As the latest media dust-up plays out (King Kong vs.
Godzilla, Beowulf vs. the Kraken: pick your metaphor) some people realize we’re
not just bystanders. Today’s media giants have changed from one-time players like
General Electric and Verizon, but the information and entertainment Americans
need or want are affected. So the Community Word asked two long-time area media
professionals and scholars to weigh in on the industry’s health, owners and models.
Netflix and Paramount both are trying to buy Warner Bros./Discovery.
Netflix’ $82.7 billion offer was accepted, but long-time suitor Paramount/Skydance
then launched a hostile effort to buy WB with apparent support from the White
House and financing from three Persian Gulf nations. Both offers have opponents,
from unions (the NewsGuild, SAG/AFTRA and the Writers Guild) to politicians.
“A Netflix-Warner Bros. would create one massive media giant with control of
close to half of the streaming market, threatening to force Americans into
higher subscription prices and fewer choices over what and how they watch,
while putting American workers at risk,” said Massachusetts Democratic Sen
Elizabeth Warren, who also opposes Paramount’s purchase. “A Paramount
Skydance-Warner Bros. merger would be a five-alarm antitrust fire and exactly
what our anti-monopoly laws are written to prevent.”
* Do you think chain/corporate ownership makes a
difference compared to regional or local ownership? Are there ways to
balance business interests and public service?
John Malone - The Communications Act of 1934
established that, in exchange for the use of the [broadcast] spectrum,
licensees were required to operate in the public interest, convenience and necessity. The Federal Communications Commission
has licensing and regulatory jurisdiction only over the licensees who use
government-owned airwaves. Since all other “non-broadcast” media companies
(movie studios, Internet companies, and “Big Tech” operate outside of the
purview of the FCC, the only regulatory recourse left is through
anti-competitive regulation.
The notion of broadcasters serving as public trustees began
to change in the late 1970s with the Carter administration’s deregulatory
efforts. The Reagan administration accelerated deregulation by shifting
regulatory policy away from a trusteeship model and toward a marketplace
approach. Government would no longer mandate minimal hours of news programming,
community-outreach efforts, maximum commercial units per hour, etc.
FCC Commissioner Mark Fowler said a television was no
different than any other home appliance: “a toaster with pictures.” The National
Association of Broadcasters rationale [was] “We have to provide these services
because listeners expect them. If we do not serve the public, the marketplace
will not be well served and we will suffer.” This philosophy failed to predict
that the entire industry would scale back their “issue responsive” programming,
among other news offerings. Hence, the industry as a whole would begin an
incremental erosion of local content.
Remember when the “Big Three” networks (CBS, NBC, ABC)
expected to lose money on its news content? CBS patriarch Bill Paley said, “I
have Lucille Ball and Jack Benny to make my millions. News is considered a form
of tithing for the privilege of using the airwaves.” In 1985-86, all three
networks changed ownership and became part of larger publicly-traded
corporations. The new deregulated FCC paved the way for massive cuts in network
news. Bureaus closed, layoffs ballooned, and programming options that typically
brought lower ratings than entertainment programs vanished.
The Telecommunications Act of 1996, signed by President
Clinton, eliminated the national radio ownership cap. Most policymakers
belatedly admitted it was a grave error. It created a “spectrum rush” where
larger players gobbled up stations from their original “mom-and-pop” owners at
unheard-of prices. For example, I was working at WTAZ in Morton at the time. Under
existing media-valuation formulas, that station would have appraised at about
$500,000. They were sold in 1998 to Kelly Communications for $1.8 million. This
assumed that Kelly would flip the station in a package with the others to a
large national operator.
Nationally, companies paid outrageous sums for radio
stations using borrowed money. Once the payments began, they had to cut costs
to meet their debt service. The largest expense is salaries, so stations were
forced to pare back to minimum staffing. That necessitated cuts in content.
Basic economics includes the study of market failures, when
the market no longer can make efficient adjustments. Two examples of market
failure are monopolies and failure to provide for a public good. The first
speaks for itself. As for public good, what profit motive exists for the
creation of non-entertainment content? News departments don’t make money. So
without a regulatory apparatus in place, most public good will suffer. Think of
a city park. People like visiting it, but the land would produce more value as
an office complex. Only regulation and government intervention preserves the
park.
