Local Marketing Agreement - Criticism

Criticism

The use of LMA's has been considered controversial by many broadcasters and public interest organizations. Sinclair Broadcast Group and Nexstar Broadcasting Group have been singled out as broadcasters utilizing LMA's as part of their business models the most—the two broadcasters have financed holding companies (such as Cunningham and Mission Broadcasting respectively) whose only purpose are to acquire television stations in smaller markets outright so that they can be operated through an LMA by a station in the same market owned by its respective company.

The consolidation of news departments through local marketing agreements between "major" network affiliates has been criticized for resulting in employee layoffs at the affected stations, and for reducing the number of editorial voices in a market, as two separately-branded newscasts may ultimately consist of much of exactly the same content. In 2009, Raycom Media (owner of Hawaii's NBC and MyNetworkTV affiliates) was faced with complaints after it announced that it would take over operations of CBS affiliate KGMB under such an agreement, fold all three stations into a shared news operation known as Hawaii News Now, and lay off parts of its workforce. The Media Council of Hawaii attempted to complain to the FCC about the agreement, stating that it would "directly reduce the diversity of local voices in a community by replacing independent newscasts on the brokered station with those of the brokering station." In response, the FCC stated it would begin to investigate into the matter

Broadcasters can also collect carriage fees for the stations they operate under LMA's on behalf of their owner, often bundling its carriage agreements with those of stations they own outright. This can, especially in LMA's between two stations affiliated with "major" U.S. networks, allow the broadcaster to charge higher fees for retransmission consent to television providers for carrying the stations—which could result in smaller cable companies not being able to afford the higher fees imposed.

However, many broadcasters who engage in the practice believe that such agreements are beneficial to the survival of television stations, especially in smaller markets—where the cost savings achieved through the consolidation of resources and staff may be necessary to fund a station's continued operation.