CONFERENCE TOPIC:
Will media lobbying of FCC lead to greater concentration of
voices
in fewer hands?
Speaker says yes, but does it matter?
REPORTING ON FAMILY NEWSPAPER CONFERENCE AT UNIVERSITY OF
ILLINOIS
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.
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 head 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 ResponsibleWealth.org
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 http://www.countyenews.com/.
“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?"