Hi there,

I am currently doing some investigations into the ownership of the
media.  I need to concentrate on the past decade and need information
on the changes in ownership and structure of the mass media in that
time.  The answer will include information on the major news
corporations that control the media in all its forms and demonstrate
how the structure of ownership has changed - including examples of
mergers, buyouts etc.

I am also looking for information on why this happened?  Simply for
companies to make profit or to be more powerful?  And also want to
investigate what problems these large companies bring who own
newpapers, news channels etc - like Newscorp.  The answer should
include political discussion, moral dilemmas, as well as business
information to take into account all of these things.

The more resources shown the better and the bigger the tip will be!

Many thanks

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Clarification of Question by dontam-ga on 08 Apr 2003 07:12 PDT

Hi all,

Point taken about the price for the answer - I have doubled it for $40
but thats the most I can afford!  Thanks for the pointers as well guys
but I need an in depth look into this subject.

thanks

Hello -

Important note: This answer is not finished until you're satisfied
with it.  If you choose to rate this answer, I ask that you do so
after asking for any needed information/clarification.  Thanks for
your understanding.
_______

Without a doubt, this past several years has seen a lot of corporate
mergers, almost to to a very curious level.  According to a McKinsey
and Company article, "The recent spate of mergers represents the last
throes of a consolidation that started a dozen years ago and has been
marked by such deals as Time merging with Warner, then buying Turner
Broadcasting, then selling itself to America Online; Disney buying
ABC; Viacom buying CBS; and Vivendi buying Universal. Recent months
have seen such combinations as Comcast and AT&T Broadband, EchoStar
and DirecTV, Vivendi Universal and USA Networks." (6)

Why are they doing this?  There are a variety of issues, not the least
of which is the Almighty Dollar.  If company Y has shown nothing but
earnings growth over a certain number of years, and that growth is the
direct result of feeding off the potential revenue of company X,
company X would love to do something about it.  Often times they do,
and this results in the swallowing of corporate Y.   They also merge
for "for vertical integration (a car company buying a parts supplier),
horizontal integration (one bank purchasing another), and
conglomeration (a whiskey firm buying a media giant) among others.
CEOs (Chief Executive Officers, or company leaders) often talk about
synergies, which are like magic equations that lead to two plus two
equaling five or fourteen, that can only come from their two firms
merging." (1)  Giga Information Group "identifies four reasons why
companies merge: to improve operational efficiencies and reduce costs
by cutting overhead, to obtain access to new technologies or
intellectual talent, to increase market share, and to eliminate
competition." (2)  "Any merger or acquisition can result in cost
cutting and more market share. A large number of employees in the
management cadre of merging companies are likely to lose their jobs as
the merger would lead to overlapping in areas like marketing -- one of
the few disadvantages of the mega mergers. This is one area where
Indian companies, which are now increasingly looking at listing on
Nasdaq and New York Stock Exchange of the US, will have to tread
cautiously." (3)

Mergers don't happen in secret though.  Especially ones involving
massive multi-billion dollar concerns.  Critics of media concentration
will now wonder how much more wheeling and dealing can go on before
there are but one or two juggernauts controlling every image,
syllable, and sound of information and entertainment.   WNPJ Corporate
Accountability Task Group says, "Media consolidation means cross
merchandising and insidious product placement - with publishers,
moviemakers, video game programmers, fastfood outlets, and toy makers
all pushing coordinated marketing strategies. For example, Disney
which now owns ABC also has its own chain of retail stores, radio
stations, film studios, and theme parks - all peddling similar
products. Commercialization also entails limited radio play formats,
tv programming, and news print space, since the advertising demands of
corporate funders get top priority. This pressure has even compromised
the federal funding and content integrity of public radio and
television in the U.S.  Media pollution is now rampant as everything
is commodified for corporate profit, leading to sexist beauty images,
gratuitous violence, stereotypical portrayals of racial and ethnic
groups, as well as unrelenting consumerism. Markets assign price tags
that erode all other social values and destroy public culture in the
process." (4)  Companies squelching the competition result in less
choice for the consumer.  "Choice does not always guarantee quality,
but it does provide an alternative. Competitive markets are more
likely to pay attention to local issues, are more apt to invest in
investigative journalism in order to compete, and are generally more
accountable to their audience or readership than are monopoly markets.
Canada has held several commissions over the years that have looked at
the state of competition in the mass media. Finding that competition
was in fact threatened by mergers and acquisitions, the federal
government eventually introduced legislation to limit these
practices." (5)

Examples of mergers from "Corporate Control of the Mass Media
A Threat to Our Democracy" (4): 

*  The top twelve media conglomerates include: AOL-Time Warner,
Viacom, News Corporation, Bertelsmann AG, Sony, Disney, Pearson PLC,
Westinghouse, General Electric, Von Holtzbrinck, Hearst, and TCI.
* In 1945, 75% of U.S. daily newspapers were independently owned, by
1998 only 20% remained so (300 out of 1500).
* CBS and Chancellor Media now control 53% of the listener audience in
the top ten U.S. radio markets.
* Tribune Co. alone owns 11 newspapers with a circulation of 3.6
million and reaches 75% of the U.S. public through its nationwide
TV/cable network.
* There are now more fulltime public relations specialists in the U.S.
than professional journalists.

