Will Cross-Ownership Save the Newspapers?

Media Daily News is reporting that FCC commissioner Robert McDowell is asking the Third Circuit Court of Appeals in Philadelphia to quickly decide on the legitimacy of new cross-ownership rules which would allow broadcast outlets to take ownership of newspapers, given the number of papers that stand on the threshold of failure and ceasing to publish. Already this year, we have seen the collapse of several papers, notably the Denver Rocky Mountain News and the Seattle Post-Intelligencer. Remaining papers are fighting for advertising dollars and readership, as news consumers are getting more of their news from online sources, including those run by the papers themselves.

Will allowing radio and television companies the ability to buy struggling papers the answer? Broadcasters are facing some of the very same challenges that the newspaper publishers are facing. TV stations are forming market duopolies, where one company programs two stations in town, much as Denver’s KDVR-TV/DT has combined the news operations of rival KWGN-TV/DT, a CW affiliate owned by the bankrupt Tribune Company. (The mess they have made of KWGN, and the ridiculous rebranding of the station as “The Deuce” is a subject for another post.)

Yet, the Media Daily News is also reporting that FCC commissioner, Jonathan Adelstein is arguing that allowing two failing business models to combine won’t save either one. Local radio ad revenue suffered a 10% decline last year, and accelerating to 13% during the fourth quarter, according to the Radio Advertising Bureau. TV is also showing declines in revenue.

Are there any economies of scale to be found by say, combining the newsrooms of Radio/TV/Newspapers? Can synergies be found by sharing back office functions, such as accounting, sales, and editorial boards? Prior to the change in regulations in 1965, it was common. In fact, the Tribune Company, publisher of The Chicago Tribune, and owner of the aforementioned KWGN-TV/DT, also owned the WGN radio and TV stations in Chicago. In fact, it’s call letters stood for “World’s Greatest Newspaper”. The former owner of KPRC radio and TV in Houston also owned the now defunct Houston Post. KPRC represented Post Radio Company. Other cross-ownership of publishers and broadcasters was common.

The jury is still out on if such a plan will work today. I am skeptical, and I also hate to see a further concentration of editorial voices in fewer and fewer corporate hands. To me, it is a travesty that we see media companies owning hundreds of radio stations, including up to eight in one market. Back when ownership was restricted to seven AM, seven FM, and seven TV stations nationwide, we had a real diversity of local programming that, as required by the FCC, “served the public interest, as a public trustee”. Now we get the same syndicated junk from coast to coast. No longer is local radio the community voice. Nor is it the training ground for the next generation of broadcasters. We will have to keep an eye on this and see what happens next. Whatever occurs, I doubt the public’s best interest will be at the heart of any decisions.