Thursday, August 19, 2010

A number of broadcasters support the AM/FM Subcaps

A number of broadcasters teamed up to file reply comments with the FCC seeking repeal of the AM/FM subcaps on July 26. The coalition represents some 668 stations in markets of all sizes. My two broadcasting companies (Monticello Media and MSG Radio) as well as our brokerage firm signed onto the comments.

If the subcaps are repealed, it will result in new capital coming into our capital starved industry. I predict that a number of broadcasting companies may be saved from bankruptcy if the subcaps are removed on a timely basis.

The subcaps are no longer (if ever) justified. You can read the details in the Reply Comments. Essentially, if you operate in a market where ownership of four FMs and two AMs is allowed (or four AMs and two FMs), the removal of the subcaps would allow you to own six stations, regardless of flavor. If they are repealed, unprofitable clusters can swap/trade/buy/sell and improve their strategic and financial positions.

Repealing the subcaps will awaken a stagnant industry, introduce fresh capital, and open doors for new minority ownership. Let's hope that the FCC sees the wisdom of eliminating an antiquated burden on broadcasters.

Click here for the filing: Reply Comments

That is my opinion. What is yours?

George
Media Services Group

2 comments:

  1. The sub-cap issue is short sighted. Certainly it would bring more capital into the market but in long term, it would further dilute the variety of programming and create more "voice tracked jukebox" radio stations. And we know that listenership is moving towards alternative (Ipod) music sources because of exactly that. Additionally it would allow the dominant market group to use it's power to dictate spot rates...which pushes the little guy out of business. Let's face it...once radio became a Corporate Cash machine it lost it's appeal.

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  2. Keep the subcaps it's the only way to keep AM viable, make more translators available for AM do not make translators attributable. Allow newspapers and TV stations to buy radio stations regardless of market size.

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