The COVID-19 crisis has created dual challenges for broadcasters. On one hand, the public is more reliant than ever on local news for important, fast-breaking information. But on the other hand, the economic slowdown caused by the outbreak has resulted in a serious reduction in advertising revenue.
Womble Bond Dickinson telecom attorney Gregg Skall writes about the challenges facing broadcasters—as well as possible solutions—in his latest FCC Uncensored column at All Access.
Skall noted that with excess commercial inventory, some stations are offering free time for coronavirus-related public service announcements. But that creates a huge potential problem since we’re in the middle of political primary season. Broadcasters have to offer legally qualified candidates the lowest unit charge per spot that is measured by the best advertising rates offered to their very best advertiser clients. If they offer them low-priced or free coronavirus related spots that could have a devastating impact on their political rates, especially since federal candidates have a statutory right to access their stations.
Skall said the FCC already is working with broadcasters to help with short-term ad rate adjustments. “On March 25th, the (FCC Media Bureau) staff advised broadcasters they could exclude free time provided to commercial advertisers when calculating lowest unit charges, provided that free time is not associated with an existing commercial advertiser or contract for paid time or otherwise could be considered a bonus spot,” Skall writes.
He also notes that many broadcasters are finding creative ways to attract new clients during the COVID-19 outbreak, such as restaurant ads focusing on take-out and delivery services.
“Bottom line is that while times are difficult, there are opportunities to serve your community while bringing in some new business. Important, however, to remember that any free PSAs offered to existing advertising clients must not be tied in any way to a current paid-for advertising package."
“Bottom line is that while times are difficult, there are opportunities to serve your community while bringing in some new business. Important, however, to remember that any free PSAs offered to existing advertising clients must not be tied in any way to a current paid-for advertising package,” Skall writes.
Gregg Skall represents broadcasters and other parties in their regulatory dealings before the Federal Communications Commission and in their commercial business dealings. He serves as Washington Counsel to several state broadcaster associations. He also works with telecommunications companies and with radio device manufacturers to obtain FCC approvals.