NOW on October Media Ownership Hearings

Know Your Media Owners: Sinclair Broadcasting Group

Sinclair Broadcasting Group was founded in 1986 by the four sons of Julian Sinclair Smith, who founded the first UHF station in Baltimore in 1971. In the early 1990s, after the brothers bought controlling interest in the company from their parents, SBG began buying stations. Within a decade of its founding, Sinclair would become the largest commercial broadcasting network not owned by a network. Today, Sinclair owns or manages 58 stations in 36 markets. Sinclair controls stations affiliated with six major networks. These stations reach 22% of U.S. households.

Sinclair has been the center of some controversy in recent years. In 2002, the company created a local news network that acted in conjunction with a centralized news operation. Critics believe that plan was detrimental to local news because it would deemphasize local stories that a centralized news network could not produce. In 2004, Sinclair took heat for attempting to show an anti-John Kerry film several days before the presidential election.

More information:
CJR Who Owns What?

NBC Universal Cuts Effect Local Stations

From Washington Post, November 29, 2006:

In a generational change of local TV news personalities, WRC (Channel 4) has in recent weeks begun eliminating some of its most familiar faces as part of a cost-cutting drive by its owner, NBC Universal. Yesterday, Arch Campbell -- the station's avuncular entertainment reporter/reviewer -- became the latest News4 star to announce he was severing ties with the station.

...

WRC is a highly profitable operation (Jack would not release specific figures) that has long enjoyed a market-leading position. The station nevertheless has been swept up by the "NBC 2.0" program, a broad initiative by NBC Universal to cut more than $750 million in expenses from its news and entertainment operations and trim about 700 positions (roughly 5 percent of its employees).

NBC Universal owns 10 NBC stations, 15 Telemundo stations and one independent station, all of which are in large markets. How deep the cuts into these stations are will determine how much effect they will have on the quality of news on these stations.

Tribune Co. Rejects Consortium Inquiry About Baltimore Sun

From Washington Post, November 28, 2006:

The embattled Tribune Co., which has put its 11 newspapers and 25 television stations up for sale, is not ready to consider bids for individual properties, the company said in an e-mail exchange with a Baltimore investor group.

Ted Venetoulis, a businessman and former local politician, is leading a consortium of prominent Baltimoreans who want to buy the Sun, if Tribune decides to break up the company and sell it piece by piece.

...

...Tribune declined Venetoulis access to the Sun's books, saying the company continues to seek a single buyer for all of its properties.

FCC Media Ownership Policies Make Television’s “Vast Wasteland” Even Vaster, Creative Voices Tells Commission

From The Center for Creative Voices in Media, October 23, 2006:

Misguided FCC media ownership policies harm competition, diversity of viewpoints, and localism – the Commission’s key policy goals in regulating media ownership – and prevent the American public from receiving better broadcast television, the Center for Creative Voices in Media told the Commission in comments filed today.

...

General Electric’s recent announcement that it would reduce or eliminate scripted programming on its NBC network in the 8-9 p.m. hour of primetime is particularly illustrative of the unintended harmful consequences of FCC policy changes that have had the practical effect of eliminating independently-produced programming from the public’s airwaves.

O.J. Book Event Could Effect Cross-Ownership Rules

From Advertising Age, November 27, 2006:

Even though Fox Broadcasting's O.J. special was canceled, it still may have done lasting harm to the broadcast industry.

...

The backlash comes at a sensitive time for broadcasters, which have been battling the belief that cross-media ownership gives them too much power -- and some fear the incident gives ammunition to their foes. The Federal Communications Commission is reconsidering rules that determine whether media companies can own more than two TV stations in a market, as well as whether those that own radio stations and newspapers should also be allowed to own TV stations.

News Corp.'s Fox is at the forefront of a broadcast-network-TV push to be allowed to buy more of its affiliate stations.

"Think about how much O.J. they could have crammed in if they owned three TV stations, eight radio stations and the local paper in your town," said Craig Aaron, communications director for Free Press, a group campaigning against loosening of the rules. "It certainly doesn't help Big Media's case for throwing out the rules."

Taking into account how irresponsible actions of media conglomerates, like publishing, promoting and broadcasting an accused murderer's would-be confession, the FCC should see that the potential for abuse of power of the media is real. The O.J. book would have made a lot of money for News Corp., so it was in the companies best interest to use as much of their own company's resources to promote it as possible. Craig Aaron is right that News Corp. would have had this story everywhere. The FCC should recognize that unethical behavior like this is likely if cross-ownership rules are weakened.

Additional stories:
Rintels on O.J. Flap: "The Dark Side of Synergy"

FCC Announces 10 Studies on Media Ownership

FCC Public Notice, November 22, 2006:

The Commission will be conducting 10 economic studies as part of its review of its media
ownership rules. Each of these studies will be peer reviewed.

