Consumer Study Shows Allowing Media Mergers Would Bulldoze Diversity, Democracy

Mergers Among Los Angeles Media Companies Would Violate Federal Guidelines, Increase Market Share of Top 4 Firms to 80 Pct

10/3/2006 3:15:00 PM

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To: State Desk

Contact: Mark Cooper of Consumer Federation of America, 301- 807-1623; Jeannine Kenney of Consumers Union, 202-462-6262

LOS ANGELES, Oct. 3 /PRNewswire-USNewswire/ -- A new study of the Los Angeles media market, released today, shows that eliminating current federal prohibitions on single ownership of both a newspaper and television station in the same market would violate federal merger guidelines and give a handful of media corporations undue influence over local news and public opinion in the LA market.

"Allowing mergers between newspapers and TV stations in the same market poses a grave threat to democratic discourse," said Mark Cooper, director of consumer research for the Consumer Federation of America and the study's author. "It would give far too few companies, far too much influence over far too many people."

The study results were released today by the Consumer Federation of America, Consumers Union and Free Press, during the Federal Communications Commission's first public hearing, held in Los Angeles, on its review of existing media ownership limits. The current rules prohibit one company from owning both a newspaper and television station in the same market, among other restrictions. The FCC's prior attempt to loosen ownership limits in 2003 was thrown out by a federal court.

The study found that allowing cross-ownership of LA's daily newspapers with its top TV stations would result in market concentration that far exceeds acceptable levels under federal merger guidelines. The results are significant because the LA media market, with more than 100 media outlets, is one of the nation's largest. The study found that despite the large number of newspapers, TV stations and radio outlets, only 15 reach more than five percent of their audience; half have only a negligible market share.

Among the study's findings are:

-- Allowing the top LA newspapers to merge with the top LA TV stations increases market share of the leading news provider from 16 percent to 26 percent and increases the market share of the top four companies from 54 percent to 80 percent.

-- In any merger scenario involving top media outlets, market concentration levels violate federal thresholds for acceptable levels of market influence.

-- National television networks and cable channels, the Internet and other news sources are insignificant sources of local news and information for the public.

"No matter how you slice it," Cooper said, "allowing leading media companies in this market to merge, produces unacceptable concentration in news production. That would be a concern regardless of the industry, but in the marketplace of news and ideas the results are even more alarming."

The groups criticized the FCC's attempt to loosen the ownership restrictions in 2003 because, among other problems, the Commission failed to consider the market reach of media companies and instead relied on a "head count" of media outlets to evaluate the impact of media mergers.

"Most Americans rely on their local newspapers and TV stations for local news and information," said Jeannine Kenney, senior policy analyst for Consumers Union. "A healthy democracy requires that they compete with each other, not consolidate, to ensure the public has access to diverse and independent sources of news and opinion."

The FCC intends to hold an additional five public hearings during its review of media ownership rules and take public comment until late 2006. The Commission is likely to propose new rules early next year.

Cooper's full written statement, including the study results, can be found at http://www.hearusnow.org .

Details about today's FCC hearing can be found at http://www.fcc.gov.

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