Big Radio Merger Fuels Concern Over Diversity
NEW YORK — In the early 1980s, Burlington, Vt., literally buzzed with local radio news. The city had just elected the country's only Socialist mayor, the Democrats and Republicans were up in arms, and the city's four radio stations, all with strong local news departments, kept the community informed of every twist in the political saga.
"I was doing 17 live broadcasts a day; there was a rivalry, real competition," says Peter Freyne, a longtime local columnist. "It doesn't really exist anymore."
Critics of the proposed merger between Westinghouse/CBS and Infinity Broadcasting say the same fate, and worse, awaits many communities if the deal is allowed to proceed unchallenged. But its supporters call such concerns about a loss of diversity "far-fetched," and counter the merger will streamline management in a fragmented industry, increase competition within communities, and, thus, bolster local voices.
The $3.9 billion merger, which still needs shareholder and regulatory approval, would bring together the country's two largest radio broadcasters. Together they would own 83 stations and command almost $1 billion of advertising revenues. In some major markets, like New York, Philadelphia, and San Francisco, the new company would command up to 40 percent of the radio market, in addition to owning a local television station.
"Our fear is that this combines too much economic power over political and social commentary in these key urban markets," says Gene Kimmelman, co-director of the Consumers Union., a nonprofit lobbying group based in Washington, D.C. "We think this violates antitrust laws."
Mr. Kimmelman says this new entity will have the ability to leverage significant advertising dollars against smaller independent media companies as well as an ability to assert a point of view - whether it's on politics, social matters, or entertainment - that will "reverberate throughout the community and dominate the airwaves."
Consumers Union, along with other nonprofit groups, will ask the Federal Trade Commission and the Justice Department to require the companies to split up a significant portion of their assets in various markets before any approval is granted.
But supporters of the merger contend such concerns are overblown and display a lack of understanding of the dynamics of the radio industry. "It makes absolutely no sense to believe that a company that owns multiple voices would want to homogenize or stifle any of those voices," says Gil Schwartz, a CBS spokesman.
Mr. Schwartz says Westinghouse, a pioneer in radio broadcasting in 1920, understands that success of radio depends on being a viable, local medium. He also insists that CBS, Westinghouse, and Infinity have long recognized the importance of competition, not just with others' stations, but also with their own properties in a single market.
"Doesn't Kellogg want Cornflakes to compete with Rice Krispies?" asks Schwartz. "The whole idea of 'branding' in American business is that a company develops specific brands for individuals that have specific tastes. That's why this whole thing about homogenization of voices is ... a completely unnecessary thing to worry about."
Schwartz notes that such concerns were aired after the Westinghouse/CBS merger was announced six months ago and none, he argues, has been born out.
In New York, for instance, Westinghouse/CBS owns two all-news radio stations, WCBS and WINS. Both have distinctive styles and appeal to different audiences, and neither changed after the merger.
But Kimmelman and other critics say that tactic may create the appearance of a multiplicity of voices, but if all are owned by just a few, powerful media companies with similar vested interests, the appearance will be deceiving. "The real downside here is that if you do make a mistake, if you do let a few companies dominate the flow of entertainment and information, it becomes very difficult for the public to become aware of what it needs to do change things," contends Kimmelman. "There are very few politicians now who will risk the wrath of the media."
He and other critics contend important stories that affect broadcasters' bottom lines aren't being told. For instance, the move to get broadcasters to pay for additional broadcast spectrum has received minimal coverage in the broadcast media.
Schwartz contends that's more likely because the story is complicated and difficult to make compelling. He chalks it up to a commercial bias against difficult news stories, as opposed to any financial conspiracy.
Merger supporters also note that there are more than 10,000 radio stations nationwide, and even as this group doubles in size it will still only own 83 stations - a "very small" slice of the radio pie.
But critics counter that this small slice will control significant segments of most of the country's major media markets. And as such, it may be a much bigger slice than at first appears. As a result, the critics believe, the scenario that unfolded in Burlington during the 1980s is more likely to develop in some larger cities as a result of the merger.
During the1980s, Mr. Freyne says, most Burlington-area radio news departments fell victim to bottom-line pressures. Several locally owned stations were sold to out-of-state corporations which pressured them to increase profits, while the others simply struggled to survive in an increasingly competitive advertising market. There is now only one local radio station that regularly produces in-depth local news.