Sources:

Mergers:
=========
Who owns what?
http://www.cjr.org/owners/index.asp

(6) Here Comes another Wave of Media Mergers
http://www.mckinsey.com/knowledge/articles
anotherwaveofmediamergers_030602.asp

Behind the Mergers: Q&A
http://www.cjr.org/year/02/3/hickey.asp

Media Needs Globalization
http://www.csulb.edu/~d49er/archives/2002/fall/opinion/v10n12-med.shtml

(1)  Why do companies merge? And what makes a company worth so much
money?
http://www.justaskjames.com/default.asp?QID=22

(2) IT Managers ñ the Key to Successful Mergers
http://www.businessweek.com/adsections/cebit/cebit2k/itmanagers.htm

(3) Merging to save money, increase market by Dev Chatterjee
http://www.indianexpress.com/ie/daily/20000124/ibu24015.html


Moral/political discussion:
=============================
(4) Corporate Control of the Mass Media
A Threat to Our Democracy?  by WNPJ Corporate Accountability Task
Group
http://www.mindspring.com/~wnpj/brmedia.htm

(5) Concentration of Ownership in the Mass Media: A Threat to the Free
Exchange of Information?
http://www.peak.sfu.ca/cmass/issue3/concentration.html


Search Strategy:
media mergers
+Why companies merge
media "companies merge +in order +to"
media mergers "merging +to"

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Request for Answer Clarification by dontam-ga on 09 Apr 2003 10:44 PDT

Hi there,

Thanks for this answer as well.  I havent done an in depth analysis of
this one yet but from the first read I need to say that it is very
centred on the mergers that have happened.  This is very true and will
form part of my investigations, however I am also looking to research
into other areas to do with the changes in ownership structure.  For
example, looking into the question of whether it is better to have
many or few people in charge of our mass media.  I was also thinking
of looking into how the media companies have used their subsidaries as
tools to achieve a greater goal (if thats possible im just thinking
off the top of my head here!).

Also maybe looking at the type of businesses the bid media giants own
- like newspapers, tv channels etc and how that can have an effect on
what we see in the media - ie Out of all 177 odd newspapers owned by
Murdoch, not one was against the war in Iraq.  Probably because of
Murdochs close friendship with Tony Blair.  That kind of thing.

Sorry to be a picky individual, and maybe I should have been clearer
in the question, but the first answer was  great one, just too centred
on the merger thing.

Thanks

Tam

---

Clarification of Answer by jbf777-ga on 09 Apr 2003 12:08 PDT

Hi -

Thanks for your request for clarification.  Have you looked at the
sources I've included?  They examine the ethical questions involved w/
mergers -- democracy, choice, etc.  Whether something is "better" or
not is all in the eye of the individual, but the articles in the
"morals" section of the answer should address that.

If they don't offer the additional information you're looking for,
please don't hesitate to tell me, and I'll see what I can find.

jbf777-ga
GA Researcher

Great answer!

Hi -

It would seem the amount of information you're looking for would
warrant a higher price.  You may consider increasing the list price of
your question a bit.

As I uderstand it, 7 companies own all the media(newspapers, tv,
radio, magazines) in the world.  Reason only seven companies own the
media is so they can regulate what Americans see and hear?

There are a number of books which could be of use to you:
http://www.amazon.com/exec/obidos/tg/detail/-/0847683893/qid=1049773471/sr=1-8/ref=sr_1_8/002-5711873-5123200?v=glance&s=books

Media ownership has become more concentrated over time, but especially
since the enactment of the Telecommunications Act of 1996 which
relaxed the rules governing the maximum number of broadcast stations
that could be owned by one company and the total number of media
outlets (print and broadcast, called cross-ownership) that could be
owned by a single company in any given market. The Federal
Communications Commission (FCC) was directed to conduct a biennial
review of the broadcasting industry rules of ownership by the 1996
Act, and is currently considering a further relaxation or abolition of
the remaining rules that restrict ownership. The issues resulting from
the current state of the rules and the proposed changes have been the
subject of studies that were commissioned by the FCC and by
independent groups interested in the subject. Two recent broadcast
program investigations by the Public Broadcasting Service's NOW, with
Bill Moyers, have examined the studies, and presented interviews with
commissioners and broadcast executives, as well as commentaries by
experts.

According to material and interviews in the NOW program segments, the
number of companies that owned a controlling interest in the main
media outlets in North America (newspapers, magazines, television and
radio broadcast stations) has declined from 50 in 1984 to 10 in 1996.
Despite the increase in the number of cable and satellite channels,
ten cable channels and five broadcast networks account for 90% of all
viewers. (NOW: Politics & Big Media - Overview|PBS
<http://www.pbs.org/now/politics/bigmedia.html>)

NOW: Transcript: Bill Moyers Journal
http://www.pbs.org/now/transcript/transcript_bmjfcc.html

"MOYERS: But consolidation is the trend. In 1975 there were some 1500
owners of full-power TV stations and daily newspapers. By 2000, that
number had dropped to about 625.

