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A screed against greed - Broadcasting & Cable

A screed against greed

If 'bigger is better,' the issue becomes 'better for whom?'
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In August, when Fox bought the 10 Chris-Craft stations for $5.4 billion, the deal gave Fox duopolies in New York, Los Angeles, Phoenix and Salt Lake City. Fox's Mitch Stern exclaimed how now, "You have
to deal with us" in those markets, and later in the same story, he pointed out how running two stations in one market can be done with 5% to 15% fewer people.

Of course, in New York and Los Angeles, you're not dealing with small broadcasters. The biggest ones have stations there, so being bigger still is a good thing.

Yet, when we ran that story, it occurred to me that what some segments of our readership find good news or savvy economics, another set finds depressing and just somehow wrong. Stern pointed out that Chris Craft stations, before the sale, had profit margins of about 30%. After some of those stations become part of duopolies, he said, their profit margins should just about double.

Owners, investors and the guys with sharp suits must be ecstatic to see an FCC that increasingly allows media giants to get bigger and bigger. But there are plenty more worthy pencil pushers and middle-level executives who, I'd bet, are likely candidates to be the manpower extras who won't make the duopoly cut.

Big broadcasters like to argue that consolidation creates synergies that give them the means to spend money on things like programming that really matter to their viewers, listeners and customers. Maybe that's true. If one radio chain now owns over 1,000 stations, why, they must be really pouring money back into exciting new formats, brilliant personalities and penetrating local programs.

Surely, you've noticed how much better radio has become since it was essentially deregulated. It's a regular renaissance all around the dial. Likewise, local children's shows and hard-hitting documentaries dot television schedules from Bangor to Bakersfield.

I'm kidding.

We shouldn't be anxious to have the government impose rules on broadcasters, but it would be interesting if the FCC asked certain questions to broadcasters, then published the answers, and let the interested public administer the punishment.

For example:

  • Besides news or sports-related programs, did your television/radio station produce any
    special programming last year that was at least a half-hour long?
  • Did you increase the number of news programs in the last year?
  • If yes, how many full-time employees did you add?
  • How much extra advertising has your new news program brought in?
  • Since forming a duopoly, entering into an LMA, or taking ownership of multiple radio outlets in your city, how much have advertising rates risen?
  • Why?
  • In what ways would you say your station better serves its community than it did prior to the duopoly/LMA?

Of course, most other businesses don't have to answer questions like that. But as long as the government gives broadcasters their spectrum, the feds have the power to influence who gets to ride the rides. The FCC has the right to at least require a full accounting of what its license holders are doing with the precious property.

I've written mild screeds against media greed before and predictably, I get responses from television executives angry that I've taken a bite out of the hand that feeds me (and them). The truth is, criticism from relatively friendly corners makes media better because the industry is so quick to label its critics as hayseeds, religious reactionaries or cultural lugnuts.

For example, it might have taken broadcasters years to discover television news had it not been that the FCC pushed stations into that kind of community service early on.

Now news is the money spot. Sometimes, do-gooders have a good idea..

The public has now had years to become foggy about the concept of public-interest requirements and no one should fear, particularly with the incoming president, that television or radio stations will be severely tested again.

But it wouldn't be horrible if, every time some broadcasting executive extols the value of local
broadcasting that there were some proof it isn't just a lot of talk.

Bednarski can be reached at pbednarski@cahners.com or at 212-337-6965.

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