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«I. Introduction In modern democracies we find more and more channels of communication held in fewer hands. As evidenced by the historic development ...»

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Excessive Media Ownership and

Its Potential Threats to Democracy:

A Comparative Analysis

Raphael Cohen-Almagor with Stefan Seiterle1

I. Introduction

In modern democracies we find more and more channels of communication held

in fewer hands. As evidenced by the historic development of large European media

conglomerates, such as News International, Bertelsmann, Hachette, and Fininvest,

the tendency for media firms to expand and diversify is not new.2 This tendency has been on the rise in Europe,3 Israel and North America during the 1990s when we witnessed major transactions and mergers that increased the power of a few media tycoons in the major countries of the world.

The process had started some thirty years ago. When we look at the western world we can discern a pattern that developed during the late 1960s ± early 1970s, that big conglomerates buy up the media. In 1958, the three largest Canadian newspaper chains ± Southam, Thomson, and the Toronto Sun ± controlled about 25 percent of daily circulation. By 1970, this figure reached 45 %. The 1970s and 1980s saw the most astounding media buy-outs of the century, usually by highly diversified conglomerates looking to expand into ªinfotainmentº, information, and news. In 1980, the three largest paper chains in Canada controlled about 57 % of the market. The extraordinary consolidation in media ownership continued with 1 Stefan Seiterle wrote the first draft of the last section of this article dealing with Germany. Prof. Cohen-Almagor thanks him for his kind cooperation, and to Bob Franklin for his comments on an earlier draft. Further gratitude is made to Louise Bourgeois, Stefaan Verhulst, Enn Raudsepp, Anne Taylor, Moshe Negbi, Sam Lehman-Wilzig, Joe Magnet, Dan Caspi, and Ross Perigoe for providing him with pertinent material. Gratitude is also expressed to Eli Dunker for his excellent research assistance.

2 Gillian Doyle, ªRegulation of Media Ownership and Pluralism in Europe: Can the European Union Take Us Forward?º Cardozo Arts & Entertainment Law Journal, Vol. 16, Nos.

2 ± 3 (1998), p. 451.

3 Cf. Serge Robillard, ªVers une nouvelle reglementation europeenneº, La Concentration dans les medias, Numero 1, Quebec: Universite Laval, Centre detudes sur les medias, December 1996, pp. 25 ± 33. In Italy, Prime Minister Silvio Berlusconi owns the three commercial broadcast networks. Obviously he also has influence over the content of the three government-owned networks. The result is effective control over news programs.

438 Raphael Cohen-Almagor with Stefan Seiterle even greater frenzy in the western world as the 1980s drew to a close with the merger of Warner Brothers and Time Inc. (now called Time Warner Inc.); Rupert Murdoch's $3 billion purchase of Walter Annenberg's Triangle Publications;4 the decision of Gulf & Western (now called Paramount Communications Inc.) to concentrate on planetary media ownership; and Maclean Hunter's takeover of Selkirk Communications Ltd. This rapid concentration in media ownership was aided by conservative governments that embraced the principles of deregulation and privatization, including major funding cuts to public broadcasting throughout Europe, Britain, Canada, and the United States. As the buying spree continued unabated, less media corporate conglomerates own and control most of the world's major newspapers, magazines, broadcasting stations, book publishers, movie studios, and record and videocassette industries. In August 1995, Walt Disney Co. spent $19 billion in the second largest takeover in United States history acquiring the ABC television network. The next day it was announced that Westinghouse Electric Corp. had purchased CBS Inc., for $5.4 billion. A month later, Time Warner Inc.

took over Turner Broadcasting System in a $7 billion stock transaction.5 In 1996, the two largest radio chains owned 115 stations. In 2003, those two own more than 1,400. In effect, three companies own half the stations in America, delivering a homogenized product that neglects local news coverage and dictates music sales.6 In Canadian television, five corporations reached 62 % of viewers in 1993. In the cable industry, three companies had 68 % of the audience, up from 36 % in

1983. In radio, with 479 stations, ten companies controlled 55 % of the revenue share. In magazine publishing, the largest eight publishers controlled 52 % of circulation in 1993 ± 94. As for the press, the Southam-Hollinger chain alone controlled 43 %, Thomson 12 %, and the Toronto Sun chain 11 %.7 In comparison, the largest newspaper chain in the United States has about 10 % of national circulation, and the top radio station owner has about 1 percent of the stations.8 4 Murdoch inherited a single newspaper in Australia 50 years ago and through fearlessness and determination built an empire. In Britain and the United States he took on unions and politicians to establish himself in print and television arkets with entrenched players. The Australian-born Murdoch changed his citizenship, becoming an American to get around rules barring foreigners from owning broadcast outlets. Now his News Corp. includes an unparalleled worldwide satellite-TV operation. Cf. Johnnie L. Roberts, ªThe Rupert rulesº, Newsweek (2004) http://msnbc.msn.com / id / 3606171.

