Newscasts at stations owned by large television networks also fared poorly in the study. It was released Sunday by the Project for Excellence in Journalism, affiliated with the Columbia University School of Journalism.
The report comes as the Federal Communications Commission considers relaxing restrictions on the number of TV stations companies can own.
The five-year study, which examined roughly one-quarter of the nation's local TV stations, gave an "A" grade to only 11 percent of stations owned by the 10 biggest media companies. Thirty-one percent of stations owned by small groups earned the top grade.
"These were really big differences," project director Tom Rosenstiel said. "I hope it would cause FCC regulators to think twice before changing rules so a handful of companies control most of the local stations. Based on this, it would appear to be dangerous."
But smaller was not always better. The study found some evidence that cross-ownership stations - those owned by companies that run a newspaper in the same market - are more apt to run good newscasts.
TV stations were graded based on how thoroughly they cover their communities, the balance and accuracy of the stories and how much enterprise was involved in reporting them.
Theoretically, large companies would be able to offer their stations greater resources, but they also could see the newscasts as places to boost profits by spending less, Rosenstiel said.
Viacom (which owns CBS) is the biggest station group owner, followed by Fox, Paxson, NBC and the Tribune Co.
By David Bauder