Copyright 2002 The Denver Post Corporation The Denver
Post
March 17, 2002 Sunday 1ST EDITION
SECTION: A SECTION; Pg. F-01
LENGTH: 2901 words
HEADLINE:
Media marriage Cross-ownership of TV, newspapers in Denver appears to be
approaching the Big Day
BYLINE: Story by Joanne
Ostrow, Denver Post TV/Radio Critic,
BODY: Synergy-n. ('sin'-er-gee'), combined action or functions;
either the spice of life or ominous merger mumbo-jumbo,depending on
your viewpoint.
IMAGINE, in the not too
distant future, a newspaper-television-Web combo in Denver - a
publishing, broadcasting, Internet enterprise, all owned by one
company, all synergistically driving toward the same bottom line.
Turn on the TV, and there's a Denver Post reporter
explaining his exclusive story in the next morning's paper. Open the
Sunday paper, and there's a column by the TV station's consumer
reporter. Place a classified ad and the operator induces you to spend
a bit more to run the ad online, too. Click on the jointly
produced website and see a promotion for the baseball team in which
the company is invested, plus a full-motion videoclip of the
sports writer's interview with the team manager.
Even in Denver, it may not take too much imagination
before you watch as former media rivals merge into
multimedia collaborators.
Depending where
you stand, this is either a terrific opportunity to market and
communicate across various platforms or another perplexing sign of
mega-media dominance.
This week
the federal government zeroed in on the cross-ownership
question and put the brakes on. Just when it looked like a sure
thing, the trend toward media consolidation slowed a bit.
'There's a lot of heat out of Congress to get the FCC to
go slow on raising the (ownership) caps and on
cross-ownership,' said KUSA-Channel 9 general manager Roger
Ogden. The mood at the moment is 'a little less certain than a few
weeks ago.'
That was when a federal appeals court
abolished the ban on cable-broadcast cross-ownership, meaning
a city's dominant cable outfit (like AT&T Broadband in Denver)
could also own a TV station here. Everyone on both sides of the
debate believed the newspaper-TV cross-ownership prohibition
would be lifted next.
Democratic members of Congress
jumped in, promising to guard against 'undue media concentration,' in
the words of Rep. Edward Markey, D-Mass.
On
Tuesday the head of the Senate Commerce Committee, Sen. Ernest
Hollings (D-S.C.), announced plans to formally review the decision by
the Department of Justice and the Federal Trade Commission to give
the Justice Department exclusive jurisdiction over all major media
mergers. Hollings wants to let public-interest groups have a say in
the process.
Washington remains on a deregulatory roll.
But the floodgates may not automatically open to a new era of mergers
creating newspaper-TV combinations throughout the country.
Media owners are playing wait-and-see. Denver Post
publisher William Dean Singleton thinks it unlikely the momentum
toward dropping the regulations will slow significantly.
'I just don't see that at all,' he said. 'That's
some people's interpretation of a grouchy Sen. Hollings.'
In fact, Singleton believes the cross-ownership
rules will be lifted before the end of 2002.
'It has become increasingly clear the courts are going to
do the (FCC's) job for them if they don't get it done. If the
FCC doesn't (lift the restrictions) this year, it's likely the
courts will the following year.'
Longstanding policy
Should one company be
allowed to own a dominant local television station as well as publish
the local newspaper, or papers?
For decades
the Federal Communications Commission believed the tentacles of
ownership should not extend to different media within a
market. It was considered beneficial for democracy to encourage a
proliferation of voices.
In recent years the multitude
of TV-radio-Internet options has led the agency under Michael Powell
(son of Secretary of State Colin Powell) to conclude these rules are
needlessly restrictive.
The rules were put in place in
the Nixon era, as a way to ensure media diversity within a city or
region. In 1975, broadcast-newspaper combos were banned by the FCC,
although a number of existing combos were allowed to stand.
Rupert Murdoch became a lightning rod for the debate when
he bought Metromedia in the mid-'80s, creating
newspaper-TV cross-ownerships in New York and Chicago. Murdoch
became the test case again last year when his purchase of the
Chris-Craft station group, including WWOR-TV in New York, might have
meant he had to sell the New York Post. Targeting Murdoch, an appeals
court decided, was unconstitutional. Instead the FCC proposed
removing its ban on TV-newspaper cross-ownership
altogether.
Newspaper publishers are eager for the ban
to be lifted. In Denver, Singleton is on record saying he'd like to
buy a TV station - and a radio outlet, too - in every market where it
is feasible where his company owns a paper.
'We have looked ahead at options preparing for the rule
to change. We have some in various markets lined up, but not
in Denver,' he said. Instead, he plans to focus on fostering
the newspaper's cooperative agreement with Channel 9.
'Obviously if we had an opportunity to buy a station in
Denver we would certainly do so,' he added. 'We are working on
radio possibilities in Denver.'
In Los
Angeles and San Francisco, where Singleton's MediaNews Group Inc.
owns groups of newspapers, 'the price of entry into broadcasting is
more than we would want to spend.'
