Is Media Privatization The New Trend? - Jaffer Ali - MediaBizBlogger

By Jaffer Ali Archives
Cover image for  article: Is Media Privatization The New Trend? - Jaffer Ali - MediaBizBlogger

The title of this article is somewhat rhetorical. With Clear Channel and the Tribune Company each entering into multi-billion dollar leveraged buyouts (LBO), there are two main reasons for what some are seeing as this emerging trend. One is economic and the other is political.

The first is often spoken of freely in public discourse while the other lies largely hidden beneath the water line. As audience shares decline and future economic performance appear unstable, mainstream media assets must get higher marginal advertising rates to compensate for the new realities. How long is this sustainable? The LA Times recently said,

"Shares of major newspaper publishers have been declining in recent months over deepening concerns about an ongoing migration of readers and advertisers to the Internet." --LA Times, October 18, 2007

"Going private" is one strategy media outlets are considering. Even the venerable Sumner Redstone, Chairman of CBS responded to the LBO trend,

"…would we consider [going private] at some time in the future? We consider all alternatives. And if we did decide to take one of these companies private...there would be more money offered than we could possibly handle." --Sumner Redstone, Chairman of CBS

Speculation abounds that the NY Times and Virgin Media will also follow the privatization trend. But the astute reader will instantly recognize that "going private" will not solve the fundamental economic dilemma facing traditional media. Going private is no magical elixir for solving the audience shift that is afoot.

But what going private does offer is a shield for companies from prying, public eyes. Traditional media has an enormous "responsibility" that is rarely spoken about. That is to promote the prevailing worldview of the government. What? Let me say this in another way. Traditional media exists to promote acquiescence to a political agenda.

Let me use two examples to clarify.

The number one selling album in the nation last week was the new Bruce Springsteen album, Magic. Clear Channel, the largest radio network has ordered that its stations not play a single track from the album. They are publicly saying Springsteen is too old, yet they play his older tracks liberally.*

It makes no sense until you understand that Magic is intensely antiwar and Clear Channel, which is being purchased by Presidential candidate Mitt Romney's Bain Capital, has the unfortunate habit of exercising its political agenda.

It is obvious that people will gravitate toward alternative media outlets to find "The Boss". Clear Channel seems to be acting against its economic interests. This situation only makes sense when you understand that it is being loyal to its political agenda.

Another example of the media dutifully acting as a quasi-governmental arm can be seen by examining how the media en masse reacted to the September air strike on a Syrian facility. When President Bush was asked about it he curtly said, "I will not comment on that." The press corps tried one more run at the issue and the President grew more irritated. The press corps got the message and let the issue slide into obscurity.

But just a few weeks after the attack, Israel's Jerusalem Post published a report that it was not Israel who attacked Syria, but it was the US Air Force that carried out the air strike and Israel only provided air cover.**

The truth or falsity of who attacked is beyond me to personally know, but the point is that when a government official can determine what is news or what is not news by dismissing important questions, then we in fact have a subservient media that is complicit with the government agenda. It should be clear to anyone with any sense of journalism that an air strike on Syria is news, whichever nation carried out the attack.

The case has been made that mainstream media audience share will continue its decline if media outlets do not break their allegiance to an overall political agenda. I have read in at least four or five alternative online media sources about our air strike on Syria, and of course have listened to Springsteen's Magic tracks on outlets other than Clear Channel. Millions have found alternatives to traditional media and will continue to do so.

What I am suggesting is that there is a connection between the economic dynamic of audience shrinkage and the overall political agenda. All media must be subsidized from advertising or other sources. In dictatorships, media is subsidized directly by the government. In democracies, media is subsidized by corporations.

The Private Equity firms leading the LBO charge have a political agenda as well as economic agenda.

"Private-equity firms …largely unknown outside Wall Street now possess more than $2 trillion in buying power. In addition to Kohlberg Kravis, the new brand names of finance are Bain Capital, Blackstone Group, Carlyle Group and Texas Pacific Group." --NY Times July 25, 2006

If you doubt the political agenda of some of these Private Equity firms, one only needs to look at the board of directors of just one of the movers and shakers in this space:

Carlyle Group
George H. Bush: Former President
James Baker: Former Sec. of State
Frank Carlucci: Former Dir. of CIA
John Majors: Former PM of England

So the trend to privatize will continue precisely because audience shares will certainly continue to decline. The more that CNN, Fox, NY Times, Washington Post and other media outlets appear to become subservient to and act as a quasi-propaganda arm of Washington politicians, people will "exit".

Privatization will allow mainstream media outlets to follow a political agenda without the public quarterly report card. Ultimately, privatization is not a long term answer to the problem. At best it is like sweeping back the tide with the proverbial broom.

Jaffer Ali is the CEO of the media company, NextEra Media and EVTV1 and writes on the intersection of politics and media. He can be reached at
* Bruce: Magic Refused Radio Play,2933,306164,00.html#2


** USAF Struck Syrian Nuclear Site

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