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A blessing in disguise? FCC’s failure to lift cross-ownership rules may have saved many media companies from committing suicide 11/23/07

Posted by Steve Boriss in Local affiliates.

There is trouble ahead for media companies like the Washington Post and Belo who tried to protect their stock values from their declining newspaper businesses by diversifying into local TV station ownership. According to TheStreet.com’s Nat Worden, their stock prices had been artificially inflated by investors’ expectations that the FCC would ultimately eliminate “cross-ownership” rules banning them from owning newspapers and TV stations in the same local markets. Such a move, now unlikely, might have launched a new era of acquisitions and consolidations, providing these companies’ local TV operations with new opportunities for revenue growth and higher profits from greater efficiencies.

mcclatchygrph.jpgBut if these media companies had been allowed to go on such TV station acquisition binges, they would likely have suffered a similar hangover as the McClatchy newspaper chain. In 2006 McClatchy bought the Knight-Ridder chain, blinded by the gleam in its eyes of revenue and profit growth, unable to see the imminent hit newspapers would take from the Internet. The impact on McClatchy’s stock price, shown to the right, speaks for itself. Similarly, local TV stations will soon be taking a big hit from the Internet as their networks move to betray and bypass them. The TV networks are now pushing for us to download their programming, then wirelessly stream it to our TV’s using Microsoft & partners’ new “media extender” technology. Viewers will get programming on demand that is better and more convenient than using TiVo. The networks will keep all the advertising revenues from embedded advertising. But, local TV stations will ultimately be cut-out of the supply chain, losing the ad revenues they have been receiving for broadcasting the networks’ content that last 50 miles to our homes. By fumbling its proposal, the FCC just might have saved the media companies from themselves.


1. Ydobon - 11/24/07

Off topic, from “Investigate the Media”, San Francisco Chronicle Deceives Its Readers

“If you make a comment on an article posted at SFGate, and if the site moderators then subsequently delete your comment for whatever reason, it will only appear as deleted to the other readers. HOWEVER, your comment will NOT appear to be deleted if viewed from your own computer! The Chronicle‘s goal is to trick deleted commenters into not knowing their comments were in fact deleted.”

“Why would SFGate do such a thing? Because ever since public input was first allowed at SFGate, many commenters who had their comments deleted would come back onto the comment thread and point out that they had been silenced for ideological reasons — i.e. they weren’t sufficiently “progressive” — or because they had pointed out ethical lapses at SFGate and the Chronicle.”

Commenter DavoGrande clarifies

“Fine, block him, but don’t block him with a trick gadget that lets him believe he was NOT blocked. It’s dishonest, and that is what this whole thread is about. It’s NOT the contents of his comments! Nobody CARES what they were… because with their trickery, SFGate BYPASSED that whole discussion!”

Stealth censorship.

Orwell was an optimist.

Hat tip to Instapundit.

Post Scriptum: Does the SF Chronicle really need to further weaken reader trust?

When Do You Stop the Presses?

“At Hearst Newspapers’ San Francisco Chronicle, according to a deposition given by James M. Asher, the company’s chief legal and business development officer, losses of $330 million piled up between mid-2000 and September, 2006, better—or should I say worse?—than $1 million a week.”

2. Joel Mcfarland - 1/10/09

good luck

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