Will media lobbying of FCC lead to greater concentration of voices in fewer hands?

Speaker says yes, but does it matter?




By Bill Densmore

Newshare Corp. 


CHAMPAIGN, Ill., Sept. 10, 2002 -- Media concentration in the hands of a decreasing number of large public corporations could be arrested and perhaps reversed if the U.S. Federal Communications Commission maintains bans on cross-ownership of  market-competing television stations and newspapers, a conference here was told.


But key commentators say relaxing the ban is politically inevitable unless citizens object --  because of the powerful impact of media organizations which are themselves lobbying for the repeal.

Family Newspapers of America website
Champaign News-Gazette coverage of symposium
Media Future: Risk of Monopoly? (Christian Science Monitor, Sept. 19, 2002)
U.S. Rep. Bernie Sanders on "media monopoly" (Ft. Worth Star-Telegram, June 22, 2002)
Analysis of cross-ownership by Douglas Gomery, Univ. of Maryland journalism professor (March 2002)


The FCC began its deliberation on the issue on Sept. 12. (In a lecture, FCC commissioner Michael J. Copps challenged big media. "Some very important media enterprises have financial interests riding on the outcome of the ownership proceedings," said Copps. "The very institutions we rely on as a forum for this debate are the very institutions most affected by its outcome. The media are at pains to assure us their news gathering operations are independent of their corporate interests. Here is an excellent opportunity to test that proposition.")


Among the best previews of the FCC’s consideration, is an issue is an article on the website of The Financial Times, of London.  It mentions Tribune Co., of Chicago, with significant major-market newspaper and television interests, as among those most interested in a relaxed ban. The Tribune sent a reporter to this week’s conference and Jack Fuller, president of its Tribune Publishing Co. unit, was a keynote panelist. ["Owning television, radio and newspapers in a single market is a way to lower costs, increase efficiencies and provide higher quality news in times of economic duress," Fuller was quoted as telling the conference in Tribune reporter Kathy Bergen's account.].


"If we simply preserve the cross-ownership ban and further turn the clock back, you would see a significant disinvestment in newspapers and media companies by the institutional markets," said Frank Blethen, president of the Seattle Times Co., whose companies is controlled by his family's third generation. "Because they are going to go somewhere where they see more ownership and more value. If you see that happen, you are going to see some of the chains divest themselves of radio stations and newspapers. [Blethen speech text, in which the Seattle publisher warns that American democracy is endangered by media conglomerates more interested in short-term profits than news and public service. ]


Blethen said that would be an “exciting picture,” because newspaper valuations would begin to decline, accelerating the disinvestments by financially-motivated owners. "And it's a real irony that us independent owners would just a soon have the value of our assets go down."


Approximately 50 journalists, newspaper owners and scholars joined University of Illinois journalism students this week at a three-day conference on "The Independent Family Newspaper in America: Its Future and Relevance."  Blethen, representing one of the largest remaining family-owned newspapers in the United States, was a keynote speaker. 


A coalition of consumer groups, including the Consumers Union, is opposed to allowing cross ownership. The groups' detailed study claims a decline in journalistic standards in markets where cross-ownership has been permitted in the past: It asserts a Tampa, Fla., newspaper eliminated critical reviews of the parent company's TV programming; a Quincy, Ill., joint-ownership venture employed predatory ad pricing to stifle competition; and a media conglomerate in Canada imposed a uniform editorial policy on 14 different big-city papers, and brooked no dissent in the process.


Fewer than 290 of 1,500 U.S. daily newspapers are now owned by family-controlled companies,  and that number is shrinking quickly, researchers say.  Proponents of family control, like Blethen, say the result is community disinvestment and disinterest by distance corporate owners who have no interest in pursuing controversial or costly news. Blethen, and others, say the result threatens democracy and leads to a lack of diversity.


