Media Consolidation: A Threat to Minority Voices
By
Hugo Balta
June 28, 2010
Introduction
The regulatory changes implemented by the Federal Communications Commission (F.C.C.) encourage the concentration of local television ownership drowning out independent voices and eroding the quality and diversity in disseminating information.
Media corporations are using real economic pressures to gain support from the F.C.C. for their unrealistic and strategic plans of reaching profitability and growth through media consolidation that diminishes local television news coverage.
NBC took advantage of the relaxed rules by purchasing Telemundo Communications Group promising to invest in the Spanish language television network in order to improve working environment conditions, the quality of news programming and service to the community.
Three years later, NBC Universal C.E.O. Jeff Zucker would initiate TV 2.0, a project that would decimate Telemundo news operations to conditions worse than before the media marriage and effectively cripple a growth market.
Now Comcast looks to merge with NBC Universal, telling some of the same tall tales the Hispanic community heard eight years ago. The F.C.C. must look closely at the history of both media companies in regards to their commitment to diversity and hear the concerns of the public before approving the deal.
Fool me once, shame on you. Fool me twice, shame on me .
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PART I
F.C.C., A BRIEF HISTORY
Federal Communications Commission; Media Consolidation
NBC, ABC and CBS (the Big Three Networks) founded as radio stations in the 1920’s, controlled television from the 1950’s to the early 1990’s . Attempts by other companies to enter the television medium were unsuccessful. The cost of starting a broadcast network and difficulty of competing with the Big Three Networks contributed to the undoing of most new companies.
The Federal Communications Commission (F.C.C.) repeatedly promised to remedy the problem of minorities being under represented in broadcast ownership, beginning with its 1978 Statement of Policy on Minority Ownership of Broadcasting Facilities which found that only one television station was owned by a minority .
The F.C.C. tried to stimulate minority ownership by giving tax deferrals to television owners when they sold stations to minorities and tax certificates to investors for providing capital to minorities in order to buy TV stations. According to the National Association of Black Owned Broadcasters (NABOB), ownership rates peaked in the mid-1990s. The NABOB estimates that African-Americans owned 23 television stations in 1995; that all changed a year later.
The Telecommunications Act of 1996, signed into law by President Bill Clinton provided major changes in laws with the purpose of stimulating competition and increasing minority ownership of broadcast licenses, but instead launched the mergers of several large companies, a course that continues today.
The Act (Telecommunications Act of 1996) requires the F.C.C. to eliminate “market entry barriers for entrepreneurs and other small businesses” and to do so by “favoring diversity of media voices .” Nevertheless, the deregulations led to fewer broadcasters competing in regional markets and the elimination of many local, independent and alternative media outlets.
It wasn’t until February 2003 that the F.C.C. finally succumbed to the public outcry of more input on the elimination of media ownership rules and hosted an official forum. A few months later, without any public comment period, the F.C.C. approved new media laws that did away with many restrictions limiting ownership of media within a local area and expanding the reach of large media companies.
Federal Communications Commission; Media Consolidation 3
Here are some hi-lights of the release: FCC SETS LIMITS ON MEDIA CONCENTRATION :
• Single-company ownership of media in a given market is now permitted up to 45% (formerly 35%, up from 25% in 1985) of that market.
• Restrictions on newspaper and TV station ownership in the same market were removed.
• All TV channels, magazines, newspapers, cable, and Internet services are now counted, weighted based on people's average tendency to find news on that medium. At the same time, whether a channel actually contains news is no longer considered in counting the percentage of a medium owned by one owner.
• Previous requirements for periodic review of license have been changed. Licenses are no longer reviewed for "public-interest" considerations.
Millions of Americans spoke out against the F.C.C.’s decision and in 2004, the United States Court of Appeals for the Third Circuit in Prometheus Radio Project VS. F.C.C., ruled 2-1 to overturn the rules. The court mandated that the F.C.C. retain the old media rules until they could provide a rational explanation for the changes .
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Out of the Picture: Minority Ownership
In a 2006 study, the Free Press compared the effects of F.C.C. policy and media consolidation on minority ownership. The study proved that while the television landscape and minority population dramatically changed, ownership of that media (by minorities) did little by comparison. Television stations owned by minorities dropped to its lowest point since the federal government began tracking such data in 1990.
Here are some of the findings from Out of the Picture: Minority & Female TV Station Ownership in the United States :
• Women comprise 51 percent of the entire U.S. population, but own a total of only 80 stations, or 5.87 percent of all full power commercial television stations.
• From October 2006 to October 2007 the number of female-owned full power commercial TV stations increased from 76 to 80, or from 5.58 percent to 5.87 percent of all stations. However, much of this increase is due to changes in ownership structure of several family-owned companies, and not due to the actual acquisition of stations by female-owned companies.
• Minorities comprise 34 percent of the entire U.S. population, but own a total of 43 stations, or 3.15 percent of all full-power commercial television stations.
• From October 2006 to October 2007 the number of minority-owned full power commercial TV stations decreased by 8.5 percent, from 47 to 43 stations, or from 3.45 percent to 3.15 percent of all stations.
• Blacks or African Americans comprise 13 percent of the entire U.S. population but only own a total of 8 stations, or 0.6 percent of all stations.
• From October 2006 to October 2007 the number of African American-owned full power commercial TV stations decreased by nearly 60 percent, from 19 to 8, or from 1.4 percent to 0.6 percent of all stations.
• Hispanics or Latinos comprise 15 percent of the entire U.S. population, but only own a total of 17 stations, or 1.25 percent of all stations.
• From October 2006 to October 2007 the number of Latino-owned full power commercial TV stations increased from 16 to 17, or from 1.18 percent to 1.25 percent of all stations. This increase stems from the purchase of a Salt Lake City station, KPNZ, by Liberman Broadcasting.
• Asians comprise 4.5 percent of the entire U.S. population but only own a total of 13 stations, or 0.95 percent of all stations. From October 2006 to October 2007 the number of Asian-owned full power commercial TV stations increased from 7 to 13, or from 0.51 percent to 0.95 percent of all stations. This increase stems from the April 2007 purchase of 5 home-shopping affiliates from EW Scripps Company by Multicultural Radio Broadcasting Incorporated. Multicultural Radio Broadcasting also owns 42 radio stations and is the second largest minority-owned broadcasting company.
• Non-Hispanic White owners controlled 1,116 stations, or 81.9 percent of the all stations. Companies with dispersed voting interest (usually large publicly traded corporations such as ABC/Disney) controlled the remaining 203 stations, or 14.9 percent of all
While there has been an increase of commercial television stations by 15 percent, there has been a 33 percent decrease in the number of owners between 1996 and 2010. While the research does not exist to quantify the negative effects that media consolidation has had on local news; fewer voices cannot be positive.
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FCC’s TV Duopoly Rule Relaxation
In 2007, The Federal Communications Commission once again proposed to relax the ban on the cross-ownership of newspapers and broadcast stations. It was not as ambitious as the 2003 consolidation proposal, but the Third Circuit Court placed a stay on the F.C.C.
However, during the F.C.C.’s 2010 quadrennial review, the court removed the stay giving way for the 2007 rules to be in effect. The Federal Communications Commission reexamines its broadcast ownership rules every few years and repeal or modify any regulation it determines to be no longer in the public interest .
Media consolidation has an arduous blow on minority owners because advertisement agencies want to put their clients into large station groups. Small station owners don’t stand a chance in competing with large media companies.
Industry executives are quick to point out the diversity in cable (ex. BET, TV One, Oxygen), but the truth is that none of those channels are minority-owned, using the government's own definition of slightly more than 50% minority ownership . BET (Black Entertainment Television is owned by Viacom, TV One is owned by Comcast, Oxygen is owned by General Electric).
Researchers found that from 1999 to 2006 the relaxation of the television duopoly rule (TVDR) did not appear to have a positive impact on minority ownership of television stations. The major beneficiaries were the largest television broadcast station owners.
This is what the The Impact of the FCC’s TV Duopoly Rule Relaxation on Minority and Women Owned Broadcast Stations 1999-2006 found :
• The relaxation of the TVDR codified the existing contractual relationships (local management agreements or LMAs) between group station owners and the stations they managed.
• Some group station owners leveraged their control of LMAs into control of access to attractive syndicated programming as well as access to programming affiliations with emerging networks.
• The majority of the broadcast group owners who benefited from the relaxation of the TVDR were the largest (top twenty-five) group broadcast owners (based on revenue, national market reach and/or number of stations owned). As of 2005, they accounted for 83 of the 109 (76%) duopolies identified.
• Many of the group owners that managed “sister” stations acquired them outright once the TVDR was relaxed.
• Only one minority-owned duopoly was created. It has since been dissolved.
• There were no surviving minority-owned duopolies
• Within markets entered and or occupied by TV duopolies, the number of minority owned stations dropped by more than thirty-nine percent.
