Media Mergers

Nancy Woodhull

• Publisher: Routledge
• Year: 2020
• ISBN:
  9781351309349
• Edition: 1
• Topic: Economics
• Subtopic: Economic Theory
• Index: Economics

The recent surge in media mergers has set off a wave of stories that all hit very close to home. In some cases, the news organizations themselves become news. The formation of communication conglomerates raises profound questions for reporters' lives and work, such as: What is the best way to cover stories of high profile and complexity? Will the new giants broaden both the definition of journalism and the opportunities for journalists to practice their craft? What are the prospects for the new partnership of big news, new media, and big business? The consequences of consolidation vary by media industry. The evolution of communication technology is so fast that today's truisms can be undone tomorrow. Media Mergers provides a healthy dose of skepticism, a search for illuminating facts, and a willingness to consider all sides of the discussion.

This book approaches the emergence of media giants from a variety of angles. The contributors offer many ways of understanding their scale and their significance. Media Mergers is divided into six parts: "Point/Counterpoint, " "The Imperial Moment, " "Captains of Communication, " "States of Media, " "The Consequences of Media Empires in the United States, " and "The Consequences of Media Empires Around the World." Authors include: Todd Gitlin; Steven Rattner; Ken Auletta; Madeline Rogers; Danny Schechter; Barbara Maltby; and Mac Margolis.

Included in this volume is a roundtable introduced by Walter Cronkite and moderated by Alex Jones. Participants are Frank A. Bennack, Jr., Neil S. Braun, P. Anthony Ridder, and Arthur Ochs Sulzberger, Jr. A review essay by Anne Wells Branscomb concludes book. She discusses various books on the subjects of media moguls, multimedia conglomerates, and media takeovers. Media Mergers is especially pertinent today, an age in which the communications industry is constantly changing, progressing, and being affected by business upheavals. It will be of interest to publishers, media specialists, and all those in communications, policy and research.

I

Point/Counterpoint

1

Not So Fast

Todd Gitlin

The typical media report about media conglomeration is supercharged with the rhetoric of the conglomerates themselves. Fusing a business story with a celebrity story, it stresses the glamour of deal-making and the size, complexity and hypothetical synergy of the composite firm. Murdoch/ Disney/Time Warner/TCI is said to be sprawling through hardware and software, space and cable, wires and wireless, news and entertainment to bestride the earth. Stock analysts opine that the latest move of the week is somebody’s coup. The burning question of the hour is, What’s on the mind, the walls, the menu and the feet of Gerald Levin/Ted Turner/Rupert Murdoch/Michael Eisner/John Malone/ Sumner Redstone/Barry Diller as this colossus contemplates the deal of deals? The journalism of the awe-filled room is usually too busy to ask what these immense mergers and acquisitions mean for American—that is, world—culture. That’s not the beat of the breathless chronicler. Nor are the prognosticators called to account for their previous financial projections, the ones that misfired.

Meanwhile, critics of the conglomeration juggernaut stress the danger of censorship. In television, there are a few reported cases, enough to worry about, though the argument as usually presented is not rigorous enough. NBC in particular seems to have gone lightly reporting allegations against the parent company, General Electric. According to the television reporter Marc Gunther in American Journalism Review (October 1995), a 1989 “Today” segment on defective bolts failed to cite GE, which used said bolts for nuclear reactors; “Today” mentioned GE only in a damage-controlling follow-up. A 1990 “Today” segment on consumer boycotts, Gunther adds, omitted any mention of a campaign against GE itself, and one guest has said that a producer cautioned him not to bring up the GE case. (NBC said this was the producer’s say-so.) But Gunther goes on to note that since 1990, NBC has covered GE scandals unobjectionably. It will come as no surprise if other such cases turn up nevertheless. Self-censorship, in any case, is probably the worse danger, but it is rarely expressed—it leaves no smoking memos.

But just how rip-roaringly fearless were the networks in the good old days when Paley, Sarnoff and other founding titans roamed the earth? The case against GE as such would be more impressive if critics compared NBC coverage of GE before its acquisition of RCA with coverage afterward. For that matter, does NBC cover GE differently than ABC, CBS and CNN do? Did it before, when NBC belonged to RCA, a major military contractor among other things, not exactly the corner grocery store? Did CBS cover nuclear power questions more assiduously before Westinghouse, a nuclear power, purchased the company? It’s not clear. And one reason it isn’t clear is that none of the television networks, regardless of who exactly holds title, lusts to expose the depredations of business. In the spirit of this political moment, television news at large has been far more ardent in pursuit of government red tape than in pursuit of industrial crime.

