The effects of mergers in broadcast television

In 1999 the Federal Communications Commission decided to relax its prohibition against one firm owning two television stations in the same market. Although joint ownership was prohibited prior to 1999, evidence on the effects of joint operation is provided by local marketing agreements, contractual arrangements that allow one station to operate another station in the same market. Chapter 1 studies the effect of joint operation on costs by estimating a model of television station entry decisions from 1993 to 1998. Using the method of simulated moments to estimate the entry model, I find that stations operated under local marketing agreements are significantly more likely to enter. Controlling for the endogeneity of local marketing agreements and the competition-reducing effects of local marketing agreements does not affect the conclusion that joint operation reduces costs. Chapter 2 uses the experience with local marketing agreements to study the effects of joint operation on markets for advertising and programming. Using panel data on over 160 markets from 1993 to 1998, I find that most mergers do not increase the price of advertising. However, mergers between stations that are likely to be close substitutes (as measured by their network affiliation) can lead to significant price increases.

Department dc:contributor.department

Massachusetts Institute of Technology. Dept. of Economics.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2001

Author dc:creator

• Rainey, Mark Christopher, 1974-

Advisor dc:contributor.advisor

• Nancy L. Rose.

• Economics.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/35490

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/35490