Trump's FCC chair takes aim at national networks
While pledging to protect local stations
The Trump loyalist expected to take over the Federal Communications Commission has fired a warning shot across the bow of the national TV networks that just might help your local TV station.
Brendan Carr is already one of five FCC Commissioners. He was nominated by then-president Donald Trump in 2017 and renominated by President Biden in 2023. Trump is expected to name him to chair the FCC Commission early next year.
Carr made news earlier this week when he wrote a letter to Bob Iger, head of Disney, which owns the ABC TV network. Carr’s letter starts out in attack mode – citing a Gallup survey showing that “only 31% of Americans have a great deal or even a fair amount of trust in the mass media, which includes ABC.” Carr’s claim is disingenuous at best, because much of the blame for Americans’ declining trust in media can be blamed on Carr’s boss – Trump – who routinely attacks the media and calls journalists “enemies of the people.”
Carr then cites as evidence the recent ABC News $16 million legal settlement with Trump. I wrote last week why this settlement is bad news, and here’s one more reason. A Trump appointee is using ABC’s settlement to further claim it proves the media is biased against Trump, and to try to intimidate ABC into future obedience.
But the point of this column is where Carr’s letter to ABC goes next, which didn’t get a lot of coverage. Carr draws a distinction between the national networks like ABC, CBS and NBC – and the local stations that carry network programming. Carr claims while Americans distrust the networks, they “largely hold positive views of their local media outlets” and that “local journalists in their area are mostly in touch with their community and are doing well at key roles, including reporting the news accurately…”
Network/affiliate relations are dicey
This gets at an important point that many Americans likely don’t understand about their local TV stations. Although the networks own a few stations, most TV stations are owned by independent companies like Hearst, Tegna, and Nexstar, not the networks. Their relationship with the networks is contractual. Most of them go back to the origins of TV. My former station, KCCI in Des Moines, has been a CBS affiliate since it signed on the air in 1955, leading some viewers to assume CBS owns the station. It was originally owned by the Register and Tribune, sold a few times and eventually bought by Hearst in the late 1990s.
Bear with me a bit longer down this line of thought and I’ll get back to Carr’s letter and why it’s important.
The contracts between local stations and the networks tend to be long-term – around ten years. Renegotiating those contracts can be tense and the power dynamic between networks and local stations has shifted a lot since the 1950s. Back then, the networks paid local stations to run network programming. After all, the network can’t sell advertising unless local stations carry those ads. Those payments were called “network compensation”, and they were a significant revenue stream for local stations.
Compensation turned into reverse compensation
About 20 years ago, the networks started demanding an end to network compensation. Then, in more recent negotiations, they demanded “reverse compensation” – where the stations would pay the network for the right to be, for example, a CBS affiliate. The network position came down to, in essence, “if you want NFL football, NCIS and the CBS Evening News to be part of your station brand, you’re going to have to pay us for it. Or else, we’ll go find another station in your market and do a deal with them. And you can air Laverne and Shirley reruns as far as we care.”
Over time, millions of dollars that used to go from the networks to local stations started flowing the other way, from stations to the networks. That hurt station revenue. One way stations compensated for that loss was to extract payments from cable and satellite providers for the right to carry a local station. If you pay Mediacom, Dish, Direct, or YouTube TV – part of your dollar goes to the local stations. The station position, in essence, is, “We pay for a news staff and programming, and you can’t just steal our product and resell it to viewers without giving us a cut.” Federal law requires those distributors to pay local stations.
So, stations have been making money again from those “retransmission” payments. And now the networks are demanding their own cut of that revenue in negotiating contracts with stations. Brendan Carr’s letter accuses ABC of trying to take ALL of that revenue from local stations. “My understanding is that ABC is attempting to extract onerous financial and operational concessions from local broadcast TV stations under the threat of terminating long-held affiliations, which could result in blackouts and other harms to local consumers of broadcast news and content.”
Carr tells ABC that he’s going to keep a close eye on the situation, and he expects the network not to do financial harm to stations “that serve the needs of their local communities.”
Can Carr be trusted?
In general, I’m worried about Carr’s leadership of the FCC. He wrote the communications law part of Project 2025 – and anybody who touched that document is a cause for concern. But with respect to his warning shot at ABC, I agree with his approach. The relationship between the networks and their local affiliates is fraught with problems. Networks demand further financial concessions from local stations, while also selling that very same network programming direct to consumers through apps like Hulu, Peacock and Paramount Plus.
And Carr is right that local TV news operations have done a good job providing fair political coverage and not venturing down the partisan path of Fox News or MSNBC. Sure, there have been a few exceptions, like the Sinclair-owned stations which have leaned too far to the right. Local stations ARE connected to their communities. Your local TV news anchors and reporters live here, shop here, send their kids to schools here and pay taxes here. That tie needs to be protected so stations can invest in strong local journalism and not send too much revenue to the networks in New York.
Bottom line:
What does all this mean to you, the discerning news consumer? In my view, we can’t trust Donald Trump when it comes to the news media. He will use every weapon he has to punish those who displease him, such as filing a ridiculous lawsuit against the Des Moines Register. But if Trump’s FCC stands up for local TV news operations, and does what it can to protect station revenue, that could bolster an important source of local news at a time when local newspapers are struggling. It bears watching. We’ll need to see how it turns out.
(CNN’s Brian Stelter posted the entire Carr letter on X, and you can read it here.)
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Thanks, Dave. Your column was all news to me. This area, like so many others, is more complicated that most realize. I look forward to you keeping us up on what happens next.
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