Blethen called lobbying of the FCC by media organizations who are going to benefit from a relaxation of cross-ownership rules just one example of a “very corrupt political system. This is a huge public policy debate with huge public policy impact . . . I think there is a chance that there is going to be some reform.”  He said some consumer groups and labor organizations have gotten interested in the issue.


Added Thomas Kunkel, dean of the University of Maryland journalism school: "I feel ultimately rules will be relaxed, but it won't happen anytime quickly, and that is itself a bit of a surprise." He said the opposition to the rules-relaxation from Sen. Ernest F. Hollings, D-S.C., was one reason for the slowdown in congressional consideration of the issue.

 “The rampant clustering of American's chain newspapers have truely brought the industry to a crisis point,” said Kunkel, journalism school dean at the University of Maryland. “And these trends are truely threatening independent newspapers. But I have to say that the fate of the independent is now inevitable in the same way that Wal-Mart is now inevitably putting out neighborhood stores."


Kunkel described results of a Pew Charitable Trust-funded effort he lead to analyze the trends and forces reshaping American journalism.  The study became in June 2001 a book from the University of Arkansas Press, “Leaving Readers Behind: The Age of Corporate Newspapering.” 


The multi-year study, with results published in the American Journalism Review, found a dramatic shrinkage in the number of reporters assigned to state capitals and to the Washington bureaucracies, and less international coverage.  But it also found that metro-newspaper news space had doubled in the last generation, that papers were better organized, better printed and have more sections, with much better business coverage. Writers are more talented and educated, and newsrooms are more diverse.


Neuharth: Commitment, not ownership, is key


While changes in FCC regulation may affect who owns TV and newspaper properties which have already fallen out of family hands, preserving the family newspapers which remain may involve a different consideration – the competence and commitment of a paper's local management.


That’s the view of Alan H. Neuharth, the retired chairman and CEO of Gannett Co. Inc., and the single person most often associated with the "chaining" of America's newspapers. Neuharth, for his part, calls FCC relaxation of the cross-ownership rule “inevitable” from a political standpoint.  He says what’s more critical to family ownership is keeping relatives among owning families involved in the business and not squabbling with each other. 


"It is true that during the 19 years, that [Gannett] acquired 69 daily newspapers, most of them family owned," he said. "In the vast majority of those, the families came to us looking for a deal. We never once made an unfriendly or hostile offer." He said the families, "lost interest, and decided to take the money and run. . . . the key is to make sure that some or most of the family members are actively involved."


"Most of the concern has been based on a fear of what would happen rather than what has happened," Neuharth told conference attendees. "I think an objective analysis of the content of newspapers in this country would lead to the conclusion that what matters is less whether the ownership is a family or a big public or private chain than the dedication of the decision makers in that organization, public or private."


Added Mary Sharp, metro-Iowa editor of The Gazette, a 119-year-old, family-owed daily in Cedar Rapids, Iowa: "The corporate structure doesn't matter that much for me. What matters is the leadership you get in the newsroom, the leadership you have in the publisher's office. There is pressure in family newspapers to make a profit, too. There has to be, or we are all out of jobs."


“The best independent publishers and editors have been just as good at modern managers at turning profits,” says Robert Reid, a University of Illinois journalism professor who formerly was editorial director of a long ago-sold  family-owned newspaper group in southern Illinois.


More of Neuharth’s keynote speech was devoted to his analysis of declining newspaper circulation than to the decline in family ownership. Ten years ago, U.S. daily newspaper circulation stood at 60 million copies, said Neuharth. Now it is down to 55 million, yet the nation’s population has grown to 288 million from 252 million during the same period. Why aren’t newspapers growing, asked Neuharth? His answer: Because they are failing to keep up with their racially diverse audiences, and failing to attract young readers, including pre-teenagers.


One of Kunkel’s prescriptions for improving journalism: Develop hard evidence that good journalism is profitable.


 "We have made the content of newspapers so bland and unappetizing. I think that is largely what is killing newspapers -- they are not very interesting for the most part,” said Kunkel. “We’ve blanded it down so badly that people are not wanting to read anymore."