Included in these are studies on the effect of ownership structure on programming in television and radio, news coverage of cross-owned television stations and newspapers, and a study on how people get news, which will be conducted by Nielsen. With the announcement of such a comprehesive set of studies, the FCC is showing that it is sensitive to the fears espoused by very many people during the last round of public hearings on ownership rule changes. This public announcement will also help to ensure that the results of these studies will be presented, regardless of their findings. Given the recent controversy concerning the suppressed localism study, that is a good sign that the Commission is taking this issue seriously and will act more transparently than it has in the past.

Private Equity Firms Becoming Big Players in Media

From New York Times, November 17, 2006:

Some of the largest broadcasters and publishers are being swept into the arms of private equity firms, which are drawn to the rich cash flows these businesses generate and are undaunted by their slowing growth. The trend could raise new regulatory concerns, however, as some of the big private equity firms start to weave a complex web of cross-ownerships in the industry.

The latest example is Clear Channel Communications, the nation’s No. 1 network of radio stations, including Z100 in New York and KIIS-FM in Los Angeles. Yesterday, the company agreed to be acquired for $18.7 billion by Thomas H. Lee Partners and Bain Capital in the largest buyout ever in the media and entertainment industry, according to Thomson Financial.

Just a few months ago, two private equity groups were locked in a bidding war for Univision Communications, the largest Spanish-language broadcaster in the United States. The winning consortium agreed to pay $12 billion for the company. And yesterday, the Reader’s Digest Association, publisher of Reader’s Digest magazine, agreed to be taken private for $1.6 billion by a buyout consortium led by Ripplewood Holdings.

This is an interesting trend. The potential for cross-ownership within these firms should be closely watched by the FCC.

Clear Channel Sale to End Era...or Will It?

From Washington Post, November 17, 2006:

Clear Channel Communications Inc. has agreed to sell the company to a consortium of private-equity firms and plans to shear off more than one-third of its 1,150 radio stations, dismantling a giant that dominated the industry and became the bogyman of media consolidation for the past half-decade.

The deal is worth $26.7 billion dollars. The plan to sell one-third of its radio stations, 448, to be exact, is coupled with a plan to sell its 42-station television group. The Washington Post may be off base in saying that the selling of one-third of its stations will "dismantle" the media giant, though, when you consider:

None of the 448 radio stations are in the top 100 markets in the United States. Over all, the properties to be sold accounted for less than 10 percent of Clear Channel’s $6.6 billion in revenue last year, the company said.

Even with those sales, Clear Channel will remain a broadcasting behemoth, and its proposed buyers already have big media investments. This combination could raise concerns among regulators. (New York Times, Nov. 17, 2006)

It seems the investors are simply shearing the stations that get the least bang for the buck. These stations may be small market stations facing debt from digital switch costs in recent years, and the new owners of Clear Channel may be trying to sell the burden of those debt, which will be slow to recover to someone else. It's worth looking into.

Common Cause Study on Telecommunications Act of 1996

The Fallout From the Telecommunications Act of 1996: Unintended Consequences and Lessons Learned is the best concise overview of that bill I've come across on the web. I recommend it to all my readers. This piece provides a chance to see the blow-by-blow history of the Telecom Act and how it has effected Americans 10 years later. Check it out.

"Big Media Won't Bring Good Things to Life"

From the Denver Post, October 24, 2006:

It controls the news you watch, which has become kinder and gentler to government and corporations, while focusing on sex scandals, manhunts, and the big crime story of the day.

That's the mantra of media giants, who are more concerned with profits than educating viewers. GE, just like Disney and Time Warner, are monsters with insatiable appetites. They want to control more media and would if there weren't Federal Communications Commission rules prohibiting big media from getting bigger.

All that could change if the FCC has its way this winter and allows corporations to own more media outlets in the same city.

The writer, Cindy Rodriguez, brings in a lot of examples of how corporate-controlled newsrooms fill the airwaves with useless news stories which they tend to run into the ground. Interesting op-ed piece from a major newspaper.

Case Study of Possible Effects of Cross-Ownership on Washington State Media

From Reclaim the Media, October 19, 2006:

Cities across Washington State will suffer if the Federal Communications Commission (FCC) eliminates or further relaxes key limits on media ownership, according to new research examining the impact of potential media mergers in Seattle, Spokane, and Yakima. The study, released by Reclaim the Media in conjunction with the national Media and Democracy Coalition, focuses on the potential impact of newspaper-broadcast "cross-ownership" mergers.

There are some interesting findings in this report, that should serve as a warning to the rest of the nation of what is at stake.

