Shared Service Agreements (SSAs) have become a common practice in the television industry, as they allow for more efficient use of resources and increase market reach for broadcasters. Essentially, SSAs are agreements where one station provides services to another station, such as programming, sales, or administrative support.
The main purpose of SSAs is to help smaller stations compete with larger ones in a given market. By pooling resources, these stations can offer better programming and services to viewers and advertisers alike, while maintaining their independence. It also allows for smaller stations to benefit from economies of scale that larger stations enjoy, without the added costs.
SSAs have been a topic of controversy over the last few years, particularly in the wake of the FCC`s decision to allow multiple stations to be owned by the same company in a single market. Critics argue that SSAs are being used to circumvent the FCC`s ownership rules, allowing larger stations to control smaller ones without technically owning them. They fear that this may lead to the consolidation of the television industry, limiting competition and reducing the diversity of viewpoints.
In response, the FCC has taken a closer look at SSAs, and has instituted new rules to regulate their use. These rules include a prohibition on agreements that result in a station controlling more than 15% of the advertising time in a given market, and a requirement that all agreements be made public.
Despite the controversy, SSAs continue to be a popular method for smaller stations to compete in today`s television market. With the right agreements in place, they can offer viewers and advertisers the same quality programming and services as larger stations, while maintaining their independence and avoiding the costs of ownership. While regulation around SSAs will continue to evolve, these agreements are likely to remain an important part of the television industry for years to come.