As FCC Ownership Rules Loosen, Two Divergent Futures Emerge For Local TV Stations
With the Federal Communications Commission poised to revisit long-standing ownership rules governing local broadcast television, a new wave of M&A speculation is once again rippling across the industry. If the FCC loosens or eliminates the national ownership cap or further erodes the “duopoly” rules in local markets, expect a flurry of consolidation. But lost in this speculation is a more nuanced — and more important — truth: not all local stations are created equal, and the paths ahead for network-owned stations and independently owned affiliates couldn’t be more different.
At a glance, both network-owned-and-operated stations (O&Os) and independently owned network affiliates perform the same basic function — they carry the same primetime content, the same national newscasts, and they fight for the same retransmission dollars. But the underlying business models and strategic outlooks of these two types of stations are increasingly distinct. The coming wave of media consolidation will only deepen that divide.
The Power (And Limits) Of The Network O&O Model
O&O stations — those owned outright by the networks themselves (e.g., ABC, NBC, CBS, Fox) — are typically concentrated in the largest U.S. markets. These stations are deeply integrated into the operations of their parent companies and serve as crucial distribution points for national advertising, political spending, and digital experimentation. NBCUniversal, for instance, uses its owned stations to beta-test streaming integrations and promote Peacock. The networks’ digital pivot is increasingly built around the control they have over these O&Os.
O&Os also benefit from scale: they tend to be better staffed, more technologically advanced, and more nimble in adopting cross-platform advertising solutions. These stations are positioned to remain central to their parent companies' evolving distribution and monetization strategies — whether through ATSC 3.0 datacasting, live-streaming through apps, or integrated ad-tech stacks.
But O&Os are not immune to the pressures facing the broader linear TV business. Even in major markets, local ratings have been declining, and the economics of news production are increasingly difficult to justify — especially when compared to the lower-cost, higher-margin world of digital video. For now, however, O&Os still enjoy a unique position as corporate beachheads, protected by their parent networks' strategic imperatives.
Affiliate Stations: Precariously Perched
Independently owned affiliates — such as those owned by Nexstar, Sinclair, Gray, Hearst, and others — make up the majority of the local broadcast television landscape. These stations license network programming but operate as standalone businesses. That means they carry more financial risk — including the so-called “reverse compensation” fees they must pay back to the networks — but also retain more control over local content, ad sales, and strategic direction.
In many markets, affiliates are the dominant source of local news and community engagement. They are often more trusted by viewers than their network-owned counterparts, particularly in small and mid-sized DMAs. Some affiliate groups have become powerhouse operators in their own right, cobbling together scale across dozens of markets.
But the ground is shifting beneath their feet. As networks increasingly look to control their digital destiny — launching direct-to-consumer platforms, streaming live feeds, and claiming digital ad inventory — independent affiliates are being left out. They’re also highly exposed to retransmission risk: ongoing battles with MVPDs over ever-increasing fees have led to frequent blackouts, damaging viewer trust.
Moreover, affiliate groups may find themselves at the center of whatever consolidation is to come. Some will be buyers. Others, likely smaller station owners, will be sellers — especially if the FCC relaxes the local ownership limits that currently prevent a single entity from owning more than two “top-four” rated stations in a market. Still others may be squeezed between networks intent on reclaiming local inventory and new digital entrants siphoning off ad dollars.
One Regulatory Change, Two Very Different Outcomes
All of this brings us back to the FCC’s pending moves. What appears on the surface to be a deregulatory gift to broadcasters may, in fact, accelerate a structural divergence in the industry. For O&O stations, loosened ownership caps will likely enable broadcast networks to strengthen their positions in more markets, adding scale to an increasingly national-like model. For affiliates, particularly those without the operational scale of a Nexstar or a Gray, the future looks more fragile.
Ultimately, the future of local broadcast TV is not a single story — it’s two stories unfolding in parallel. One, driven by the networks’ vertical integration and streaming ambitions. The other, grounded in community identity and regional reach, but increasingly exposed to digital disruption and shifting regulatory winds.
In the months ahead, as deal activity heats up and policy lines shift, we’d do well to recognize that what benefits one part of the local TV world may hamper another. For policymakers, investors, and viewers alike, understanding these diverging futures isn’t just a matter of semantics — it’s essential to understanding what’s at stake.
Local News To Peruse
With Trusty’s FCC Confirmation, The Dereg Dam Is Ready To Burst - Janet Stilson [TVNewsCheck]
Rearranging The Deck Chairs At Tegna - Kirk Varner {TVND.com]
There’s Still Some Life Left In The Incredible Shrinking Pay-TV Bundle - Anthony Crupi [Sportico]
NextGen TV Virtual Channels Combine The 'BEST' Of OTA, OTT - Tom Butts [TVTech]
The Future Of Weather Forecasting Is Hyperlocal - Thomas E. Weber [Wall Street Journal]
