The Media Ownership Endgame: Martin's Opening Gambit on Newspaper-TV Cross Ownership

As I’ve said before, Kevin Martin plays a mean game of hardball — but an honest one. And while I’m happy to have him on the right side in limiting cable market power, it makes fighting on the media ownership side an utter bitch and a half. Like Belichik prepping the Patriots, Martin has carefully studied the mistakes of Michael Powell, studied the strategies of the media reform movement, carefully considered his own strengths and weaknesses, and set up his game plan with a determination to win.

This tends to make some of my friends and colleagues in the movement hate Martin personally, or get bogged down in the distractions and the moves Martin throws. But that’s as stupid as letting yourself get distracted by trash talk. To win this fight, we need to keep our eye on the game, stay nimble, have our own special teams prepped, and remember we’re in this to win in the long haul.

With this in mind, we turn to the opening moves in Broadcast Media Ownership Endgame. Martin already has one key advantage in that because he is the Chairman, he can set the agenda. He controls the timing and can float trial balloons, decide when to hold new hearings or release new studies, and finally declare when he wants a vote. Martin demonstrated his skill in this over the last month, gradually building to the end game, alternating period when nothing seemed to be happening with sudden frenzied activity. Each such move requires us to mobilize resources and exhaust ourselves, and forces us to make process demands for more time and reasonable opportunities for comment. Martin can then chose to acede to our requests in a limited way, letting a deadline slip a few weeks or postponing something by a month. This makes it look like Martin is being reasonable and accommodating, and casts us in the role of partisan foot draggers. Worse, it makes it increasingly difficult to mobilize our troops, because how many times do we have to fight and win these minor skirmishes over procedural issues and timing? People get tired of the issue, or think we already won when what we achieved was merely a temporary respite. Then, like a matador administering the coup de grace on the exhausted bull, Martin plunges his point directly into the heart. (‘Scuse me a minute, I need to check to see if my ears and tail are still attached.)

But Martin has now clearly committed to the final moves of the end game with a PR blitz/charm offensive similar in many ways to his approach in the 700 MHZ proceeding. And, as with the C Block “open access” condition, I do not expect Martin to make signifcant changes to his proposal now that he has put himself out in front and committed to a public position. Martin the Matador has dropped the cloak and gone for the sword. The question is whether the media reform bull is as exhausted or confused as Martin thinks, or if we still have sufficient wits and stamina to give him a surprise.

More below . . .

This time, the vehicle was an op ed in the NY times. After Powell’s attempt to gut the media ownership rules entirely, Martin’s proposal seems relatively modest. As set forth more fully in Martin’s official statement, the FCC’s new rules would generally eliminate the newspaper broadcast cross-ownership ban in the top 20 markets (which, as Copps and Adelstein point out in their own joint statement, have 43% of the population of the U.S.), although Martin’s proposal would prevent a merger of a newspaper with one of the top four rated television broadcast stations and Martin would still require 8 independent voices in the market post-merger. For other markets, companies seeking to own a newspaper and a broadcast outlet could apply for a waiver on the basis of a showing that (a) the market is not unduly concentrated, (b) the companies promise to provide more news and maintain separate editorial judgment, and (c) the financial condition of the newspaper makes a merger necessary.

Unsurprisingly, Martin has drawn fire from those of us in the media reform movement ideologically opposed to any further relaxation of the rules (and who in fact think the conversation we ought to be having is “how do we break up the media barons the way Teddy Roosevelt broke up Standard Oil”) and those in the neo-con dereg camp who supported Powell’s wholesale dereg and think Martin doesn’t go nearly far enough in throwing off these regulatory shackles which violate the First Amendment no matter what the Supreme Court said. And, of course, media companies that were hoping for major revocation of the rules are seriously upset, because the next time they will get a shot at gutting the ownership rules will be 2010, and the FCC will almost certainly be in very different hands at this point.

But Martin knows that he will never win over the ideologically driven folks or the business folks. He is targeting the folks in Congress and the vast majority of people who only sort of follow this with half an ear, if at all. And for that vast middle ground, he has pitched this perfectly. When Powell launched his campaign for full-scale dereg, he wrote an op ed in USA Today chiding his opponents for “substituting ideology for opinion and fact” and generally declaring that anyone who didn’t recognize that the media world had changed to a point where we should scrap the ownership rules was just living in the past. The whole thing came off as patronizing and made it look as if Powell had prejudged the matter by substituting his own judgment for the facts. Martin’s Op Ed, by contrast, strikes a moderate tone and makes a very different case. “Look,” he says, “newspapers are failing. How can it help diversity if we let newspapers die? We’ve been studying this for 18 months. We’re making one minor change to one rule. I agree with the Democratic Commissioners that this stuff matters to our democracy, but how can it serve the interests of producing more news to let newspapers die? C’mon guys, you mean to say that nothing has changed since 1975 when the FCC first created this rule? In the immortal words of Dr. Evil, ‘throw me a friggin’ bone here, OK?’”