• By contrast, in non-duopoly markets the number of minority-owned stations dropped by ten percent.
• The duopolies created in markets in which female owned television stations operated were non-female owned.
• There were no female-owned television duopolies.
• 36% of the female owned stations operating in duopoly markets were sold. All of the stations were sold to non-female, non-minority-owners.
• Female owned stations were more likely to be found in non-duopoly Markets.
• The change to the TVDR has not had a positive impact on minority or female ownership of television stations.
The F.C.C. released its request for proposals (RFP) for media ownership studies on June of 2010. The nine studies are an effort to review data on how different ownership structures affect competition, localism and diversity.
Recent studies have been met with some criticism. F.C.C. commissioner Michael J. Copps, (a Democratic commissioner who was part of the F.C.C. review in 2006) opposes loosening the ownership rules, stating “Our country urgently needs a media that is reflective of our diverse communities and interests.
If a central tenet of our F.C.C. mandate is to promote diversity in the media, which it is, then we need diverse ownership policies to help that happen. Anyone who actually thinks that who owns the media doesn’t significantly affect how our country is being informed is not paying attention .”
For nearly 15 years, through mergers and acquisitions, six media companies (General Electric, Viacom, Disney, News Corp., Time Warner and CBS have concentrated their control over what we see on television by painting a picture of gloom and doom.
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PART 2
MEDIA CONSOLIDATION
Media Buying Media
Big media executives are infamous for crying “wolf” about the economics of their business. They’re likely to insist that consolidation is the only way to save their industry from ruin, when in fact the return on the investment will take them several years to accomplish. They will also go on to preach about how the merger will improve the quality of the workplace and news product, when actually many journalists lose their jobs and content is homogenized.
It used to be that entertainment programming’s ability to generate revenue bailed news out, but the tide has been turning at local television stations. In fact, regardless of the reduction of ad sales in recent years, the production and distribution of local news is a profitable business. Tribune Company television stations have expanded news hours as an initiative to grow revenue. WTIC/Fox 61 (owned by Tribune) extended its morning news hours and added a late evening newscast .
The biggest motivation for media companies to buy other media companies is that stations generate lots of cash flow, with margins often hitting 40%-50% (by comparison, strong newspapers generate 20% margins) .
In 2001, there were more than 35 million Spanish-speaking individuals in the U.S., Hispanics were the nation's fastest-growing demographic and on the verge of becoming the largest minority group. Hispanics represented one of the most attractive opportunities for dynamic growth in the television marketplace. Considering their purchasing power (estimated in the hundreds of billions), it's no wonder large media companies wanted a piece of the action .
When Univision went up for sale, two groups threw their hat in the ring and in the end the largest Spanish language broadcaster in the United States sold for $13.7 billion dollars .
Understanding that their company was near the ceiling of potential revenue growth, executives at NBC and General Electric (NBC’s parent company) looked at Telemundo as a way to increase revenue.
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NBC Buys Telemundo
In 2002, NBC bought Telemundo, the second largest Hispanic network in the U.S. for $2.7 billion dollars in cash and stock to acquire the network from Sony and Liberty Media, its principal owners .
At the time of the purchase, the 24-hour Telemundo network served 86 markets, reaching 88 percent of Hispanic TV households in the United States. Among Telemundo’s assets were the national Telemundo network and full-power, owned-and-operated local stations in top Hispanic U.S. DMAs (Designated Marketing Areas ), including :
• New York (#2 market in Spanish language media)
• Miami/Fort Lauderdale
• Chicago
• San Antonio
• Houston
• Denver
• San Jose/San Francisco
• Dallas/Fort Worth
• Two Los Angeles stations (KWHY-TV & KVEA-TV) (#1 market in Spanish language media)
• The number 1 station in Puerto Rico
• 40 broadcast affiliates
• Two cable networks, Mun2 and Telemundo Internacional.
NBC became the only major broadcast network with a business fully focused on developing and airing programming specifically created for the Spanish language market.
The deal was said to strategically put NBC (at the time, the nation's number one English-language network), in a position to offer advertisers packaged deals across the two distinct properties.
Sales and promotion, station operations, entertainment programming and sports were the best opportunities for revenue growth and cost synergies. Some of the possibilities included the addition of Spanish-language versions of NBC shows on Telemundo like late night shows, reality programs and the Olympics .
Local News was seen as the best way to realize NBC’s long term business goals and justifying the merger with Telemundo.
I was an employee of WNBC, the NBC (later NBC Universal with the 2005 merger of Universal Studios) flagship station in New York City when the purchase occurred and was recruited to be the Project Manager for the NBC Integration team.
My responsibility was to travel to all the markets where Telemundo had an owned and operated station in order to add resources, training and new processes that would improve local news operations. I led initiatives (recruiting, purchase equipment, negotiate service contracts) to launch local news in markets where there were none. In cities where there were both an NBC and a Telemundo owned and operated station (referred to as “duopolies”), I assisted in the moving of the Telemundo personnel under the same roof (location) in an effort to improve communication and resources. The game plan was to invest in Telemundo in order to finally challenge Univision, grow viewership and strengthen its position with advertisers.
Univision outperformed Telemundo four-to-one. A stronger, competitive Telemundo would provide buyers with negotiating leverage at Univision .
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Latino Organizations Speak Out
The deal was not without controversy; several Hispanic organizations warned of the potential negative effects of an NBC, Telemundo marriage.
On December of 2001, the National Latino Media Council petitioned the F.C.C. to deny approval of the proposed NBC-Telemundo merger, insisting that it was not in the best interest of Latinos or the public.
The council voiced concerns about the damaging effects media consolidation has had on diversity, program content and minority ownership. Juan Figueroa, Puerto Rican Legal Defense and Education Fund (PRLDEF) President stated, “We have seen the consequences of media consolidations. By its very nature, media consolidation means that companies are seeking the greatest market share at the lowest cost. This has had devastating effects on Latinos. Rampant cost-cutting has resulted in layoffs, hiring freezes, and cuts in critically important, but less lucrative, program areas such as news and public affairs. Thus, it means fewer existing opportunities in the industry and reduced services to Latino audiences and customers ."
NBC was quick to respond to its critics, promising to improve the quality of the Spanish-language news of Telemundo. These are NBC's summarized arguments for approval of the merger, as they appear on the 2001 filing to the F.C.C. :
• The merger will give Telemundo the resources to compete effectively with Univision, which is the dominant Spanish-language television broadcaster in the United States.
• By raising the bar for competition, the merger will require both Univision and Telemundo to improve the quality of their programming and therefore their level of service to the Spanish-speaking Latino community.
• The merger will result in an improvement in Telemundo's news and information programming, both at the network and local station level.
• As members of the GE/NBC family, Telemundo's employees will have greater opportunities for career advancement and training.
• The merger will also benefit NBC's English-only audience by creating new possibilities for the cross-fertilization of ideas and viewpoints between the Latino and English-speaking cultures.
After a few months (before and shortly after the F.C.C.’s approval of the merger) of concerted efforts that resulted in the acquisition of new local stations, launch of news programs and the hiring of employees at Telemundo; critics’ worst fears were realized.
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PART 3
TELEMUNDO DOWNTURN
NBC’s TV 2.0
In the summer of 2006, Jeff Zucker, Chief Executive Officer of NBC Universal announced “TV 2.0”, an initiative to achieve profitability through the investment of new technology and the reduction of employees. Telemundo was the first to get hit.
NBC Universal eliminated local newscasts at six Telemundo local stations and replaced them with what they called "hubbed" newscasts produced out of the newly formed Telemundo Production Center (TPC) in Fort Worth, Texas. The half-hour centralized newscasts included a report from the cities where once there were vibrant and competitive news departments.
The National Association of Hispanic Journalists (NAHJ) led the criticism of NBC Universal’s actions. “This is about the larger trend of (what is happening to) local news, whether large media companies, for the sake of consolidation and saving money, will resort to cutting local newscasts,” said Iván Román, executive director of NAHJ .
The cities where the local newscasts are being axed ranked among the top 10 Hispanic markets: Houston (4), Dallas (6), San Antonio (7), San Jose (8) and Phoenix (9), according to 2006-07 Nielsen Media Research. They are significant Spanish language media markets .
Nearly seventy employees at Telemundo’s Puerto Rico television station WKAQ were laid off. WKAQ is where Telemundo was founded and prior to NBC’s purchase was the dominant station in the island.
Telemundo Vice President of Communications Alfredo Richard tried to spin the cuts by stating the creation of new jobs at the TPC. This was nothing more than a shell game since few employees from existing local news departments were transferred to the Telemundo Production Center.
NAHJ also questioned the actions of NBCU’s (NBC Universal) TV 2.0 program, observing that no English language news divisions were being effected: “NBC is not doing away with local newscasts at any of its English-language stations -- only with its Telemundo properties. This leads us to question the company's commitment to the Latino community.
