Via America’s Lawyer: Mike Papantonio and Holland Cooke discuss the massive media merger looming between AT&T and Time Warner, a merger that even President Donald Trump warned could be dangerous.
Transcript:
Mike Papantonio: Believe it or not there was a time in US history when the media actually did its job. When you turned on the news you saw real journalists covering real stories that actually mattered to Americans. These journalists asked tough questions to world leaders, they exposed corruption at the very highest levels of government, and they kept consumers informed about the dangers they faced from large corporations. TV networks weren’t chasing ratings. They were chasing stories. Their main goal was getting information to the public, not beating the competitor. The airwaves that are part of the public common actually benefited from that type of journalism.
But in the years between 1940 and 1980 rules were passed at the federal level to prevent media outlets from buying up other stations. This applied both to radio and television. These rules were necessary to keep information flowing without being consolidated or filtered out by media conglomerate that owned all the stations and owned all the message. But in the election of Ronald Reagan in 1980 all those rules went out the window. One of Reagan’s first acts as president was to extend the license of existing media owners from three years to five years, allowing outlets to operate for longer period without having to renew their licenses.
Not long after that Reagan lifted the limits on how much not entertainment programs the stations were required there, and he eliminated the limits on how much advertising could be aired. There was a time when they controlled those things. So now the advertisers, Bayer, and Merck, and Dell, and McDonald, Douglas, they own the airwaves, they own your airwaves.
In 1987 Reagan eliminated the Fairness Doctrine. The Fairness Doctrine if you recall had been required media outlets to spend equal time on a story from both sides, from all sides. This meant that the public could hear all of the sides of the story and come to their own conclusions. It kept media outlets from becoming biased toward any political party or special interest group or corporation, but the biggest gift that corporate media ever received came in the form of the 1996 Telecommunications Act that was signed by none other than president Bill Clinton. This act effectively lifted the cap on how many media outlets that a single entity can own in a market. It paved the way for massive media consolidation in the United States. It’s where we are today because of it. It was Clinton’s hope that this new corporate media would help build his presidential legacy. It didn’t work out that way though, did it?
For more than a year communication giant AT&T has been attempting to finalize a merger with Time Warner, the parent company of CNN and HBO and Warner Brothers. This is an $84 billion merger that would further reduce the number of media owners in United States, once again narrowing the viewpoints that American consumers have access to. During the presidential campaign Donald Trump of all people actually warned about how dangerous media mergers could be for Americans, by further consolidating media ownership into the hands of just a few wealthy corporations. So far the United States is the only country that hasn’t signed off on the AT&T deal and hopefully this will be one campaign promise that maybe Donald Trump will actually keep.
Joining me to discuss this issue is host of The Big Picture and a dear friend, Holland Cooke. Holland, let me start out by telling, why don’t you tell us exactly what this AT&T Time Warner issue would mean for media in the United States? This is a big, this is big deal, and people are missing the story.
Holland Cooke: Yeah, the rich get richer, the big get bigger, and the cocktail party buzzword is going to be vertical integration, meaning that you don’t just own the stuff but you also own the pipe that it goes through. AT&T has 90 million cellphone users, myself included, 20 million direct TV subscribers, myself included, they own cable, but they’ve got to put some stuff on those platforms and that’s where this Time Warner merger comes in because they have all the content that you mentioned. If this sounds vaguely familiar, it’s a flashback to the Comcast NBC Universal ingestion, where they got that through the Justice Department by promising that they would not freeze competitors out of content and out of distribution. As you said, this deal is a year in the making and it’s not nearly over the finish line yet. But we’ll see if they can play nice together. I think that’s where the Justice Department is going to set the bar on this.
Mike Papantonio: Both you and I came up during a time when the media was owned by that 50 or 60 different entities, when they owned, you had different people that owned radio stations and TV, and you got all these different opinions. It wasn’t one CNN only opinion or one MSNBC only opinion. It was opinions that were diverse, that gave us ideas that we could think about. Now the truth is in 2017 those 50 or 60 entities are down to four. What is your take on that and how dangerous is it?
Holland Cooke: Well, you and I being brothers in the talk radio family have had a front row seat for this. Very few companies own very many radio stations now. There’s one called the Cumulous Media which owns over 400 radio stations. They have over two B, billion dollars in debt and just this week they stiffed an insurance payment that are creditors of some $26 million. Bigger than they are is a company called iHeartMedia, formally known as Clear Channel. They own over 800 stations and their untenable debt is over 20 B, billion dollars, and that is money that does not exist in nature anywhere.