Problems of media concentration viewed


Many panelists and speakers described their perception of the problems of media concentration.

Chief among them, they said, have been the effects of the sale of papers for high prices to companies which must finance their acquisitions out of cash flow. In too many cases,  they said, this has produced inevitable results -- a reduction in newsroom staff, shrunken "newsholes" to cut newsprint costs, fewer business-office staff when functions are consolidated nationally, and a tendency toward a revolving-door at the publisher level.


The result, according to writer and University of Illinois journalism professor Robert W. McChesney, is a "noxious brew" in which chain owners make lots of money by practicing low-quality journalism, including declines in investigative journalism, international reporting and labor coverage - and an increase in fluffy stories or stories aimed at demographic groups most appealing to advertisers.


McChesney argues that objective journalism is not what the nation's Founding Fathers expected when they enshrined the First Amendment and enacted huge postal subsidiaries making it inexpensive to distribute print newspapers around the fledgling nation. For more than a century, he said, the press was rigourously partisan.


On this point, Blethen said that at the Seattle Times, the newsroom goal is not necessarily to be objective, but rather to be fair and responsible.  He said he thinks of his relationship to his family’s papers as a stewardship rather than ownership. He said chain ownership of papers “drives out all values that are not short term and are not financial” and leads to ownership with “no passion, no interest and in investment in telling the complicated stories . . . [such as] misconduct in public office.” He called concentration of newspaper ownership “an untold story that will eventually lead to our undoing” as a democracy.  And he cited Walter Lippman’s famous words, “only in variety is their freedom.”


McChesney said objective journalism has lead to reliance on official sources, which "locks in the status quo and makes fundamental criticism impossible." For example, he said, it seems to be assumed by the nation's media that "the United States is a bumbling philanthropist in international affairs and that we can invade any country any time we want with no debate about the underlying assumption of whether we have such a right under international law."


Too much journalism thus becomes a barrage of disconnected facts. Evidence for the result of this are surveys which show that people who consume the most news about complicated stories such as the Clinton health-plan initiatives or the Persian Gulf political situation have the least overall knowledge of the facts.


This substitution of disconnected facts in place of context and meaning is leading to a de-politization of American civic life, said McChesney, and a lack of involvment in the political process. For example, said panelist James H. Ottaway Jr., chairman of Ottaway Newspapers, Inc.,  reporters at some Ottaway papers in upstate New York attend zoing board meetings and are the only member of the public present.


"It is very easy for journalists to become disillusioned in this environment," said McChesney. "You do a great expose and nothing happens, no other media picks it up . . . Nothing happens because the political structure has grown so corrupt and is so tied into political money."


McChesney blames "extraordinary inequality in the United States" as the cancer afflicting democracy and, hence, a cancer for journalism as well. In the year 2000 U.S. presidential election, he said, over half the votes came from the wealthiest fifth of the population. "Why?"  he asks. "Because the poorer you are, the less the system addresses your problems. Anyone who goes to Washington quickly grasps that . . . so this is why it is not, simply, a matter of practicing good journalism. The pressures go way behind that."


The solution, he says, is a more viable democracy with less corruption in the system and reduced inequality. He said that will require feisty journalism that opens its arms to controversy. "We need to treat the people in power in this country with the same skepticism as we treat other leaders around the world," he said.


Repeal of federal estate tax debated


Blethen and McChesney differ on one solution to the decline of family-owned papers.


Blethen believes the federal estate-transfer tax should be repealed, because it forces families in many small businesses - not just newspapers - to sell out and raise money for taxes rather than pass the business to a new generation.  Blethen says estimates by some congressman of  a negative effect on the federal treasury of such a move are unrealistic. [Also see


But McChesney said he had a visceral reaction against repealing the state tax because it "will shift more of the tax burden to people who can't afford it." His focus, like Blethen, is on retaining or reimposing broadcasting and antitrust regulations which limit media cross-ownership. "Today, unlike the 1790s, these rules are made by and for the big media companies," he said.