To the point: if regionalized newscasts are good for journalism and not just a way to save money while giving the appearance of meeting the network's public interest obligations, why are regional newscasts only being planned for the Spanish-speaking audience? Doesn't the English-language audience deserve this level of service ?”
When TV 2.0 was introduced, I was the Vice President of News and News Director (2003-2009) at Telemundo’s local television station WNJU serving the New York City metropolitan area. The communication given to me was to eliminate weekend newscasts. A quickly thought out, poorly organized direction by corporate leaders to achieve profitability.
I resisted the proposed cuts insisting that there existed alternatives to the elimination of news hours. The financial target corporate wanted to achieve was $1 million dollars. By reorganizing the news department, cutting the budget for certain special projects, not hiring for open staff positions, reducing the hours of freelance workers and minimal lay offs – I was able to prevent the elimination of weekend news.
It was imperative for me to maintain a weekend news presence for competitive reasons as well as service to the Hispanic community. There are more than two million Hispanics in New York City alone, 27.5% of the population . The major source of Spanish language local television news is Telemundo and Univision (by comparison there are nine English language local news television stations). Prior to the TV 2.0 initiative, Telemundo’s WNJU was outperforming the local Univision station (a feat that had been achieved for the first time in the local television station’s history) .
The greatest strength of any television broadcast network is its local news station. News programming is the best vehicle to connect with the community by providing them with information and entertainment content. I warned Telemundo corporate executives that cuts to personnel and special projects in the news department would put at risk the ability of WNJU to promote prime time novelas (night time soaps). The result would be a loss of viewers, followed by ratings and of course revenue (local ad sales are determined by rating points measured by Neilsen ). The Telemundo corporate leadership claimed to understand the volatile situation, but insisted that the downsizing was temporary and the sacrifices made would ensure a positive, productive fiscal 2007. That never happened.
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The “Right Sizing of Telemundo 47
In 2007, Sales missed their revenue targets putting further pressure on news production cost (a reduced cost since in the previous year $1 million dollars was cut in the news department). Once again, I was asked to eliminate news hours. This was a vicious cycle that continued for two years, culminating with the final downsizing or “right sizing” as it was dubbed by the executive leadership team in March 2009. It finally forced my hand and resulted in the elimination of weekend, morning and midday news programs as well as the reduction in staff.
When I was named as the head of the news department in February 2003, WNJU boasted a news team of more than 80 journalists (including studio operation support) and nearly 20 hours of news programming. By the time I left (as a result of layoffs) in October 2009, the news team had dwindled to just shy of 30 journalists (including studio operation support) and only five days and five hours of news programming a week.
The TV 2.0 and “right sizing” initiatives were short term, band aid solutions to a larger problem of leadership in a transitional time for the news gathering industry. Every year (from 2006-2009) I was asked to make reductions in the news budget to ensure the success of the sales team.
To put it simply (as an example, these are not real numbers), in 2006’s budget planning meeting, the cost to produce news in 2007 was estimated at $1,000. Sales could only commit to $900 of revenue (based on their projections of the advertisement market and ratings). I was forced to make cuts to the tune of $800 to ensure that as a television station we would be in the black by $100. Well, when 2007 rolled along, sales could only come up with $700 to cover the cost of the $800 to produce news even though market conditions did not change dramatically. That same scenario played out in 2008 and in 2009.
The Sales department, claiming to be the victims of a depressed advertising market was a difficult pill to swallow considering the growing number of Hispanics and their purchasing power. There are now over 43 million Hispanics in the United States, with an estimated purchasing power of almost $800 billion dollars. Research shows 89% prefer to speak Spanish at home. It is also evident, thanks to Nielsen ratings, that in many markets, they also prefer to watch news in Spanish .
General Electric’s (the parent company of NBC Universal) quest to get a return for paying too much for Telemundo is to blame for the systematic destruction of Spanish language local news. The end result is consistent to similar outcomes of media consolidation, the homogenization of content and culture.
“English-language media does not cover the Latino community the way Spanish-language media does,” says Ivan Román, Executive Director of NAHJ. “With fewer journalists covering the Hispanic community, they are diminishing their service to Latinos .”
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PART 4
LOCAL NEWS
The Centralization of Local News
Giant media companies have abandoned their commitment to quality journalism and service to community. NBC Universal is an example of a mega conglomerate that is irresponsible in fulfilling its obligation to educate and inform the public.
In 2004, the F.C.C. commissioned a study titled "Do Local Owners Deliver More Localism?" which found that locally owned broadcasters devote, on average, an additional 20 to 25 percent of their newscasts to local news stories. That translates into approximately 5.5 more minutes per half-hour broadcast . The study also found that network owned-and-operated stations -- those belonging to ABC, CBS, NBC and Fox -- aired significantly less local news.
In an editorial, Federal Communications Commissioner Michael J. Copps wrote: "We have a system that has been buffeted by an endless cycle of consolidation, budget-cutting, and bureau-closing. We have witnessed the number of statehouse and city hall reporters declining decade after decade, despite an explosion in state and local lobbying. As the number of channels has multiplied, there is far less total local programming and reporting being produced. These days, if it bleeds, it leads ."
In 2006, The Sinclair Broadcast Group shutdown its local news operation in several markets (including Milwaukee, Tampa and Buffalo) and moved to a centralized news operation. The decision made a dent to the bottom line, but did not consider some of the local sensibilities in newsgathering. Maryland-based weather forecasters, for example, may not understand the complexities of lake-effect snow in Buffalo or hurricane season in Florida .
In 2009, four New York City television stations formed the Local News Service (LNS) to share video news content. Fox’s WNYW-TV, Tribune's The CW affiliate WPIX-TV, CBS’s WCBS-TV and NBCU’s WNBC-TV argued that it was unproductive to have four different news crews covering stories like ribbon cutting ceremonies, most press conferences and planned events. The idea would be to send one crew (supplied with resources from each of the four LNS TV stations) in order to free up other news teams to cover more substantial news stories. The LNS group contends that while the video for four separate news organizations come from one origin, the actual focus of the story is different. That might be true in theory, but if the practice is downsizing the amount of news teams covering stories, then the LNS is just substituting for those dismissed journalists as stated by one local union member, “This concept is just another way to cut staff at the stations by allowing the elimination of up to 75% of union ENG (engineer) crews at each shop .”
If the centralization of local news gathering puts at risk not only the jobs, but also the production of different points of view in a story; imagine what the effect is on Spanish language local news. As I was continuously pressured to meet corporate leaders’ directive to achieve news profitability, I found myself sacrificing local news coverage in order to sustain a seven day news operation.
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Telemundo 47 loses its identity
Year after year the pressure to make cuts was strenuous. Telemundo’s Hialeah leadership‘s (Telemundo headquarters is based in Hialeah, Florida) answer to budget woes was the elimination of news hours (and subsequent layoff of employees). For three years I was able to sustain existing news hours (20 hours, 7 days a week) by adding more stories from other sources.
We would import content from Telemundo Network news and the Telemundo Stations Group. I rationalized that certain stories on Network news which only aired once in the early evening could re-air again to a new audience in the late evening local newscasts. It was a sound argument based on research from Nielsen that shows viewers, on average did not watch the early evening block of news programs as well as the late evening news. The problem was that by increasing news content intended for a national audience (lacking the focus of the local New York City metropolitan area), I was decreasing the time of news specifically focused on the community that we served. The same can be said about the use of stories from the Telemundo Stations Division.
We increased the use of stories produced in other markets (South Florida, Los Angeles, Chicago, Dallas, etc.) arguing that while the focus of the stories were not New York City centric, they were about Hispanics and that at least they shared a common perspective. In reality while it’s true that a health story in Los Angeles might be the same in New York City, there are differences because of local services, government and ethnicity. Los Angeles is largely made up of Hispanics from Mexico and New York is largely populated by Hispanics from Puerto Rico. Not only do these groups differ culturally, but also politically since Puerto Rico is a Commonwealth and residents from the island enjoy the same rights as all American citizens.
The last effort to sustain a seven day operation, while at the same time forced to make more cuts to “right size” the news department budget was the use of content produced by NBC Universal. Stories from NBC Network News and the NBCU Local Stations, including WNBC (the local NBC station in New York City) were imported and translated into Spanish for broadcast.
There are national stories, regardless of language that are of major importance to the Hispanic community. Still, the focus of these stories did not have a Spanish speaking audience in mind, let alone an audience that is foreign born or whose immigrant status might be questionable. Images might sometime be universal, but it’s the interviews that help guide the focus of the stories. The translation of interviews is not enough when the questions most relevant to Hispanics are not asked.
The same argument can be used in the importing of news content from local NBCU stations including WNBC. While the images are of the local market that WNJU (Telemundo’s local news station) serves, again the interviews were not focused on the Hispanics residing in the New York City market.
The end result is obvious. All newscasts were largely diluted with content that did not reflect the specific experiences of our viewers. Once we failed to be reflective of the community we served, we also failed as journalists and paid the price for it; viewers turned to Univision.