Conglomerates would seem to be set-ups for conflicts of interest between news and entertainment. Time, after all, as Gunther points out, devoted a cover story to Scott Turow, a Warner Books author, timed to the Warner Bros. release of the movie Presumed Innocent. Time found Turow more newsworthy than Newsweek did. TV Guide and the New York Post, both controlled by Murdoch’s News Corp., have recently come under attack for showing favoritism toward programs on Fox, also owned by Murdoch. TV Guide, for instance, was criticized for a December 1995 cover featuring the low-rated Fox show “Party of Five”—“The Best Show You’re Not Watching.” On the other hand, Time’s coverage of the Bob Dole/William Bennett attack on gangsta rap did not fawn on the parent company and was no more—or less—superficial than Newsweek’s. Movies and celebrities are the stuff of cover stories whoever the owner is. In any event, to investigate the impact of mergers, it won’t do simply to ask, say, Joel Siegel of “Good Morning America” whether he plans to go light on Disney releases. What would you expect a self-respecting reviewer to say? Would any reviewer survive in any major publishing outlet today who did not gush about a hefty share of Hollywood releases?

SOURCE: Gallup/CNN/USA TODAY poll; News Interest Index poll; Princeton Survey Research Associates/Newsweek poll

FIGURE 1.1
Public Opinion on Mergers

More worrying by far than petty backscratching (or backstabbing) is the long-term chill—the sum, over months and years, of 1,000 microdecisions made by 1,000 personnel about 1,000 stories that it seems, well, injudicious to push too far. Worrying is the closure of news that comes from closure of bureaus and miscellaneous cost cutting. (The networks have precious few researchers as it is.) It stands to reason that reporters will also hesitate to take the risk of stepping on exposed toes. The larger and farther flung the enterprise, the more toes, and therefore the greater the risk for reporters. What was Cap Cities/ABC’s Thomas Murphy signaling when he chided “Good Morning America’s” Charlie Gibson for doubting how glorious it would be to work for the Disney “family”?

Already, in fact, the networks and papers alike have shown precious little interest in the momentous telecommunications legislation that Congress just passed in a snap and the president signed. The fragment of the bill that concerned the V-chip received more news attention than the rest of the bill put together—the increase of license periods to eight years, for example, and the easing of ownership restrictions. Now, single-ownership papers may or may not have been more likely to cover these questions than the chains have—this is pretty serious, complicated stuff for today’s American newspapers. But aren’t these questions worth contemplating at a leisurely pace before irreversible mergers are blithely waved through by a government afflicted by deregulation mania?

The case against the ill effects of conglomeration is strongest and best researched in the case of newspapers. The 12 largest chains control almost half of daily circulation. Chains, especially those that trade on the stock market, are more eager than single-paper proprietors to raise profit margins. They tend to cut costs by firing reporters and editors. As the number of newspapers in a chain goes up, the size of the newshole tends to shrink. Soft-news coverage goes up. Local coverage may increase or decrease as a percentage of the whole, but the articles tend to get shorter in either case. As for local TV, serious reporting is scarce enough there but is more likely to be found on the occasional independent station (like Oakland’s KTVU) than from a station owned by a network or a chain.

Not nearly enough attention has been paid to the consequences of conglomeration in book publishing. At this writing, there remains one Independently owned major commercial publishing company in New York (W.W. Norton). In general, the giants seem more reluctant to publish the so-called midlist. They are far less willing than before the great wave of mergers in the 1980s to use their cash cows to subsidize less commercial but worthy authors throughout what may turn out to be unremunerative careers. Like Hollywood studios, they bet big on blockbuster prospects. This does nothing for the culture but make fortunes.

The fate of publishing is also inextricably linked to the growing weight of chain bookstores. The New York Times reported, remarkably enough on its front page, the open secret that many people in publishing already knew: that Barnes & Noble, the nation’s dominant chain, has been taking payments from publishers for premium space. A pile of books in the window, at the entrance or at the end of an aisle is not a sign that a bookseller has made a judgment of quality, nor even a measure of sales volume. It is a measure of subsidy. Even strapped independents are said to be resorting to this practice.

The point is not that the media were once fearless and are suddenly in danger of becoming fearful, or that entertainment was once stupendous and is suddenly in danger of dumbing down. (Network television in the fabled ‘60s, for instance, was largely brain-dead.) The point is that the changes now in progress are largely irreversible, potentially consequential, and they are being left to marketeers whose commitment to the public is dubious. The fact of diversification is being offered up as proof that there’s no danger.

