The long restrictive rule that prohibits a publisher in America from owning a television or radio station in the same city as a newspaper may soon be relaxed.
The head of the Federal Communications Commission is proposing the decades-old rule should be scrapped. Most likely to benefit are publishers such as Rupert Murdoch who in addition to owning the Fox TV local channel also owns the New York Post and very soon the Wall Street Journal.
Also likely to benefit is Samuel Zell, the Chicago investor who is negotiating to buy the Chicago Tribune.
Despite the law change, a rush to buy up ‘frozen’newspapers is not anticipated – as the market in newspapers today is not what it was.
The change in rules nevertheless appears to enjoy the support of the five commission members who have been under pressure for years to rescind the rule.
At the same time the FCC is considering amending the rule which limits the number of TV and radio stations a company can own in the same city. The recent migration of advertising from newspapers to the internet has also put pressure on the FCC to change those rules.
A small number of media companies, including the New York Times, were able to obtain waivers allowing them to have radio and TV stations as well as newspapers in the same city, because the cross-ownership restrictions only went into effect in 1974 – and were not applied retrospectively
Samuel Zell has welcomed the move. He wants to complete his $8bn buyout of the Chicago Tribune by the end of the year. At the moment he only has temporary waivers that allow him to operate news papers and tv station in five cities, New York,Chicago, Los Angeles, Hartford and Miami.
Meanwhile Rupert Murdoch, preparing to consolidate his purchase of Dow Jones, has told shareholders in News Corp he is prepared to invest a total of $200m in the Wall Street Journal in the coming years, of which $70m will be invested the first year he takes over.