HOW WILL FCC PAPER-TV RULING SHIFT THE MULTIMEDIA SCENE? U.S. Senate hears testimony indicating few changes on tap

NewsInc, May 26, 2003

Should the Federal Communications Commission loosen the rule next week that forbids the cross-ownership of newspapers and broadcasters in the same market, how will the media landscape change?

If top newspaper and media executives are to be believed, not much.

FCC Chairman Michael Powell insisted as late as last week that the commission would vote next Monday, June 2, to repeal or scale back six rules that regard various aspects of media ownership, including the newspaper-broadcast cross-ownership rule.

Bearing down on that vote, the Senate Commerce Committee heard from newspaper publishers and broadcasting and entertainment executives last week, who were all skeptical of those who say there will be a flurry of sales of newspapers, radio and TV stations.

In separate interviews with the Washington Post, publishing and broadcasting executives such as the New York Times Co.'s Russell Lewis, Mel Karmazin, head of Viacom Inc. -- owner of CBS Television and Infinity Radio -- and News Corp.'s Rupert Murdoch all contended that not much would change.

William Dean Singleton, the co-chairman and chief executive of Denver's MediaNews Group Inc., not only attempted to reassure the Senate committee, he also told the Post that while his company would hope to buy four TV stations after the newspaper-broadcast cross-ownership rule falls, he thought that there wouldn't be huge changes.

"Gannett isn't going to buy Viacom and Viacom isn't going to buy Gannett," the paper quoted him as saying.

Singleton and others have said that any changes will happen in small markets. "In the end, you look at all the major markets, and the number of opportunities are pretty slim," an unnamed media banker was quoted as saying by Reuters.

"In some of the smaller markets, where Hearst, Gannett or Belo have a station where they'd like to get a newspaper, there could be a one-off swap, but there sure aren't a lot of them," the wire service quoted the banker as saying.

The Richmond, Va.-based Media General Inc. told its shareholders last week at its annual meeting that it is confident that the FCC will repeal the newspaper-TV cross-ownership rule and that the company would "likely swap and purchase newspapers and broadcast stations in support of its Southeast growth strategy."

And during his Senate testimony last week, Murdoch specifically denied that News Corp. -- which owns not only the New York Post but also Fox Television and the Fox News Channel as well as dozens of newspapers in the United Kingdom and Australia -- would go on a buying spree should the rules be lifted. The Associated Press reported that Murdoch's comment drew chuckles from some senators and spectators.

Getting out in front of any rule changes the FCC might make, last week the San Francisco Chronicle -- a unit of The Hearst Corp. -- said that it had signed a deal with Viacom's KPIX-TV and KCBS Radio, two leading San Francisco broadcasters, providing for the sharing of newsroom resources, promotional exchanges and in some instances the collaboration on advertising sales.

"For us, it's an opportunity to get our good work, our good journalism, out to a wider audience," Phil Bronstein, editor of the Chronicle, his paper quoted him as saying. "It's not about cross-ownership."

The Chronicle had previously had a relationship with KTVU, a unit of Cox Enterprises Inc. of Atlanta, which expired last week, and for almost 50 years the paper's parent company owned the local NBC affiliate, KRON, a relationship that was torn asunder when the parent company's owners decided to dissolve the business in 1999.

Who knows what evil lurks in the minds of publishers? The Shadow thinks that the fallout will be closer to the Singleton-anonymous investment banker's scenario than to the fear-mongering fantasies that consumer advocates and public interest lawyers are promulgating. These people are innocent of a newspaper fact-of-life: they are too disorganized to conspire to achieve anything.