In a 2007 statement on localism, F.C.C. Chairman Kevin Martin addressed the importance of the impact on the community: “I know that localism is important to broadcasters who recognize that their own success depends on responding to the needs and interests of their local communities. Most broadcasters do a good job, both by airing programming of unique interest to their local communities and more generally by contributing to the sense of community in their local towns. It has become apparent, however, that some broadcasters may not be doing all they can or should to serve their local communities .”
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NBC, Comcast Merger Proposal
Three years later NBC Universal is knocking on the door of another media consolidation, this time with Comcast, the nation's largest cable company with franchises in 39 states (as well as the District of Columbia) and what was old is new. Some of the same promises that were made by NBC in 2002 are being made in 2010.
Here’s a communication released by NBC Universal in June 2010 :
• Minority Ownership: Comcast commits to add at least three new independently-owned and operated cable nets with “substantial minority ownership” (it did not specify what percentage).
• Advisory Councils: Comcast and NBCU will establish four diversity advisory councils representing African Americans, Latinos, Asian-Pacific Islanders and other constituencies.
• Entertainment/News: NBCU pledged to expand or continue to support five diversity programs targeted at different aspects of entertainment production, including four pipeline development programs for programming development and management). The company will also expand six diversity programs targeting news.
• Philanthropy: Comcast will increase its community investment in minority-led and minority-serving institutions by 10% per year for each of the next three years; NBCU will increase its funding by 10% per year for each of the next three years for key organizations serving under-served and diverse communities.
• Supplier Diversity: Comcast and NBCU will increase the percentage of business conducted with minority- owned vendors, with the goal of mirroring the percentage of minority-owned businesses in the communities they serve.
Once again voices are being raised against a media merger, the media merger to dwarf all other mergers before it.
“We have seen the devastating impact media consolidation has had on newsrooms and our members,” said Iván Román, NAHJ’s executive director. “Companies like Comcast and NBC may try to sell us on why consolidation will benefit our community. But we know better. It never happens once the deal is done. Instead, Latino journalists are laid off and our community continues to be marginalized in news coverage .”
A Comcast – NBC deal would mean that one company would own and control access to news and entertainment programming, cable channels and local broadcast stations and movie studios. After its takeover of NBCU, Comcast would control one in every five television viewing hours .
At a congressional field hearing held in June by the House Judiciary Committee in California to look into programming and workplace diversity issues from the proposed merger, Representative Maxine Waters of Los Angeles grilled an NBC executive over how many minority producers the network had on its shows and asked Committee Chairman Representative John Conyers if it was possible to subpoena Comcast if it was not forthcoming on information the committee's members wanted .
In April, I joined Joseph Torres, government relations manger for the public interest group Free Press in Washington, D.C. to speak with Representative Waters and other congressional teams in order to provide them with my first hand account of the NBC – Telemundo merger and the negative effects to employees, newsgathering and the community.
Comcast and NBC leaders promised to increase efforts to employ a diverse senior staff as well as create diversity advisory councils focused on African Americans, Latinos, Asians and other communities. I was an active member of such a council.
In 2009, I was asked by Telemundo’s Chief Executive Officer, Don Browne to join a large task force of Telemundo and NBCU employees in exploring opportunities for NBC News divisions and programs to effectively reach out to the Hispanic community by leveraging the experience of the Spanish language media company. This project was driven by NBC News’ own research which showed they were lagging behind other English language news networks in capturing the growing Hispanic audience and the upcoming census which will show that the country’s growth is driven by Hispanics. The project lasted several months as each team researched Telemundo’s resources and potential positive impact on NBC News. The results were presented to NBCU executives, but very little was done with any of the recommendations.
The exercise was one of many other such projects and conversations that proved to be futile, a warning I had given Mr. Browne.
During the many meetings that project leaders had with Mr. Browne prior to releasing the results of the different task force teams, I insisted that the problem was too few decision makers at NBC News were non Hispanic and lacked the sensibility and the vision to see the opportunities. I said we needed to provide stern constructive criticism of NBC News’ poor record of not drawing from the well of talent and experience at Telemundo in hiring for management opportunities. Mr. Browne refused to have that debate with NBCU executives, including NBCU C.E.O. Jeff Zucker. In the eight years since NBC merged with Telemundo, little has been done to increase diversity at the English language network. Despite several available positions throughout the years for back office and front line management opportunities, fewer than 5 have been filled with Telemundo employees or Hispanics.
In fact, more NBC News employees have migrated to leadership positions at Telemundo (among them Don Browne, a non Hispanic employee who does not speak, read or write Spanish proficiently).
NBC Universal had a unique opportunity to infuse diversity into all of its news, entertainment and digital platforms by seeking out Telemundo in recruiting and mentoring leaders. As VP of News I would continuously pitch Telemundo employees for opportunities at NBC to no avail.
Many of the producers, reporters and assignments personnel including managers who were not able to cross the bridge over to NBC left Telemundo and enjoy fruitful, productive careers at other English language news operations. It was frustrating to be in a company that preached diversity, but did not practice it. In one conversation, the VP of News for WNBC said to me that a Telemundo weather anchor was not hired for a staff position because of her accent. I felt that it was an absurd decision. New York City is one of the most diverse markets in the country where people of all walks of life work and live together. New Yorkers are tolerant of different accents and the only one that is not accepted is the one they can’t understand. I protested by saying it was unfair not to hire the Telemundo employee based on her accent when a current staff reporter had a British accent. So, it wasn’t a question about having an accent, it was about having a Spanish accent.
I have been fortunate to have had a long and diverse career at NBC Universal. In my 14 years with the media company I have worked as a Producer at NBC Miami, Senior Producer at MSNBC cable news, Producer at WNBC and VP of News for Telemundo New York. When the opportunity became available for VP of News at NBC San Jose, I quickly raised my hand. I did not get the position, which I was perfectly fine with until a colleague (from NBC) who was contacted as a reference shared with me some startling information. In a conversation with the General Manager of NBC San Jose and other members of the hiring committee, the only concern with my candidacy was that I was a Telemundo employee.
I don’t believe the observation to be a racial prejudice, more likely it is a corporate bias that exists at NBCU. There is an ignorant belief that the quality of work produced at NBC is superior to Telemundo. That, of course is far from the truth. Telemundo is much more productive, efficient and relevant to the community than NBC News (at the local level).
Telemundo does a much better job in developing content that is informational, educational and empowering to viewers. Spanish language media is a guide to many immigrants who make the United States their adoptive home. Telemundo does a far superior effort in explaining to viewers about what’s happening in their community such as health concerns, neighborhood events and local politics.
The study Media Markets and Localism: Does Local News en Español Boost Hispanic Voter Turnout? found Hispanic voter turnout averages 37 percent in markets without local Spanish news and 45 percent in markets with local television news in Spanish . Media consolidation has the potential of harming democracy by eliminating the public’s "town square."
If the continued centralization of news content is allowed then the megaphone viewers use to question their lawmakers is lost and television news loses it’s interactivity with viewers.
What is now a conversation and exchange of ideas with the community would become a one way street of controlled messages that does not take into consideration the need for specific and unique focus in storytelling. A well informed, educated and empowered viewer is a responsible citizen, member of our society.
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Conclusion
The Federal Communication Commission’s continued support of media consolidation is a threat to minority voices because it forces the centralization of news operations which results in the homogenization of content that eliminates diverse viewpoints in local communities.
Rules that were intended to promote and protect minority ownership of television broadcasting stations are being taken advantage of by big media companies that are crying “the sky is falling” in regards to the economics of their businesses. The truth is poor decisions by TV executives result in the shrinking of ratings and the blowing up of budgets that sponsors can no longer afford nor support.
NBC Universal saw an opportunity to buy Telemundo and told tall tales about growing the Spanish language television network to secure the approval of the F.C.C. and win the support of the community. Soon after the merger, NBCU launched initiatives that all but annihilated Telemundo in order to please General Electric stock holders.
TV 2.0 and the “right sizing” project sought to reach profits by cutting budgets that ripped away Telemundo local news departments’ ability to provide high quality and relevant content to its viewers. The victims of the failed media merger are the Hispanic journalists who give voice to their minority group and the community who depend on those journalists to inform, educate and empower them.
Now NBCU wants to marry Comcast, making some of the same promises of investing in Telemundo and by doing so, invest in the Hispanic community. With such a terrible eight year report card on diversity and accountability, why is the F.C.C. even entertaining a mega media merger that would surpass all others before it?
NBCU is in financial trouble and a deal with Comcast would bail them out. History will repeat itself; once the deal is done cuts are sure to follow. NBCU executives will jump off the plane with golden parachutes while many journalists will be laid off with a basic severance package, if that.
The F.C.C. needs to take a moment of pause, listen to the public and not allow the NBCU, Comcast merger to proceed without looking at history and realizing the potential negative impact to the future.
