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SPEECHES, SPECIAL REPORTS AND MESSAGES
AMERICAN DEMOCRACY AT RISK: CAN AMERICAN DEMOCRACY SURVIVE THE LOSS OF AN INDEPENDENT PRESS AND A DIVERSITY OF VOICES? Frank A. Blethen Delivered to the School of Journalism and Communications at the University of Oregon, The Ruhl Symposium on Ethics in Journalism. May 14, 2002. Opening: America at Risk Background The America we know and love today is at risk. And, hardly anyone is paying attention. The threat is not from terrorists or foreign governments, though we certainly have felt and continue to feel, their impact. No, the risk is not coming from outside the country, but from within. And internal threats, the political scientists warn, often are the most dangerous. It is my belief that the threat we face is the accelerating concentration of control of our media and of our information distribution channels, from one end of this country to the other. In 1975 there were 863 daily newspapers owners. In 2000, there were only 290. In 1975 there were 543 television station owners. In 2000, there were only 360. It is a very serious threat to our way of life. Our democracy is based on a four-legged stool.
Take away any leg and our 216-year old democracy is at risk of tipping over. Concentration of media control threatens to destroy that fourth leg of the stool - freedom of speech and a free press - by eliminating our nation's diversity of independent voices. These are the voices that ensure the other three legs of the stool stay steady. They are the voices that represent the public against abuses of power, that hold government and business accountable for their behavior. And that give citizens the independent, trustworthy news and information they need to participate in meaningful ways in their communities and their governance. These independent, community-connected voices are disappearing at an
alarming rate. Why aren't we as a nation and, those of us who are stewards
of a free press, paying attention to such a frightening development?
The silence itself may be the most persuasive evidence of the threat. I'm frightened because the monopolization of media ownership is moving with great speed. Limits on how much of the country's broadcast capacity any one company can control have fallen away. Just ahead are moves to eliminate the longstanding ban on newspaper and television cross-ownership. I'm frightened because of the likelihood that newspapers, television, cable and radio will continue unabated to fall into even fewer hands. And, these hands have values far different from traditional journalistic and community service values. Several years ago, Nicholas Johnson, former FCC commissioner, was asked if concentration in the media markets is something about which citizens should be concerned. His answer was "at the time of the Time-Warner merger, when company executives were asked why they were merging, they said that according to their calculations, it would not be long before there would be five businesses that controlled all the media on the Planet Earth, and that they intended to be one of them!" This prospect apparently scared Nicholas Johnson, and this was prior to 1999 when only ten companies controlled more than 51% of the nation's daily newspaper circulation. It certainly scares me and should scare you. A Brief History America's press has never been perfect. Far from it. Our first newspapers were highly partisan, mean-spirited and completely unprofessional by today's standards. But crude as they were, these so-called "scandalmongers" served as the public's watchdog of government and of its powerful friends, despite an early misguided effort through the Alien and Sedition Act to neuter the watchdog. The more enlightened of our founding fathers understood that an independent, free and unfettered press was critical to engaging the populace in its democracy, and that such engagement was essential for representative government to work. They intuitively knew that an independent press would evolve as the country evolved. That there would be - that there needed to be -- a multitude of voices to represent the diverse opinions, interests and backgrounds of the population. The key to preserving this leg of the democracy stool was to protect it from external controls, whether from the government through laws restraining its freedom, or from individuals or businesses chilling its independence through harassing litigation. The principle was so important it became the stepping off point for the Bill of Rights. The First Amendment to the United States Constitution, and the Supreme Court's interpretation of it through the last century. All of which ensured the evolution of a diverse and truly free press. The expansion of our press, paralleled the expanded participation of our citizens in their own government. This was critical. Without expanded inclusion, American democracy would have failed because so many of our people would not have had a stake in its survival. Until the last decade or two, this evolution was generally for the better. It fostered individual rights, more inclusion in the social, economic and political life of the country, and it spurred greater standards of public accountability and ethical behavior. I believe the pinnacle of this country's independent and diverse press was from the mid-1950s through the mid-1980s. During this period newspaper and broadcast journalism developed an unprecedented level of professionalism and ethical standards that represented the best in us and in our country. It included industry-wide discussions on ethics, standards, objectivity, fairness, inclusiveness, responsibility and, even courage. These discussions elevated us. Not only that, but it was the high water mark for public-service journalism. There was the publishing of the Pentagon Papers and the Washington Post's Watergate coverage. But there was much, much more than that. If you look at the Public Service winners of the Pulitzer Prize during those years, you see many small and mid-sized newspapers, almost all then owned by local families. They were on the list because they were doing courageous local reporting. Newspapers in Columbus, Georgia; Watsonville, Riverside and Point Reyes, California; Amarillo and Lufkin, Texas; Hutchinson, Kansas; Utica, Winston-Salem, Charlotte, St. Petersburg, Little Rock, Anchorage, Milwaukee and Boston all were Pulitzer Prize public service winners. We were inspired by the courage of these newspapers and we were inspired by their owners.
