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Media Money

Media corporations give millions, receive billions.

by Sakura Saunders and Ben ClarkeSpecial to CorpWatch
August 25th, 2004

Cartoonist Khalil Bendib

Opening with a challenge by Democratic Vice Presidential candidate John Edwards to spend three minutes with the men who served with his running mate John Kerry, the Swift Boat Veterans for Truth (SBVT) denounce Kerry’s war record, with war-time pictures and man by man testimonials. This ad blitz, priced at $550,000, hit the airwaves in early August 2004.

It was quickly met with a counterattack funded by Moveon.org. “Swift response” aired in the same markets as the SBVT spot, plus nationally on CNN and Fox. Featuring a jab at President Bush’s war record and an admonishment by Republican war vet Senator John McCain. The counter-spot cost $200,000 to place. Since August 19, John Kerry has launched two of his own rebuttal ads featuring the fellow soldier whose life Kerry had saved. Placement price: $190,000. Total price tag for this commercial exchange--almost $1 million dollars.

Continuing a twenty-year trend that has seen advertising expenses skyrocket as traditional political party organizing has fallen by the wayside, the total for political ads this election year is estimated by most industry analysts at over $1.5 billion, $400 million of which will be spent by the presidential campaigns. Over the last 24 years, broadcast TV advertising alone has increased from $90 million to over a $1 billion. (See chart from Television Bureau of Advertising.) At roughly the same pace that advertising revenue has grown, broadcast TV coverage of substantive electoral issues has dwindled. Network convention coverage, for example, has fallen from around 100 hours in 1980 to approximately 18 hours this year.

Another study shows that the two weeks leading up to the Super Tuesday primaries, ABC, CBS, NBC and Fox devoted an average of just eight percent of their news coverage to election coverage. (See chart from Alliance for Better Campaigns).
Industry spokespeople defend their record citing surveys that show the public is satisfied with the amount of election coverage they are getting. The National Association of Broadcasters (NAB), the largest trade association of TV stattions in the U.S., argues that politicians are happy with the system as well. NAB spokesperson, Jeff York claims that politicians prefer advertising to independent news coverage because, "They can control the message when they buy advertising. They have less control when it's live news."

But critics of the broadcast industry say that the reliance on political advertisement to communicate with the public amplifies the need for big money funders and empowers special interests. They claim that the solution to the spiraling cost of political advertising is surprisingly simple, make it free. After all, the broadcast networks receive their licenses free from the federal government in exchange for meeting the needs of the public interest.

Since 1987, when the Reagan appointed Federal Communications Commission (FCC) repealed the last effective elements of the Fairness Doctrine requiring broadcasters to cover contrasting views of important issues, there have been no serious public interest requirements regarding electoral coverage. After Clinton pushed through the incumbent friendly Telecommunications Act of 1996, again with no public interest requirements, broadcasters have happily consolidated ownership and raked in the advertising profits at an ever accelerating pace.

In January 1998, Clinton briefly toyed with a proposal for free or reduced rate television time for electoral candidates, going so far as to order then FCC chairman, Bill Kennard, to develop new rules for political ads. But Kennard quickly backed down when within days, the FCC received a letter from 17 Republican members of the House, including Tom Delay (R-Texas) and Billy Tauzin (R-Louisiana), proclaiming that “only Congress has the authority to write the laws of this nation”. In the Senate, John McCain (R-Arizona) and Conrad Burns (R-Montana) announced that they would block the FCC free airtime initiative.

In the late 90s, Congresswoman Louise Slaughter (D-New York) introduced the Fairness in Political Advertising Act in three successive sessions of Congress. While she has found 14 other brave souls to co-sponsor the bill she's never received a congressional hearing on the subject. Later, Slaughter learned that the broadcasting industry had spent $11 million to defeat her bill.

In 2002, during the debate on the Campaign Finance Reform Act banning unlimited soft money contributions to the political parties, Slaughter again pushed to decrease the cost of political advertising. "I find it extremely ironic that this body would consider an amendment to protect this special interest group [the broadcasters] as we work to limit the influence of special interest money in our political process," she remarked.

According to a the Center for Responsive Politics, the National Association of Broadcasters (NAB) spent thousands in campaign contributions prior to the vote to approve the Bipartisan Campaign Finance Reform Law, including $15,000 to the National Republican Congressional Committee and $17,000 to the Democratic Congressional Campaign Committee. In addition to these soft money contributions, the NAB doled out more than $60,000 to House and Senate members during that time, including large contributions to Lindsay Graham (R-South Carolina), Richard Burr (R-North Carolina), and John Dingell (D-Michigan), all of whom later went on to sponsor pro-industry amendments.

Slaughter's position on cheaper commercials lost in the house 321-101. A provision to reduce the cost of airtime did clear the Senate with a 60-40 vote but according to Meredith McGehee of the Alliance for Better Campaigns, it turns out that incumbent Senators face a slightly different equation when it comes to advertising costs. McGehee explains that “Because of redistricting, races for house seats are usually more secure, incumbent Congressmen are hesitant to support a policy that might upset that security. The Senate is more open to granting political ad subsidies, because their campaigns already rely more heavily on advertising to communicate their message.”

