Power Without Responsibility (JN 500) News Media Ownership and Regulation Case Study: News International (UK)

Lecture Outline 1. Who Owns What? 2. Concentration of Media Ownership 3. Media Moguls and Political Influence 4. Regulatory Structure 5. Models of Regulation 6. Case study: News International (UK)

1. Who Owns What? News UK – The Sun, The Times, Sunday Times, Sky Trinity Mirror – Mirror, Sunday Mirror, People, Daily Record Northern & Shell (Richard Desmond) – Express, Express on Sunday, Daily Star, OK! Daily Mail and General Trust (Jonathan Harmsworth) – Daily Mail, Mail on Sunday, 20% stake in ITN Telegraph Group (Barclay brothers) - Daily Telegraph, Sunday Telegraph, The Business, The Spectator Guardian Media Group (Scott Trust) – The Guardian, The Observer Independent Print Ltd (Lebedev) – Independent, Independent on Sunday, The i, Evening Standard Pearson – Financial Times

1. Who Owns What? Lebedev looking to sell Independent titles: ander-lebedev-buyers-independent-sunday-i ander-lebedev-buyers-independent-sunday-i Desmond sold Channel 5 to Viacom:

2. Concentration of Media Ownership In UK, 10 newspapers account for about 70% of total circulation. UK TV less diverse historically with strong influence of BBC.

2. Concentration of Media Ownership Reasons for concentration of media ownership: High cost barriers to entry Economies of scale Competitive forces – companies use economic strength to battle weaker competitors. Different kinds of media conglomerates: News media conglomerates (e.g: News Corp) Media and leisure conglomerates (e.g: Disney, that own everything from theme parks to ABC U.S. TV network) Media and telecommunications conglomerates (e.g: Comcast Corp, largest cable and home internet service provider in U.S. and also owns NBC Universal.)

2. Concentration of Media Ownership Arguments against concentration of media ownership: Potential abuse of power; Loss of diversity of expression (insufficient ideological diversity); Conflict of interest; and Repressive journalistic culture (internalisation of organisational values). Not just consolidation of economic power of media but hegemonic role of media in structuring of social consciousness.

2. Concentration of Media Ownership Counter argument about rise of Internet, social media and new media technologies.

3. Media Moguls and Political Influence Post-war media characterised more as ‘market-driven journalism’. Thomson new kind of media mogul exemplifying “concentration, conglomeration and internationalization” (Seymour-Ure 1996, p. 121). Started with Canadian newspapers, bought the Scotsman in 1959, became book publisher, and acquired The Times in 1966.

3. Media Moguls and Political Influence The media mogul has been a remarkably persistent figure in contemporary era. Moguls generate interest because they are often charismatic individuals but direct interventions can be overstated (Hesmondhalgh). Direct political uses of media empire have passed under weight of commercial pressures to build and maintain large, heterogeneous audiences (Ward).

3. Media Moguls and Political Influence Media mogul influence needs to be considered within structural contexts. Power is seen as setting rules and constraints within which actors … act to realise their goals. Both individuals and structures are relevant. The general features of the media economy – the market, the state regulatory structure, the corporate structure – organise and prioritise a range of alternatives and possibilities, but within this context individual and collective actors operate more or less effectively to realise their interests (Street). Despite this …

3. Media Moguls and Political Influence Media moguls do have influence over politicians and policy process. Commercial success does not automatically translate into political influence but it does grant them social status and political access. Media mogul influence over editorial staff and production process such as appointment and removal of editors, involvement in editorial policy, commercial policy (Street). Lord Matthews (former owner of the Evening Standard): “By and large editors will have complete freedom as long as they agree with the policy I have laid down.”

3. Media Moguls and Political Influence Berlusconi as Italian Prime Minister had influence over the three state television stations as well as his own three private television stations.

3. Media Moguls and Political Influence “ This discussion is not just a matter of identifying examples of influence. It has crucial implications for the debate about democracy and mass media. Put crudely, if particular individuals are seen to have power, or if certain partial interests predominate in the way the media operate, and if these individuals and interests control political discourse to the detriment of other legitimate goals and values, then this may constitute the basis for constricting their rights to own such outlets or to have influence over them ” (Street 2001, p. 125).

4. Regulatory Structure Despite commercial and market incentives for concentration of ownership, it is not inevitable and markets can be regulated. “Much attention is devoted to the power of media moguls but we should not overlook the power that individual politicians have over the media – from a legislative point of view but also from the perspective of appointments to public broadcasters, regulatory authorities” (Craig 2004, p. 42).

4. Regulatory Structure Government regulation through: 1. public ownership of media 2. legislative framework. Anglo world two traditional approaches to media regulation. U.S. – commercial media system, U.K./Commonwealth countries – stronger role for state regulation, public service broadcasting. In U.K. traditional concern for preservation of ‘ cultural standards ’, high culture.

4. Regulatory Structure Reasons for regulation: allocation of airwaves spectrum the building of a national culture to address issues of media ownership to address issues of censorship to address issues of media practice.