“Just because you can do something, does not mean you always should”.
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By
Hugo Balta
June 28, 2010
Introduction
The regulatory changes implemented by the Federal Communications Commission (F.C.C.) encourage the concentration of local television ownership drowning out independent voices and eroding the quality and diversity in disseminating information.
Media corporations are using real economic pressures to gain support from the F.C.C. for their unrealistic and strategic plans of reaching profitability and growth through media consolidation that diminishes local television news coverage.
NBC took advantage of the relaxed rules by purchasing Telemundo Communications Group promising to invest in the Spanish language television network in order to improve working environment conditions, the quality of news programming and service to the community.
Three years later, NBC Universal C.E.O. Jeff Zucker would initiate TV 2.0, a project that would decimate Telemundo news operations to conditions worse than before the media marriage and effectively cripple a growth market.
Now Comcast looks to merge with NBC Universal, telling some of the same tall tales the Hispanic community heard eight years ago. The F.C.C. must look closely at the history of both media companies in regards to their commitment to diversity and hear the concerns of the public before approving the deal.
Fool me once, shame on you. Fool me twice, shame on me .
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PART I
F.C.C., A BRIEF HISTORY
Federal Communications Commission; Media Consolidation
NBC, ABC and CBS (the Big Three Networks) founded as radio stations in the 1920’s, controlled television from the 1950’s to the early 1990’s . Attempts by other companies to enter the television medium were unsuccessful. The cost of starting a broadcast network and difficulty of competing with the Big Three Networks contributed to the undoing of most new companies.
The Federal Communications Commission (F.C.C.) repeatedly promised to remedy the problem of minorities being under represented in broadcast ownership, beginning with its 1978 Statement of Policy on Minority Ownership of Broadcasting Facilities which found that only one television station was owned by a minority .
The F.C.C. tried to stimulate minority ownership by giving tax deferrals to television owners when they sold stations to minorities and tax certificates to investors for providing capital to minorities in order to buy TV stations. According to the National Association of Black Owned Broadcasters (NABOB), ownership rates peaked in the mid-1990s. The NABOB estimates that African-Americans owned 23 television stations in 1995; that all changed a year later.
The Telecommunications Act of 1996, signed into law by President Bill Clinton provided major changes in laws with the purpose of stimulating competition and increasing minority ownership of broadcast licenses, but instead launched the mergers of several large companies, a course that continues today.
The Act (Telecommunications Act of 1996) requires the F.C.C. to eliminate “market entry barriers for entrepreneurs and other small businesses” and to do so by “favoring diversity of media voices .” Nevertheless, the deregulations led to fewer broadcasters competing in regional markets and the elimination of many local, independent and alternative media outlets.
It wasn’t until February 2003 that the F.C.C. finally succumbed to the public outcry of more input on the elimination of media ownership rules and hosted an official forum. A few months later, without any public comment period, the F.C.C. approved new media laws that did away with many restrictions limiting ownership of media within a local area and expanding the reach of large media companies.
Federal Communications Commission; Media Consolidation 3
Here are some hi-lights of the release: FCC SETS LIMITS ON MEDIA CONCENTRATION :
• Single-company ownership of media in a given market is now permitted up to 45% (formerly 35%, up from 25% in 1985) of that market.
• Restrictions on newspaper and TV station ownership in the same market were removed.
• All TV channels, magazines, newspapers, cable, and Internet services are now counted, weighted based on people's average tendency to find news on that medium. At the same time, whether a channel actually contains news is no longer considered in counting the percentage of a medium owned by one owner.
• Previous requirements for periodic review of license have been changed. Licenses are no longer reviewed for "public-interest" considerations.
Millions of Americans spoke out against the F.C.C.’s decision and in 2004, the United States Court of Appeals for the Third Circuit in Prometheus Radio Project VS. F.C.C., ruled 2-1 to overturn the rules. The court mandated that the F.C.C. retain the old media rules until they could provide a rational explanation for the changes .
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Out of the Picture: Minority Ownership
In a 2006 study, the Free Press compared the effects of F.C.C. policy and media consolidation on minority ownership. The study proved that while the television landscape and minority population dramatically changed, ownership of that media (by minorities) did little by comparison. Television stations owned by minorities dropped to its lowest point since the federal government began tracking such data in 1990.
Here are some of the findings from Out of the Picture: Minority & Female TV Station Ownership in the United States :
• Women comprise 51 percent of the entire U.S. population, but own a total of only 80 stations, or 5.87 percent of all full power commercial television stations.
• From October 2006 to October 2007 the number of female-owned full power commercial TV stations increased from 76 to 80, or from 5.58 percent to 5.87 percent of all stations. However, much of this increase is due to changes in ownership structure of several family-owned companies, and not due to the actual acquisition of stations by female-owned companies.
• Minorities comprise 34 percent of the entire U.S. population, but own a total of 43 stations, or 3.15 percent of all full-power commercial television stations.
• From October 2006 to October 2007 the number of minority-owned full power commercial TV stations decreased by 8.5 percent, from 47 to 43 stations, or from 3.45 percent to 3.15 percent of all stations.
• Blacks or African Americans comprise 13 percent of the entire U.S. population but only own a total of 8 stations, or 0.6 percent of all stations.
• From October 2006 to October 2007 the number of African American-owned full power commercial TV stations decreased by nearly 60 percent, from 19 to 8, or from 1.4 percent to 0.6 percent of all stations.
• Hispanics or Latinos comprise 15 percent of the entire U.S. population, but only own a total of 17 stations, or 1.25 percent of all stations.
• From October 2006 to October 2007 the number of Latino-owned full power commercial TV stations increased from 16 to 17, or from 1.18 percent to 1.25 percent of all stations. This increase stems from the purchase of a Salt Lake City station, KPNZ, by Liberman Broadcasting.
• Asians comprise 4.5 percent of the entire U.S. population but only own a total of 13 stations, or 0.95 percent of all stations. From October 2006 to October 2007 the number of Asian-owned full power commercial TV stations increased from 7 to 13, or from 0.51 percent to 0.95 percent of all stations. This increase stems from the April 2007 purchase of 5 home-shopping affiliates from EW Scripps Company by Multicultural Radio Broadcasting Incorporated. Multicultural Radio Broadcasting also owns 42 radio stations and is the second largest minority-owned broadcasting company.
• Non-Hispanic White owners controlled 1,116 stations, or 81.9 percent of the all stations. Companies with dispersed voting interest (usually large publicly traded corporations such as ABC/Disney) controlled the remaining 203 stations, or 14.9 percent of all
While there has been an increase of commercial television stations by 15 percent, there has been a 33 percent decrease in the number of owners between 1996 and 2010. While the research does not exist to quantify the negative effects that media consolidation has had on local news; fewer voices cannot be positive.
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FCC’s TV Duopoly Rule Relaxation
In 2007, The Federal Communications Commission once again proposed to relax the ban on the cross-ownership of newspapers and broadcast stations. It was not as ambitious as the 2003 consolidation proposal, but the Third Circuit Court placed a stay on the F.C.C.
However, during the F.C.C.’s 2010 quadrennial review, the court removed the stay giving way for the 2007 rules to be in effect. The Federal Communications Commission reexamines its broadcast ownership rules every few years and repeal or modify any regulation it determines to be no longer in the public interest .
Media consolidation has an arduous blow on minority owners because advertisement agencies want to put their clients into large station groups. Small station owners don’t stand a chance in competing with large media companies.
Industry executives are quick to point out the diversity in cable (ex. BET, TV One, Oxygen), but the truth is that none of those channels are minority-owned, using the government's own definition of slightly more than 50% minority ownership . BET (Black Entertainment Television is owned by Viacom, TV One is owned by Comcast, Oxygen is owned by General Electric).
Researchers found that from 1999 to 2006 the relaxation of the television duopoly rule (TVDR) did not appear to have a positive impact on minority ownership of television stations. The major beneficiaries were the largest television broadcast station owners.
This is what the The Impact of the FCC’s TV Duopoly Rule Relaxation on Minority and Women Owned Broadcast Stations 1999-2006 found :
• The relaxation of the TVDR codified the existing contractual relationships (local management agreements or LMAs) between group station owners and the stations they managed.
• Some group station owners leveraged their control of LMAs into control of access to attractive syndicated programming as well as access to programming affiliations with emerging networks.
• The majority of the broadcast group owners who benefited from the relaxation of the TVDR were the largest (top twenty-five) group broadcast owners (based on revenue, national market reach and/or number of stations owned). As of 2005, they accounted for 83 of the 109 (76%) duopolies identified.
• Many of the group owners that managed “sister” stations acquired them outright once the TVDR was relaxed.
• Only one minority-owned duopoly was created. It has since been dissolved.
• There were no surviving minority-owned duopolies
• Within markets entered and or occupied by TV duopolies, the number of minority owned stations dropped by more than thirty-nine percent.
• By contrast, in non-duopoly markets the number of minority-owned stations dropped by ten percent.
