Home » Analysis

Media Conglomerates Seek To Get While the Getting's Good


Whatever else will happen, Bush won't be in the White House in 2009, and odds are good that a Democrat will. And while Clinton, the frontrunner, has taken money from Rupert Murdoch, she's unlikely to be particularly friendly to the idea of more media consolidation. Something about Disney and a certain documentary packed full of lies, among other things.

So you can understand why the FCC, currently with a 3-2 Republican/Democratic majority wants to ease restriction ASAP. The window is closing, and without a friendly President the odds are grim, given that Congress is pretty hostile to the idea (when the NRA and the religious right are against your idea along with the ACLU and unions, you know it isn't popular with anyone outside the corporate lobbyist community.)

The New York Times writes:

The head of the Federal Communications Commission has circulated an ambitious plan to relax the decades-old media ownership rules, including repealing a rule that forbids a company to own both a newspaper and a television or radio station in the same city.

Kevin J. Martin, chairman of the commission, wants to repeal the rule in the next two months — a plan that, if successful, would be a big victory for some executives of media conglomerates.

Among them are Samuel Zell, the Chicago investor who is seeking to complete a buyout of the Tribune Company, and Rupert Murdoch, who has lobbied against the rule for years so that he can continue controlling both The New York Post and a Fox television station in New York.

Last time the FCC, under Powell (yes, Colin Powell's son, whose career Colin bought and paid for by carrying Bush's water) did this 3 million Americans contacted them, coming out against it -- the most in FCC history. Of course they ignored all that and passed it anyway, then it was reversed by the Supreme Court.

Which is, needless to say, the other reason this is being done again: because the Court's membership has changed and Martin is betting they won't stop the FCC again.

Which means the only chance to stop this will probably be an act of Congress instructing the FCC not to do it. Normally that'd be impossible to get through - but what the NRA and the Religious Right want they tend to get from Republican members of Congress. So I'd say there's a chance. But this is going to be a big fight because there's a ton of money - and political power - for the conglomerates and their owners on the table. Murdoch in particular buys media companies for influence. His purchase of the Wall Street Journal, for example, was not justified on the numbers, he can never make enough back to repay the inflated price. Fox News appears to be still a net money-loser over its entire lifespan. Murdoch isn't driven by money, he's driven by power. And since he has explicitly stated that Fox helped sell, for example, the Iraq War, he's a prime example of why too much power in the hands of media barons is a bad idea. (Those 70% of Americans didn't wind up thinking Iraq was behind 9/11 without a big boost from Murdoch's newspapers and TV stations.)


Ian Welsh October 18, 2007 - 5:01am
Ian Welsh's diary | printer friendly version | digg
( categories: Analysis | Media Criticism | USA: Congress | USA: Domestic Issues | USA: Presidency )

Zell interests me

I don't think he's driven by power, but money, and 8Bn is a lot.
current stock price is $28something
from back in April:

It's official: Tribune (TRB-NYSE) is being acquired by Sam Zell for $34.00 per share in cash, sort of. Tribune will be privately held, with an Employee Stock Ownership Plan (ESOP) holding all of Tribune's then-outstanding common stock and Zell holding a subordinated note and a warrant entitling him to acquire 40 percent of Tribune's common stock. Zell will join the Tribune board upon completion of his initial investment and will become chairman when the merger closes.
This is a two-stage deal where Sam Zell will acquire 126 million shares in a cash tender in Q2, but then a second stage tender in Q4. The board of directors of Tribune, on the recommendation of a special committee comprised entirely of independent directors, has approved the agreements and will recommend Tribune shareholder approval. Representatives of the Chandler Trusts on the board abstained from voting as directors. However, the Chandler Trusts have agreed to vote in favor of the transaction.
The Employee Stock Option Plan will immediately buy $250 million in newly issued stock at $28.00. Sam Zell will invest $250 million and join the boards. Tribune itself will launch a tender for its own shares at $34.00 ($4.3 Billion). Shareholders may receive an 8% annualized "ticking fee" on their shares if it has not closed by January 1, 2008. The company can shop the deal up to shareholder approval date for a break-up fee of $25 million to Sam Zell. Tribune is suspending its dividend.
Tribune has financing commitments from Citigroup, Merrill Lynch and JPMorgan Chase to fund the transactions. Tribune will initially raise $7.0 billion of new debt of which $4.2 billion will be used to complete the tender offer and the remaining $2.8 billion will be used to refinance existing bank credit facilities. In the second stage, Tribune will raise an additional $4.2 billion of debt which will be used to buy all the remaining outstanding shares of the company. Tribune's existing publicly-traded bonds are expected to remain outstanding.
The Chicago Cubs will be sold after the 2007 season along with a 25% stake in Comcast SportsNet Chicago, and those proceeds will pay down debt. If this is not a complicated or unusual deal, then who knows what is. This is really more of an investment and assumption of control with a leveraged gamble from the new assumed debt. For a billionaire, he just took the company on the cheap compared to a classic buyout of what is otherwised thought of as a media asset in a diminishing industry.

http://www.247wallst.com/2007/04/tribunes_murky_.html

is Sam getting stung by the current mess in the financial sector?
anybody know what the holdup has been? can he muscle the FCC changes?
I'm very tempted to ride w/ him.

dk October 18, 2007 - 7:02am
login or register to post comments
Emergence of The Corporatist State

The primary problem in the US is the corporatist state that controls the wealth of the nation and rules as a plutocratic oligarchy, using such tools as legalized bribery (campaign finance and lobbying) and corporatist media control. Media control is a sine qua non of totalitarian regimes, whether of the Left (socialistic) or the Right (fascistic). The US is sliding down the slippery slope toward fascism, and corporatist media control is greasing the wheels. It can be argued that the Bush Administration is acting more like a cabal or even a cult than the government of a liberal democracy. This is simple to account for in terms of the emerging corporatist state, however. It has happened in the past and left tell-tale marks, which are now becoming pretty obvious in contemporary America.

tjfxh October 18, 2007 - 10:03am
login or register to post comments
"Whatever else will happen,

"Whatever else will happen, Bush won't be in the White House in 2009"

Reporter: Mr. President, following up on Vladimir Putin for a moment, he said recently that next year, when he has to step down according to the constitution, as the president, he may become prime minister; in effect keeping power and dashing any hopes for a genuine democratic transition there ...

Bush: I've been planning that myself.

http://blog.wired.com/27bstroke6/2007/10/bush-quip-might.html

m October 18, 2007 - 6:28pm
login or register to post comments

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.