Additional links:
The full report (pdf)

Job Losses and Lower Wages in Radio Due to Consoldation

From PR Newswire, August 9, 2006:

A study released today by the Future of Music Coalition (FMC) found that the vast majority of major U.S. cities has experienced both layoffs and lower wage growth within the radio profession, associated with the unprecedented consolidation of radio station ownership over the last decade. The study also shows that the job losses in radio impede federal policy mandates to promote localism and diversity in media.

...

The study's findings include:
-- The combined market share of the top four radio companies in each local
market increased by an average of 14.3 percent between 1993 and 2004
across 265 markets.
-- Cities with higher degrees of radio consolidation had greater job
losses among news reporters and broadcast technicians from 1996 to
2003.
-- Cities with higher degrees of radio consolidation experienced smaller
wage growth for DJs and news reporters from 1996 to 2003.

Additional Links:
PR Newswire: http://www.prnewswire.com
Future of Music Coalition: http://www.futureofmusic.org/

Pastor Speaks About Consolidation

Here's a piece from Free Press on October 5, 2006, by a pastor in the United Church of Christ about the difficulty his church had securing a station for spreading his church's message. It says a lot about the challenges consolidation of ownership is bringing to diversity on the airwaves.

Report: Media Consolidation Shuts Out Female and Minority Owners

From The Louisiana Weekly, September 25, 2006:

As the Federal Communications Commission considers sweeping changes to the nation's media landscape, Free Press released a new report last week on female and minority media ownership that shows the consequences of further consolidation.

The new study, "Out of the Picture," is the first complete assessment and analysis of female and minority ownership of full-power commercial broadcast television stations. The report argues that the FCC has abandoned its responsibility to monitor and foster the diversity of media owners, while ignoring the impact of its own policies.

The report was done by the media watchdog group Free Press. Among the findings:

- Women comprise 51 percent of the entire U.S. population, but own only 4.97 percent of all TV stations.

- Minorities make up 33 percent of the entire U.S. population, but own only 3.26 percent of all stations.

- While the level of female and minority ownership has advanced in other industries since the late 1990s, it has worsened in the broadcast sector.

- Hispanic- or Latino-owned stations reach just 21.8 percent of the Latino TV households in the United States.

- 91 percent of African-American TV households are not reached by a black-owned TV station.

- Markets with minority owners are significantly less concentrated than markets without them — even if the size of the market is held constant.

The complete report is available at http://www.stopbigmedia.com/files/out_of_the_picture.pdf

Media Ownership Hearings Begin in California

From the Associated Press, October 4, 2006:

The battle over media consolidation began with hundreds of people, including actors, writers and musicians, imploring the Federal Communications Commission to prevent media conglomerates from growing even bigger.

Two FCC public hearings on the topic Tuesday resembled baseball playoff games with attendees whooping, clapping wildly and even booing as the five commissioners sat quietly and listened for more than seven hours.

Commission Chairman Kevin Martin, a Republican, has said he backs a repeal of the rule that restricts a company from owning both a newspaper and broadcast station in the same city.

With most U.S. cities supporting only one daily newspaper and usually 3 or 4 local news stations, allowing one company to own a newspaper and a TV station in a single market would give them dominating control over how people get their news. Repealing this restriction might also lead to a media conglomerate cutting back staff at either the newspaper, the TV station, or both, and produce content for both outlets out of the cut-back newsrooms.

There are arguments for repealing this restriction, however:

Several speakers supported lifting some restrictions, noting that advertisers were shifting their spending to the Internet and cable channels even as local TV stations find it more expensive to provide news coverage of their communities.

Paula Madison, president and general manager of KNBC in Los Angeles, noted that 90 percent of local content is provided by the largest media companies in the market, contrary to the "big media is bad media assumption."

At some point, putting newspapers and local TV stations under a single ownership umbrella, may be a financial necessity, but that should be a last resort. Ms. Madison's assertion may that 90 percent of local content is provided by the largest media companies may be true due to the disproportionate market share of conglomerates to local owners, but according to the recently released FCC report on local tv news stations, locally owned stations provide more local content per half-hour.

Interesting quotes from the hearing:

"Homogenization is good for milk, but bad for ideas." Patric Verrone, president of the Writers Guild of America, west

"Locally owned newspapers, TV news and radio used to be the rule and not the exception." FCC member Michael Copps

E.W. Scripps Co. to Sell 5 Stations

From the Wall Street Journal, September 27, 2006:

E.W. Scripps Co. agreed to sell its five TV stations affiliated with the
Shop at Home network to Multicultural Television Broadcasting LLC for $170
million.
...
The stations are WMFP-TV in Boston; WOAC-TV in Cleveland; WRAY-TV in
Raleigh-Durham, N.C.; WSAH-TV in Bridgeport, Conn.; and KCNS-TV in San
Francisco.