Broadcasters have a
stake is seeing the restrictions removed, too, so they can better
compete with cable. (As usual it's about making more money:
Broadcasters are fighting a tough battle against cable, which has two
revenue streams, subscriptions as well as advertising.)
The abundance of media sources and the presence of
mega-media competitors would seem to argue for the lifting of old
rules. Yet there are plenty of opponents.
The advertising industry fears media consolidation will
allow companies to dictate ad rates. Citizen watchdog groups worry
that business interests will affect news coverage and that control
by fewer owners amounts to a threat to democratic expression.
'In general, democratic debate is enhanced when there
are more independent media voices,' according to Jason Salzman,
board chair of the Rocky Mountain Media Watch.
The Disney-'Nightline' standoff is instructive,
consumer advocates believe.
Jeff Chester,
executive director of the Center for Digital Democracy in Washington,
D.C., a public advocate and longtime opponent of media consolidation,
points to the corporate snub of Ted Koppel as evidence of the
bottom-line obsession that, he believes, will hurt journalism and the
public. The idea of 'jettisoning 'Nightline,'' Chester says, 'for a
program with more attractive demographics illustrates why the public
should be concerned about new FCC proposals, which would strip away
media ownership safeguards.'
Some
point to potential conflicts of interest. If a newspaper owned a
piece of a baseball team, (as is the case with the Denver Newspaper
Agency and the Colorado Rockies), and if the company also owned a TV
station that held the broadcast rights to the baseball games, what
would stop them from lobbying in print and on the air for a new
baseball stadium? It happened in Milwaukee.
There is
resistance to the idea of cross-ownership inside
the respective newsrooms as well. Cultural differences between
the pencil press and the electronic media are often caricatured
(the traditional ink-stained wretches of print versus the
blow-dried specimens of TV), and they reflect different personalities
and skills. For journalists on both sides of the
print-electronic divide, the future may mean learning a new
paradigm.
Buoyed by opposition
'It's inevitable, short of a true political
epiphany,' according to public advocate Chester. Still, he takes
heart in an increasing level of opposition from the Writers Guild
in Hollywood, the Newspaper Guild, the anti-globalization
'Seattle folks' and Sen. Hollings.
Corporate
owners says newspaper-TV mergers can be good for business and good
for journalism. They believe TV-newspaper combos ultimately benefit
the public: They allow greater investment in Internet and alternative
news delivery systems, for example. The newspaper asset extends the
reporting staffs of TV newsrooms to create a more robust news
product. The TV asset allows wider distribution, better promotion and
immediacy.
A TV station may have 80 employees where a
large newspaper staff has hundreds. A proponent of convergence, Roger
Ogden has had a hand in helping merge the Gannett TV and
newspaper properties in Phoenix.
'The
newspaper has five people doing what we have half-a-person doing,' he
said. Newspapers have depth, television has reach. Together, he
believes, they can be a winning force.
'I'm not ready
to curse it,' said Carl Gottlieb of the Project for Excellence in
Journalism, a Washington, D.C., think tank. 'I don't know that
journalistically there's anything wrong with newspaper-TV
cross-ownerships unless they decide to diminish the number of
voices in the market. On the plus side it could make for more robust
media.'
Increasingly, media companies face a new
economic reality. In Gottlieb's view, 'The smart media company will
really work hard at developing a model that allows print reporters to
exhibit the specialized knowledge they have and, at the same time,
make the TV folks who are debriefing them their partners.'
Skeptics think cross-ownership will hurt
journalism.
'My biggest criticism of what Michael
Powell is doing,' said public advocate Chester, 'is he doesn't make a
distinction between what newspapers do and what broadcasters do. The
newspaper function is still unique and critical.'
Audience acceptance of the new newspaper-TV-Internet
combos may not be a sure thing, either. A study by the Poynter
Institute found the public resents 'tie-ins,' those promotional
blurbs that plug the newspaper from the TV screen and plug the TV
station from the paper. It's all seen as so much selling.
Still, 'any media company worth its ink or transmitter
might want to take a look at cross-ownership as a way to serve
diverse audiences,' Gottlieb said.
50
TV-newspaper combos
Cross-media combos are daily
practice in Chicago and New York, Tampa and Phoenix. There are about
50 newspaper-broadcast combinations in the country, some of which
existed before the passage of the cross-ownership regulations
and some that were granted waivers by the FCC.
In Tampa, the Tampa Tribune and WFLA-TV, both owned by
Media General, collaborate and share a website, Tampa Bay Online,
or TBO.com. Photographers for the newspaper carry video-cameras
in addition to still cameras. Print reporters regularly appear on
the air.
All layers of the operation
cross-promote one another; buy a classified ad for one price, pay a
bit more and get online exposure, too. The hybrid aims to combine the
depth and breadth of newspaper reporting with the larger audience and
profitability of a broadcast station plus the immediacy of the
Web.