Pulitzer Prizes became important because they reflected a collective aspiration to do meaningful and important journalism on behalf of our readers, no matter the size of our communities or the limits of our resources.
But, somewhere in the late'70s we began to lose our way. News and quality independent journalism no longer ruled our business. Local, family ownership of newspapers were rapidly giving way to non-local corporate chains. Many newspapers became business "assets" to be "leveraged"; "commodities" to be "sold and traded"; "products to be hawked".
A new phenomenon appeared in the '90s with few independents left to gobble up the large chains began to indiscriminately trade and swap newspapers they acquired in the prior two decades. Listen to the language as this change took place:
Editors and publishers who used to be integral fixtures in a community have become transients as they move from newspaper to newspaper making their way up the corporate ladder. Our passion for community service and quality journalism has been too frequently pushed aside in favor of chasing stock prices. When did bragging about profit margins, quarterly profits and "reduced headcount" become more important than talking about journalistic accomplishments and public service? When did publishers and editors stop talking about their latest battle with a pushy politician or a powerful, secretive and abusive local business or institution? The What The "what" is the change in the daily newspaper ownership structure from private to public, combined with an unfettered increase in control of all media. This shift began slowly - driven at the seller's end by the federal death tax, and at the acquirer's end by growth of the public financial markets. It quickly accelerated with the financial market's rapid growth, timid federal regulation, lax antitrust enforcement and the absence of laws restricting mass control. This rush to consolidation and public ownership isn't just in the newspaper and media business. It affects most industries. It is a trend that has precious few benefits in any industry, except perhaps short-term financial ones for institutional investors. It is ominous when newspapers and media companies are run with a short-term focus - without consideration for social and political implications. In the news business, the trend is potentially fatal for a democracy. This is one of the most important stories of our lifetime, and yet newspapers aren't telling it. The '90s I believe the '90s will go down in history as one of this country's least constructive and most self-absorbed decades. Yes, we made incredible technological and economic advances during that decade. But, we lost our ethical grounding. We lost much of our sense of community and our sense of compassion for each other. We became beguiled with personal wealth and material possessions. We celebrated stock portfolios instead of community service. We watched silently as our regulators acquiesced to the nonsensical corporate mega-mergers that ran rampant. It's happened in newspapers, television, radio, cable, banking, energy, drug stores, car dealerships and even funeral homes. Industry after industry, we lost our local businesses, our local employers and our local civic leaders. To be sure, American free enterprise is unlike anything the world has ever seen. For all its fits and starts, American capitalism, coupled with mass public education, has produced wealth and a quality of life that our founding fathers couldn't have imagined. It has extended that quality of life to more people than any other country has ever been able to achieve. But like all systems, there needs to be a framework that protects it from corruption and which protects us, as individuals, from abuses of wealth and power. In America, we rely on our system of laws and on our free press for that protection. Lawmaking and Regulation The problem we have with lawmaking today is that Congress and, our regulatory agencies, are overwhelmed by the complexity of the economy, as well as by big special interests. The mergers and massive acquisitions government has allowed have, in turn, produced ever larger and more powerful special interests with unprecedented influence on our political institutions. As a result, the most significant business regulations and laws of recent years have not been created through thoughtful articulation and debate of what is best for the American public and our individual communities. Rather, they have been determined by the lobbying of special interests in Washington, D.C. Repeal of the Glass-Stegal law opened up banking to national mega mergers. Consequently, most of us no longer have local banks that historically have been community mainstays. Many of our regulatory agencies have become toothless and passive. Even worse, some of them, like the FCC and the FAA, have become pawns of the large companies they are supposed to be regulating on our behalf. We see the consequences of this lack of regulation in most every industry in the United States, as