• The duopolies created in markets in which female owned television stations operated were non-female owned.
• There were no female-owned television duopolies.
• 36% of the female owned stations operating in duopoly markets were sold. All of the stations were sold to non-female, non-minority-owners.
• Female owned stations were more likely to be found in non-duopoly Markets.
• The change to the TVDR has not had a positive impact on minority or female ownership of television stations.
The F.C.C. released its request for proposals (RFP) for media ownership studies on June of 2010. The nine studies are an effort to review data on how different ownership structures affect competition, localism and diversity.
Recent studies have been met with some criticism. F.C.C. commissioner Michael J. Copps, (a Democratic commissioner who was part of the F.C.C. review in 2006) opposes loosening the ownership rules, stating “Our country urgently needs a media that is reflective of our diverse communities and interests.
If a central tenet of our F.C.C. mandate is to promote diversity in the media, which it is, then we need diverse ownership policies to help that happen. Anyone who actually thinks that who owns the media doesn’t significantly affect how our country is being informed is not paying attention .”
For nearly 15 years, through mergers and acquisitions, six media companies (General Electric, Viacom, Disney, News Corp., Time Warner and CBS have concentrated their control over what we see on television by painting a picture of gloom and doom.
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PART 2
MEDIA CONSOLIDATION
Media Buying Media
Big media executives are infamous for crying “wolf” about the economics of their business. They’re likely to insist that consolidation is the only way to save their industry from ruin, when in fact the return on the investment will take them several years to accomplish. They will also go on to preach about how the merger will improve the quality of the workplace and news product, when actually many journalists lose their jobs and content is homogenized.
It used to be that entertainment programming’s ability to generate revenue bailed news out, but the tide has been turning at local television stations. In fact, regardless of the reduction of ad sales in recent years, the production and distribution of local news is a profitable business. Tribune Company television stations have expanded news hours as an initiative to grow revenue. WTIC/Fox 61 (owned by Tribune) extended its morning news hours and added a late evening newscast .
The biggest motivation for media companies to buy other media companies is that stations generate lots of cash flow, with margins often hitting 40%-50% (by comparison, strong newspapers generate 20% margins) .
In 2001, there were more than 35 million Spanish-speaking individuals in the U.S., Hispanics were the nation's fastest-growing demographic and on the verge of becoming the largest minority group. Hispanics represented one of the most attractive opportunities for dynamic growth in the television marketplace. Considering their purchasing power (estimated in the hundreds of billions), it's no wonder large media companies wanted a piece of the action .
When Univision went up for sale, two groups threw their hat in the ring and in the end the largest Spanish language broadcaster in the United States sold for $13.7 billion dollars .
Understanding that their company was near the ceiling of potential revenue growth, executives at NBC and General Electric (NBC’s parent company) looked at Telemundo as a way to increase revenue.
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NBC Buys Telemundo
In 2002, NBC bought Telemundo, the second largest Hispanic network in the U.S. for $2.7 billion dollars in cash and stock to acquire the network from Sony and Liberty Media, its principal owners .
At the time of the purchase, the 24-hour Telemundo network served 86 markets, reaching 88 percent of Hispanic TV households in the United States. Among Telemundo’s assets were the national Telemundo network and full-power, owned-and-operated local stations in top Hispanic U.S. DMAs (Designated Marketing Areas ), including :
• New York (#2 market in Spanish language media)
• Miami/Fort Lauderdale
• Chicago
• San Antonio
• Houston
• Denver
• San Jose/San Francisco
• Dallas/Fort Worth
• Two Los Angeles stations (KWHY-TV & KVEA-TV) (#1 market in Spanish language media)
• The number 1 station in Puerto Rico
• 40 broadcast affiliates
• Two cable networks, Mun2 and Telemundo Internacional.
NBC became the only major broadcast network with a business fully focused on developing and airing programming specifically created for the Spanish language market.
The deal was said to strategically put NBC (at the time, the nation's number one English-language network), in a position to offer advertisers packaged deals across the two distinct properties.
Sales and promotion, station operations, entertainment programming and sports were the best opportunities for revenue growth and cost synergies. Some of the possibilities included the addition of Spanish-language versions of NBC shows on Telemundo like late night shows, reality programs and the Olympics .
Local News was seen as the best way to realize NBC’s long term business goals and justifying the merger with Telemundo.
I was an employee of WNBC, the NBC (later NBC Universal with the 2005 merger of Universal Studios) flagship station in New York City when the purchase occurred and was recruited to be the Project Manager for the NBC Integration team.
My responsibility was to travel to all the markets where Telemundo had an owned and operated station in order to add resources, training and new processes that would improve local news operations. I led initiatives (recruiting, purchase equipment, negotiate service contracts) to launch local news in markets where there were none. In cities where there were both an NBC and a Telemundo owned and operated station (referred to as “duopolies”), I assisted in the moving of the Telemundo personnel under the same roof (location) in an effort to improve communication and resources. The game plan was to invest in Telemundo in order to finally challenge Univision, grow viewership and strengthen its position with advertisers.
Univision outperformed Telemundo four-to-one. A stronger, competitive Telemundo would provide buyers with negotiating leverage at Univision .
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Latino Organizations Speak Out
The deal was not without controversy; several Hispanic organizations warned of the potential negative effects of an NBC, Telemundo marriage.
On December of 2001, the National Latino Media Council petitioned the F.C.C. to deny approval of the proposed NBC-Telemundo merger, insisting that it was not in the best interest of Latinos or the public.
The council voiced concerns about the damaging effects media consolidation has had on diversity, program content and minority ownership. Juan Figueroa, Puerto Rican Legal Defense and Education Fund (PRLDEF) President stated, “We have seen the consequences of media consolidations. By its very nature, media consolidation means that companies are seeking the greatest market share at the lowest cost. This has had devastating effects on Latinos. Rampant cost-cutting has resulted in layoffs, hiring freezes, and cuts in critically important, but less lucrative, program areas such as news and public affairs. Thus, it means fewer existing opportunities in the industry and reduced services to Latino audiences and customers ."
NBC was quick to respond to its critics, promising to improve the quality of the Spanish-language news of Telemundo. These are NBC's summarized arguments for approval of the merger, as they appear on the 2001 filing to the F.C.C. :
• The merger will give Telemundo the resources to compete effectively with Univision, which is the dominant Spanish-language television broadcaster in the United States.
• By raising the bar for competition, the merger will require both Univision and Telemundo to improve the quality of their programming and therefore their level of service to the Spanish-speaking Latino community.
• The merger will result in an improvement in Telemundo's news and information programming, both at the network and local station level.
• As members of the GE/NBC family, Telemundo's employees will have greater opportunities for career advancement and training.
• The merger will also benefit NBC's English-only audience by creating new possibilities for the cross-fertilization of ideas and viewpoints between the Latino and English-speaking cultures.
After a few months (before and shortly after the F.C.C.’s approval of the merger) of concerted efforts that resulted in the acquisition of new local stations, launch of news programs and the hiring of employees at Telemundo; critics’ worst fears were realized.
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PART 3
TELEMUNDO DOWNTURN
NBC’s TV 2.0
In the summer of 2006, Jeff Zucker, Chief Executive Officer of NBC Universal announced “TV 2.0”, an initiative to achieve profitability through the investment of new technology and the reduction of employees. Telemundo was the first to get hit.
NBC Universal eliminated local newscasts at six Telemundo local stations and replaced them with what they called "hubbed" newscasts produced out of the newly formed Telemundo Production Center (TPC) in Fort Worth, Texas. The half-hour centralized newscasts included a report from the cities where once there were vibrant and competitive news departments.
The National Association of Hispanic Journalists (NAHJ) led the criticism of NBC Universal’s actions. “This is about the larger trend of (what is happening to) local news, whether large media companies, for the sake of consolidation and saving money, will resort to cutting local newscasts,” said Iván Román, executive director of NAHJ .
The cities where the local newscasts are being axed ranked among the top 10 Hispanic markets: Houston (4), Dallas (6), San Antonio (7), San Jose (8) and Phoenix (9), according to 2006-07 Nielsen Media Research. They are significant Spanish language media markets .
Nearly seventy employees at Telemundo’s Puerto Rico television station WKAQ were laid off. WKAQ is where Telemundo was founded and prior to NBC’s purchase was the dominant station in the island.
Telemundo Vice President of Communications Alfredo Richard tried to spin the cuts by stating the creation of new jobs at the TPC. This was nothing more than a shell game since few employees from existing local news departments were transferred to the Telemundo Production Center.
NAHJ also questioned the actions of NBCU’s (NBC Universal) TV 2.0 program, observing that no English language news divisions were being effected: “NBC is not doing away with local newscasts at any of its English-language stations -- only with its Telemundo properties. This leads us to question the company's commitment to the Latino community.