The bottom line is that some station formats demand issue-responsive
news programming. News/Talk radio for one. And some companies do local radio
better than others. The mom-and-pop operators like Charlie Wright in Canton are
long gone, but some companies realize they need to remain relevant to their
communities. Those who short-circuit that approach fail. Non-commercial
National Public Radio-affiliated stations were more likely to maximize public-value
creation, according to FCC documents.
Debbie Hedemann - I've always been of the opinion
that large corporate ownership can be negative. I worked in the industry during
deregulation (the Telecommunications Act of 1996). While it can provide
resources and support on a larger scale to smaller stations, it also takes away
control from smaller stations. I've seen instances where a station owned by a
large corporation has been instructed what not to say or to talk about/cover on
their news programs in order to appease ownership. News/journalism is meant to
tell the public what is happening. There should not be any barriers to that.
To be honest, I don't know what the business model would be
except for the big corporate owners to allow the journalists to do their job as
they see best.
* It seems that audiences are eroding, too. For
example, the Journal Star's own circulation numbers they published in October’s
USPS Form 3526 showed a 2025 print/electronic circulation of less than 10,000 for
a daily that once topped 100,000. Some blame smartphones or social media plus
"news avoidance." Any thoughts or theories?
D.H. - "News avoidance" is definitely a
thing. Students tell me that they don't "do" news or they try to
avoid it. They do not consume news, which makes it difficult to teach them how
to be journalists. The other issue is that because most of their information
about the world comes from social media, their algorithms are only going to
show them what they want to see. If they don't want to see the news, they
won't. If they want to see cat videos, they will. If they consume biased news,
they will continue seeing it without looking at other sides. False news and
misinformation are real and continue to be perpetuated. If they do consume any
news, often they find themselves in echo chambers where false information can
be reinforced.
J.M. – Print journalism has its own problems. The
industry never figured out a way to monetize the digital side until it was too
late. The 2025 “Medill State of Local News” report shows that 213 out of the
3,143 counties in the country now have no local newspaper, and in another 1,524
counties there’s only one news source. Those that exist are watered-down
publications nowhere near the size and scope of their predecessors. There are
no easy explanations. I can remember when the Journal Star had more revenue
than all of the television stations in Peoria, combined. The print industry has
been forced to react to losses in revenue by cutting to the bare bones. When
content is cut because of revenue shortfalls (editorial pages, local
human-interest stories and features, etc.), circulation suffers.
The news business has itself to blame for much of this. The
programming of news for revenue and ratings has led to the shaping of stories
to serve a target audience. Fox News and MSNBC engage in this practice as a
business model. But the problem is also more nuanced. Trust in journalism has
eroded exponentially in recent decades. There are too many agendas and not
enough solid reporting going on in major organizations. This absence of trust
trickles down.
* Lastly, are local reporters still
"hometown" or temporary residents with less history, familiarity or contact
with everyday Peorians or sources, or just a promotion in a new media climate?
D. H. - I think that local TV reporters are still
considered to be "hometown." There are many polls from groups like
Pew Research, Gallup and Knight Foundation that indicate that this is true – we
tend to trust our local news reporters because they're our neighbors.
J.M. - The era of long-time market legend
broadcasters (Tom McIntyre, Bob Larson, etc.) is over. The new economics of the
television industry have turned jobs in markets the size of Peoria/Bloomington
into stepping-stones. Reporters sign a contract, stay for two years, and move
on. I’m not being critical. I’m just telling the truth. How can someone become
connected to a community in such a short time? This is just another outcome of
the cost efficiencies expected from companies that are highly leveraged with
private equity and bank debt.
Dr. John Malone is
Associate Professor of Communication at Eureka College who previously was a
communication professor at Lincoln College for 18 years. He started in radio in
1987 and was Operations Manager at WTAZ in the 1990s, after which he became Program
Director and a host at WMBD radio. His dissertation toward earning a Doctorate
of Public Administration from the University of Illinois at Springfield in 2020
addressed much of this topic.
Debbie Hedemann is
chair of Illinois Central College’s communication program and manager of
ICC’s Harbinger Student Media. After earning a Master of Arts in Radio, TV,
Film Programming and Management from Indiana State University, her career
started as a production assistant and worked many behind-the-scenes positions
in programming, production, engineering, promotions and operations manager.
