Dubious Assumptions  | American Journalism Review
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From AJR,   December 2002

Dubious Assumptions   

ABC News and CNN are hardly a match made in heaven.

By Deborah Potter
Deborah Potter (potter@newslab.org) is executive director of NewsLab, a broadcast training and research center, and a former network correspondent.     

If you look only at the bottom line, the idea makes a lot of sense. A merger between ABC News and CNN could save their parent companies millions, so it's easy to see why the bosses are talking. But there's more at stake here than a healthy balance sheet.

To Disney Chairman Michael Eisner, the merger discussions are all about finding "more efficient ways to deliver the news." No wonder. While its audience dwarfs that of CNN, ABC News is barely breaking even, thanks in part to a star-studded, multimillion-dollar payroll and expensive union contracts. CNN, however, with its downscale pay and worldwide distribution system, makes a healthy profit. It also has three times as many bureaus overseas as ABC; a merger would boost ABC's international coverage overnight.

What's in it for CNN? A network that has reached deep into its pockets to hire a little star power (think Paula Zahn and Connie Chung) would be nuts to pass up a chance at putting Ted Koppel and Diane Sawyer into its lineup. Besides, just think of all that free cross-promotion.

In the best of all possible worlds, a merger could result in a bigger, stronger news organization providing broader coverage and better-quality journalism both on the air and on cable. But that outcome would depend on some assumptions that recent history suggests are wishful thinking.

Assumption No. 1: A merger would ensure that both companies have more resources to cover the news. Maybe not. When CNN's parent Time Warner merged with AOL almost two years ago, the network quickly found cost-saving "operating efficiencies." CNN fired 400 people, 10 percent of its workforce.

Assumption No. 2: Everyone will pitch in for the good of the order. Don't be so sure. A merged ABC-CNN would need its biggest stars to be more productive to justify their exorbitant salaries. But after reportedly resisting efforts to make him take a pay cut just for anchoring "World News Tonight," why would Peter Jennings want to work harder without additional compensation?

Assumption No. 3: ABC News and CNN are both in the TV news business, so they won't have any trouble working together. Whom are we kidding? Nobody will say so out loud, but network news divisions have long looked down their noses at cable. We're not talking oil and water here, but it's certainly not a given that two news organizations with such different cultures will play nicely together.

When companies merge, the bean counters always look for redundancies to weed out. Some cutbacks make sense, whether you're producing jelly beans or journalism. Why would you need two sets of accountants, for example, when you only have one set of books? But when it comes to the product, journalism isn't jelly beans. A merger in the news business effectively means fewer sources of information, not just fewer flavors. As former network correspondent Ken Bode wrote in the Los Angeles Times, a merger of ABC News and CNN would be "a major step toward that great nirvana to which we seem to be heading when all television news looks the same."

Federal Communications Commisson barriers against this kind of concentration have been crumbling since deregulation swept through the media in the mid-'90s. The latest rule to fall is a prohibition against cross-ownership of broadcast and cable properties in the same market. The commission is reviewing several other rules with an eye toward lifting them in 2003, including one that bars television networks from merging with one another. Soon, the big could get even bigger.

FCC Chairman Michael Powell believes the ownership regulations are outdated in today's multichannel world. But a multiplicity of outlets doesn't guarantee variety. When the same company owns several channels, what you tend to see is repurposing. ABC practices "instant reruns" by featuring its newest entertainment shows on its Family cable network. NBC has been doing it with news content for years, re-airing stories and segments on its cable arms, MSNBC and CNBC. There's every reason to believe that an ABC News-CNN merger would not give viewers more information, but rather more chances to see the same stuff.

If both companies stand to gain from a merger, what's holding it up? It's telling that similar talks between CNN and CBS News foundered months ago over concerns about who would control the new company. The same issue appears to be the biggest hurdle now. And while the companies quarrel about who would be in charge, the viewers don't even have a place at the table. They should. They're the ones who stand to lose the most.



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