The National Acquirers
Whether for better news or fatter profit, media companies want in on TV/newspaper crossownership
By Bill McConnell -- Broadcasting & Cable, 12/9/2001 7:00:00 PM
On a Friday afternoon last July, Tampa Tribune photographer Cliff McBride arrived at the scene of a crime that would traumatize the city. Only minutes before, a robbery suspect had shot and killed a police officer in the parking lot of an apartment complex, making Lois Marrero the first woman on Tampa, Fla.,'s police force murdered in the line of duty.
A distraught colleague kneeling by Marrero's body would be the initial image of the tragedy for many Tampa citizens, but the picture didn't appear first in the pages of the Tribune. Instead of a still camera, McBride grabbed his video camera. His reports, with near-instant dispatch, were broadcast on WFLA-TV and streamed over Tampa Bay Online, both owned, with the Tribune, by Richmond, Va.-based Media General.
Capturing the scene on video first would likely not be the choice of most print photographers, but McBride is no longer simply a newspaper journalist.
WFLA-TV, the Tribune and TBO.com combine to make up Media General's massive investment in a new kind of operation that combines the reporting breadth of a newspaper, the audience reach and profitability of a broadcast station, and the immediacy of the Web.
The Tampa staff moved two years ago into a new $35 million facility, the first in the nation to combine the three media in a single operation. Media General plans to copy the concept in five other markets where it owns TV and newspaper combos.
In fact, many media companies are angling to follow suit, including Tribune, Gannett, the New York Times, Hearst-Argyle and Belo. Many of those companies filed comments last week in a preceding on removing the ban on same-market newspaper/broadcast crossownership that will determine whether such cross-pollination can flourish.
So, are the rules going away?
When FCC Chairman Michael Powell took over, conventional wisdom said the deregulatory Republican majority would either eliminate or greatly relax the rules. But given the Democratic takeover of the Senate, that outcome is not guaranteed.
The determining factor may come from federal judges. The federal appeals court in Washington has already tossed out FCC restrictions on cable ownership, and legal battles over the 35% cap, local-TV-station limits and newspaper/cable crossownership are pending. A decision in any of these cases could affect the FCC's direction on ownership issues in general.
Powell is well aware of the interconnections of the various ownership fights and says the commission's handling of the broadcast/newspaper crossownership rule will be "a hallmark of the way we examine any and all of our rules."
The potential benefits to companies and viewers alike of combined newspaper/ broadcast operations are enormous, industry executives say. Merging news operations with newspapers will allow TV outlets, which generally have small news staffs, to greatly increase their breadth of coverage.
For example, when Tribune's WTIC-TV Hartford, Conn., wanted to investigate whether state-licensed contractors working in homes were employing convicted sex offenders, the station "simply didn't have the assets to pursue the story, but Tribune's Hartford Courant did," says Tribune Washington Vice President Shaun Sheehan. The two collaborated, the station got the story, and the state launched an investigation, says Sheehan.
Also, according to a study conducted by Media General, TV stations with converged operations averaged three hours more of non-entertainment programming each week than traditional stand-alone operations. One unexpected benefit has already been identified: With access to newspapers' computerized archives, stations—which often scatter their broadcasts with coverage of car wrecks—can better identify dangerous intersections.
But despite the big plans to take advantage of converging media, some industry watchdogs say widespread benefits have yet to materialize.
Instead, they say, crossownership today usually means cross-promotion of news coverage produced separately by the various outlets.
"So far, viewers are not at all impressed," said the Poynter Institute's Al Tompkins, who has conducted focus groups of Media General's Tampa audiences. "There's a daily drumbeat of 'look at the paper, look at the paper, look at the paper.'" One example: Every year, the Tribune produces a guide to dealing with hurricanes that gets major plugs from WFLA-TV. "Viewers perceive this as selling them something, not telling them something," he said.
Public advocates argue that the downside is much greater than tie-ins. They say the consolidation trend in general and crossownership of newspapers in particular is a threat to democratic expression because it limits the number of voices that can have meaningful impact on debate.
Advertisers also are worried that crossownership will give newspaper/ broadcast groups power to dictate prices in local markets. Allen Banks, North American media director for Saatchi & Saatchi and policy-committee chairman for the American Association of Advertising Agencies, said that competition posed by newspapers was one of the safeguards broadcasters touted to assuage concerns when the FCC relaxed restrictions on duopolies and radio/TV combos two years ago. "You can't have it both ways," he said. "If you own all of those media, I can't see how there won't be an adverse affect."