"This is not a hypothetical discussion," said McChesney. "This week, the FCC is about to announce the beginning of its rulemaking on cross-ownership issues. All of these are either going to be eliminated or relaxed in the next year without public participation unless there is organized opposition in the next year."


The FCC's 1998 changes which relaxed cross-ownership rules in the radio industry have all-but-eliminated many family-owned radio stations and allowed two or three companies to control all the radio stations in a given geographic market, McChesney noted. "It has turned into a commercial sewer," he said. "Journalism has been eliminated, news has been reduced and `payola' has returned."  


Payola refers to the practice, prevalent and banned in the late 1950s, of disc jockeys or their owners being paid for providing airplay for particular records. While that specific practice may not have reappeared, critics of the major multi-station operators allege they have found other legal ways to receive pay-for-play.


Healthy trend: Growth of weeklies


Listening to McChesney, and later to Neuharth, was Cheryl Wormley, a former home-economics teacher who a decade ago decided with some friends to start a weekly newspaper, The Woodstock Independent, where there had not been one in the then-rural Chicago suburb of Woodstock, Ill. Since then, her paper has won awards, has profited and she was among panelists at this conference sponsored by the University of Illinois School of Journalism and the The News-Gazette, the Champaign-Urbana family-owned daily celebrating its 150th birthday this year.


Wormley's Illinois weekly success is testament to one trend which bodes well for family ownership of papers, said Ottaway, who heads the community-daily unit of Dow Jones & Co.,  publisher of the nation's second-largest daily, The Wall Street Journal.  That “healthy trend,” he said, is the growth of weekly newspapers.   From 1980 to 1990, he said, American dailies lost 10 percent of circulation and American weeklies grew by about 10 percent. He likened this change to the formation of new community banks, as larger banks have consolidated.


The ease with which weeklies may be started was described by Jim Nowlan, a 20-year veteran of state politics who returned to his rural western Illinois hometown and started the weekly Stark County News six months ago – with $700 computers, a single page scanner  and a couple of good digital cameras. With those resources, a  small staff and the ability to send pages via the Internet to a distant (chain-owned) daily for printing, Nowlan says he was in business – and giving nearby chain-owned weeklies fresh headaches.

Now, said Nowlan, he will soon use off-the-shelf software to send digital versions of full editions to subscribers in Florida and elsewhere – via the Internet. And the work to put those editions together is being done by high-school students, via his website called


“It is easier than you think to start a newspaper,” said Nowlan.


For Wormley, who is 58, the question of family ownership is not theoretical. She is trying to figure out what to do with her little paper. Although thriving, she is surrounded by chain-owned dailies and weeklies who would be happy to acquire her paper. Her children are not interested in taking on the business and her husband hopes she will retire soon. Wormley is exploring ways to find another independent buyer, or to turn over the paper gradually to its employees.


But in the meantime, she and others at this conference provided their recipee for keeping newspapers -- no matter who owns them -- strong and growing.  "We do take on our local government and take stands that are not popular, and we have had a successful experience doing it," she says simply.


News is the key, added Neuharth in a compliment to Walter Hussman Jr. family owner of the Arkansas Democrat-Gazette, the surviving daily in Little Rock. Earlier, Gannett had purchased a competing daily. But Hussman's journalism won in 1991, the former Gannett executive recalled.


"Within five years, he ran Gannett out of town," said Neuharth. "And he did it in a very basic way. He put news in his newspaper. Lots of news about big things. Lots of news about little things."  On a recent car ride in Arkansas,  Neuharth said he picked up a copy of the Democrat-Gazette and  "it had so much news in it that I spent three hours reading it between Pine Bluff and Little Rock."


