to Exceed Strict Ownership Caps]
