We come to you today from that haunt of frequent flyers, busy executives, and TV station consultants alike—The Delta Sky Club. It is packed, as these airline club locations tend to be more and more these days. But we have managed to secure a small bit of workspace, allowing us to pull out our trusty laptop and bring you this Friday edition of The Topline.

Back in the early 1960s, the game show producing dynamic duo of Mark Goodson and Bill Todman brought a new game show to life on CBS. Creator Bob Stewart cooked up the show, which featured two teams of two people, a celebrity and a civilian. The object was to try to guess a mystery word based on single-word clues given by their partner. The twist was that the audience would know the word before the guesses began. Points were awarded based on the fewest guesses needed to determine the word correctly. "Password” became a hit, and the show ran in various forms on different networks for nearly three decades. In recent years, NBC’s “Tonight Show" host Jimmy Fallon brought Password back to life--first as a segment on his show and then as a stand-alone game show.

If we were playing the game for this column, this is where the announcer would tell you in a hushed voice what the password is for this round. You’ll have to see if you can guess it as you read along.

Last week, the Eighth Circuit of the US Court of Appeals issued an interesting ruling that received minimal notice by many in the broadcasting industry, but the decision stands to change that industry substantially in about 80 days from the time we are writing this. The court delivered its decision, in the matter of Zimmer Radio of Mid-Missouri v. FCC. Don’t let the name Zimmer Radio throw you off, as the Missouri-based radio station owner was just the first name as the petitioner on the case, which also included the National Association of Broadcasters (NAB) as well as all of the four major television network affiliate groups, representing the local television stations affiliated with ABC, CBS, FOX, and NBC.

The case challenged the Federal Communications Commission’s decision in its 2018 Quadrennial Review, which retained the existing broadcast ownership rules, which include a prohibition against one company owning more than one television station affiliated with one of the “big four” networks in the same market. The Eighth Circuit court unanimously accepted that the arguments put forth by the NAB, which presented that “in many markets, combinations of the top four rated stations would increase competition.” At the same time, the court rejected the FCC’s argument that the top four-rated stations in a given market “are generally associated with the four major broadcast networks and that they are more likely to originate local news."

The Eighth Circuit didn’t find much else worth changing, so they left the remainder of the FCC’s current rules (at least as released in 2023) for both Local Television Ownership and Local Radio Ownership, essentially in place.

There is a lot to unpack in this seemingly narrow decision. You can read the full decision here. For those of you who haven’t passed the bar exam, we will examine this through the lens of its potential real-world implications, as the Eighth Circuit’s decision seems to mean that it will soon be open season for hunting duopolies.

To get a preview of what that may mean in practice, we needed to get on a plane and head south.

And so we did, non-stop to television market #41. That would be Jacksonville, Florida. It is a reasonably good example of a medium-sized television DMA, as determined by Nielsen, but with one unique aspect. The market’s 16 counties in Northeast Florida and Southeastern Georgia are home to some 688,000 television households, representing about 0.6% of the US television universe. Jacksonville is also the largest city in the US (by land mass), with some spectacular beaches along what’s known as “The First Coast. It is also the home to the typically disappointing Jaguars of the National Football League.

Football record notwithstanding, Jacksonville is a charming place that has seven full-power commercial television stations on the air. But for our professional purposes, the unique feature here is that there are three different “duopolies” currently operating in the Jacksonville market. The first was TEGNA’s WTLV, the market’s NBC affiliate on channel 12, co-owned with WJXX, the market’s ABC affiliate on channel 25. Cox Media Group’s “virtual duopoly” is the pairing of WFOX, the Fox affiliate on Channel 30, and co-managed WJAX, the Hoffman Communications-owned CBS affiliate on Channel 47. The third station duo is Graham Media Group’s WJXT, a news-heavy independent on channel 4, branded as “The Local Station.” It is co-owned with WCWJ, the market’s CW affiliate on channel 17. (Of course, these stations are broadcasting on different digital channels, but use their legacy channel numbers as their branding.)

This complicated situation is allowed under the current FCC rules (before the Eighth Circuit weighed in last week) because of the unique way the ownership of each station evolved over the years. WJXT was the market’s first station, signing on the air as WMBR-TV back in 1949 as a CBS network affiliate. It would remain one until 2002, when owner Post-Newsweek (the predecessor of Graham Media) got into a nasty network affiliation renewal battle, and it gave up the CBS affiliation to become the news-centric independent station it is today. That’s the same situation that will be happening soon in Miami to WPLG and in Atlanta to WANF. Both will become independent stations that are heavily focused on local news programming throughout the day.

