When a high school chaperone relaxes the rules, there's a lot of pairing up.

The same thing is happening in the TV broadcast world. After the Federal Communications Commission loosened curbs on ownership in major markets in August 1999, six big TV station group owners started getting cozy.

Predictable? Yes. And with the chaperone still looking the other way, other broadcasters may turn bold. Keep an eye on Walt Disney Co.'s ABC, Barry Diller's USA Networks Inc. and the Tribune Co. Each owns stations in the coveted New York and Los Angeles markets and could want more.

If nothing else, these companies might feel the need to catch up. Viacom Inc. paid $50 billion to waltz off with CBS Corp. in April. Two weeks ago, News Corp. agreed to pay $5.35 billion for Chris-Craft Industries Inc. and two affiliated companies.

General Electric Co.'s NBC found a cheaper date in Paxson Communications Corp., paying just $415 million last September for a 32 percent stake. Paxson, which owns 66 lesser-known TV stations, has begun running some NBC programming along with its "family-friendly" network fare.

Consolidation looks good to shareholders, but TV viewers may be irked by changes. Some local newscasts have been disappearing. In Jacksonville, Fla., viewers see the same local newscast on the ABC and NBC affiliates because Gannett Co. now owns both stations and can economize.

Viacom may shut down the United Paramount Network if it loses the affiliation of eight Chris-Craft stations in the News Corp. sale. That would displease fans of "Moesha," "The Parkers" and "Smackdown!"

Prior to last August, broadcasters were limited to owning one TV station in a given market. The FCC decided to allow common ownership of two TV stations, if eight other stations continued to operate in the market under separate ownership.

But the sweetest break for the big broadcasters came with the FCC's decision not to count a second station in a local market toward the broadcaster's national audience cap, which is set at 35 percent. The FCC decision sparked the merger between Viacom and CBS, which owned TV stations in six of the same markets.

News Corp. said its bid for Chris-Craft was prompted by overlap in four cities, including New York and Los Angeles, the top two markets. In a conference call with analysts and reporters, News Corp. executives said they expect to reap savings from combined engineering and administrative functions, and gain leverage with program suppliers and advertisers.


For reprint and licensing requests for this article, CLICK HERE.