Needless to say, I have serious substantive problems with Martin’s position. While the market has changed in many ways since 1975, this includes amplifying the power of concentrated media voices to create the echo chamber effect that has rendered the mainstream media a charming and informative mix of empty-headed idiocy and ideologically driven idiocy. Further, the last five years have shown us that it is the efforts to harness mythological synergies that are part of the reasons why newspapers are going broke. These guys bankrupted themselves snarfing up properties and then fired news staff, destroying their own product. Allowing more cross-ownership to cure newspaper bankruptcy is like giving a drug addict more heroin in the hopes that he will eventually take enough to satisfy his craving and, hunger sated, will swear off the stuff for ever more. Yes, we normally let the market sort such self-destructive patterns out. But the result of this “market correction” is that our Republic is being systemically starved of the information and civic debate it needs to govern itself effectively. Even as Clear Channel, Belo and other chains struggle to unwind deals that proved enormously unprofitable, the new buyers and combinations are not looking to re-invest millions to rebuild local news bureaus or sell properties to minority owners.

But I am not the average reader. I am in an ideologically driven movement and therefore, from the perspective of the average person paying attention with half an ear, someone who should be upset if Martin is being “reasonable.” Because for those millions of voters, and the Senators and Representatives outside the Commerce Committees who represent those millions of voters, the fact that I’m unhappy, neo-cons are unhappy, and industry is unhappy must mean the Martin is striking an appropriate balance.

Similarly, the average person does not recognize the fact that while we have been at this for 18 months, with 6 public hearings, economic studies, etc., etc., we haven’t actually known what the proposed rule changes would be until today. So we’ve been exhausting our resources and troops, mobilizing at the drop of a hat, and generally forced to show our hand at every opportunity without having a real target at which to focus and aim. For the last 18 months, Martin has been playing the Matador to the media reform bull, expertly taunting us with his cape and then stepping aside at the last moment. After all this, Martin finally reveals the actual proposed rule changes — and gives less than two weeks to turn around substantive comments again now that we finally know what the proposal is.

But the vast majority of undecided voters to whom Martin is directing his gambit do not know this. For those just turning in, this clamoring for more study and more time appears to be just more partisan Washington foot-dragging and obstruction. After all, it’s been 18 months and the FCC did all these studies? How much more time can you want? And Martin makes the point in his op ed that the broadcast world has been in a state of uncertainty about the rules for for years — neatly eliding over the fact that a healthy chunk of that delay was caused by the FCC’s insistence on doing a crappy set of rules the first time then sitting with its thumb up its rear until Powell left and Bush finally got around to appointing a fifth Commissioner so Martin could force a 3-2 party-line vote to get the processing moving along the lines that he wanted.

It is also worth noting that, substantively, the rule changes are somewhat more expansive than Martin makes them out to be. The current FCC waiver standard is that waivers are not supposed to be granted except in extraordinary cases, although the FCC will usually give temporary waivers for a couple of years to give companies time to divest properties (while avoiding a “fire sale” — as if the companies didn’t know in advance the deal violated the rules and planned appropriately). And for the last 10 years, while the newspaper cross-ownership rules have been in flux, the FCC has been pretty liberal about granting temporary waivers. (You can get a good feel for it from this old post of mine about a messy waiver of Tribune’s in Connecticut).

But Martin’s waiver standard really doesn’t call for much. As long as merger proponents are willing to say “I pledge that I do more news and promise to keep the editorial boards separate — really I will. And if you don’t let us co-own the newspaper and the TV station, the newspaper will just die, I know it!” I mean, lets face it, what’s the FCC gonna do if they don’t keep their promise — revoke the waiver at license review time? Get real! The FCC doesn’t even require existing stations to provide any news. So while Martin gives the appearance of making a minor change to only one rule, he’s basically gutting the cross-ownership rule. But he’s doing it in such a way that he can honestly say “no, I’m just trying to make a minor adjustment and provide much needed certainty for the markets oh, and save print newspapers from extinction. Isn’t this better than pretending to have a tight waiver standard and giving temporary waivers that we endlessly renew?” (Which while I would argue that’s a false choice, it still reads pretty darn good and sensible.)

Finally, there’s the plain fact that holding the line at just effective elimination of the newspaper-broadcast cross-ownership rule after 7 years of assault from the Bush Administration and the DC Circuit is a major accomplishment. It’s just not enough. It’s like holding off drilling in the Alaska wildlife refuge but not being able to stop subsidies to energy companies and tax breaks for SUVs. On the one hand, Martin is positioned to say “wow, you guys really did a great job. You should be proud of what you accomplished.” And on one level, that’ll be true. But on that fundamental reality level, Martin will have pulled off what he set out to do since he first became a Commissioner and started preaching that the newspaper broadcast cross-ownership rule was obsolete. And that would be a tremendous loss for all of us. Because as I said above, we are having the wrong conversation here if the question is limited to “how much more consolidation should we allow?” A “win” that amounts to taking only a relatively modest hit on further consolidation is simply not acceptable when we should be talking about how to reverse the excess deregulation and concentration that has destroyed local radio and is on the verge of destroying local television and newspapers.

As Martin said of Commissioner Copps, I have the utmost respect for Kevin Martin and his position here. I can acknowledge Martin’s strategic genius and acumen — even respect his position intellectually — while remaining certain that his proposal is flat out wrong. Because this is not about who can be more “reasonable” or come up with the most effective compromise, or even who at the end of the day can claim a win. Since Michael Powell first threw down the gauntlet in 2002, this has been about what do the facts tell us about our media world. And I remain convinced that our media world remains desperately anemic for want of diverse ownership. We won’t cure that by bleeding the patient any further — no matter how reasonable such an approach may seem.

Stay tuned . . . .

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