The mighty of the media industry will grow mightier while smaller competitors fall by the wayside.

That appeared to be the consensus after yesterday's ruling by the Federal Communications Commission to relax rules on the concentration of media ownership. Major media companies, such as Tribune Co., are signaling a growing appetite for television stations and newspapers in markets where they already have a presence. Meanwhile, some small to mid-size firms are showing a readiness to put up a for-sale sign, if only because competition could get tougher in an increasingly consolidating industry with fewer, more powerful players.

"The big guys will get bigger and the little guys will have to decide whether they want to exist anymore," said Tom Wolzien, a senior media analyst at Sanford C. Bernstein & Co. in New York. Bernstein manages accounts that include investments in such media firms as Viacom Inc. and Gannett Co.

Many in the television, newspaper and radio businesses said yesterday that they expect a series of acquisitions -- in the range of tens of millions, even hundreds of millions of dollars -- to take place over the next several months. But neither industry officials nor Wall Street analysts expect to see a repeat of the blockbuster deals of recent years, or any quick changes. Rather, the changes will be modest but steady, reshaping the media industry in five to 10 years.

If the new FCC rules withstand expected court challenges from media companies that want even fewer restrictions and by opponents who are concerned about the implications for consumer choice, the limit on the number of television stations that a network can own would rise from 35 to 45 percent of the national audience. And in major cities, such as Washington, one company would be able to own as many as three TV stations, up from two.

For Chicago-based Tribune Co., the FCC action could presage some strategic acquisitions. "We're going to take little bites," said Vice President Shaun Sheehan, chief lobbyist of the company, which owns 26 TV stations, 12 newspapers and one radio station. Tribune Co., which made a major move when it acquired the Times Mirror Co. newspaper chain in 2000, is interested in bolstering its business by pursuing "top-30-market TV and major-market newspapers," Sheehan said. "That's all we're interested in."

New York Times Co., which owns 19 newspapers, eight TV stations and two radio stations, declined to comment on potential acquisitions or divestitures. But Catherine J. Mathis, vice president of corporate communications, said, "There may be opportunities to expand our holdings through tax-efficient swaps." For example, the Times could swap a TV station it owns for one in a market where it already operates a newspaper.

Rupert Murdoch's News Corp. also declined to comment on specific purchases. But Murdoch recently indicated that he did not have any acquisition plans beyond DirecTV, the satellite-television business. Other people, however, believe Murdoch's acquisitive ways won't end there, saying he has already made good use of duopolies -- owning two TV stations in one market, such as in Washington, where his company owns WTTG-5 and the UPN affiliate, WDCA-20. Television stations are among the most profitable of media properties, with annual profit margins that range from 20 to 50 percent. Combining the back-office functions of two stations, as well as bundling advertising and marketing deals and trimming staffs, make them even more profitable.

Other media firms indicated an interest in expanding their businesses, including Gannett. "We're always in the market for properties," said Tara Connell, vice president of corporate communications of the McLean-based chain of 100 newspapers and 22 TV stations. She declined, however, to go into specifics.

The Washington Post Co., which owns six television stations, also declined to comment on the impact of the FCC's ruling. Alan Frank, chief executive of the company's television unit, Post-Newsweek Stations Inc., is chairman of the Network Affiliated Stations Alliance, a group of 600 television station owners who say allowing networks to own more stations will diminish local programming.

For many small and medium-size firms, yesterday's FCC ruling created a potential financial windfall because the value of their holdings is likely to increase. Granite Broadcasting Corp. of New York, which owns television stations in Detroit and San Francisco and many smaller markets, has been looking to sell or swap its big stations. The FCC decision increased the pool of potential buyers for both stations, according to W. Don Cornwell, Granite's chief executive.

"The FCC proceeding this morning was great news for our aspirations with regard to San Francisco and Detroit," Cornwell said. "There is a pretty large group of prospective players who might come to the party. In San Francisco, it could be anyone from Viacom to NBC to Cox."

Freedom Communications, which owns eight TV stations, the Orange County Register in the Los Angeles area as well as 27 daily newspapers and 38 weeklies in smaller markets, had already hired Morgan Stanley to explore the possible sale of its holdings before the FCC ruling.

Alan Bell, chief executive of the Irvine, Calif., company, said Gannett has indicated that it is interested in bidding for Freedom's holdings. The firm has been privately owned for more than 100 years, although pressure to liquidate has been building from some of its roughly 80 shareholders, and Morgan Stanley recently began sending out brochures to potential buyers.

"It is a good thing in terms of pricing the company's worth," Bell said of the FCC's decision.

But Ben Turner, president of Seattle-based Fisher Broadcasting, a medium-size company with a presence in the Northwest, decried the FCC's ruling, saying it will reduce the ability of small broadcasters to compete. He also said it will deprive communities of the kind of local coverage they deserve from television stations, as major networks gobble up affiliates and cut programming costs.

"It was a blow to localism," Turner said. "I think we put into jeopardy a system that is reliant on local views and divergent thought. The more power you give a few companies, the less opportunity you are going to have for a lot of divergent thought at the local level as a countercheck to network programming." Turner said Fisher was neither looking to sell nor buy media properties.

On Wall Street, bankers echoed the predictions of many media firms yesterday, saying they expect targeted acquisitions rather than a rush to major consolidation in the wake of the FCC vote. In a report yesterday, Lehman Brothers analyst Stuart Linde said Viacom may look to purchase CBS affiliates in major markets. Linde also said New Corp.'s Fox network might move to buy an affiliate in San Francisco, the only top-10 market in which Fox does not already own its affiliate.

Because the FCC ruling had long been expected, it has already been priced into the stock prices of companies expected to benefit, analysts said. Gannett rose 0.7 percent on the day to $79.54. Tribune also rose 54 cents, or 0.7 percent, to $79.54. And News Corp. rose 44 cents, or 1.4 percent, to $31.21.

"Media stocks are getting a little movement on anticipation" of the new rules going into effect, said Andy Brooks, head trader at T. Rowe Price in Baltimore. "But it's still something of a wild card. Once there is certainty you will see more follow-through" in stock prices.

Washington Post staff writers Ben White and Frank Ahrens contributed to this report.

© 2003 The Washington Post Company

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