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Copyright 2002 The Denver Post Corporation  
The Denver Post

March 17, 2002 Sunday 1ST EDITION


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,

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 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, '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,

'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.

The next wave is building.

GRAPHIC: Illustration by Maureen Scance

LOAD-DATE: March 19, 2002

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