House Subcommittee Hearing to Probe Private Equity in Media

House Telecommunications & Internet Subcommittee Hearing Tuesday to Focus on Role of Private Equity in Communications Marketplace

By John Eggerton -- Broadcasting & Cable, 3/10/2008 1:01:00 PM

The House Telecommunications & Internet Subcommittee scheduled a hearing for Tuesday at 9:30 a.m. on the role of private equity in the communications marketplace.

Federal Communications Commission member Michael Copps, for one, has expressed concerns about the impact of venture capital on media companies. Copps has argued that with private equity taking a bigger stake in the media -- what he called the FCC's "pell mell" approval of "rafts of private-equity deals" -- companies were increasingly no longer accountable to divulge even basic ownership information. When something goes wrong, he added, or the equity firm goes bust, what happens to the media company and who does the FCC seek out for redress?

FCC chairman Kevin Martin told reporters that while the commission has never studied the role of private equity in media deals, there was no evidence that private-equity ownership affected the management of such companies and he was still not convinced that there was any difference.

Looking to examine any possible evidence, the subcommittee scheduled the following witnesses: Carlito P. Caliboso, chairman of the Public Utilities Commission in Honolulu; Richard J. Bressler, managing director; Thomas H. Lee Partners, Boston; Josh Lerner, Ph.D.; Jacob H. Schiff, professor of investment banking, Harvard Business School, Boston; and Eli M. Noam, Ph.D., director, Columbia Institute for Tele-Information, professor of finance and economics, Columbia Business School, New York.