There's no doubt that conflicts of interest have created some serious lapses in editorial judgment. Milwaukee's Journal Communications, owner of the city's Journal-Sentinel newspaper and WTMJ TV and radio stations faced intense criticism when publisher Robert Kahlor allowed the paper to shed its watchdog role and become a cheerleader for a new baseball stadium funded primarily with public money. Not only did Kahlor chair the governor's stadium commission, but he spent more than $25,000 of Journal company cash lobbying state lawmakers to support public funding.
No coincidence, say local critics, that WTMJ stations also carry Brewers games. "All four Journal media lost almost all objectivity," says Dave Berkman, retired professor of mass communications and media columnist for the city's alternative weekly, Shepherd-Express.
But it's too early to conclude that a few egregious incidents taint crossownership as a whole, says Carl Gottlieb, a former broadcast journalist now with Project for Excellence in Journalism. "I don't see bad guys yet, and I don't see good guys." But his fear is that corporate bean counters see convergence simply as a way to "thin the herd" of reporters rather than using the huge reporting teams fielded by papers to greatly broaden the scope of broadcast stories. Stations also may be hurt if they rely on print reporters to do all the legwork and brief broadcast personalities on the air, he said.
Broadcasters can't prepare for a massive shift to a converged staff just yet. For 25 years, the federal government has banned, sort of, ownership of broadcast stations and newspapers in the same market.
After practically begging newspapers to get into the fledgling radio business in the 1920s, the FCC roughly 50 years later decided broadcast/newspaper combos could potentially dominate local media markets, choke off coverage of important public issues, and dictate ad rates to local businesses.
The clampdown was far from total. More than 140 combos existing when the restriction was established in 1975 were allowed to continue. Also, four permanent waivers have been granted since then, including a deal to let Rupert Murdoch's News Corp. own the New York Post and a TV station that reaches part of the Big Apple's metro area. Because the FCC can't block any sale that doesn't transfer a broadcast license, it can't stop station owners from buying newspapers. Consequently, the commission tolerates local combos created by media mergers until the affected broadcast station faces license renewal.
Today, roughly 50 local combinations of broadcast stations and newspapers operate.
Porous as the ban may be, it has irritated TV-group owners since its inception, and, after years of fighting vainly for repeal, media companies may finally get their wish. Powell, prodded in part by the deregulatory Telecommunications Act of 1996, says its time to reconsider the restriction.
Though saying that the goals of diversity underlying the rule remain "vital as ever," Powell argues that the 1975 rule was justified on little more than hypothetical fears rather than real-world evidence or solidly grounded economic theory. Last week, more than a dozen companies honored his request for in-depth analyses of a proposed repeal.
Arguing to retain the restriction was a coalition of public-advocacy groups— Media Access Project, the Consumer Federation of America and Consumers Union among them—and more than 1,300 individuals whose input was generated by a coalition appeal for grass-roots support.
At the top of the debate is the radical transformation of the media since 1975.
Most broadcasters say there was never evidence of actual abuses of power but, today, there's no chance for one owner in the market to dominate a local audience. Now people can turn to cable and the Internet, neither of which existed 25 years ago. Technology also allows the New York Times, USA Today and Wall Street Journal to operate printing plants across the country and serve as truly national newspapers. As for broadcasting itself, the number of radio and TV stations increased from 7,500 and fewer than 1,000, respectively, to 12,000 and 1,600.
Intensifying newspaper owners' determination is the rapid consolidation of the media since the FCC and Congress began lifting local-ownership limits on broadcasters alone. Today, an owner can control up to eight radio stations in the largest markets, and, two years ago, the FCC allowed ownership of two TV stations or TV/radio crossownership in a market. Faced by the double dilemma of diminishing print circulation and local competitors' profiting from increased economies of scale, newspaper owners say they must have power to build a cross-media presence in markets across the country.
"The ban serves no legitimate purpose in the modern media marketplace," said John Sturm, president of the Newspaper Association of America.
Public advocates counter that consolidation has already damaged debate and coverage of public issues by decreasing the number of owners. Adding newspapers to the local consolidation trend would magnify that trend, advertisers suggest, by placing what is generally the largest, most aggressive journalism operation in a market into the hands of a diminishing number of corporate giants.
After all, the consolidation wave that was launched by the 1996 Telecommunications Act has cut the number of owners dramatically: from 5,100 commercial radio owners to 3,800 today and 543 commercial TV owners to 360, they say. During that time, media companies have eliminated the vast majority of radio newsrooms. Despite the growth in the number of TV stations, the number of TV newsrooms has declined by 10%, according to figures supplied by public advocates.
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