To the point: if regionalized newscasts are good for journalism and not just a way to save money while giving the appearance of meeting the network's public interest obligations, why are regional newscasts only being planned for the Spanish-speaking audience? Doesn't the English-language audience deserve this level of service ?”
When TV 2.0 was introduced, I was the Vice President of News and News Director (2003-2009) at Telemundo’s local television station WNJU serving the New York City metropolitan area. The communication given to me was to eliminate weekend newscasts. A quickly thought out, poorly organized direction by corporate leaders to achieve profitability.
I resisted the proposed cuts insisting that there existed alternatives to the elimination of news hours. The financial target corporate wanted to achieve was $1 million dollars. By reorganizing the news department, cutting the budget for certain special projects, not hiring for open staff positions, reducing the hours of freelance workers and minimal lay offs – I was able to prevent the elimination of weekend news.
It was imperative for me to maintain a weekend news presence for competitive reasons as well as service to the Hispanic community. There are more than two million Hispanics in New York City alone, 27.5% of the population . The major source of Spanish language local television news is Telemundo and Univision (by comparison there are nine English language local news television stations). Prior to the TV 2.0 initiative, Telemundo’s WNJU was outperforming the local Univision station (a feat that had been achieved for the first time in the local television station’s history) .
The greatest strength of any television broadcast network is its local news station. News programming is the best vehicle to connect with the community by providing them with information and entertainment content. I warned Telemundo corporate executives that cuts to personnel and special projects in the news department would put at risk the ability of WNJU to promote prime time novelas (night time soaps). The result would be a loss of viewers, followed by ratings and of course revenue (local ad sales are determined by rating points measured by Neilsen ). The Telemundo corporate leadership claimed to understand the volatile situation, but insisted that the downsizing was temporary and the sacrifices made would ensure a positive, productive fiscal 2007. That never happened.
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The “Right Sizing of Telemundo 47
In 2007, Sales missed their revenue targets putting further pressure on news production cost (a reduced cost since in the previous year $1 million dollars was cut in the news department). Once again, I was asked to eliminate news hours. This was a vicious cycle that continued for two years, culminating with the final downsizing or “right sizing” as it was dubbed by the executive leadership team in March 2009. It finally forced my hand and resulted in the elimination of weekend, morning and midday news programs as well as the reduction in staff.
When I was named as the head of the news department in February 2003, WNJU boasted a news team of more than 80 journalists (including studio operation support) and nearly 20 hours of news programming. By the time I left (as a result of layoffs) in October 2009, the news team had dwindled to just shy of 30 journalists (including studio operation support) and only five days and five hours of news programming a week.
The TV 2.0 and “right sizing” initiatives were short term, band aid solutions to a larger problem of leadership in a transitional time for the news gathering industry. Every year (from 2006-2009) I was asked to make reductions in the news budget to ensure the success of the sales team.
To put it simply (as an example, these are not real numbers), in 2006’s budget planning meeting, the cost to produce news in 2007 was estimated at $1,000. Sales could only commit to $900 of revenue (based on their projections of the advertisement market and ratings). I was forced to make cuts to the tune of $800 to ensure that as a television station we would be in the black by $100. Well, when 2007 rolled along, sales could only come up with $700 to cover the cost of the $800 to produce news even though market conditions did not change dramatically. That same scenario played out in 2008 and in 2009.
The Sales department, claiming to be the victims of a depressed advertising market was a difficult pill to swallow considering the growing number of Hispanics and their purchasing power. There are now over 43 million Hispanics in the United States, with an estimated purchasing power of almost $800 billion dollars. Research shows 89% prefer to speak Spanish at home. It is also evident, thanks to Nielsen ratings, that in many markets, they also prefer to watch news in Spanish .
General Electric’s (the parent company of NBC Universal) quest to get a return for paying too much for Telemundo is to blame for the systematic destruction of Spanish language local news. The end result is consistent to similar outcomes of media consolidation, the homogenization of content and culture.
“English-language media does not cover the Latino community the way Spanish-language media does,” says Ivan Román, Executive Director of NAHJ. “With fewer journalists covering the Hispanic community, they are diminishing their service to Latinos .”
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PART 4
LOCAL NEWS
The Centralization of Local News
Giant media companies have abandoned their commitment to quality journalism and service to community. NBC Universal is an example of a mega conglomerate that is irresponsible in fulfilling its obligation to educate and inform the public.
In 2004, the F.C.C. commissioned a study titled "Do Local Owners Deliver More Localism?" which found that locally owned broadcasters devote, on average, an additional 20 to 25 percent of their newscasts to local news stories. That translates into approximately 5.5 more minutes per half-hour broadcast . The study also found that network owned-and-operated stations -- those belonging to ABC, CBS, NBC and Fox -- aired significantly less local news.
In an editorial, Federal Communications Commissioner Michael J. Copps wrote: "We have a system that has been buffeted by an endless cycle of consolidation, budget-cutting, and bureau-closing. We have witnessed the number of statehouse and city hall reporters declining decade after decade, despite an explosion in state and local lobbying. As the number of channels has multiplied, there is far less total local programming and reporting being produced. These days, if it bleeds, it leads ."
In 2006, The Sinclair Broadcast Group shutdown its local news operation in several markets (including Milwaukee, Tampa and Buffalo) and moved to a centralized news operation. The decision made a dent to the bottom line, but did not consider some of the local sensibilities in newsgathering. Maryland-based weather forecasters, for example, may not understand the complexities of lake-effect snow in Buffalo or hurricane season in Florida .
In 2009, four New York City television stations formed the Local News Service (LNS) to share video news content. Fox’s WNYW-TV, Tribune's The CW affiliate WPIX-TV, CBS’s WCBS-TV and NBCU’s WNBC-TV argued that it was unproductive to have four different news crews covering stories like ribbon cutting ceremonies, most press conferences and planned events. The idea would be to send one crew (supplied with resources from each of the four LNS TV stations) in order to free up other news teams to cover more substantial news stories. The LNS group contends that while the video for four separate news organizations come from one origin, the actual focus of the story is different. That might be true in theory, but if the practice is downsizing the amount of news teams covering stories, then the LNS is just substituting for those dismissed journalists as stated by one local union member, “This concept is just another way to cut staff at the stations by allowing the elimination of up to 75% of union ENG (engineer) crews at each shop .”
If the centralization of local news gathering puts at risk not only the jobs, but also the production of different points of view in a story; imagine what the effect is on Spanish language local news. As I was continuously pressured to meet corporate leaders’ directive to achieve news profitability, I found myself sacrificing local news coverage in order to sustain a seven day news operation.
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Telemundo 47 loses its identity
Year after year the pressure to make cuts was strenuous. Telemundo’s Hialeah leadership‘s (Telemundo headquarters is based in Hialeah, Florida) answer to budget woes was the elimination of news hours (and subsequent layoff of employees). For three years I was able to sustain existing news hours (20 hours, 7 days a week) by adding more stories from other sources.
We would import content from Telemundo Network news and the Telemundo Stations Group. I rationalized that certain stories on Network news which only aired once in the early evening could re-air again to a new audience in the late evening local newscasts. It was a sound argument based on research from Nielsen that shows viewers, on average did not watch the early evening block of news programs as well as the late evening news. The problem was that by increasing news content intended for a national audience (lacking the focus of the local New York City metropolitan area), I was decreasing the time of news specifically focused on the community that we served. The same can be said about the use of stories from the Telemundo Stations Division.
We increased the use of stories produced in other markets (South Florida, Los Angeles, Chicago, Dallas, etc.) arguing that while the focus of the stories were not New York City centric, they were about Hispanics and that at least they shared a common perspective. In reality while it’s true that a health story in Los Angeles might be the same in New York City, there are differences because of local services, government and ethnicity. Los Angeles is largely made up of Hispanics from Mexico and New York is largely populated by Hispanics from Puerto Rico. Not only do these groups differ culturally, but also politically since Puerto Rico is a Commonwealth and residents from the island enjoy the same rights as all American citizens.
The last effort to sustain a seven day operation, while at the same time forced to make more cuts to “right size” the news department budget was the use of content produced by NBC Universal. Stories from NBC Network News and the NBCU Local Stations, including WNBC (the local NBC station in New York City) were imported and translated into Spanish for broadcast.
There are national stories, regardless of language that are of major importance to the Hispanic community. Still, the focus of these stories did not have a Spanish speaking audience in mind, let alone an audience that is foreign born or whose immigrant status might be questionable. Images might sometime be universal, but it’s the interviews that help guide the focus of the stories. The translation of interviews is not enough when the questions most relevant to Hispanics are not asked.
The same argument can be used in the importing of news content from local NBCU stations including WNBC. While the images are of the local market that WNJU (Telemundo’s local news station) serves, again the interviews were not focused on the Hispanics residing in the New York City market.
The end result is obvious. All newscasts were largely diluted with content that did not reflect the specific experiences of our viewers. Once we failed to be reflective of the community we served, we also failed as journalists and paid the price for it; viewers turned to Univision.