NAB spokesperson Jeff York downplays NAB's role in killing cheaper commercial
time in Congress. He argues that politicians currently refuse the free airtime that they are offered because they are afraid to confront their challengers. To support his claim he points to a Washington Post article that exposed eleven Senators who refused to debate their opponents on NBC’s Meet the Press. Tim Russert, the show’s host is quoted stating that the Senate candidates would “prefer to hide behind 30-second ads."

NAB's York claims that “it would be hard to imagine a broadcaster refusing to get both candidates on the air, who wouldn’t want to have that explosive debate?” But in fact broadcasters do regularly refuse to broadcast debates. In a study released just last week by the Committee for the Study of the American Electorate shows that 73% of the 174 debates (gubernatorial and congressional) researched by the committee were not aired by any of the networks (NBC, ABC, CBS, UPN, Fox, and WB). Furthermore, 82% of stations with one or more debates in their area refused to air them.

Political payoffs
So far this election season broadcasters have donated $ 3,592,069 in hard money contributions to candidates. Over the past three years the big five Media companies, Disney (ABC), News Corp (Fox) GE (NBC & Telemundo), Viacom (ABC), Time Warner (CNN & WB) plus the NAB have spent over $ 79, 740,000 on lobbying.

Political Moneyline /FECinfo.com

Killing free or reduced air time for political ads is only one of the lobbying goals of the NAB and the big media companies. NAB's legislative agenda ranges from promoting protectionist policies against the Satellite Television industry and Low Power radio, to limiting their public interest requirements by fighting spectrum user fees and political advertisement subsidies. Beyond protecting the broadcasting industry, media company lobbying efforts have ranged from supporting provisions in international free trade agreements to the elimination of the estate tax.

Contributions, lobbying, all expenses paid junkets, and above all favorable spin during the ever smaller news hole in which news issues are framed are the payback provided by the broadcasters to the politicians. Norman Solomon, media analyst for the media watchdog group FAIR, points out that Fox New’s parent, NewsCorp had a large stake in the deregulation rules because they both already owned more stations than the previous rules had allowed. Fox provided vehemently pro-war news coverage and editorials in the period before the Iraq invasion. Solomon comments, "This is the typical Karl Rove strategy of helping out those who further the agenda of the administration.”

It can be hard to determine which partner is leading the dance at any given moment. General Electric, which owns NBC, spent over $45 million dollars on lobbying in 2003 alone. GE is also a defense department contractor with annual revenue of $134.2 billion, profiting handsomely from its government contracts in Iraq.

GE's has also been caught up in some controversy involving the coveage of the 2000 presidential election. Congressman Henry Waxman (D-California) has repeatedly accused Jack Welch, then CEO of GE, of interfering with the election coverage by ordering the premature announcement of Bush’s victory on NBC. Welch, a long time Bush supporter, has denied the charges. But according to Neil Gordon, investigator for the Center for Public Integrity, Welch did admit that he was cheering for Bush at NBC headquarters. He reports that after initially promising to turn over an internal videotape of Welch at NBC headquarters on election night, NBC withdrew the offer.

On the democratic presidential side, John Kerry has in the past been an outspoken critic of special interest money in politics, co-sponsoring the joint resolution against media consolidation and supporting multiple bills restricting campaign financing. He also recently gave an interview to John Nichols of The Nation magazine, where he used the media democracy rhetoric of the left to express his views. But media remains missing from his campaign platform, and not one of the 400+ press releases on the website has anything to do with media issues.

Kerry's relative reticence on media reform might be related to the fact that his top financial supporters are media companies and the law firms that represent them. Two of Kerry’s top four career patrons are the law firms Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, who represent telecom and cable interests, and Skadden, Arps, Slate, Meagher & Flom, who represent Time Warner and News Corp.. Time Warner also ranks in the top four category of Kerry supporters.

Grassroots campaign

The failure of politicians to produce meaningful media reforms has provoked a nationwide effort to open the public airwaves serve for political debate, especially among candidates. This year a coalition of 60 non-profits, unions and churches have joined the a campaign called “Our Democracy, Our Airwaves.” The coalition includes the AFL-CIO, Common Cause, the Communications Workers of America, the Consumers Union, the League of Women Voters, the Sierra Club, and the United Church of Christ, amongst others.

Their aim is to require that broadcasters to air a minimum of two hours of candidate or issue-focused programming a week as part of their public interest requirement. They also want to create a voucher system for political advertisements, funded by a spectrum user fee applied to broadcasters. This campaign already has a bill of the same title in the Commerce, Science and Transportation Committee of the Senate, and is sponsored by John McCain (R-Arizona), Richard Durbin (D-Illinois), Russ Feingold, (D-Wisconsin) and Jon Corzine (D-New Jersey). This campaign obviously goes against the interests of the broadcasting industry’s bottom line, but with a strong grassroots constituency, they hope to counter the broadcaster’s political weight, making it so that politicians might have more to lose than their campaign contributions.