FCC decision will spawn mergers
June 4, 2003
The Federal Communications Commission ruling Tuesday opened the doors for companies to own more than one media in a given market. Experts disagree on whether this is a positive change.
The FCC decision relaxed prior rules regarding cross-ownership of multiple television stations or ownership of a television station and a newspaper in the same area, said Art Slusark, representative for the Meredith Corporation.
Meredith owns 11 television stations nationwide and publishes Better Homes and Gardens, according to the company’s Web site, www.meredith.com.
The new rules regarding duopolies, ownership of two stations in one market, will be easier, Slusark said.
“[The decision] will allow, for the first time, triopolies in the nation’s largest markets,” he said.
Slusark said the decision will allow more leeway for bigger corporations to trade stations with smaller corporations to obtain more duopolies.
“Our station’s value will likely increase because of more competition,” Slusark said. This is good effect of the decision, he said.
Bigger companies will get larger and be able to cut better deals because of the decision, Slusark said, but, “[Meredith] has competed well and will continue to do so in the future,” he said.
Meredith Corporation currently has one duopoly in Portland, Ore., said Slusark, and is interested in having more, he said.
The benefits of owning duopolies includes the ability to have just one accounting department and one back office for both stations, Slusark said.
Thomas Beell, professor of journalism and communication, said owners of stations will look for ways to increase profits.
One way, he said, would be consolidating two newsrooms. Employees of the second station acquired could be laid off or fired, Beell said.
Combining staffs could lead to fewer jobs for students in journalism, Beell said.
“I don’t think this will produce more opportunities for graduates,” he said.
Beell said the FCC decision could create a kind of monopoly if all the stations are owned by only a few companies.
“I don’t think this is going to be good for America,” Beell said. “As these companies get bigger and bigger, competition declines and diminishes. In our capitalist America, we argue that competition is good.”
Barbara Mack, associate professor of journalism and communication, agrees the ruling will have a negative effect for American consumers.
Mack said the consumer groups were all opposed to changing the regulations.
“The FCC got more than half a million comments, all against the rule,” Mack said.
Mack said ultimately, consumer prices will raise because there will be more advertising and less competition.
“It is going to make it easier for the rich to get richer and harder for the poorer to get good television,” Mack said. “If I were a greedy capitalist, I would be saying hooray [for the FCC decision].”
FCC rules prohibited corporations from owning more than one television station in one market before Tuesday’s decision, Mack said.
“The theory was [the FCC] wanted a diversity of voices in a community,” Mack said.
Beell said there would be a decline in diversity of coverage and ownership.
“There is a distinct possibility of hurting diversity,” Beell said.
Slusark said there are concerns about competition in the industry.
“Some people in the industry fear groups will get too large and competition pressure too great,” Slusark said.
Slusark said people also fear that local news coverage will not get its proper play because there will be more syndicated news.
This has not been the case with the Portland, Ore. market, Slusark said.
Slusark said it was an “unrealistic viewpoint” to keep the rules the same.
“The current rules and regulations in place were done about 25 to 30 years ago,” said Slusark. “Media has changed a lot. Internet did not exist; cable did not exist and satellite TV did not exist.”