She’s worked for an NBC affiliate in Terre Haute, Ind., a Fox affiliate in
Bloomington, and Peoria affiliates of ABC, the WB, and UPN, and has taught at
ICC for 22 years.
Big players: Four major
corporations own key media in Peoria market
Cumulus Media radio group
Market capitalization: $1.71 million
President & CEO : Mary Berner
Cumulus holdings in metro Peoria are WFYR-FM 97.3, WGLO-FM
95.5, WIXO-FM 105.7, WVEL-AM 1140 and WZPW-FM 92.3, the market’s second-largest
cluster (behind Midwest Communications). However, its 428 radio stations make the
corporation the country’s second largest radio chain (behind iHeartMedia’s 860
stations).
Local Cumulus stations use some news stories from WMBD-TV 31
and the Cumulus subsidiary Westwood One, but after the January 6, 2021, attack
on the US. Capitol, company executives warned on-air staff to refrain from
broadcasting misinformation about election fraud.
Journal Star
USA Today Co. (corporate name changed from Gannett in
September)
Market cap: $524.2 million
Chairman & CEO Mike Reed
The largest U.S. newspaper publisher, with about 100 daily
newspapers and almost 1,000 weeklies, USA Today/Gannett’s CEO comes from a
private-equity background with a reputation for buying newspapers and cutting
them to the bone, mostly through newsroom layoffs, then leaving them a shadow
of their former selves.
The Boston Globe in 2023 described how Reed’s management has
resulted in “brutal and probably irreversible damage on already struggling news
organizations all across this country.”
Although USA Today endorsed Biden in 2020 and opposed Trump
in 2016, Reed oversaw USA Today’s decision in October 2024 not to endorse a
presidential candidate. Nevertheless, President Trump that December sued the company’s
daily Des Moines Register for publishing a pre-election poll that found Kamala
Harris leading among Iowa voters.
WEEK-TV 25
Gray Media
Market cap: $516.9 million
Chairman & CEO Hilton Howell Jr.
Owner of the market’s NBC affiliate and operator of the ABC
station (WHOI), Gray is among several companies (including Nexstar) interested
in buying TV television stations owned by Cox Media Group – a deal that would
require an OK by the Trump administration’s Federal Communications Commission.
Given FCC Chairman Brendan Carr’s recent pledge to change broadcasting to favor
mergers and acquisitions, and his complaints about content critical of the
President, any approval might have conditions.
Also, federal rules for years have prohibited
television-station owners from owning licensed outlets that reach more than 39%
of the U.S. population. Since Gray owns or operates about 180 TV stations in more
than 110 U.S. markets, “its size could prove problematic under existing
regulations,” according to Matthew Keys of TheDesk.net, a media news and
analysis web site.
However, Howell has made substantial contributions to Republican
candidates and Super PACs, according to FEC data compiled by the nonpartisan Center
for Responsive Politics, so Gray may have an edge.
WMDB-TV 31
Nexstar Media Group
Market Cap: $5.21 billion
Chairman & CEO Perry Sook
After FCC Chairman Brendan Carr in September threatened
media companies that produced or aired late-night host Jimmy Kimmel’s ABC
program – warning companies such as Disney and Nexstar, “We can do this the
easy way or the hard way,” Nexstar announced it would preempt Kimmel’s program that
aired any of its stations (it’s broadcast on WHOI in Peoria) and Disney (which
owns ABC) suspended Kimmel’s show. After a public outcry, Kimmel returned to
the air (and recently signed a contract extension).
The owner of Peoria’s CBS affiliate and operator of the Fox
station (WYZZ), Nexstar also is looking to expand, and Sook has expressed
optimism that the FCC will relax the 39% cap on TV-station ownership and other limits
blocking the conglomerate from increasing its already extensive control over
local-broadcast news.
Days after the 2024 election, The Hollywood Reporter said Sook
implied he thought some broadcast journalism was slanted, and he hoped
"fact-based journalism will come back into vogue, as well as eliminating
the level of activist journalism out there."
Edited from a report by the nonpartisan, nonprofit FreePress.net,
a media research and advocacy group.
