How Bigger Media Will Hurt Oregon: A Report on Oregon Media Markets and the Impact of Newspaper/TV Cross-Ownership Mergers

Executive Summary

Broadcast licenses give their holders powerful public voices that are not available to every citizen. They pose a challenge in a society whose democracy relies on vigorous debate over public policy and social issues. The Courts have long accepted limitation on ownership of media outlets by those who hold broadcast licenses as “a reasonable means of promoting the public interest in diversified mass communications.”

Further, localism is important because of our federal system of government that elects representatives on a local basis and places a great deal of emphasis on local policy for critically important issues – like public safety and education. Localism remains vital in media policy because citizens rely overwhelmingly on traditional outlets for information – local television stations and daily newspapers.

This study examines what would happen if the largest newspapers and television stations in several Oregon cities got even bigger by merging. These situations could become a reality if the Federal Communications Commission relaxes a cross-ownership prohibition currently under consideration. The study uses a methodology that reflects the recent court ruling that overturned the FCC the last time the agency attempted to relax media ownership limits.

This study analyzes each market to answer three key questions. First, we measure how concentrated the ownership of media channels is today across each of the major media (newspapers, radio, and TV) and across the overall market of all media channels. Second, we measure how concentrated the market would become if cross-media mergers were permitted, i.e. the newspaper owner bought the largest TV station. Finally, we compare the levels of concentration today and the levels of concentration after a merger to standard measures of competition. The standards in the Department of Justice Merger Guidelines are used to determine the effects of possible mergers on the market for news and information in those cities. We also examine the percentage of the audience (market share) controlled by the largest single company in a given city, as well as the market share controlled by the top four firms in a single medium (e.g. the top four radio stations). This measure shows us whether or not a market is an oligopoly, i.e. a small number of firms control most of the market share.

The results are stark. We find that Oregon citizens already face highly concentrated markets with few choices of news and views. Possible mergers would only make matters worse, risking both localism and democracy. Even in Portland, the largest market in the state by far, any cross media merger involving the top two firms would increase concentration in excess of the Department of Justice and Federal Trade Commission Merger Guidelines. In the smaller markets, the outlook is even worse.