American broadcasting as we know it is becoming American broadcasting as we knew it. The revolution in communications technology -- cable, satellites, home video -- may turn out to be small McNuggets when compared with the revolution in the communications business now in full swing. Forces of bigness in the new age of mega-media are shifting and realigning and, in the process, remaking and reshaping what has become an enormous part of American life.
American life and American television are inextricably interlinked. As broadcasting businesses get bigger, bigger, and fewer in number, broadcasting grows less responsive, less manageable and less civilized. In short, worse. And, potentially, more dangerous.
The finale to a year of mergers and takeovers and escalations in the concentration of media ownership was a crescendo indeed: General Electric's proposed $6.28 billion takeover of RCA, which includes NBC, now the number one network in prime-time ratings. In preceding months, Capital Cities Communications took over ABC for $3.5 billion, Australian media baron Rupert Murdoch gobbled up the hugely profitable Metromedia station group, and CBS narrowly rebuffed a hostile takeover attempt by maverick entrepreneur Ted Turner.
One relatively immediate possible effect of the GE takeover bid: the departure in 1986 of NBC Chairman Grant A. Tinker, who engineered the network's spectacular comeback with programming hailed for its tastefulness and class. Tinker's genteel management style is almost certain to clash with that of GE Chairman John Welch Jr., described by Fortune magazine as one of America's 10 most hard-nosed senior executives. "According to former employees, Welch conducts meetings so aggressively that people tremble," Fortune reported.
"When Grant leaves it will have nothing to do with recent occurrences," NBC Executive Vice President M.S. Rukeyser Jr. said yesterday.
Broadcasting magazine hailed the GE-RCA match-up as a "marriage made in takeover heaven," but there are now signs a few people may show up at the wedding ceremony with shotguns, hoping to force the partners not toward the altar but away from it, and perhaps giving takeover mania its first major challenge.
"This could be one of the most interesting takeover counterfights around," predicts consumer advocate Ralph Nader, whose watchdog group is one of the potential challengers. "Of course the takeover was treated as a fait accompli by the guys at the top. They had less than an hour of deliberations before presenting this to the world. There are a lot of guys within NBC and RCA who don't want it. In a case like this, though, no one else gets asked. No one else gets consulted. Zero."
Nader's specific objections to this takeover center on GE's status as a defense contractor and its involvement in the nuclear power industry; how would such a company respond to investigative reports on its business by a news division it owns? Nader thinks there probably wouldn't be any such reports to worry about. "Self-censorship is alive and well in the U.S. media," he roars. "People in the business will say, 'Nobody called me and put me in handcuffs and told me not to write a certain story,' and I say, 'They don't need to. You put the handcuffs on yourself.'
"The level of self-censorship due to conglomerate ownership and bottom-line ratings mentality in the broadcast media is increasing greatly," Nader says. "Even if they do the tough topics, they don't really get at them. They don't come to any conclusions."
Producer Norman Lear, who recently divested himself of his own relatively small media empire, Embassy Communications, sees the mega-trend in mega-mergers as typifying and accelerating "the whole obsession with short-term thinking" that dominates "the corporate culture" today. While he finds the GE-RCA takeover to be "brilliant, from a business standpoint," he shares Nader's worries about a giant firm, and a nonbroadcaster besides, owning and operating a news organization.
"It does bother me," says Lear. "I've dealt enough with bureaucracy, all kinds, including network, to know that the tendency is for underlings to try to outguess what might be on the minds of their bosses three rungs above. They could think, 'He might not like Archie Bunker diapering his grandson,' or whatever."
The result of this merger, says Lear, could be that the new company, potentially the largest defense contractor in America, would own a powerful television network. "I worry about a kind of prior censorship happening on an almost unconscious level," says Lear, "of defense contract irregularities and cost overruns not being looked into because nobody wants to look for trouble."
Nader also looks askance at GE's business record and what it bodes for its performance as a broadcaster. "They're always in trouble," he says. The troubles include a 1985 criminal indictment for fraud in connection with the company's dealings as a defense contractor. In 1981, GE was fined $31,000 for maintaining a $1.25 million slush fund used for bribing Puerto Rican officials. A 1984 study of taxes paid by corporations found GE to be "the biggest corporate beneficiary" of tax changes engendered by President Reagan, coincidentally once the host of "General Electric Theater" on CBS.
"GE earned $6.5 billion in pretax domestic profits over three years, paid not one cent in federal income taxes, and claimed tax refunds of $283 million in taxes paid before Reagan took office," the report said.
But being a good citizen no longer appears to be a major criterion for owning broadcast properties in the United States. Striking down old prohibitions against awarding licenses to those with checkered records in other fields is part of FCC Chairman Mark Fowler's sweeping deregulatory philosophy, a mind-set that is largely responsible for the environment in which the new media mergers thrive and flourish.