Something had to give, and this is why it’s tough to find local news on radio and why you hear Rush Limbaugh up and down the dial from town to town, because as of today most radio broadcast hours are robotic. If it’s a music station, the DJ is in some other city at the mothership, and after the local morning show most of these talk stations just plug into a syndicated show. It’s not like when we came up in media where you had two stations in the market, racing their logo news cars to the scene of the story. Now you’re lucky if you hear the story.
Mike Papantonio: Yeah, so we don’t own the airways anymore. The airwaves, people forget something, the airwaves are a public commons. We own them. But now the advertisers own them. I mean, Merck owns them. Look, Holland, watch the news tonight and in one hour you’re going to see eight commercials from Merck or Pfizer or Bayer-
Holland Cooke: Pills.
Mike Papantonio: Selling you something you probably don’t even need. So what’s happened is the airwaves have simply become a vehicle for the industry to sell us whatever they want to sell us. Did I get that right or do you have a different take?
Holland Cooke: Oh sure. You’re going to feel remiss if you don’t run right out and get the new iPhone. This is going to be something a blind man could see on TV for the next several weeks. They got bills to pay. And you’re right, the content is now there to please the advertisers that support it. I got all wistful when you introduced the segment because we remember when uncle Walter said, “That’s the way it is,” and the CBS, the Tiffany Network wasn’t looking at the ratings, they wanted to tell the story.
Mike Papantonio: So this AT&T merger is going to require that the United States sign off on it. The FCC has got to sign off on it to allow this to happen. Every other country has signed off on it. But you remember president Trump saying, “Oh gee, whiz, we’ve got to stop these mergers. We have to do something about it. It’s terrible.” He warned the American people that this is a big problem and we got to do something about it. What’s going to happen with Ajit Pai? He serves as chairman of the FCC, an Obama nominee by the way, which is very interesting because this is the guy that wanted to do away with net neutrality. Now he’s going to be making decisions about this. What’s your take?
Holland Cooke: Yeah, he still does, and he is a hold over from the Obama administration when he was a commissioner. Now he is the head of the FCC and he holds a three-to-two majority when the five commissioners vote on things. I’ve met the chairman. You’ll never meet a more affable guy. I’ve chatted him up at a couple of broadcasting conventions, but net neutrality is in his cross hairs, his private sector experience as shall we politely say informed his position on regulation and the guy’s never met a merger he didn’t like. So I think that the FCC is going to hold the door open for this.
Where the bar is set high is the Justice Department because they have been kind to these vertical integrations, as long as they play nice with each other. Where the Department of Justice gets nervous is when you try to buy a competitor. That’s going to be where the action is. I don’t think the FCC is even going to be a speed bump here.
Mike Papantonio: I got to tell you something. Everybody gives Bill Clinton a pass on this issue and it makes me crazy, because here’s a guy that he signed the Telecommunications Act, it paved the way for these mergers, and I really do believe, I remember seeing in articles talking about the fact that he thought that this was going to be great for his presidency if he just allowed media to buy, gobble everything up he was going to control the people who gobbled everything up. Didn’t work out quite so well. What’s your take on Bill Clinton’s involvement with this entire thing?
Holland Cooke: Yeah, and then FCC chairman Michael Powell, this was a classic midnight amendment that got tacked on to a fairly unrelated bill. It was about telecom and radio was lobbying heavily to get this done, and the minute this went through and the ownership caps were lifted, which you mentioned earlier, there was a ration of stations who used to be allowed to own. Now you can own as many as you want, as long as you don’t own more than eight radio stations in one market.
A feeding frenzy began, where these big companies were paying untenable prices while it was a sellers market and mom-and-pop radio station owners might not have even thought of selling before, somebody came along with more money than their station was worth, and they’re on the beach down in Florida now, and the people, the big companies, the big Wall Street companies that are radio’s mega owners overpaid for these stations and they’ve been burning the furniture to keep the lights on. So the listener has suffered in the process.
Mike Papantonio: Right, right, right. The end of the story I think is this, if it happened, first of all, I believe it probably will happen. Money talks in this country. At the end of the story is corporate media is already in big trouble. You’ve got social media that’s moving in. They’re taking with news away. You’ve got skinny bundles right now, you’ve got Netflix, HB … You’ve got all these entities that are doing their own programming. It’s already a big problem for corporate media; I think this makes it worse.
Holland Cooke: Yeah, the genie is out of the bottle. You’ve got a couple of big cable companies here and hell for them is these cord cutters because we got Sling and Roku, you can watch TV on your phone, they’re and running the distribution systems, so innovation in the marketplace will find a way.
Mike Papantonio: Right. Right. Got to go. Thanks a lot for joining me, okay?
Holland Cooke: You bet Mike.
