Speaking with one voice: Does media cross-ownership stifle diversity?

Special to
The Freedom Forum Online

12.15.00

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NEW YORK — On the same day that America Online and Time Warner won their merger bid to become the largest media company in the world, media experts disagreed yesterday about the impact of media cross-ownership on quality journalism and the First Amendment.

"It is generally understood that the rise of media monopolies led to a shift in editorial content, city by city, to a far-less confrontational, far-less controversial, far-less skeptical and challenging press," said Reed Hundt, former chairman of the Federal Communications Commission, at a panel on "Speaking With One Voice? Cross-Ownership of the Press."

Arthur Siskind, group general counsel of News Corporation, Ltd. — one of the largest media companies in the world and the parent operator of Rupert Murdoch's media outlets — strongly disagreed.

"We as a company have acquired more and more TV stations around the country," he said. "But we have introduced local and national news where news programs never existed before because of our ability to subsidize those programs."

Hundt and Siskind were joined by Michael Wolff, New York magazine's media columnist, and Nancy Hicks Maynard, president of Maynard Partners, for the First Amendment Breakfast Series held at the First Amendment Center, which co-sponsored the event with Columbia University's Journalism School.

The panel debated the relationship between cross-ownership of the press and the First Amendment and how the sale of media outlets impacts the diversity of free expression.

Siskind and Wolff viewed cross-ownership as primarily about business competition and the forces of the free market, while Hundt and Maynard were more concerned with the free exchange of ideas.

Cross-ownership of the media raises the question of whether structures of power in the media industry can "dictate and shape the actual significance and utility of the First Amendment," said Hundt, now a senior advisor at the global financial consulting management firm, Mackenzie & Co.

Likening the election battle in Florida to the increasing consolidation of media ownership, Hundt added, "The decision was made by the U.S. Supreme Court because of the categorical imperative of DNA — the court wished to replicate itself."

That's the same reason blue-chip companies buy up small media outlets, he added.

Almost 60% of all radio stations in the country, Hundt pointed out, changed hands when the 1996 Telecommunications Act was passed by the Republican majority in Congress. This erased the diversity of the radio industry, he said.

"They didn't change hands to go from one small group owner to another small group owner," he said. "They changed hands to be massively consolidated."

Stating that he could not be objective on the issue of cross-ownership because News Corp. owns the New York Post and 82% of Fox Entertainment Group, Siskind said, "Those of us that advocate for the revocation of the newspaper cross-ownership rule do not advocate elimination of economic competition."

"And this rule is not necessary to preserve and protect competition," he added.

Still, in 1993 the FCC granted News Corp. a permanent waiver to the newspaper-broadcast cross-ownership rule — the 1975 FCC stipulation barring the grant of a TV license to an entity that operates or controls a daily. And, News Corp. recently petitioned the FCC to own more than one TV station in New York, which is prohibited under the FCC's 1999 duopoly rule.

Agreeing with Siskind, Wolff said that media cross-ownership "has nothing to do with the First Amendment. It is merely about how we make a media business."

However, Wolff admitted he could no longer be objective about cross-ownership because he is "being paid an enormous amount of money" by Murdoch and Harper Collins to write Autumn of the Moguls, a book dealing with the top rungs of power in media conglomerates.

Both Siskind and Wolff claim that consolidation has led to more media outlets, which, in turn, has led to a proliferation of voices in the media along with better journalism.

Siskind cited a long list of alternative and mainstream media outlets as examples of how diverse the media remains despite allegations that corporate consolidation has weeded out the underdogs.

"All these new outlets translate into increased choices for the viewer, the reader, the listener, and the Internet surfer," Siskind said. "The New York market is an example for why the absolute rule barring cross-ownership simply makes no sense in a market which is undoubtedly the most competitive and diverse."

But Hundt and Maynard argued that cross-ownership snuffs out diversity.

"The idea that there are all these voices with cross-ownership is a bit of a canard," Maynard said. Her recent book, Mega Media: How Market Forces are Transforming News systematically examines how cross-ownership is affecting the media.

She recalled how the staff at The Oakland Tribune, which she co-owned with her husband, Bob Maynard, for more than 10 years before turning it over to corporate ownership, expressed concern over the future of journalistic standards after the sale.

"People were running around saying, 'What's happening? News has gone to hell!' " she said.

As President-elect George W. Bush moves into the White House, some of the panelists anticipate a continued trend toward corporate consolidation of media outlets.

"This agenda is going to be pressed very, very vigorously to allow newspapers and TV stations to own each other," Hundt said. He predicted that regulation laws will be eradicated and waivers for cross-ownership will be granted.

Wolff, however, predicts the reverse. "As much as we have followed consolidation and the consolidators," he said, "we will now begin to follow the break-up artists."

In fact, Wolff claimed, print media may be facing doom not because of media monopolies but because of bad management. "Newspapers are going away because they are run by idiots," he said. "There is nobody dumber than a person who runs a newspaper."

The one thing the panelists all agree on is that there are significant risks to free speech when the government determines how large media companies can be. But even on that point Hundt added a final thought.

"It's not clear to me that the media is going to lead a reasonable debate about the consolidation of the media," he said.

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