Want better news? Block Gannett-Belo deal

By:  Seattle Times - Craig Aaron
Source: Seattle Times

TRAVEL across America, and you’ll see unique landmarks, taste new flavors and hear different accents. Yet just about everyone everywhere agrees on one thing: Their local news must be the worst in the country.

But it’s not the worst. It’s just the same.

Local broadcasts are becoming simulcasts, with the same cookie-cutter content piped in from distant corporate headquarters, once-competitive stations combined into single newsrooms and fewer journalists forced to fill more hours of airtime.

Could it get any worse? Oh, yes.

On June 13, Gannett announced a $2.2 billion acquisition of rival TV group Belo Corp. The deal would double the number of TV stations Gannett owns and make the company — already the nation’s largest newspaper publisher by circulation — the third-largest local TV chain in terms of revenue, according to BIA/Kelsey.

In Seattle, Gannett would take over NBC affiliate KING 5, and its corporate footprint would cover the Northwest with stations in Spokane, Boise and Portland, plus the daily newspaper in Oregon’s capital city, Salem.

Gannett would be even more dominant in other markets. The company would control the top two network affiliates in St. Louis; the daily newspaper and ABC station in Louisville; two stations plus a piece of the daily paper in Tucson; and three TV stations plus the daily Arizona Republic in Phoenix.

That’s a massive amount of media power for one company. The Gannett-Belo deal violates longstanding Federal Communications Commission regulations that prohibit one company from owning both a newspaper and TV station or multiple network affiliates in the same market.

But Gannett executives seem oddly unconcerned about the FCC, which must approve this deal. In fact, in conversations with investors and the trade press, Gannett has been forthright about its plans to skirt the limits on local ownership.

In markets like Phoenix, Portland and St. Louis, Gannett plans to establish a “sidecar” company that’s independent in name only. The arrangement would allow Gannett to claim the sidecar is independent — but still run its newsroom via a “shared services agreement.”

Gannett’s even setting up former Belo executive Jack Sander to run the shell operation. According to the industry-watching website TVNewsCheck, “Gannett is guaranteeing loans that will enable Sander to buy the stations.”

No need to worry, though, because Gannett promises these stations will be “almost completely independent operations.”

Call it covert consolidation. Having failed to eliminate the FCC’s remaining ownership limits in the face of widespread public opposition, broadcasters have been merging their operations in every way except on paper. These shady combinations are already up and running in nearly half the nation’s TV markets.

Covert consolidation might make good business sense for big media companies. Owning multiple stations gives them more clout in negotiations with advertisers and the cable and satellite companies that pay to retransmit broadcast TV. And they don’t need to hire as many reporters, anchors and producers, either.

The many downsides for viewers: fewer viewpoints, fewer reporters, fewer people asking tough questions or digging for stories. With covert consolidation, instead of competing for scoops, these stations are colluding to cut costs. And companies seldom invest the profits from covert consolidation into more robust local coverage. They just pad the bottom lines.

Gannett claims it will continue to operate separate newsrooms in the markets where it will have two stations. “They will continue to compete head-to-head so there will be no reduction in editorial voices,” Gannett’s David Lougee, a former KING 5 news director, told the website TV Spy. “It’s kind of like when one company owned Gap and Old Navy. They both competed against each other.”

But we’re not talking about khakis and T-shirts. The public needs diverse and competing sources of news and information to hold government and corporate leaders accountable.

So what’s the FCC doing about it? Not much. The public’s watchdog has become an industry lap dog. Forget about biting the hand that feeds you — this puppy doesn’t even remember how to bark.

The FCC’s mandate is to ensure competition, diversity and localism, to make sure broadcasters profiting off the public airwaves actually serve their communities. But the agency has come up with far more ways to get independent and diverse voices out of the media business rather than into it.

And right now a new wave of consolidation is sweeping the local TV business. Besides Gannett, companies like Media General, Nexstar and Raycom are looking to buy more or be bought out. And Baltimore-based Sinclair, which recently acquired Seattle’s ABC affiliate KOMO-TV, is on a feeding frenzy and could soon control as many as 140 stations.

By the time all these deals are done, fewer than 10 companies could control almost all of the network affiliates in the major markets and swing states. Wall Street is overjoyed, but the rest of us should be very worried.

Gannett-Belo will be one of the first big tests for Tom Wheeler, the longtime cable and wireless industry lobbyist President Obama nominated to head the FCC. Washington Sen. Maria Cantwell grilled Wheeler during his confirmation hearing last week about opposing further consolidation.

“I understand the seriousness of this issue and have long been an advocate of diversity of voices,” Wheeler said.

But when Cantwell pressed him on the Gannett deal, Wheeler said, “I am specifically trying not to be specific.”

Here’s a better answer: The FCC needs to end this charade. If the agency’s rules don’t allow mergers between these stations, then de facto mergers shouldn’t be allowed either. If that means breaking up a few big media companies along the way and stopping this deal, so be it.

Want better local news? Blocking the Gannett-Belo deal would be a great way to start.