Andrew Jay Schwartzman, director of the Media Access Project -- another potential challenger to the RCA takeover -- says the FCC has turned a major corner in the history of American telecommunications policy, and that Fowler has engineered a potentially cataclysmic departure in regulating broadcasting -- "the divorcing of licensee responsibility from the broadcast license," and the death of the idea that broadcasting is a special business, not just another business, one that requires an extra measure of responsibility in its owners and leaders.
"They're changing that," Schwartzman says. "There's no concern now over who these media owners are and where they're coming from. It's changing how broadcasting is viewed, and it's got lots of ripple effects. Quick-buck entrepreneurs could move into broadcasting and establish a new idea of what profitability is, and then everything deteriorates, because the established broadcasters feel forced to compete."
Schwartzman says broadcasting is now wide open to nonbroadcasters, to "companies whose principal business is not broadcasting, making their money from journalism and public service. Instead broadcasting gets lost in giant conglomerates where the commitment is to the bottom line, the quick turnaround."
The business is getting bloodier as it gets bigger. "Fowler has repealed the trafficking rule, the one that said a license had to be held for three or four years when it changed hands," Schwartzman says. "This meant you had to drop some roots in the community, not come and go in the middle of the night like those people in 'Huckleberry Finn.' Now trafficking in broadcast properties is becoming common. That makes people focus much more on cash flow, on short-term things like dressing up the balance sheet, and less on establishing roots in the community and building a loyal audience. It's a different way to make money in the broadcasting business."
Schwartzman says voices are starting to be raised in Congress about Fowler's relaxation of all the rules that have governed broadcasting, and about his seeming eagerness to approve mergers and takeovers that seem certain to decrease diversity of ownership, long a commission goal, and concentrate it in fewer and fewer hands.
But Schwartzman may be just optimistic about congressional reaction. So far there has been barely a peep. In October and November, blistering letters were exchanged between Fowler and Rep. Timothy Wirth (D-Colo.), chairman of the House telecommunications subcommittee, about Fowler's zeal in granting cross-ownership waivers, specifically to Rupert Murdoch. By the old rules, Murdoch should have to divest himself of his Chicago Sun-Times and New York Post newspapers now that he owns TV stations in those cities, but Fowler granted him a temporary waiver that some insiders feel, in the current climate, will become permanent.
Now, though, Wirth's rancor seems to have cooled. He is still considered a leading opponent of Fowler on the Hill, along with Rep. John D. Dingell (D-Mich.), chairman of the House Committee on Energy and Commerce. In a statement about the GE-RCA takeover released last week, Dingell took special pains to point out the FCC's responsibilities in investigating the case. It seemed a clear slap at Fowler.
"To have one of the nation's largest purchasers of television advertising acquire a real ownership link with one of the three major television networks raises interesting questions," Dingell said. "Then, too, there might be a concern about news coverage on a network owned by a major American corporation, one which does considerable business with the federal government and, of course, the Defense Department."
One small phrase in Dingell's statement strikes at the heart of the matter: "The Federal Communications Commission has a special burden in this case given the fact that RCA owns NBC," Dingell wrote, "since broadcasting is unlike other businesses." That idea, that broadcasting is unlike other businesses, that it carries with it an extraordinary burden of social responsibility, is what Fowler's philosophy seeks to topple.
On the Senate side, meanwhile, there seems little interest in the wholesale revisions taking place in American mass communications. Alan Moore, a spokesman for the Senate Commerce Committee, said yesterday, "I don't think there's much concern on the Senate side" about the GE-RCA takeover, in part because "we're getting used to mega-mergers" and in part because GE "has a relatively clean image" and a "reservoir of good will."
"If this were General Dynamics, it would be a different matter," Moore said.
And so the mergers and the takeovers go on, virtually unchallenged, and big conglomerates get bigger. Where will it lead? Schwartzman says one possible scenario is "a real backlash" against deregulation and the unchecked media empire building and predicts a coalition of liberals and conservatives joining forces to halt the spiraling concentrations of power.
But that's so unlikely. As Nader says, "There's a lot of potential turmoil and dissent under the surface, but nothing will happen if the press doesn't cover it. Fatigue becomes contagious."
Another scenario? Schwartzman looks ahead to 1995 when the trend toward mega-media could "lobotomize and trivialize our society. Bigness involves a removal of localism from the process," he says. "With investors buying and selling stations only for the capital gains they can get, the focus will get more and more on entertainment and less on news. 'Entertainment Tonight' is a perfectly fine program of its type, but as network news shows get more and more like it, you've got to get worried."
Lear recalls working up a science-fiction project several years ago that conjured a World War III being fought not among nations but between the last two giant conglomerates on earth. Says Lear now, "I'm not so sure that's science fiction any more." And perhaps each conglomerate will own a network with which to cover the war.