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One Share, One Vote Is Fair

The combination of AT&T and Time Warner Inc. is beneficial and should be approved, if for no other reason than because of “corporate democracy” in governance.

Most other major “content” companies have two classes of stock, vesting extraordinary voting powers to controlling families far in excess of their equity ownership. AT&T and Time Warner have rare one-share, one-vote structures. This also leads to more independent boards of directors.

Viacom and CBS Corp. are both controlled by the Redstone family. Sumner Redstone has displayed little public responsibility to anything more than the transient stock price. He fired very able CEOs, including Frank Biondi and Tom Freston, as well as Mel Karmazin, who initiated the merger with CBS, giving Redstone control of both media giants. Until recently, he supported Viacom CEO Philippe Dauman, whose compensation included hundreds of millions of dollars, while the company deteriorated.

21st Century Fox and News Corp. are controlled by the super-voting stock of the Murdoch family. Rupert Murdoch’s two older male children are now succeeding him, despite the journalistic scandals in the United Kingdom overseen by James Murdoch.

The two largest content/distribution companies are The Walt Disney Co., which is fully and equitably public (but also has significant non-media holdings), and Comcast, in which the Roberts family’s voting rights are multiples of their equity ownership.

So far, Comcast has exhibited no special favors to the distribution or the content side of its holdings, nor has it discriminated against any competitor. Indeed, it has greatly improved the performance of NBCUniversal, which it acquired from GE, and is the principal innovator in more consumer-friendly cable navigation.

Discovery is largely controlled by super-voting interests of John Malone and the Newhouse family. A+E Networks is controlled by the fully public Disney and fully private Hearst family interests.

There are other family controlled video-content suppliers, e.g. AMC Networks, Scripps Networks Interactive, et. al. — but they lack the clout of the big players.

The regulatory process should be both objective and subjective, including the degree of individual or family control, past records, integrity and relative incentives to further improve technology as it further disassembles the cozy media history of the past 50 years.

Full disclosure: I am a shareholder in both AT&T (as a result of its DirecTV acquisition) and Time Warner, after having served both as a senior Warner Bros. executive from 1969 to 2003 and as one of Steve Ross’s strategic advisers until his death in 1992.

I brought the acquisition of MTV and Nickelodeon to the management of pre- Redstone Viacom, introduced Ross to his Time counterparts leading to the original Time Warner merger, and have served on the boards of three public media companies.

I hope an insider’s insight can carry real-world weight when theorists or ideologues, on both sides of the regulatory discussion make their evaluation.

Edward Bleier is the retired president of Warner Bros. Domestic Pay TV, Cable & Network Features, now serving on the boards and governance committees of three media companies.