Media consolidation - a panacea that may not be good for journalism

http://www.guardian.co.uk/media/greenslade/2013/jan/07/us-press-publishing-newspapers

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Greater media consolidation is generally considered by owners in both Britain and the United States to offer a way out of the current crisis.

But an American commentator, Josh Stearns, believes that we should think again about acceding to such a plan. He argues that "media consolidation is largely what got us into this mess in the first place."

After pointing out a truth that some publishers would prefer we didn't notice - that they are still making reasonable profits - Stearns takes issue with the commercial strategy they employed in the days when they made bumper profits.

Instead of investing in journalism and the web, he says "they went on a buying spree" which meant that many of the biggest among them "got over-leveraged with debt as they gobbled up competitors."

He is writing about the US experience. But that remark about indebtedness certainly applies in the UK too, particularly at Johnston Press (which makes good money but must service an intolerable debt burden due to its former acquisition spree).

Back to Stearns, who develops his argument by pointing to the negative consequences for local journalism once papers are bought and sold by centralised, remote media companies:

"The people who get hurt are journalists and communities. Journalists lose their contracts or their jobs and communities are left with newspapers whose revenues are used only to pay off debt."

One of his major concerns is about the Federal Communications Commission (FCC) relaxing its cross-ownership restrictions that currently prevent one company owning both a newspaper and broadcast stations in the same market. And one organisation pushing hard for that, he writes, is Rupert Murdoch's News Corporation.

He assumes that Murdoch is seeking the change in FCC rules in order to acquire the Los Angeles Times and the Chicago Tribune from the Tribune Company, which has just emerged from bankruptcy (see Peter Preston on this too).

So why would that be a bad thing? According to Stearns, cross-ownership leads to less total news being produced locally. He concludes:

"The FCC's plan to relax the newspaper/broadcast cross-ownership ban will lead to more absentee landlords controlling our nation's public airwaves, and it will hurt media diversity."

There is certainly a belief among leading newspaper publishers in Britain that further consolidation is necessary. As for cross-ownership, several of them are also eager to be involved in the local TV initiative.

But I don't think all of Stearns's fears really apply in the UK. Most obviously, I am not certain whether "local markets" genuinely exist any longer in Britain.

<em>Source:</em> Free Press