In a 2007 statement on localism, F.C.C. Chairman Kevin Martin addressed the importance of the impact on the community: “I know that localism is important to broadcasters who recognize that their own success depends on responding to the needs and interests of their local communities. Most broadcasters do a good job, both by airing programming of unique interest to their local communities and more generally by contributing to the sense of community in their local towns. It has become apparent, however, that some broadcasters may not be doing all they can or should to serve their local communities .”
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NBC, Comcast Merger Proposal
Three years later NBC Universal is knocking on the door of another media consolidation, this time with Comcast, the nation's largest cable company with franchises in 39 states (as well as the District of Columbia) and what was old is new. Some of the same promises that were made by NBC in 2002 are being made in 2010.
Here’s a communication released by NBC Universal in June 2010 :
• Minority Ownership: Comcast commits to add at least three new independently-owned and operated cable nets with “substantial minority ownership” (it did not specify what percentage).
• Advisory Councils: Comcast and NBCU will establish four diversity advisory councils representing African Americans, Latinos, Asian-Pacific Islanders and other constituencies.
• Entertainment/News: NBCU pledged to expand or continue to support five diversity programs targeted at different aspects of entertainment production, including four pipeline development programs for programming development and management). The company will also expand six diversity programs targeting news.
• Philanthropy: Comcast will increase its community investment in minority-led and minority-serving institutions by 10% per year for each of the next three years; NBCU will increase its funding by 10% per year for each of the next three years for key organizations serving under-served and diverse communities.
• Supplier Diversity: Comcast and NBCU will increase the percentage of business conducted with minority- owned vendors, with the goal of mirroring the percentage of minority-owned businesses in the communities they serve.
Once again voices are being raised against a media merger, the media merger to dwarf all other mergers before it.
“We have seen the devastating impact media consolidation has had on newsrooms and our members,” said Iván Román, NAHJ’s executive director. “Companies like Comcast and NBC may try to sell us on why consolidation will benefit our community. But we know better. It never happens once the deal is done. Instead, Latino journalists are laid off and our community continues to be marginalized in news coverage .”
A Comcast – NBC deal would mean that one company would own and control access to news and entertainment programming, cable channels and local broadcast stations and movie studios. After its takeover of NBCU, Comcast would control one in every five television viewing hours .
At a congressional field hearing held in June by the House Judiciary Committee in California to look into programming and workplace diversity issues from the proposed merger, Representative Maxine Waters of Los Angeles grilled an NBC executive over how many minority producers the network had on its shows and asked Committee Chairman Representative John Conyers if it was possible to subpoena Comcast if it was not forthcoming on information the committee's members wanted .
In April, I joined Joseph Torres, government relations manger for the public interest group Free Press in Washington, D.C. to speak with Representative Waters and other congressional teams in order to provide them with my first hand account of the NBC – Telemundo merger and the negative effects to employees, newsgathering and the community.
Comcast and NBC leaders promised to increase efforts to employ a diverse senior staff as well as create diversity advisory councils focused on African Americans, Latinos, Asians and other communities. I was an active member of such a council.
In 2009, I was asked by Telemundo’s Chief Executive Officer, Don Browne to join a large task force of Telemundo and NBCU employees in exploring opportunities for NBC News divisions and programs to effectively reach out to the Hispanic community by leveraging the experience of the Spanish language media company. This project was driven by NBC News’ own research which showed they were lagging behind other English language news networks in capturing the growing Hispanic audience and the upcoming census which will show that the country’s growth is driven by Hispanics. The project lasted several months as each team researched Telemundo’s resources and potential positive impact on NBC News. The results were presented to NBCU executives, but very little was done with any of the recommendations.
The exercise was one of many other such projects and conversations that proved to be futile, a warning I had given Mr. Browne.
During the many meetings that project leaders had with Mr. Browne prior to releasing the results of the different task force teams, I insisted that the problem was too few decision makers at NBC News were non Hispanic and lacked the sensibility and the vision to see the opportunities. I said we needed to provide stern constructive criticism of NBC News’ poor record of not drawing from the well of talent and experience at Telemundo in hiring for management opportunities. Mr. Browne refused to have that debate with NBCU executives, including NBCU C.E.O. Jeff Zucker. In the eight years since NBC merged with Telemundo, little has been done to increase diversity at the English language network. Despite several available positions throughout the years for back office and front line management opportunities, fewer than 5 have been filled with Telemundo employees or Hispanics.
In fact, more NBC News employees have migrated to leadership positions at Telemundo (among them Don Browne, a non Hispanic employee who does not speak, read or write Spanish proficiently).
NBC Universal had a unique opportunity to infuse diversity into all of its news, entertainment and digital platforms by seeking out Telemundo in recruiting and mentoring leaders. As VP of News I would continuously pitch Telemundo employees for opportunities at NBC to no avail.
Many of the producers, reporters and assignments personnel including managers who were not able to cross the bridge over to NBC left Telemundo and enjoy fruitful, productive careers at other English language news operations. It was frustrating to be in a company that preached diversity, but did not practice it. In one conversation, the VP of News for WNBC said to me that a Telemundo weather anchor was not hired for a staff position because of her accent. I felt that it was an absurd decision. New York City is one of the most diverse markets in the country where people of all walks of life work and live together. New Yorkers are tolerant of different accents and the only one that is not accepted is the one they can’t understand. I protested by saying it was unfair not to hire the Telemundo employee based on her accent when a current staff reporter had a British accent. So, it wasn’t a question about having an accent, it was about having a Spanish accent.
I have been fortunate to have had a long and diverse career at NBC Universal. In my 14 years with the media company I have worked as a Producer at NBC Miami, Senior Producer at MSNBC cable news, Producer at WNBC and VP of News for Telemundo New York. When the opportunity became available for VP of News at NBC San Jose, I quickly raised my hand. I did not get the position, which I was perfectly fine with until a colleague (from NBC) who was contacted as a reference shared with me some startling information. In a conversation with the General Manager of NBC San Jose and other members of the hiring committee, the only concern with my candidacy was that I was a Telemundo employee.
I don’t believe the observation to be a racial prejudice, more likely it is a corporate bias that exists at NBCU. There is an ignorant belief that the quality of work produced at NBC is superior to Telemundo. That, of course is far from the truth. Telemundo is much more productive, efficient and relevant to the community than NBC News (at the local level).
Telemundo does a much better job in developing content that is informational, educational and empowering to viewers. Spanish language media is a guide to many immigrants who make the United States their adoptive home. Telemundo does a far superior effort in explaining to viewers about what’s happening in their community such as health concerns, neighborhood events and local politics.
The study Media Markets and Localism: Does Local News en Español Boost Hispanic Voter Turnout? found Hispanic voter turnout averages 37 percent in markets without local Spanish news and 45 percent in markets with local television news in Spanish . Media consolidation has the potential of harming democracy by eliminating the public’s "town square."
If the continued centralization of news content is allowed then the megaphone viewers use to question their lawmakers is lost and television news loses it’s interactivity with viewers.
What is now a conversation and exchange of ideas with the community would become a one way street of controlled messages that does not take into consideration the need for specific and unique focus in storytelling. A well informed, educated and empowered viewer is a responsible citizen, member of our society.
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Conclusion
The Federal Communication Commission’s continued support of media consolidation is a threat to minority voices because it forces the centralization of news operations which results in the homogenization of content that eliminates diverse viewpoints in local communities.
Rules that were intended to promote and protect minority ownership of television broadcasting stations are being taken advantage of by big media companies that are crying “the sky is falling” in regards to the economics of their businesses. The truth is poor decisions by TV executives result in the shrinking of ratings and the blowing up of budgets that sponsors can no longer afford nor support.
NBC Universal saw an opportunity to buy Telemundo and told tall tales about growing the Spanish language television network to secure the approval of the F.C.C. and win the support of the community. Soon after the merger, NBCU launched initiatives that all but annihilated Telemundo in order to please General Electric stock holders.
TV 2.0 and the “right sizing” project sought to reach profits by cutting budgets that ripped away Telemundo local news departments’ ability to provide high quality and relevant content to its viewers. The victims of the failed media merger are the Hispanic journalists who give voice to their minority group and the community who depend on those journalists to inform, educate and empower them.
Now NBCU wants to marry Comcast, making some of the same promises of investing in Telemundo and by doing so, invest in the Hispanic community. With such a terrible eight year report card on diversity and accountability, why is the F.C.C. even entertaining a mega media merger that would surpass all others before it?
NBCU is in financial trouble and a deal with Comcast would bail them out. History will repeat itself; once the deal is done cuts are sure to follow. NBCU executives will jump off the plane with golden parachutes while many journalists will be laid off with a basic severance package, if that.
The F.C.C. needs to take a moment of pause, listen to the public and not allow the NBCU, Comcast merger to proceed without looking at history and realizing the potential negative impact to the future.
“Just because you can do something, does not mean you always should”.
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