4. Regulatory Structure Traditionally, print not subject to regulation unlike broadcasting, but now estabishment of post-Leveson regulatory body set up under Royal Charter. ss-regulation-judge-for-yourself--the-royal-charter-in- full html ss-regulation-judge-for-yourself--the-royal-charter-in- full html

4. Regulatory Structure New body the Independent Press Standards Organisation (IPSO) started by newspapers opposed to Royal Charter regulatory body: edia/2014/sep/14/ipso-isnt- perfect-only-show-in-town- press-regulator edia/2014/sep/14/ipso-isnt- perfect-only-show-in-town- press-regulator Address by IPSO chairman Sir Alan Moses: /content/ipso-chair-sir-alan- moses-fearless-press-can-also- be-fair-press /content/ipso-chair-sir-alan- moses-fearless-press-can-also- be-fair-press

4. Regulatory Structure Press Commission in 1949 led to formation of the industry body, the Press Council in 1953 to monitor monopolistic trends and process complaints. Dissatisfaction with 1980s tabloid press led to the Press Complaints Commission in 1991 (succeeding Press Council) – majority of non-press members.

4. Regulatory Structure Since the 1980s – with the rise of neo-liberalism – there has been a trend towards deregulation of media. ‘ De- regulation ’ does not just mean less regulation – it means regulation in favour of particular interests. Since 1990s regulation influenced by digitalisation and trends towards convergence of broadcasting, Internet, and telecommunications. Labour in 1997 established Dept of Culture, Media and Sport to develop integrated communications policy.

4. Regulatory Structure 1988 – Broadcasting Standards Council established to monitor levels of sex and violence on television – Independent Television Commission (commercial TV regulator) established. Broadcasting Act (1996) established frameworks for development of digital broadcasting and liberalised rules on cross-ownership Communications Act allowed further increases in commercial radio and television concentration, it allowed British terrestrial television channels to be bought by owner outside the EU Communications Act also established new regulator, the Office of Communications (Ofcom) (Curran & Seaton 2010, p. 372).

4. Regulatory Structure Ofcom broadcasting code: The 10 main sections cover protection of under-eighteens, harm and offence, crime, religion, impartiality and accuracy, elections, fairness, privacy, sponsorship and commercial references. ast-codes/broadcast-code/ ast-codes/broadcast-code/

5. Models of Regulation Free Market: Consumer sovereignty. Media policy should promote competition, consumer choice, and independence from government (but overlooks dependence upon business/advertising). Free market model promotes deregulation. Deregulation case promoted by greater media outlets due to rise of Internet and technological change (Curran & Seaton 2010, pp ).

5. Models of Regulation Social Market: Social market liberals – found across left and right of political spectrum – adopt more pragmatic approach, sometimes arguing for regulation, sometimes for market solutions. Peacock Report in 1986 made right-wing case for public service broadcasting (without advertising) due to belief that market was underdeveloped. Argument that we should move from structural to behavioural regulation of media corporations, allowing greater concentration but monitoring corporate practices (fair pricing, etc.) (Curran & Seaton 2010, pp ).

5. Models of Regulation Protectionism: Involves production quotas, restrictions on foreign media ownership, and subsidies designed to support domestic media production and control. Protectionism arises out of need to protect against U.S. ‘dumping’ and - from EU perspective – the need to develop cultural infrastructure of a new state. Radicalism: Attempts to formulate ‘non-market, non-state media institutions’ partly involving broader public involvement in media production and greater media control by professional practitioners.

6. Case study: News International (UK) 1953 – News Ltd in Adelaide after death of his father – Expanded to Sydney buying The Daily Mirror and 1964 started The Australian – UK newspaper purchases – The Sun and News of the World 1970s – US newspaper purchases – NY Post, Chicago Sun Times – 20 th C Fox and six TV stations from Metromedia. 1990s – satellite TV systems – BSkyB, Star TV. Also investment in sporting rights: UK Premier League, American Football rights – Internet strategy. Purchased MySpace and online video gaming company – Buys Dow Jones & Co, including Wall Street Journal.

6. Case study: News International (UK) July 2011 – closure of News of the World after phone hacking scandal. Also withdrew bid to buy the final 61% stake in BSkyB after political pressure – Announced split of News Corp into two companies to maximise shareholder value: News Corp (publishing) and 21 st Century Fox (Broadcasting) 2013 – Name change of News International to News UK. edia/2013/jun/26/rupert- murdoch-news-international- news-uk edia/2013/jun/26/rupert- murdoch-news-international- news-uk

6. Case study: News International (UK) Two classes of shares in News Corp companies: A and B class. Only B Class carry voting rights. Murdoch currently owns about 40% stake in voting rights in both companies. What Does News Corp and 21 st Century Fox own?

6. Case study: News International (UK) Told editor of News of the World: “I didn’t come all this way not to interfere.” Murdoch shook up British establishment with purchase of The Times and the Sunday Times in Appointed editors sympathetic to his political and economic views, such as Andrew Neil in 1983 as editor of Sunday Times. Close links to Thatcher allowed him in 1989 to launch Sky TV in apparent contravention of existing monopoly law and bid was not referred to the Monopolies and Mergers Commission.

6. Case study: News International (UK) Murdoch shifted over time from social libertarianism to militant economic libertarianism. He also remains pragmatic businessman, able to shift political allegiances if necessary – e.g. Blair.

References Craig, G 2004, The Media, Politics and Public Life, Allen & Unwin, Crows Nest, Sydney. Curran, J & Seaton, J 2010, Power Without Responsibility: Press, broadcasting and the internet in Britain. 7 th edn, Routledge, London. Hesmondhalgh, D 2002, The Cultural Industries, Sage, London. Seymour-Ure, C 1996, ‘Media : the Press’, The British Press and Broadcasting since 1945, 2 nd edn, Blackwell, Oxford. Ward, I 1995, Politics of the Media. South Melbourne: Macmillan.