Gray, Scripps swapping stations to create duopolies as FCC explores loosening ownership rules

Gray Media and The E.W. Scripps Company have entered into agreements to swap television stations across five mid-sized and small markets, resulting in the creation of new duopolies for each group.

“The local broadcasters anticipate these transactions will give them the market scale and depth to strengthen their financial durability, in turn allowing them to preserve and deepen public service to their communities with essential local news and sports programming,” reads the joint announcement.

It is a well-known adage in broadcasting that duopolies can offer stations significant cost savings by combining certain technical and back-office functions that might otherwise be duplicated if the stations were separate.

Gray will acquire Scripps’ WSYM (Fox) in Lansing, Michigan (DMA 113), and KATC (ABC) in Lafayette, Louisiana (DMA 125). The acquisition of WSYM will create a duopoly in Lansing, where Gray owns WILX (NBC), and the acquisition of KATC will complement Gray’s strong presence in the Southeast without creating a true duopoly. 

“We are very pleased to be executing a successful set of station swaps with Scripps that brings great value to both companies,” said Gray President and Co-CEO Pat LaPlatney, in the statement. “At Gray, due to the strategic nature of these two acquisitions and the benefits to our operations, we anticipate expanding the news staff and hours of live local newscasts on both stations soon after closing the acquisitions.”

Scripps will also acquire Gray’s KKTV (CBS) in Colorado Springs, Colorado (DMA 86), where Scripps owns KOAA (NBC); KKCO (NBC) and low power station KJCT-LP (ABC) in Grand Junction, Colorado (DMA 187); and KMVT (CBS) and low power station KSVT-LD (Fox) in Twin Falls, Idaho (DMA 189), where Scripps owns low power station KSAW-LD (ABC).

These acquisitions bolster Scripps’ already strong regional presence in the West, where it owns and operates television stations across Montana, Idaho, Colorado, Utah, Arizona, Nevada and California.

“These new stations will allow Scripps to expand upon our local sports and news strategies in key growth geographies for us,” said Scripps President and CEO Adam Symson. “The resulting efficiencies will allow us to further invest in our connection to our communities, offering even richer coverage of these neighborhoods and regions.”

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The swap involves the even exchange of comparable assets. In particular, the consideration for each transaction is the performance of the other transaction. As a result, neither company will pay cash consideration to the other.

Gray and Scripps anticipate closing both sides of the swap simultaneously in the fourth quarter of this year, following regulatory and other approvals.

“The regulatory approvals will require certain waivers of outdated local ownership restrictions that have uniquely restricted local broadcasters’ ability to compete in today’s dynamic and highly competitive media environment,” the statement noted, a clear reference to recent efforts to deregulate the broadcasting industry and loosen ownership rules.

The FCC has been reviewing relaxing ownership guidelines among stations that, if passed, will likely create an environment that will increase the number of duopolies and potentially triggering more such swaps. Such changes could become after as early as later in the summer of 2025.

Supporters of these moves, which includes broadcast trade groups, executives and others, say that strategies such as shared operations are vital to continue to make it possible for local stations to operate while still being fiscally viable. 

Critics say relaxed rules will lead to a lack of distinct voices in many communities, tighter pressures on local newsrooms from corporate owners and more cost-cutting, including layoffs as duplicative roles are eliminated, all of which could further strain an industry that’s faced significant cuts already. Others have called out TV station ownership groups for having to cave to shareholder pressure to grow revenue and profits each year while the industry faces significant economic challenges. 

“The parties intend to work closely with regulators, employees and other stakeholders to obtain the requisite approvals and to facilitate the smooth transitions of these stations to new ownership,” the statement notes. 

It did not specifically mention if there will be job losses as a result of the plan, though this is typically one of the key incentives to combining two stations in one market under a common owner.