Conglomerates

are giants in the business world. One of the largest came into being in 2011 when giant cable-television systems operator Comcast acquired control of General Electric’s NBCUniversal Media, LLC. CBS owns or has at least part ownership in several media entities, some of which include CBS Radio, CNET, TVGuide.com, Simon & Schuster, CBS Sports Network, Showtime, The Movie Channel, the CW Television Network (a 50/50 joint venture with Time Warner), and Smithsonian Channel.

The largest U.S. media conglomerates, ranked by market capital (value), all with stakes in multiple media enterprises, include:

Company Market Capital in Billions* Disney (DIS) $177.30 Comcast (CMCSA) $139.88

http://TVGuide.com
21st Century Fox (FOX) $54.06 Time Warner Cable, Inc. (TWC) $52.41 Time Warner, Inc. (TWX) $51.55 DirectTV (DTV) $47.18 CBS (CBS) $22.08 Viacom (VIA) $17.19

March, 2015

Media Counterpoints The Rise of the Television Supergroups

Consolidation of competing media companies into fewer and bigger media companies has changed the face of the television and film (as well as newspapers and other media types). Perry Sook, CEO of the Nexstar group, expects local stations to be primarily in the hands of the four major networks and a half-dozen other network groups by 2020, comparing the state of television stations to the era of the “Big 8” accounting firms.

Media conglomerates are often called supergroups—oligopolies that involve a market structure where a few companies dominate a market through the control (typically through ownership) of smaller firms. Many media experts have expressed concerns about media supergroups, believing that such oligopolies, through conglomeration and cross-ownership, are problematic in that they tend to reduce diversity, plurality of content, and editorial independence.

This contradicts the Congressionally mandated maximum of seven stations in single ownership before Congress loosened limits in as a result of the Telecommunications Act of 1996. Reflective of this trend is the dramatic increase in the sale of media stations, from $200 million in 2010 to more than $2 billion in 2012—a 10-fold increase!

Other factors contributing to the consolidation of media companies include the challenge most local stand-alone television networks have effectively negotiating with program suppliers in response to double-digit hikes in prices (compared to the bargaining power of larger media conglomerates). In addition, local television networks became attractive acquisition targets, in large part when they became

viewed as cash cows in response to unprecedented political spending in 2012, totaling more than $2.9 billion in ad revenues.

What would a future dominated by television supergroups look like?

Nationwide, there may be less programming diversity because groups that buy mega- bundles of programs from suppliers will also likely seek to reduce their costs by requiring their local networks to run the bundles. Bundling—the process of distributors selling films and television programs in bundles—reduces consumers’ control by forcing them to purchase less desirable content in order to purchase prime content. While bundling may make some financial sense, the downside may be less local individuality and increased cultural homogenization.

An example of the lack of diversity in television content due to supergroups includes the decision of the politically conservative Sinclair Broadcasting Group to have all its television networks (one-quarter of all stations across the country in total) show a documentary critical of presidential hopeful John Kerry during the Vietnam War, just prior to the 2004 Presidential election. A Kerry spokesperson referred to the Sinclair Broadcasting Group’s decision as an attempt to help President Bush’s election bid, a clear violation of journalism standards. Similarly, in 2012 Sinclair stations in battleground states aired an election special designed to discredit the re-election candidacy of Barack Obama, also a Democrat. Another example is the previously referenced transnational mass media News Corporation, the umbrella company under which all of Murdoch’s media companies operate

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