E.W. Scripps Co. still owns 10 TV stations across the country, including KJRH-TV, the NBC affiliate in Tulsa. The selling of these stations is reportedly part of Scripps plan to divest itself of its interest in the Shop at Home network which is unprofitable. Multicultural Television Broadcasting LLC is a "limited-liability company created by Multicultural Radio Broadcasting Inc., a media company with radio stations, cable- and satellite-TV operations, and printed publications in more than 20 languages." Multicultural Radio Broadcasting Inc. owns around 3 dozen radio and TV stations across the country already. Since the 5 stations being sold are in medium-to-large markets, presumably with diverse populations, this company may be trying to bring in stations specializing in content for non-English speaking populations in those markets.

Links:
"Scripps Selling 5 Television Stations" Houston Chronicle, Sept. 26, 2006

2004 FCC Report on Local TV News Allegedly Suppressed

From the Associated Press, September 14, 2006:

The Federal Communications Commission ordered its staff to destroy all copies of a draft study that suggested greater concentration of media ownership would hurt local TV news coverage, a former lawyer at the agency says.

...

The report, written by two economists in the FCC's Media Bureau, analyzed a database of 4,078 individual news stories broadcast in 1998. The broadcasts were obtained from Danilo Yanich, a professor and researcher at the University of Delaware, and were originally gathered by the Pew Foundation's Project for Excellence in Journalism.

The analysis showed local ownership of television stations adds almost five and one-half minutes of total news to broadcasts and more than three minutes of "on-location" news. The conclusion is at odds with FCC arguments made when it voted in 2003 to increase the number of television stations a company could own in a single market. It was part of a broader decision liberalizing ownership rules.

The report was commissioned by then-FCC Chairman Michael Powell in August 2003 and authored by Keith Brown and Peter Alexander, who have written extensively on media and telecommunications policy.

The existence of the report, finished in 2004, came to light during the Senate confirmation hearing for FCC Chairman Kevin Martin. The report has since been published on the FCC website.

Senator Barbara Boxer of California, who received a copy of the report from someone within the FCC, sent a letter to Martin inquiring about the report and its subsequent suppression.

Boxer said she was "dismayed that this report, which was done at taxpayer expense more than two years ago, and which concluded that localism is beneficial to the public, was shoved in a drawer."

...

Boxer's office said if she does not receive adequate answers to her questions, she will push for an investigation by the FCC inspector general.

Martin and former Chairman Michael Powell have both been advocates of deregulation of ownership and this report would have been damaging to allowing media corporations to own more local stations. A report concluding that locally owned stations provide more local news content and more news content overall is very telling about how larger, national owners are affecting content. When the local news stations are bought, they frequently endure cuts to their newsroom, making it more difficult to cover local stories and at the same time making it more necessary to derive content for their newscasts from the wire or from other stations under the same company. It will be interesting to see how this report is dealt with in the October 3 hearings on deregulation in Los Angeles and what investigations into the alleged suppression will discover.

Additional Links:
Full text of the report from the FCC
"FCC Destroyed Media Ownership Report" from FAIR.org

New York Times Co. to Sell 9 TV Stations

From United Press International:

NEW YORK, Sept. 13 (UPI) -- The New York Times Co. will sell its Broadcast Media Group, which includes nine network-affiliated television stations and their
related properties.

"We believe a divestiture would allow us to sharpen our focus on developing our newspaper and rapidly growing digital businesses, and the synergies between them, thereby increasing the value of our company for our shareholders," said Janet L. Robinson, the company's chief executive officer.

According to the Wall Street Journal, Sept 13, 2006, this move represents a change of course by the Times Co., which had said "it had no plans to sell the unit" three months earlier.

The stations included in the group are WHO-TV in Des Moines, Iowa (NBC); KFSM-TV in Fort Smith, Ark. (CBS); WHNT-TV in Huntsville, Ala. (CBS); WREG-TV in Memphis (CBS); WQAD-TV in Moline, Ill. (ABC); WTKR-TV in Norfolk, Va. (CBS); KFOR-TV in Oklahoma City (NBC); KAUT-TV in Oklahoma City (MyNetworkTV); and WNEP-TV in Scranton, Pa. (ABC). This group of stations accounted for 4% of the Times Co.'s total revenue in 2005.

It will be interesting to see whether these stations are bought singularly or as a group and by whom they are bought.

Hello

Welcome to Nobles Weekly. This blog will be used to recap important developments in the regulation of ownership of broadcast media outlets and offer analysis and opinion of note.

This week will be provided a brief history of this topic as well as analysis of recent events such as the National Association of Broadcasters endorsing FCC Chairman Kevin Martin, a deregulation advocate, for renomination to that position last week.