All the News That’s Fit to Merge

by Jeff Fleischer

(BuzzFlash, December 26, 2007)


Looks like it’s another happy holiday season for big media conglomerates, with the federal government again donning the Santa Claus suit.

It’s hard to remember now, but as recently as 1983, America had about 50 large media companies. By the time President Clinton and the Republican Congress followed in Ronald Reagan’s footsteps by further deregulating the industry in 1996, that figure was down to 10.

These days, of course, it’s fallen to exactly six, and those six companies have a combined reach that the bygone 50 probably never dreamed about. Thanks to a Dec. 18 ruling by the Federal Communications Commission, the situation’s only going to get worse.

In a 3-to-2 vote that split — like many FCC decisions — along party lines, the commissioners loosened a 32-year-old ban on companies owning both a newspaper and broadcast outlet in the same market. And by “loosened,” read “virtually eliminated.”

For the first time, it’s now possible for the major companies in the country’s 20 largest markets to exert significant control in both print and broadcast media in the same town at the same time. The day after the ruling, The New York Times quoted experts citing it as “paving the way” for Rupert Murdoch to own two New York TV stations along with the Wall Street Journal and New York Post. (Murdoch currently owns the two TV stations along with the two newspapers.)

That’s in New York, of course, where the marketplace is big enough to handle a Murdoch empire as well as the Times, The Village Voice, The Daily News and a number of local news stations. Apply that same concept to a smaller city without such an established and diverse media scene, and you see the danger of this ruling.

For now, the rule requires eight “independent” sources of news in a market if cross ownership is going to occur. But its definition is broad enough to include free weeklies, college radio, niche-driven publications and other sources that can’t fully compete with a major news outlet dominating multiple channels. And, except when it comes to fines for obscenity, the FCC has always moved toward further deregulation once it starts heading in that direction.

“In the final analysis, the real winners today are businesses that are in many cases quite healthy,” Michael J. Copps, one of the two Democratic FCC commissioners, said after the ruling. “And the real losers are going to be all of us who depend on the news media to learn what’s happening in our communities and to keep an eye on local government.”

FCC chairman Kevin Martin, the driving force behind the change, argued cross ownership is the only way to keep newspapers publishing.

“This relatively minor loosening of the ban,” Martin wrote in a New York Times op-ed piece in November, “on cross-ownership of newspapers and TV stations in markets where there are many voices and sufficient competition to allow for new entrants would help strike a balance between ensuring the quality of local news while guarding against too much concentration.” Martin led off his op-ed by noting that more than 300 newspapers have ceased publication in the past 30 years. That’s true, but it’s a case against allowing further consolidation. Consolidation helped drive many of those papers out of business as large chains bought and merged publications, closed those that weren’t profitable enough, and used the financial resources of chain ownership to overwhelm the competition. The surviving papers have seen downsizing of staffs and an increased use of wire and syndicated stories as chains cut their costs (and the amount of original news readers get). Financially, the surviving papers are generally performing well — publicly traded newspapers still have larger profit margins than those of the average Fortune 500 company.

As to the alleged benefits Martin cites of papers branching into broadcast, those papers struggling financially can’t afford costly radio and TV operations. It’s the powerful chains with deep pockets that stand to benefit, and their entry into markets only drives up the cost of ownership across media platforms.

They were also the only ones lobbying for this change.

“Americans from all walks of life and all political perspectives — right, left and virtually everyone in between — don’t want a handful of companies dominating their main sources of news and information,” FCC commissioner Jonathan Adelstein said before the ruling. “People aren’t clamoring for us to relax the newspaper cross-ownership ban. They’re concerned about how responsive their local media is to local communities.”

Before the ruling, the FCC held six public hearings around the country to get feedback from the public — feedback that was largely ignored. All drew huge crowds, overwhelmingly opposed to the relaxed ownership rules under consideration. On a Friday night in November, some 1,000 people attended the hearing in Seattle, many staying until 1 a.m. to voice their opposition.

“The next Tuesday morning in the New York Times we see an op-ed by the chairman saying that he’s basically going to propose rules that would basically ignore the testimony of these hundreds of people in Seattle the Friday before,” an incensed Rep. Jay Inslee (D-WA) said. “That troubles me because apparently this is an op-ed I can’t believe wasn’t written before this testimony was even listened to. And my folks in Seattle feel like they’ve been treated like a bunch of chumps.”

With the FCC rule change now passed, a lot more people are being treated like chumps.

That the ruling didn’t attract much TV coverage (aside from Bill Moyers of PBS, who’s been all over this story for months) is a sign of how well media consolidation has already worked at keeping voices of protest off the air. With more major companies now given a free ticket to join in, that’s not going to improve anytime soon.

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