Unlike the partnerships locally (where The Denver
Post has an arrangement with KUSA-Channel 9 and the Rocky Mountain
News has an arrangement with KCNC-Channel 4), the Tampa collaborators
share owners, bottom lines and a $ 35 million facility. It's the
first operation in the country to combine print, TV and Internet
media in a single operation. All the newsrooms are under one
roof, organized around a 'multimedia desk.'
'We think it will be copied in one form or another in
many markets,' said Karl Rhodes, Media General spokesman in
Richmond, Va. 'It absolutely improves the quality of journalism and
provides multimedia advertising. A lot of things it took time to work
out in Tampa are no-brainers now in other markets,' he said,
like cross-promoting each other's brand.
'Convergence is a contact sport,' according to Gil
Thelen, executive editor of the Tampa Tribune. When a print reporter
has his story broken first on TV, or vice versa, 'these are
real collisions with the status quo. We've tripped over one
another covering stories, we've had tensions, there are all manner
of issues we've had to work through. It's all about trying to
catch up with our customers,' Thelen said. Yet only by being
available on multiple platforms, he says, can you have a sizable
community to interact with.
'After almost
two years, nobody here would want to go back to the way it was.'
The staffs worked for six months before converging
to confront their stereotypes of one another.
'You know,' said Kirk Read, general manager of TBO.com,
'the shallow, pretty TV people versus the rumpled,
curmudgeonly, arrogant print people. What we found were common values
of balance and fairness. The vehicle is inconsequential to the
mission.'
'When you're together in the same building,'
Thelen said, 'you see yourself differently than in a contractual
relationship with the crowd across town. To our surprise and delight,
the journalism values were very similar.'
In
Phoenix, KPNX-TV and The Arizona Republic, both owned by Gannett,
collaborate on news stories, cross-promotion and an online component,
Azcentral.com.
'We consider it a success,' Ogden said.
'It is also a work in progress.' The editorial aspects were easiest
to merge; marketing and sales have proven more difficult.
(Advertisers who formerly bought only one medium now must buy
packages including both.) The collaborations are 'much more robust
than we have here,' he said.
'At first we didn't know
what to expect,' said Brian Kennedy, president and general manager of
KPNX in Phoenix. 'On the journalism side, we didn't know, are we
going to give our leads to them? We were competitors 24 hours ago,
then our company bought the paper, now what?'
They began slowly, joining forces on a project about
asthma, a hot topic in Arizona. A weekend-long focus in the paper and
on TV, with references back and forth and information
available through phone banks, generated a huge response.
'We began to trust each other,' Kennedy said.
Next they collaborated on a project on monsoon
season. Promoted through the newspaper, the resulting prime-time
hour ranked as the No.1 show of the night.
'Newspapers are better at getting the facts, details
and background we just didn't have. They really help us
on enterprise,' Kennedy said. TV is better at targeting
young audiences. 'If a story is relevant to people who
ordinarily wouldn't read the newspaper, say the 18- to 34-year-olds,
we promote the story, interview the reporter who's worked on it
for three months, run video, and that would reach more people.'
Post publisher Singleton believes this kind of
convergence makes perfect sense. He admires the Tribune companies in
Chicago as among the best cross-media models in the industry. 'They
really get it there,' he said. The Chicago Tribune, WGN-TV and radio
plus the online site are a powerful combination.
Singleton has long envisioned TV and newspaper
outlets sharing a building, sharing editorial functions,
saving administrative and accounting costs while
'repurposing' information for the Internet and broadband.
His aim is to be 'one-stop shopping.'
Channel 20 purchase?
Predictions for the local
scene are sketchy, but some industry observers say the UPN station,
Channel 20, is likely to be bought by Viacom/CBS, owner of
KCNC-Channel 4. That sort of two-station-per-market model is Viacom's
stated goal. And Singleton is likely to look for a TV station to
buy.
The cost of a network affiliate in a market the
size of Denver is $ 200 million to $ 300 million. (For comparison,
the NBC affiliate in San Francisco recently sold for $ 300 million
after selling five years earlier for $ 175 million. San Francisco is
TV market No.5, to Denver's No.18. The selling price is calculated
as a multiple of how much the station makes, normally 12 to 15
times pre-tax earnings. .)
Big TV group
owners already have staked their claims in Denver. CBS and Fox own
stations here, as does Tribune.
'These are not outfits
that are likely sellers of individual stations,' Channel 9's Ogden
said. He doesn't foresee them selling unless some huge deal comes
along to change everything.
Speculation within the
industry at large is that AOL Time Warner might acquire NBC, which
lacks the huge corporate connections of the other broadcast network
owners.
Imagine Viacom and News Corp., the respective
owners of CBS' KCNC-Channel 4 and Fox's KDVR-Channel 13, battling for
more stations in Denver rather than being forced to divest some.
Everything is in play for the right price.
'It's a world of scale,' KUSA's Ogden observed. 'Who
knows? AOL Time Warner wasn't predicted either.'
The first wave of media consolidation, growing out of
the Telecommunications Act of 1996, resulted in corporate
behemoths like AOL Time Warner.
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