Another trend spotted by Ottaway, and echoed by Blethen, are decisions by some chains to sell some of their papers or exit the newspaper business altogether. 


Thomson Corp., once a major publisher of small dailies in the United States, is now completely out of the business. Why, asked Ottaway? Because they company insisted on such high profit margins that they ultimately drove readers away by failing to provide quality journalism any longer. When profit margins couldn’t any longer be sustained, Thomson quit the business. “The marketplace eventually drove Thomson out of the newspaper business,” said Ottaway, proving that “profits and quality journalism cannot survive except together.”

“Thomson and Gannett and Knight-Ridder got rid of some newspapers,” Blethen added later. “The fact is, they have disinvested to the degree and milked these newspapers to a degree that there is not much left for them to do.”


The chain disinvestments in small papers is such that, “in a few years, some of these papers won’t be viable businesses an longer,” suggested Kunkel, the dean of the University of Maryland journalism school.


Added Al Smith, of Lexington, Ky.: “I think a number of those chain papers are very fragile and they would fall if somebody blew a trumpet outside their walls. I believe they might sell, and their communities might buy them back. .... or they might just improve."


Smith’s Institute for Rural Journalism and Community Issues is working with several colleges and universities in rural Appalachia to experiment with new forms of local media – perhaps web, electronic or newsletter based.


Saying McChesney’s comments were “all  too true, in many respects,” Ottaway suggested finding a way to return to the Founder Fathers’ vision of a largely non-commercial, subsidized press.  “How do you do this kind of subsidizing and keep free voices is a tough question?  But I think that is a very interesting idea and it would be fun to see how that might come about.”


Family ownership: A a love story?


H. Brandt Ayres, family owner-publisher of the Anniston [Ala.] Star, chronicled his journalistic crusades and tried to define the relationship between a community and its local family publisher.


 "We may not be as detached as good corporate newspapers,” he said. “But we care more. It is a relationship based on scolding, loving, hurting, being hurt and loving again, like any slightly dysfunctional family. Amen."


Ayers continued: "To me the defining qualities of family  papers are rootedness -- a passionate commitment to place and to the people who live there -- and spending more on the paper. If the family gets that sort of payday rush from putting out a really good newspaper they will spend more on the paper. But passionate commitment: What exactly does that mean? Does that mean we totally abandon objectivity and turn the paper into a bullhorn for the publisher's prejudices? I think a really good family and corporate newspaper has to be both an advocate and objective . . . That tension has to exist . . . in family journalism, you are also a community leader. And this is where the tension between advocate and objective observer comes in. “


Ayres cited among his “crimes of advocacy” helping to form a committee to mediate racial disputes, reforming a poor city-owned hospital to a quality regional medical center, helping form a coalition to provie a poor minority city school system,  helping raise funds to help solve a racially-motivated killing, a voter-registration crusade and reporting on financial abuses by an anti-poverty agency.


"Even family publishers who love their community sometimes raise a little hell,” Ayres said. “Shouldn't we have instead given those local controversies the puritanical stiff arm of objectivity? You can make a case. As for myself, I would ask you to explain to me what is the objective view of lousy health care, poor schools, racial murder and injustice?"


Papers losing political support of community?


The near-complete loss of local ownership of papers and a decline in the quality and extent of community journalism may be undermining political support for the press, said David Bennett, executive director of the Illinois Press Association.


"It is a lot tougher today to win important battles than it used to be,” Bennett said during a question-and-answer session. “There are a lot of reasons. My theory is this: the increasing erosion of newspapers’ commitment to the community has led to a lack of respect from the community toward us. And that has let to a loss of clout.


“Our ability to go back to community movers and shakers in terms of our ability to persuade them that our issues are important to them,” Bennett added. “They don't mind that we are making money. What they don't respect is that in some cases we appear to have abandoned our franchises . .  . So, do you think that the residual effects of one of this lack of commitment to the community is going to result in an abandoning of the ship, including our ability to protect our First Amendment rights?"