WJXT is still usually Jacksonville’s most-watched newscast in most time periods. Because of that, the four network-affiliated stations are paired up in two duopoly situations. In the case of WTLV (NBC) and WJXX (ABC), the duopoly was permitted in early 2000 due to WJXX's complex history in getting on the air and securing the ABC network affiliation. When the FCC ruled in November of 1999 that it was permissible for one company to own two television stations in the same market, WJXX’s owner, Albritton Communications, announced it was selling the Orange Park licensed station to WTLV owner Gannett (predecessor to TEGNA) the very next day after the FCC rule change.

The other two network-affiliated stations, WFOX (Fox) and WJAX (CBS), are considered a “virtual duopoly” because of the remaining FCC rule that would prevent one owner from having both network affiliates. Thus, WJAX is owned by a different company (Hoffman) that contracts with WFOX's owner (Cox) to provide “shared services” and basically does all of the operating of WJAX. This kind of arrangement is in place in many markets where large group owners like Nexstar and Sinclair have so-called “sidecar” companies that own the license of a second station, but the stations are run in tandem by the larger group owners under what is known as a "shared service arrangement.”

What that means in Jacksonville is that only three local TV newsrooms are covering the market. TEGNA’s WTLV and WJXX are co-branded as “First Coast News,” and the same news programming runs across both stations in most time periods, save for weeknights at 7 pm when “First Coast News at 7 pm” airs only on WJXX (WTLV airs “Wheel of Fortune” in the access time period). Cox Media’s WFOX and WJAX operate in a somewhat similar fashion, both branded under the same “Action News Jax” name. Because of the Fox network’s smaller programming schedule, WFOX runs an additional two hours of morning news from 7 to 9 am each weekday and then a 10 pm hour-long newscast. WJAX is in CBS programming during those times, but it is the only station of the duopoly that airs a noon edition of “Action News Jax.” Long-time market leader WJXT airs some 59 hours of local news each week, more than any other station in the market, but sister station WCWJ carries no local newscasts.

The net effect of all this is that in any given time period each day, there can be five stations carrying local news, but only three different local newscasts are actually on the air. That’s because two of those newscasts (First Coast News and Action News Jax) are seen identically across two different stations.  

So much for that premise of "increasing competition."

On the flip side, in a world where the economics of broadcast television have declined significantly, the idea of allowing two television stations to survive-and maybe even thrive-by teaming up to save on costs and personnel may make business sense. The industry argument is that it may be vital to save some stations from going out of business. 

As we were writing this story, Gray Media announced that it will be seeking permission for new duopolies in Columbus, Georgia, and Lubbock, Texas. It plans to acquire stations in each market from Sagamore Hill under the existing FCC rule that allows for a waiver for an owner to acquire a second station in a market if it is determined that the station would not be able to survive on its own. This “failing station” provision was part of the 1999 rule changes that allowed for the first duopoly in Jacksonville that we noted above. That is in addition to the pending station swaps between Gray and Scripps that would create duopolies in Lansing, Michigan, and Lafayette, Louisiana, for Gray, and ones in Colorado Springs, Colorado, and Twin Falls, Idaho, for Scripps. Editor’s Addendum: Post our initial publishing of this article, Gray announced it was acquiring the stations of Block Communications. That will give Gray another market duopoly, this time in Louisville, Kentucky, where it has WAVE (NBC) and will add WDRB (FOX).

What Jacksonville shows us is that having six television stations can mean only having three choices for local news--albeit spread amongst the various network affiliates, along with one historically strong local news station that has held its own without a network affiliation. Look for the number of markets to get new duopolies to increase dramatically.

When the Eighth Circuit court’s ruling takes effect on October 23rd, the reality is that any two stations amongst “the top four” in any given market would be able to be co-owned. That assumes the Brendan Carr-led FCC won’t put forth its own plan to deregulate the local television ownership rules further, a move it has suggested was already in the works. Legal observers believe it's why the Eighth Circuit court didn’t make last week’s ruling effective for ninety days, to give the commission time to put its plan to change the station ownership rules in place.

Now the clock is running. One way or the other, the deals to create duopolies are likely to start coming faster than the lightning round of the original Password game show. And not just in the smaller markets. Some of the long-awaited major deals that have been waiting to get done, wondering whether the FCC would allow one company to own two network affiliates in a major market, may have just been given the green light.

So, in case you haven’t guessed it, from now on, the Password is… “duopolies."

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