scores of locally-owned small and medium-sized businesses are replaced by large, national conglomerates controlled by faceless institutional investors and run by managers driven only by gaining personal wealth and stock options. These special interests have molded our telecommunication laws, our energy laws, our banking laws and even our environmental laws in ways that benefit them, not us. And even then, the financial benefit to the special interests increasingly are short-term. Just look at Enron and what used to be our local and regional telephone companies. FCC/Cross-Ownership Nowhere is the failure of government to protect the public's interest more apparent right now than what's happening at the Federal Communications Commission. The Commission operates in an unreal Washington beltway world. Their deliberations fail to grasp the public service responsibilities of media and their own responsibility to ensure a diversity of independent voices. Their hearings are dominated by a handful of giant companies like Time Warner/AOL, Gannett and The Tribune Company. Those are the very companies they are supposed to be regulating on our behalf. Historically, the FCC had strong rules about cross-ownership of television and newspapers in the same market. And, strong rules about limiting the numbers of t.v. and radio stations any single entity could own. There was good rationale for these limitations and it is still valid. These are, we should not forget, public airwaves and there is a public interest to be protected. Yet, the FCC has become a puppet to a handful of large players who may soon completely dominate America's media, including newspapers, if they aren't reigned in soon. As we meet today, repeal of the FCC cross-ownership rule is being heavily lobbied by the major media companies and chain-newspaper owners, who stand to benefit financially. From a public standpoint, repeal makes no sense.
If cross-ownership is repealed later this year, as anticipated, we will see a feeding frenzy involving the big media players as they scramble to create cross-ownership with no regard for the negative impact on the communities involved. Institutional Ownership and Concentration Bigness and power ultimately corrupt, if not controlled and balanced. Only three decades ago, the newspaper business was dominated by independent, local ownership. Real people who lived in the communities their newspapers served. People who were well known to their readers, active in community civic life. Make no mistake about it - journalistic and public service values are mutually exclusive with public companies' financial investor's values. Yes - a news organization needs to be well run and profitable if it's to be independent and fund its news operations. But when a news organization is driven to maintain its stock prices, it becomes the handmaiden of the analysts and institutional buyers who view it as a financial commodity and milk it for short-term gain and excessive profit margins. Public newspaper and media company CEOs are not compensated for winning Pulitzer Prizes or for groundbreaking investigative journalism or community service. Indeed in recent years, they have been handsomely rewarded for disinvesting in news and service. A strategy that has kept stock prices up but has reduced readership, circulation and reader loyalty. They have turned the watchdog into a lap dog. Eventually, if you'll allow me to switch metaphors, they will kill the goose that laid the golden egg. Continued cuts in news content and delivery service, and the resulting erosion of readers, will ultimately make it impossible to sustain stock price. Unfortunately, the financial markets couldn't care less. And what will they do when this happens? They'll move on to another investment. By then, the damage to our newspapers, and to the role of the Fourth Estate, will have been done. Let me digress here to acknowledge that while all publicly-traded chain ownership is ultimately bad for journalism and our local communities, that's not the case, at least yet, in all large private chains or public companies still controlled by families. One model for responsible stewardship is the Newhouse family, which operates its newspapers with class and dignity, and with devotion to journalism and local communities. The Portland Oregonian is a wonderful example, rightly regarded as one of the country's best regional dailies. And there are two publicly-traded newspapers controlled by families that create journalistic and stewardship aspirations for the rest of us: The Washington Post and The New York Times. We have much to thank the Graham, Sulzberger and Newhouse families for. Unfortunately, they are the exception. Pacific Northwest Here in the Pacific Northwest, we are blessed with some of the best and most responsible independent, family and private newspaper ownerships left in the country. Three of the four largest Sunday newspapers -- The Seattle Times, the Portland Oregonian and the Spokesman-Review -- are private and independent and are