Now it is true that two phenomena have grown simultaneously in America’s media. One is conglomeration. The other is segmentation. Demographic slices are the targets in cable TV, radio, magazines. If choice is the champion goal, then the more choice the better; and clearly Manhattan’s Time Warner Cable, with 76 channels, cannot be worse for consumers than the precable array of seven VHF channels. Can it?

Not in the obvious sense, although the proprietors of cable TV have a lock on access. These effective monopolies permit and deny access just as they choose. Accountability is not their game. Giving preferences to their corporate partners is. So is catering to high-spending demographics. But even beyond cable, the standard of comparison ought not to be the impoverished past. The relevant question is about democratic potential. No one who worries about media trusts proposes a return to the narrow pipeline of yesteryear. The question is, What variety of diversity will the titans indulge? Most likely, immense varieties of segmented entertainment.

The thoughtful discussion of ideas is at a premium. The spiral of triviality winds onward. When the possible harms are great and potentially irreversible, is this not a matter for public inquiry? Surely Congress and the press might spare 10 percent of the time, money and energy they have devoted to petty scandals involving the onetime governor of a small state for the rather more momentous question of the impact of centralized power on the nation’s sluggish flow of ideas.

The point is that the mergers are taking place amid a deafening silence. Trusts with the capacity for overbearing power are being merged and acquired into existence as if there were nothing at stake but stock values. Today’s deals may weigh on the culture for decades. The potential for harm is at least as impressive as the potential for good. If the country believed in the countervailing authority of the government, the recourse would be obvious. It’s time for the sheriff to step in and say, Not so fast. But the sheriff has been disarmed—at least politically. It suits the parties in power to collect impressive sums from the titans while proclaiming the virtues of self-regulation. If the issue were street crime, conservatives would be crying out against this abject surrender. They would be declaring that we must take the country back, city by city, newsstand by newsstand, frequency by frequency.

______________

Todd Gitlin is professor of culture, journalism and sociology at New York University. His most recent book is The Twilight of Common Dreams: Why America Is Wracked by Culture Wars.

2

A Golden Age of Competition

Steven Rattner

It is truly ironic to be assessing the impact of mergers on media competition just as we are entering what may well prove to be the golden age of competition in communications industries.

Look in almost any direction and you see developments that will benefit consumers. In Washington, Congress has just enacted long overdue legislation that will rationalize an outmoded regulatory apparatus and free giant telecommunications and cable companies to battle each other. In New York, an array of news and financial services is being launched by equally giant media companies. Around the country—particularly on the West Coast—smaller, fast-growing companies are fighting to dominate the Internet.

Why is all of this happening now, particularly at a time of such high merger activity? The explanation begins with technological change. Just a couple of decades ago, most Americans had access to only a newspaper or two, some magazines and three or four television stations to provide their information and entertainment. No cable, with its 70–plus channels of programming, no VCRs or video stores, no satellite dishes, no computer on-line services and just a single provider of local and long-distance telephone service. In the television world, as recently as 1984, the three traditional networks—ABC, NBC and CBS—had 69 percent of the viewers (while cable had 14 percent).

The changes since then are familiar but dramatic. Cable now brings us debates about national policy—albeit at various levels of civility— 24 hours a day. For news and public affairs, we can now supplement the Big Three networks with Fox, two channels of CNN, C-Span, CNBC and, in many markets, one or more local all-news channels. As a result, by February 1996, the networks’ share had dropped to 42 percent and cable’s had grown to 27 percent. (For consumers to whom cable is not available, nearly a half-dozen satellite services—which were not around 10 years ago—now provide much of the same programming.)

That’s not nearly the end of the story. The cable television companies are busily rewiring to provide not 70 channels or 500 channels or even 1,400 channels but, in effect, an infinite number of channels through video-on-demand. The result will be a vast array of new services, including shopping, games, information retrieval, transactions and much more.

Inevitably, these developments will take longer and cost more than many expect. But make no mistake about it, these services are coming. In just the past few months, we have witnessed proposals for a new Dow Jones/ITT financial news network (in addition to CNNfn, which has just been launched) and three news channels (ABC, msNBC and Fox).

All of these developments will give consumers of news and information more quantity and a greater degree of personal choice. For example, as Time Warner’s test in Orlando has demonstrated, the cable companies have within reach the ability to provide consumers with the capacity to create their own news programs by instructing a “smart box” ...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• Preface
• Introduction
• Part I: Point/Counterpoint
• Part II: The Imperial Moment
• Part III: Captains of Communication
• Part IV: States of Media
• Part V: The Consequences of Media Empires in the United States
• Part VI: The Consequences of Media Empires Around the World
• Part VII: Books
• For Further Reading
• Index