Nov 1 1995

Corporate Ownership Matters

The Case of NBC

One pundit who had no problem with the summer’s media merger marathon was USA Today columnist Michael Gartner. “It makes no difference if media are owned by corporations or families or individuals,” he wrote (8/8/95). “What matters are the integrity and intelligence and intrepidness of those owners.”

Gartner wrote from experience: “For five years, I was president of NBC News, which is owned by General Electric,” he said. “Not once did GE boss Jack Welch or anyone else at GE ask me to put something on the air–or not to…. Jack Welch, tough and some say ruthless, does not use NBC to further the gains of GE.”

Gartner should recall the warning of the dean of American press criticism, George Seldes, who wrote in 1938: “The most stupid boast in the history of present-day journalism is that of the writer who says, ‘I have never been given orders; I am free to do as I like.'”

Seldes’ point was that it is those who are likely to do something the boss doesn’t like that get told what to do; those who naturally do what the boss wants need no such direction.

Larry Grossman, Gartner’s predecessor, was told in no uncertain terms what GE expected from him. “You work for GE!” Welch once shouted at his subordinate, poking a finger at Grossman’s chest (Ken Auletta, Three Blind Mice).

Welch told Grossman not to use phrases like “Black Monday” to describe the 1987 stock market crash, because it was depressing the price of blue chip stocks like GE. And warned the NBC News chief, “Don’t bend over backwards to go after us just because we own you.” Welch even told Grossman to allow Today show weather forecaster Willard Scott to keep plugging GE light bulbs (Lawrence Grossman, The Electronic Republic; Electronic Media, 11/11/91).

Gartner, on the other hand, reportedly had a knack for knowing what the boss wanted. “Michael Gartner, the bow-tied newspaperman from Iowa, did what his bosses at NBC-TV and its parent, General Electric Co., hired him to do nearly five years ago,” the Chicago Tribune reported after Gartner lost his job following NBC‘s fake-explosion fiasco (3/3/93): “He slashed staff and services and stopped the red ink from flowing at NBC News.”

Under Gartner, according to the Cleveland Plain Dealer (3/3/93), “Corporate standards were more important than journalistic standards.” TV insiders cited this as the reason Gartner held onto his job for so long, despite the general decline of NBC News during his tenure: “He basically survived because GE liked him,” one TV executive told the Chicago Tribune (3/3/93); “Corporate loves him,” another said to the Sacramento Bee (2/15/93). “He’s a bottom-line guy.”

Most people who work for large corporations understand without being told that there are things you should and should not do. The Today show producer who declined to include an anti-GE campaign in a segment on consumer boycotts probably wasn’t thinking of an official memorandum when she said, “We can’t do that one. Well, we could do that one, but we won’t” (Extra!, 1-2/91).

Nor did Today likely get an order from GE headquarters–or from Gartner–before censoring references to GE in a story on defective bolts used in airplanes and other equipment (Today, 11/30/89). The executive at SuperChannel, NBC‘s European cable channel, probably wasn’t told to cancel the human rights show Rights & Wrongs after it examined the poor working conditions at GE plants in Mexico (Extra! Update, 8/94).

But such decisions, big and little, are made constantly when a large, diversified corporation is the owner of a news outlet. Despite Michael Gartner’s claim, a corporate owner is fundamentally different from an individual or family owner. An individually owned news outlet may be good or bad, but if the owners want to, they can decide to pursue quality journalism even if such decisions hurt their bottom line.

The management of a corporate news outlet does not have that luxury. By law, management must not allow other considerations (like journalistic ethics or the public interest) to stand in the way of profits–otherwise it would be abandoning its fiduciary responsibility to its stockholders, and would be subject to a lawsuit.

Representatives of corporations will say that good journalism is good business, and so there is no conflict. It is true that a news outlets’ credibility is one of its assets, which can be eroded by blatantly biased reporting. But to corporate owners, the value of that asset may be far outweighed by the gains to be made by using their media to promote their other lines of business. As news operations become smaller and smaller parts of ever larger conglomerates, that trade-off will become more profitable–and news decisions will more often be subordinated to corporate strategies.

“You can’t generalize about owners,” Gartner told USA Today‘s readers. “For the structure of ownership is immaterial. It’s the individuals that matter.”

To the contrary: In the structure of today’s media, individuals matter less and less.