5 Joyce Nelson, Sultans of Sleaze, Monroe, Maine: Common Courage Press, 1989, pp. 63 ± 64; James Winter, Democracy's Oxygen: How Corporations Control the News, Montreal: Black Rose Books, 1997, pp. xxiii, 3 ± 11. For further discussion on the American scene, see Marsha Cohen, ªMedia Ownership and Conglomerization and Their Impact on A Free Press: How conglomerate-owned outlets reflect bias in their coverage of media mergersº, paper presented at the National Communication Association Annual Conference, Miami Beach (19 ± 23 November 2003); http://www.fcc.gov /; http://mediaaccess.org /.

6 William Safire, ªThe great media gulpº, New York Times (22 May 2003), p. A33; William Safire, ªOn media giantismº, New York Times (20 January 2003), p. A19. For further deliberation, see ªIs big media bad?º Newsweek (2004), http://msnbc.msn.com / id /3606172.

7 Winter (op. cit. fn. 5), p. 3.

Excessive Media Ownership and Its Potential Threats to Democracy 439 Freedoms of expression and of the media do not imply the freedom to own an unlimited number of communication organs. On the contrary, these freedoms contradict one another; unrestricted capitalism in the form of either cross-ownership or excessive ownership of media organizations negates free expression and free media. Excessive media ownership might hinder pluralism of ideas, creating a media market that is tightly controlled by a few decisionmakers who use their power and influence to project views that conform to their partisan interests.

The aim of this essay is to examine the issue of ownership, which is frequently mentioned as a prime concern by Canadian and Israeli critics of their media. In both countries the issue is excessive and cross ownership of the media by a small number of people who control the print press and the electronic press. Both countries are democracies with strong emphasis on free expression and freedom of the press. In both democracies the concept of the public's right to know prevails. In both we find a shrinking group of rich and influential people who control the media. Economic interests are interwoven with political interests. In both countries media scholars voice growing concern regarding the possible clash between public interests and the narrow interests of the media barons. At present, the major player in the Canadian media, CanWest, is interested to invest in the Israeli media market.

I shall first review the press industry in each country and then reflect on the broadcasting industries. With regard to broadcasting, both countries have publicly owned stations as well as private stations. Both are concerned with the size of their audiences, and rating considerations constitute a major factor in program production and planning, although somewhat less so in the public sectors. It is argued that excessive media ownership undermines free journalism and the projection of diverse opinions, and it provides avenues for partisan, partial interests. Finally, I shall make some pertinent observations regarding Germany and its media market.

It is noted that a former Israeli businessman, Haim Saban, is invested in the German media and presently interested in the Canadian media.

–  –  –

There is a growing concentration of media ownership in the hands of few. In 1958, the three largest Canadian newspapers controlled about 25 % of daily circulation. By 1970, this figure reached 45 %. In 1980, it was about 57 %. If we look at the number of independent dailies, we can discern a rapid decline during the past twenty years. In 1970 there were 45 independents, in 1980 there were 29, and in 8 Robert G. Picard, ªThe Experience of the United States and Its Implications for Canadian Policyº, in La Concentration dans les medias, Numero 1 (Quebec: Universite Laval, Centre detudes sur les medias, December 1996), p. 20. For information about Hollinger, see generally http://www.hollinger.com /.

