Media Deregulation: More Is Less

FCC Chairman Kevin Martin is on a fast track to rushing through approval of an ambitious plan to almost singlehandedly relax media ownership rules – some of which have been in place for decades.

If it survives the court challenges that are likely, companies could own newspaper, radio and/or television stations in the same market. Consolidators would also be free to get their greedy little hands on even more stations and grow the size of their radio monopolies – sorry, I guess I should say, clusters, in the same city.

But Senators Byron Dorgan (D-ND) and Trent Lott (R-MS) are saying not so fast. Martin wants to push the ruling through by the end of this year. Inside Radio was reporting late yesterday that, “In a letter to Martin they argue "The FCC should not rush forward and repeat mistakes of the past."

Ya think?

Dorgan and Lott want the FCC to do a localism proceeding first. Elected officials have a lot on the line. Their constituents don’t like consolidation. They like their broadcasting local.

But what’s the use. I say let Martin and his buddies deregulate again.

Any company that wants to own a newspaper (with or without radio or television stations in the same market) is nuts and must have another motive, don’t you think? Like a way to generate fees for investment banks and big profits for the lead consolidators.

Someone is going to make money from all this and guess who it isn’t going to be?

The shareholders.

No one who knows what’s happening vis-à-vis the next generation and the growth of new media would want to own a newspaper.

Hell, or more radio stations for that matter.

Ditto for television, an industry that is in the early stages of corporate dementia – forgetting that content is what made the house that the Paleys and Sarnoffs built. Not delivery systems like YouTube and its clones.

Pinch yourself and then look at the stock market. See radio consolidators deeply in the toilet doing a poor job running the monopolies they already have. I know, but radio is a great free cash flow business. Great for whom?

But I guess a few media analysts could prop up the prospect of more deregulation. Get ready for the word “synergy” to get bandied about. Someone will say these deals are “accretive”. Hey, it’s back to the future.

Suckers wanted – no phone calls, just buy stock.

This is all so ludicrous that I can’t imagine any sane person would call for more deregulation. Then again, I wouldn't call the FCC sane. In fact, I hope my readers send this post to their congressmen and give them the following alternative:

“End consolidation as we know it. Limit the number of total properties a group could own. Make license renewal based on serving the public interest, convenience and necessity (that again!) and winning the support of local community groups. No automatic renewals. This would not only be good for broadcasting but it would make the owners have to face their real bosses – the listeners and viewers – not the investors. No more than 50 stations total or one in fifty different local markets. They don't need newspapers or TV stations to compete in a market. They need the goodwill of their audiences, support from the local community and an Internet/mobile strategy for the future."

Asking for more deregulation is like calling for more chemotherapy after the patient has died.

Consolidation didn’t work – by any measure.

Not by shareholder value – radio stocks are worth next to nothing.

Not by synergy.

Not by more choices for listeners.

Not by a better deal for advertisers.

So, based on that, let’s have more of the same.

The only person who would want more of this -- is the one who profits from the transactions. The broker. The investment bank. The deal maker. The principle of the acquiring company, and the federal regulators who will go work in their industry when they leave government "service".

While these folks are out lining their pockets, the Internet grows, society becomes more mobile and the next generation continues to abandon traditional media.

That’s why I say don’t fight Kevin Martin.

Let him have his way.

Radio is already dying and if he somehow thinks the best medicine is more of the same -- he's the doctor! Once Martin paves the way for consolidators to have an even bigger monopoly than they do now, then they will come to realize that more is actually less.


Shareholders first figure out that more will make them less. Nah, they'll never do that.

I've got a wild idea. Call the whole deal off, get smaller and actually start acting like local broadcasters.

Remember them?

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