role models for their commitment to news and their communities. Right here in Eugene, the Baker family's Register Guard sets a wonderful example for medium-sized newspapers. Just over the mountains in Bend, Bob Chandler's family continues to fight the good fight and place stewardship ahead of personal wealth and profit maximization. As does Scott Campbell at The Columbian in Vancouver, and Rufus Woods at The Wenatchee Daily World. Unfortunately, the deck is stacked against us. The death tax alone threatens to eventually put all of us out of business and leave our communities diminished. Two Newspaper Industries. The fact is, in America today we have two very different newspaper industries. Each is driven by diametrically opposed values and purpose. We struggle when we try to discuss journalism because we haven't made this distinction yet. We try to apply the same language and ascribe the same values to all newspapers. But they are different and we need to recognize that. You cannot evaluate or operate a "financial play" newspaper by the same standards you evaluate and operate a "journalistic" newspaper. The former is driven, ultimately, by one value and purpose: Bottom-line profitability. The latter is driven by the value of public service through independent journalism. One publishes a newspaper to make money. The other makes money to publish a newspaper. Unfortunately, the money managers currently dominate the industry dialogue. They drive out the much needed discussion about news and public service. They too frequently make us forget that news and public service is our mission and that it is indeed a very profitable businesses that can handsomely serve generations of owners and readers. Diversity and Inclusion It's impossible to have a discussion about newspapers and journalism without touching on diversity and inclusion. Like public service, the value of inclusion is not the value of the money managers who now control much of our media. Annually, we lament our industry's egregious moral failure to address diversity in employment and content. Yet we only need to look at the dominant ownership structure to find our answer as to why this terrible failure goes on year after year. The selfless public service values that support independent journalism are the same selfless public service values that support diversity and inclusion. Why is diversity so important? Yes, it is the right thing to do. But, also because inclusion is essential to preserving and maintaining America's democracy. History is clear that if people don't feel vested in their government, that government will eventually falter and fail. As we move towards a country without an independent press and a diversity of voices, it's hard to imagine we can continue to engage our citizenry in an understanding of, and commitment to, their democracy when so many people feel disenfranchised. Conclusion Our nation is at a crossroads. And, we are in crisis. We must take bold action to restore and preserve our independent journalism and our diversity of voices. We must restore and celebrate the Fourth Estate's critical role in preserving our democracy. And, we must encompass diversity and inclusion while we do this. Here are the steps we need to take:
More than 50 years ago Walter Lippmann traveled to Iowa to celebrate the hundredth birthday of The Des Moines Register and Tribune. He told an audience of Iowa's editor and publishers: "There is, I believe, a fundamental reason why the American press is strong enough to remain free. That reason is that the American newspapers, large and small, and without exception, belong to a town, a city, at the most to a region." The secret of a truly free press, he said, is "that it should consist of many newspapers decentralized in their ownership and their management, and dependent for their support... upon the communities where they are written, where they are edited, and where they are read." Lippmann concluded by saying: 'There is safety in numbers, and in diversity, and in being spread out, and in having deep roots in many places. Only in variety is there freedom." Lippman's secret of a free press is still true today. Unfortunately, that secret, diverse local ownership may no longer be strong enough to sustain our free press. Newspapers are very good businesses. They don't need to be part of large financial organizations to be successful. In fact, the only hope of our newspapers fulfilling their responsibilities under the Constitution is for the trend of financial ownership and concentration of control to be halted and reversed. A diversity of voices, and ownership, rooted in public service and not just profits, is crucial to the continued health of our democracy. This is not a side discussion about the evolution of business models. Massive media conglomeration is a threat to journalism's very core. And a danger to democracy. We are at a crossroad. Let's hope for the sake of future generations, we take the right path. Thank you.
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