29 Jahrbuch fur Recht und Ethik, Bd. 12 (2004) È 440 Raphael Cohen-Almagor with Stefan Seiterle 1996 only 14 of the 104 dailies were independent.9 Through their holdings, by the late 1990s Conrad Black controlled 60 %,10 Thomson 12 %, and the Quebecor-Sun chain more than 11 % of the market.11 Black published sixty newspapers out of 106 dailies, including all the newspapers in the provinces of Saskatchewan, Newfoundland, and Prince Edward Island.12 The Thomson empire ± one of the largest communication companies in the world ± controlled the prestigious Globe and Mail and seven other newspapers.13 Thomson was also the second largest owner of newspapers in the United States with over 140 dailies and weeklies.14 In the mids, the owners of Thomson decided to shift their interests from the print to the electronic media. Other major players were Sun media with 15 dailies and Quebecor with four tabloid dailies and eight percent of national circulation. Pierre Karl Peladeau, chief executive of Quebecor Inc., was the owner of this very successful chain comprised of Le Journal de Montreal, Le Journal de Quebec, the Sherbrooke Record, and the Winnipeg Sun.15 Concentration of the print media is magnified within Canada's regions. During the mid-1990s, in eight of Canada's ten provinces, one publisher controlled at least 56 percent, and sometimes 100 percent of newspaper circulation.16 With the notable exception of Le Devoir, all the dailies in Quebec were part of three chains owned by Conrad Black, Paul Desmarais (Power Corporation which controlled six percent of national circulation. Desmarais sold his shares in Southam Inc. to 9 Chris Cobb, ªBlack's newspaper shopping spree heightens concernsº, The Ottawa Citizen (28 May 1996), Business section, front page. Available on http://www.ottawacitizen.com /.

10 R. Emmett Tyrrell, Jr., ªA coalescing new world of ideasº, The Washington Post (4 December 1998), part A, p. A18; David Taras, Power and Betrayal in the Canadian Media, p. 18. Don Townson argues that Black's newspapers account for ªover 40 percentº of Canada's total circulation. See D. Townson, ªToronto's Bloody Newspaper Warsº, Columbia Journalism Review (July ± August 1999), p. 52.

11 Winter (op. cit. fn. 5), p. xxiv. Apart from the Sun network, the Quebecor also has two French-language newspapers in Montreal and Quebec City (Le Journal de Montreal and Le Journal de Quebec), four dailies in Alberta, two in Manitoba, five in Ontario, and the Record of Sherbrooke in Quebec. See Anthony Wilson-Smith, ªWar of wordsº, Maclean's (8 February 1999).

12 http://www.media-awareness.ca / english / index.cfm; see also Maude Barlow / James Winter, The Big Black Book, Toronto: Stoddart, 1997, pp. 4, 10; Siegel (op. cit. fn. 12), pp. 127 ± 139; Christopher Dornan, ªNewspaper Publishingº, in: Michael Dorland, ed.: The Cultural Industries in Canada, Toronto: James Lorimer & Co., 1996, pp. 60 ± 92.

13 Wilson-Smith (op. cit. fn. 11). In May 2002, Osprey Media bought the Winnipeg Free Press and Brandon Sun from Thomson Corp. See Craig Wong, ªOsprey Media files preliminary prospectusº, Ottawa Citizen (6 March 2004), Business, p. D4.

14 See David Taras, The Newsmakers: The Media's Influence on Canadian Politics, Ontario: Nelson Canada, 1990, pp. 8 ± 16; Rowland Lorimer / Jean McNulty, Mass Communication in Canada, third edition, Ontario: Oxford University Press, 1996, pp. 216 ± 219. See also Barlow / Winter (op. cit. fn. 12), p. 30.

15 Winter (op. cit. fn. 5), p. 11.

16 Siegel (op. cit. fn. 12), p. 133.

Excessive Media Ownership and Its Potential Threats to Democracy 441 Black's Hollinger Inc.), described by the Davey Committee as the ªlord of the dailiesº,17 and Pierre Peladeau (Quebecor Inc.), described by Davey as the ªking of the pop weekliesº.18 Of the 42 daily newspapers in Ontario, 30 (71 %) were owned by Black. The Irving family, owners of a huge conglomerate with more than three hundred businesses, controlled all four English-language daily newspapers in New Brunswick (less than 3 percent share of national circulation), while Black owned all ten dailies in the provinces of Newfoundland, Prince Edward Island, and Saskatchewan.19 Presently, all major media outlets in the Greater Vancouver area are concentrated under one roof, CanWest: the two dailies (the Vancouver Sun and The Province), several other papers (like Burnaby Now and the Vancouver Courier) and the dominant television outlet, BCTV.

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