A “Minor” Loosening of Media Ownership Rules

New rule would make it easier to consolidate media ownership in local markets, says Mark Lloyd.

“The newspaper is an endangered species,” declared Kevin Martin, the Chairman of the Federal Communications Commission, in a recent op-ed in the New York Times. The state of the newspaper industry is the reason Martin gives for wanting to adjust the rule that limits the ability of a media conglomerate to own both a newspaper and a broadcast operation in the same market.

The New York Times has fueled the hysteria over American newspapers with headlines such as “Circulation Plunges at Major Newspapers,” which noted a fall of 3.5 percent in circulation in 2006. The Audit Bureau of Circulations notes an industry decline of almost 3 percent in 2007. But the stock price of the New York Times suggests a more complicated picture.

There are now more New York Times readers that ever before. Subscribers to the paper are down, but there are millions of new readers on the web. As the Newspaper Association of America boasts, “newspapers and newspaper web sites reach 77 percent of U.S. of adults in a given week.” Big time newspapers are actually doing very well on the web. And the small-town newspaper industry is actually thriving, providing local news that local radio and local television have largely abandoned.

A rule that says a local television operation cannot be owned by the local newspaper is perfectly consistent with the long-held view that the robust expression of diverse and independent views is essential to democracy.Unsurprisingly, consolidation in the newspaper industry is a good sign for Wall Street, if not for local communities. Gannett, McClatchy, and Lee Enterprises are gobbling up small-town papers and competitors because there is money in local news—especially when local reporters, printers, and web developers can be so easily dismissed and centralized.

It is true that the newspaper industry is still struggling with how to adjust its business practices in a new media environment. Successfully managing the pressure from 24-hour cable channels and finding ways to profit from the Internet are by no means simple tasks. But anyone who has studied the history of media understands that the newspaper industry has been adjusting its business practices rather successfully for over 200 years, surviving the onslaught of the telegraph, the motion picture, the radio, TV, etc. There is nothing really new here.

Still, we should welcome Martin’s attempt to frame his push for new media ownership rules in the language of democracy. He tells us, “Newspapers are crucial to our democracy.” Indeed. The regulation banning a media company from owning a newspaper and a broadcast operation in the same community was designed to promote a diversity of voices in the local community. A rule that says a local television operation cannot be owned by the local newspaper is perfectly consistent with the long-held view that the robust expression of diverse and independent views is essential to democracy.

Honesty from public leaders is also crucial to our democracy. It would have been nice if Martin trusted the public with the news that he was under pressure to change the rule from billionaires Samuel Zell and Rupert Murdoch. Zell is a Chicago real estate investor who wants to complete his buyout of the Tribune Company before the end of 2007. I recommend the documentary “Outfoxed” for a detailed primer on Murdoch, the new publisher of the Wall Street Journal.

There are those who argue that the sky will not fall if Martin and his Republican colleagues at the FCC vote to eliminate the ban on broadcast/newspaper cross-ownership in the 20 largest cities. Even if, as FCC Commissioners Michael Copps and Jonathan Adelstein note, this amounts to 43 percent of the nation’s households, the Martin proposal does not for some, such as Zell and the Tribune company, go quite far enough.

Besides, as the Columbia Journalism Review acknowledges, Tribune and News Corporation and the New York Times have been operating with special waivers from this law for decades.

One might think that instead of loosening the cross-ownership ban because some have been able to avoid it, the better course might be to begin to apply the law equally to everyone.

Martin’s concern is not democracy, but it should be. We at the Center for American Progress, working with scholars at Fordham and other universities, suggested a study on the effect of local media diversity on democracy nearly a year ago. Instead, Martin decided to fund a few studies that would allow him to justify and rush toward what he calls a “relatively minor loosening” of the media ownership rules. It’s time to put the brakes on this latest attempt to further media consolidation.

For more information, see:


The positions of American Progress, and our policy experts, are independent, and the findings and conclusions presented are those of American Progress alone. A full list of supporters is available here. American Progress would like to acknowledge the many generous supporters who make our work possible.