Local News Left in Lurch as Disney, Amazon Strip Sports from Broadcast and Cable
In this article, senior reporter Karina Montoya argues that the decline of local television news, largely caused by the rise of internet-based live TV services that are not subject to "must-carry" regulations, can be addressed through updated public policy that extends these regulations to include modern streaming platforms, ensuring the continued viability of local journalism.
Local television news, which is the only accessible source of local news in many parts of the country, has been hit particularly hard in recent years. Thousands of local TV journalists are being laid off each year, and entire local newsrooms have been gutted in favor of cheaper syndication of national news programming.
The trend is driven partly by changes in technology. As more and more households obtain access to high-speed internet services, cable and satellite networks now have to compete with ever faster steaming services that don’t carry local news. But while the shift in technology is largely inevitable, its damaging consequences for local journalism are rooted in a regulatory failure and are potentially fixable through public policy.
Historically, local television has relied heavily on the revenue that cable and satellite networks are compelled to pay them under “must-carry” rules. These are longstanding regulations that require those networks to host local news stations, give them prominent placement on channel listings, and pay them fair compensation for their content, including most importantly, their local news programing.
The networks could afford to make these payments largely because they made so much money distributing live sports programming, and because millions of sports fans had no other way to get the sports coverage they wanted. This use of regulation to effectively cross subsidize local news has applied to cable companies since the 1970s and to broadcasters for decades before that.
But that regulatory framework hasn’t caught up with the way programming, and especially sports programming, is increasingly delivered these days. First came streaming platforms like Netflix and Amazon Prime Video, which not only offer all kinds of compelling competing content, but which have been bidding more recently for licenses to national sports events, thereby giving sports fans access to much of the sports coverage they need without having to pay for content they don’t want.
And now a new development is hastening the cord-cutting trend and with it the threat to what remains of local television journalism. It’s the emergence of sports-centric internet-based live television platforms, which are functionally equivalent to cable and satellite networks, but which are not subject to “must-carry” requirements. (The difference between a la carte streaming services and internet-based live television services is best exemplified by Hulu and Hulu + Live TV. Whereas Hulu consists overwhelmingly of on-demand content, Hulu + Live TV has live programmed channels that are identical to traditional cable and satellite services.)
Adoption of internet-based live television services has been gradually chipping away at local television news syndication revenues for years. But recent litigation between internet-based live television service FuboTV and programming giants Disney, Fox, and Warner Bros. has led these programmers to begin allowing distributors to offer narrower sports-only live television services instead of bundling sports and non-sports programs. This new development is likely to be the death knell for traditional cable and satellite television services, with huge implications for local television news stations.
For example, when the largest traditional satellite provider, DirecTV, launched its first sports-centric service, MySports, last month, it opted to offer it only to the customers of its internet-based subsidiary and did not include local news content. As the decline of cable and satellite is accelerated by this recent and sudden unbundling of sports content, local television news is set to be left in the lurch entirely unless we modernize our regulations to expand “must-carry” requirements to these internet-based services.
The last major update to the Communication Act, which establishes those requirements, was in 2014, when lawmakers clarified and extended those requirements for satellite television services. Meanwhile, other nations like the Czech Republic have taken steps to expand “must-carry” requirements to internet-based providers. The European Union’s adoption of the Media Freedom Act last year is expected to extend similar requirements across the continent.
Last month, Representative Mike Flood of Nebraska and Senator Ron Wyden of Oregon sent a bipartisan letter to executives of major internet-based live television services asking them to follow the example of legacy cable and satellite television providers by continuing to at least carry C-SPAN’s federal government coverage. But if policy makers are serious about preserving sustainable public interest programming, and especially local television journalism, they must do more than make polite requests of the internet-based platforms that now dominate television markets. These corporations much be compelled to serve the same public purposes, and to play by the same rules that have governed television since its earliest days.
This article was featured in The Corner Newsletter: February 28, 2025
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