It's hard to watch the beating newspapers are taking without thinking that the FCC had the right idea in letting some of them combine with TV stations to try to jump-start in both a tough economy and a ferocious media marketplace.
FCC Chairman Kevin Martin was famously upbraided recently for paying too much attention to the fate of newspapers, told by one legislator that he was not chairman of the Federal Newspaper Commission. But in many cases newspaper and TV stations fortunes are already wedded—and these days, crashing.
Check out these numbers, recounted by Newspaper Association of America President John Sturm, which are the percentage declines of share prices from their peaks over the last two years: Media General, down 69%; Gannett, 68%; Journal Communications, 65%; New York Times, 44%; Washington Post Co., down 34%.
Sturm is floored by the inability of some in Washington to see that handwriting on the wall, which should be written in red ink in letters as big as those of the First Amendment on the outside of the new Newseum.
That dire news comes as the NAA and broadcasters filed petitions in federal court last week to get their challenges of that FCC rule change moved to the D.C. circuit, a court thought to be friendlier to their arguments.
The irony, of course, is that broadcasters themselves are trying to block implementation of the rule change, which would allow TV station owners in the top 20 markets, under certain conditions, to own newspapers, and allow combos in even smaller markets, though with even more hoops to jump through. Martin thinks that's a good deal for media companies.
And it's not that broadcasters don't want those changes. It's just that they want much more. They want the ban lifted, not loosened. And they want to own more multiple stations in smaller markets.
If moving the case to the U.S. Court of Appeals for the D.C. Circuit will advance the cause of loosening the cross-ownership rule, then we hope that is where the Ninth Circuit court will agree to move it.
Even then, a decision won't likely come until early next year, if Sen. Byron Dorgan hasn't gotten the rules invalidated by a Democratically controlled Congress by then.
Nobody can argue with a straight face that broadcasters dominate the media marketplace at the moment. Cable channels get more in the aggregate, and more viewers are going to the Internet. A recent study predicted that the ad industry's interest in video that bypasses TV entirely and goes straight from the producer to the TV screen via the Internet will increase twentyfold by 2013 to $10 billion. That's a bit more than the broadcast upfronts reaped this year.
In the meantime, old-line media need all the help they can get, and if that means letting them join forces to try and hold onto their share of the marketplace, we think it is in the public interest. Until everyone can pay for cable or the country has found a way to wire the entire country for broadband, over-the-air broadcasting remains a lifeline service, and it could use its own lifeline from either the courts or the FCC.
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