When Rupert Murdoch sent a tweet last week suggesting that a sale of the Tribune Co. was imminent, one follower asked him if he was upset that he wasn’t buying the company.
“No bid. No interest,” he wrote.
Murdoch may have cooled on a purchase that would mean another venture into print media, or he may have some other plan in place for dangling the prospect of a sale, one that Tribune Co. denies. But the media titan has been clear in the past about what has prevented him from owning flagship newspaper the Los Angeles Times: the 40-year old FCC rule that prevents common ownership of a newspaper and TV station in the same market.
Murdoch has called the rules “laws from another age,” a sentiment that is likely to be echoed on Thursday, when a House Energy & Commerce subcommittee is scheduled to hold another hearing on the set of media ownership regulations.
The broadcast industry has long argued that the restrictions are outdated at a time when they face increasing competition from cable and digital outlets. The newspaper industry has for some time contended that the rule is stifling investment in a shrinking business, perhaps even some suitors who can boost the fortunes of a print media outlet.
“You are going to see a situation where more newspapers are going to come on the market. It is important to have that flexibility,” says Paul Boyle, senior VP of public policy for the Newspaper Assn. of America.
The FCC is required to review its media ownership rules every four years to determine whether they are still in the public interest, but the reviews of 2010 and 2014 have been folded into one and are still ongoing. When the latest review was launched last year, FCC chairman Tom Wheeler set a date of June 30, 2016 to complete it, which he said was “essentially half the time normally allocated to such a review.”
In his prepared testimony to the congressional committee, Boyle argued that as the commission “continues to delay, and delay, and delay, this outright ban on cross-ownership gets much further removed from the reality of today’s marketplace.”
The result, Boyle said, is that some media companies “have moved on” with “no regulatory relief or certainty in sight.” He said that the FCC’s inaction has contributed to the decision by some media companies to either sell their broadcast stations or to divide their publishing and broadcast properties, actions that have been taken by Gannett, E.W. Scripps, News Corp., Media General and Tribune Co., among others, although market valuation is also of primary concern.
For their part, broadcasters recently urged the FCC to put their review of the proposed merger of Charter Communications and Time Warner Cable on hold until it can review and update the ownership rules, which also include limits on the nationwide audience reach of a single station group and a ban on the combination of any of the four major broadcast networks.
But some public interest groups say that such laws protect against a shrinking number of independent voices in a local market. On Nov. 23, a representative from Common Cause, Todd O’Boyle, and two researchers affiliated with the University of Delaware met with the chief of staff to FCC Commissioner Mignon Clyburn to express their concern and argue that more research needs to be done before relaxing or eliminating the newspaper-broadcast cross-ownership rule.
O’Boyle says that the rule continues to serve the public interest because it protects a diversity of viewpoints. Greater concentration of media in a local market, he says, often means fewer journalists to hold public officials accountable. “It is an important jobs issue,” he says, adding that often a media merger will seek to reduce newsroom redundancies.
In cases where a combination may save a failing newspaper, he notes that “anyone is welcome is to seek a waiver and make a case that a particular consolidation would advance the public interest…We just don’t think the presumption should be that more consolidation is for the benefit of the public interest.”
Murdoch has a waiver that allowed him to own the New York Post and WNYW-TV in New York City and WWOR-TV in New Jersey. (Even though News Corp. was split into separate companies, legal experts say Murdoch may still be bound by the rules because of ownership stakes in both.) Tribune Co. also had a waiver allowing them to own the Los Angeles Times and KTLA-TV.
When the latest review was launched, the FCC sought comment on a proposal to retain the TV station/newspaper cross ownership rule yet, under certain circumstances, make it easier for media companies to seek a waiver.
Under the proposal, combinations in the top 20 markets would be given a presumption that they are in the public interest. But it would apply only if the merging station was not in the top four in that market, and only if at least eight independently owned major media voices remained in that market.
The FCC also sought comment on a proposal to eliminate the rule prohibiting common ownership of newspapers and radio stations in a market.
The FCC has been moving cautiously, perhaps given what happened the last time it tried to modify the rules. In 2007, a federal appeals court overturned an effort to relax some of the broadcast/newspaper cross ownership rules, citing procedural flaws. Another proposal to relax the rules in 2012 languished, as it was unable to secure a majority vote. Some commissioners sought more information on its potential impact ownership by women and minorities, which has been paltry.
A 2013 study commissioned by the Minority Media and Telecommunications Council found that “cross-media interests impact on minority and women broadcast ownership is not sufficiently material to be a material justification for tightening or retaining the rules.” But the study, the group said, was not meant to be exhaustive.