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. |
