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MEDIA MATTERS
News bailouts threaten freedom of press
'You can't expect a watchdog to bite the hand that feeds it'
Posted: February 10, 2009
8:39 pm Eastern
By Drew Zahn
© 2009 WorldNetDaily
Floundering media and news conglomerates have expressed interest in accepting government bailout money, leading some to object, arguing that strings attached to federal funds will subvert our nation's freedom of the press.
Brent Bozell, president of the media watchdog organization Media Research Center, contends that if a news company – even a bankrupt one – accepts taxpayer money, it can no longer be trusted to hold government accountable to the people.
"How in the world can [a] paper propose to be a watchdog for the public when it's had conversations about being bankrolled by the government?" Bozell asked in The Philadelpia Bulletin.
"When a media outlet proposes a bailout, it proposes to put itself under the authority of the entity bailing it out," Bozell said. "Therefore, if it's a government, the media entity proposes to become an arm of the government."
Bozell was reacting to news that the publisher of both the Philadelphia Inquirer and Daily News has been in discussions with Pennsylvania Gov. Ed Rendell about a potential government bailout of Philadelphia Media Holdings, the company that owns the newspapers.
"If newspapers are to play the vital role they do in a democracy," said Philadelphia Inquirer publisher Brian Tierney, quoted in his own paper, "then they cannot be put into a special line where they alone stand barred from receiving the economic development dollars that are available to every other business in the state."
Reuters reports a similar situation in Connecticut, where State Rep. Frank Nicastro, D-Bristol, petitioned the state government to step in and help save The Bristol Press and The New Britain Herald after their parent company accumulated hundreds of millions of dollars in debt, though the papers have since been purchased by a new owner.
And as the nation's largest news conglomerates face increasing, startling losses, some worry that these major corporations may turn to the federal government, much as banks and the auto industry have. But at what cost?
In an editorial titled "How About Tossin' a Bailout This Way," Jeff Ackerman, publisher of the Grass Valley, Calif., newspaper The Union joked, "If Congress bails out the newspaper industry, we'd also promise to be a lot nicer than we have been to various politicians."
Yet compromising the free press is exactly what many are worried will happen if government tosses a bailout to the media.
Former reporter and editor Paul Janensch, now a journalism professor at Quinnipiac University in Connecticut, summarized for Reuters the problem with media companies accepting government bailouts:
"You can't expect a watchdog to bite the hand that feeds it," Janensch said.
Digby Solomon, publisher of The Daily Press in Newport News, Va., told Reuters, "The whole idea of the First Amendment and separating media and giving them freedom of control from the government is sacrosanct."
The precedent for blurring the separation of press and state, however, has already been set.
The bailouts begin
Last fall, according to a Bloomberg report, the U.S. government agreed to insure as much as $139 billion in debt for GE Capital Corp., the lending arm of the giant conglomerate General Electric, which also happens to be the parent company of news provider MSNBC and television company NBC.
Two months later, MSNBC debuted a promotion for election night coverage with the tagline "The Power of Change," prompting Fox News columnist Jim Pinkerton to comment on the motto's similarity to Barack Obama's campaign slogan, "Change We Can Believe In."
"I think it goes right to what MSNBC's up to as a strategy," Pinkerton said on a Fox News broadcast, suggesting MSNBC's tenor had moved to the political left, especially with the prominence of the opinionated MSNBC host Keith Olbermann. "Now, for a $139 billion guarantee, I'd consider, I'd probably go more, I'd probably go all the way over to the Olbermann/Maddow territory."
GE, however, isn't the only media-owning corporation that has faced desperate financial times recently. Under $12 billion of debt, the Tribune Company, which owns the Chicago Tribune, Los Angeles Times and Baltimore Sun, filed for Chapter 11 bankruptcy in December. The news conglomerate McClatchy Co. reported a $21.7 million loss for the fourth quarter of 2008. And over a six-year period this decade, a company deposition revealed, Hearst Newspapers' San Francisco Chronicle lost money at the rate of $1 million per week.
In September, an editorial in Editor and Publisher further warned that a newspaper bailout was gaining credibility with the press: "[Those] talking up a government bailout also include such respected newspaper veterans as Seattle Times Publisher Frank A. Blethen and editor-turned-academic Geneva Overholser," wrote the magazine.
The strings attached
Companies that have turned to the federal government for relief, however, have also found restrictions placed upon them. Banks that accept bailout dollars, it was revealed today, will be required to limit executive compensation packages and surrender stock to the Treasury department in exchange for "capital injections." As WND reported, the president's proposed stimulus package restricts school campuses that accept building funds from permitting "sectarian instruction" or "religious worship" in structures built or modernized with the federal money.
Although no plan currently exists for the U.S. government to bailout additional media corporations, the president has already announced an agenda that may indicate the kinds of strings potentially attached to a news company bailout.
Last summer, in denying the presidential candidate's support of the so-called "Fairness Doctrine," Obama's press secretary said, "Sen. Obama supports media-ownership caps, network neutrality, public broadcasting, as well as increasing minority ownership of broadcasting and print outlets."
As WND reported, the president's position is almost identical to a liberal think tank's plan for closing the gap between the number of politically conservative and liberal radio talk shows. The plan, in essence, is to mandate additional leftist programming in the name of "diversity" and "localization" and "ownership caps" without ever needing to use the red-flagged phrase, "Fairness Doctrine."
In June of 2007, a think tank called The Center for American Progress, headed by John Podesta, co-chairman of Obama's transition team, released a report titled "The Structural Imbalance of Political Talk Radio," detailing the conservative viewpoint's dominance on the airwaves and proposing steps for leveling the playing field.
"Our conclusion is that the gap between conservative and progressive talk radio is the result of multiple structural problems in the U.S. regulatory system," the report reads, "particularly the complete breakdown of the public trustee concept of broadcast, the elimination of clear public interest requirements for broadcasting, and the relaxation of ownership rules including the requirement of local participation in management."
The report then demonstrates how radio stations owned locally, or operated by female and minority owners, are statistically more likely to carry liberal political talk shows.
To accomplish the Center's strategy, the report recommends legislating local and national caps on ownership of commercial radio stations and demanding radio stations regularly prove to the FCC that they are "operating on behalf of the public interest" to maintain their broadcasting license – both steps parroted in Obama's agenda.
Radio, however, may not be the only news outlet that sees restrictions tied to bailout money.
Prior to the election, Obama's press secretary suggested the president's plan for "diversity" included both "broadcasting and print outlets."
And in 2004, according to an Accuracy in Media column, Obama advisor Podesta argued publicly that the American public was being duped by TV news stations owned and operated by big corporations and Rupert Murdoch's Fox News. His answer to getting a more politically liberal viewpoint on television was, again, mandated diversity in ownership.
Though it has since been removed to pave the way for Obama's White House website, his transition website, Change.gov, further echoed the diversity plan.
"Barack Obama believes that the nation's rules ensuring diversity of media ownership are critical to the public interest," read the agenda page of Change.gov. "Unfortunately, over the past several years, the Federal Communications Commission has promoted the concept of consolidation over diversity. As president, Obama will encourage diversity in the ownership of broadcast media, promote the development of new media outlets for expression of diverse viewpoints, and clarify the public interest obligations of broadcasters who occupy the nation's spectrum."
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