Raycom has some explaining to do.
In October 2009, the company entered into a Shared Services Agreement with HITV License Subsidiary, Inc to operate the news department of CBS affiliate KGMB. The SSA resulted in the termination of a third of the stations’ staff and the simulcasting of some news programs.
Raycom characterized the deal as a newsroom merger and not as an ownership change.
But, in an article published in Wednesday’s Honolulu Advertiser, documents filed with the Federal Communications Commission indicate Raycom Media Inc., which owned KHNL and K5 before the deal, now controls virtually all of the operational aspects of the three stations. Critics say that violates federal laws that bar one company from owning multiple television stations in a single market.
Records obtained by The Advertiser under a Freedom of Information Act request with the FCC show that Raycom is receiving more than 90 percent of the cash flow generated by all three stations, which exceeds thresholds previously allowed by the FCC in mergers.
This discovery is of no surprise. Shared Services Agreements are nothing but money grabs by broadcast companies who are owned investment bankers, generated to maximize profits.
SSA’s are also away to circumvent the FCC rules for ownership. They can do it because the FCC isn’t doing what they’re supposed to be doing, enforcing broadcast ownership standards.
Every Shared Services Agreement entered into the last 18 months needs to be re-evaluated to find out who’s doing what! If the SSA is, in fact, a sale, which in the Honolulu case is blatantly obvious, both companies should be heavily fined for not going through the proper channels.
What’s the likelihood of that actually happening? About as much as hitting the Mega Millions lottery!