And remember the Telecommunications Act of 1996? It led to a wave of
mergers. There are now 1,700 fewer owners of commercial radio stations
— a one-third decline. Today, just a few players dominate. One
conglomerate alone - Clear Channel - owns more than 1,200 stations and
controls 11  percent of the market."


Concentrating on news, a study by the Project for Excellence in
Journalism, an institute of the Columbia University Graduate School of
Journalism, found that:

"The findings-an analysis of 172 newscasts, some 23,000 stories, over
five years-suggest that ownership type does make a difference.
Among the findings:          
* Smaller station groups overall tended to produce higher quality
newscasts than stations owned by larger companies-by a significant
margin.
* Network affiliated stations tended to produce higher quality
newscasts than network owned and operated stations-also by a large
margin.
* Stations with cross-ownership-in which the parent company also owns
a newspaper in the same market-tended to produce higher quality  and
newscasts.
* Local ownership offered some protection against newscasts being very
poor, but did not encourage superior quality."
[...]
"Taken together, the findings suggest the question of media ownership
is more complex than some advocates on both sides of the deregulatory
debate imagine. Some of the arguments favoring large companies are
unsupported by the data-even contradicted. On the other hand, some of
the arguments for the merits of local control appear similarly
difficult to prove. And some of the arguments for synergy, in
particular cross-ownership, are reinforced by the findings.

But overall the data strongly suggest regulatory changes that
encourage heavy concentration of ownership in local television by a
few large corporations will erode the quality of news Americans
receive."


Using the quailty rating system outlined in Appendix 1 of the study,
the results for quality as a function of size were as follows:

"Ownership Size and Quality
What category of ownership best serves the public interest when it
comes to news?                                                        
               Our five-year data sample suggests that when it comes
to overall quality, smaller is better.

Size of Corporate Owner and Quality Grade
Grade Top 10 Groups  11-25 Groups Midsize Groups Small Groups
A           11%          11%            17%           31% 
B           31            31            40             34
C           32            30            22             17
D           19            16            15             15
F            7            12             6             3
Total      100%          100%          100%           100%"
{...}
"To examine size, we separated the TV companies studied into four
categories, using the FCC rankings of audience reach1: the 10-largest
TV groups; groups 11 through 25 in terms of audience reach; medium
sized companies (any company below the top 25 in reach and owning at
least four stations); and small companies (companies below the top 25
in the audience reach and owning three stations or fewer). In our
sample, there are 65 stations owned by the top-ten media companies, 47
owned by the top 11-25 companies, 37 mid-size-company stations and 23
small-company stations.

Here we found clear distinctions. The smallest companies produced
higher quality newscasts.

(If you analyze the data based on population each year-the way the
study was originally designed with some markets studied multiple
times-the difference between large versus small companies becomes even
more pronounced.2 In this sample, small companies are three times more
likely than the largest companies to receive "A" grades, not twice as
likely.)"



On the positive side, cross-ownership produced higher quality
broadcast reporting, one advantage that proponents of concentration of
ownership often cite in favor of the idea. The current examples of
cross-ownership predate the prohibition that was begun in 1975,
however, and are relatively few, making the sample too small to be
statistically significant.

A Five-Year Study of Ownership and Quality
http://journalism.org/resources/research/reports/ownership/default.asp
Appendix 1: The Criteria of Quality
http://journalism.org/resources/research/reports/ownership/quality.asp


Proponents of unlimited ownership usually claim that economies of
scale will create a generally improved efficiency and better product.
They also claim that consolidation of ownership is a matter of
survival: unless the companies have the stations from which to
generate revenue, they can't afford to provide free broadcasting.
Synergy is supposed to be good for both the companies and the
consumers. One company can produce the content and then distribute it
in all of the available media formats - motion pictures, television,
Internet, DVD/VHS, thereby streamlining the system and cutting costs.
The disadvantage, critics point out, is that this creates a monopoly,
one that is based on a public resource, the broadcast license, and
which reduces diversity of voices and choice.


NOW|PBS
http://www.pbs.org/now/

NOW: Transcript - Big Media|PBS
http://www.pbs.org/now/transcript/transcript_bigmedia.html

NOW: Resources - Federal Communications Commission|PBS
http://www.pbs.org/now/resources/fcc.html

NOW: Politics & Economy - Bill Moyers Journal -- Media
Consolidation|PBS
http://www.pbs.org/now/politics/fcc.html

Journalism.org - Resources - Media Ownership
http://journalism.org/resources/research/reports/ownership/deregulation2.asp


Both the NOW site and the PEJ site provide extensive links to other
online resources and opinions, as well as to the FCC studies.

hlabadie-ga