Sen. Cantwell Criticizes Gannett/Belo Deal

By:  Broadcasting & Cable - John Eggerton
Source: Broadcasting & Cable

Media consolidation critic Sen. Maria Cantwell (D-Wash.) Tuesday criticized Gannett over its proposal to buy Belo stations, including three in Washington state, to create a so-called Super Group.

Gannett is disallowed by FCC local market caps from retaining ownership of Belo stations in five markets where it already owns a station. Those will be owned by former Belo exec Jack Sander. But Gannett has said it will provide  some back office services for the Sander stations.

At the Senate Commerce Committee hearing for FCC chair nominee Tom Wheeler on Tuesday, Cantwell brought up the deal in questioning on media ownership rules and said she saw it as an effort by Gannett to "use shared services agreements as a way to get around [FCC local ownership] rules." She said she was very concerned about the issue.

Wheeler said he understood the seriousness of the issue, and has been a longtime advocate of diversity of voices. But he said the FCC has asked GAO to study the issue and he "looked forward to their opinion." He said the key is for the commission to look at competition, localism and diversity as the touchstones, not business plans. He declined to comment on whether some broadcasters could abuse shared service agreements to get around the rules. "I am not informed enough to be explicit on that," he said, "but I am going to be."

Gannett has said it expected to be able to either own or "service" all the Belo stations and Gracia Martore, Gannett president and CEO, said this week she expected to consolidate "all the results from these stations into our overall financial results."