AJR  Features
From AJR,   October 1995

All in the Family   

The media megadeals pose a major challenge to the networks: Will ABC and CBS be able to provide unfettered coverage of their parent companies and their pet issues?

By Marc Gunther
Marc Gunther, who has covered network news since 1983, is a senior writer at Fortune magazine.     

The debut of the f/X cable network on June 1, 1994, was big news in the New York Post. The network, which features a perky breakfast show, a daily pet show and fading reruns of "Fantasy Island," was welcomed with a full-page spread, written by television reporter Steve Bornfeld. Readers who tried to tune to f/X, though, were bound to be frustrated – the network, at the time, was not carried by a single cable system in New York City.

Insiders knew right away what was going on. The Post and f/X are both owned by Rupert Murdoch's News Corp. What was presented as objective journalism in Bornfeld's story was, in fact, puffery, as Bornfeld, a respected writer who was subsequently forced out of the paper, now confirms.

"Not only did we run a splashy story on the day they debuted, but we ran a splashy story on the day after they debuted about a network that no one in the five boroughs of New York could see," Bornfeld says. "My choice was to write the stories or be fired. I didn't like it very much. But there was no shame about it at the Post."

Evidently not. The Post even ran the phone numbers of New York cable systems for readers to call and ask about f/X – without disclosing that the newspaper and the cable network share a common owner.

The Post's coverage is an extreme example of problems that can arise when news organizations become part of much bigger corporations with diverse interests.

But the example points to the kinds of problems that await journalists at Capital Cities/ABC and CBS, which on consecutive days this past summer announced their plans to merge with Disney and Westinghouse. Similar mergers will surely follow, driven by what ABC media analyst Jeff Greenfield has called "the most significant trend in American communication: the growing belief that bigger is better." At press time Time Warner was negotiating to acquire Turner Broadcasting, which owns CNN.

The result, some believe, will be that many more reporters will be forced to engage in a kind of journalistic incest when covering their corporate parents and siblings. If nothing else, that will fuel second-guessing of news judgments, suspicions about the hidden agendas of news outlets and questions about journalists' independence and credibility.

"Any news division is quite rightfully suspect when reporting on the interests of its corporate parent," says ABC's David Marash, a "Nightline" correspondent who covered the Disney-ABC deal. "It's a significant concern."

Jeff Chester, executive director of the Washington-based Center for Media Education, which opposes media concentration, goes further. "You cannot trust news organizations to cover themselves," he says, citing as an example television's meager coverage of the telecommunications debate last summer in Congress.

Consider just a few of the questions raised by the megadeals:

Will film critic Joel Siegel of ABC's "Good Morning America" feel free to deliver a withering critique of Disney's next big animated movie?

When the Capital Cities-owned Kansas City Star does a Florida travel section, will Disney World be featured on the cover?

Will CBS' "60 Minutes" investigate the nuclear industry's efforts to market "safe" plants abroad and at home, a drive led by Westinghouse?

Such hypothetical questions can't be answered yet, of course. Spokespeople for ABC News and CBS News say the networks will do business as usual, without regard for their new corporate parents.

Perhaps. But the experience of past media mergers suggests that it won't always be easy. The best way to get a feel for the thickets that await journalists at the newly merged companies is to look at the performance of news organizations that already face potential conflicts with corporate owners: Murdoch's properties, the magazines that are part of entertainment giant Time Warner, and NBC News and its parent company, General Electric.

NBC News and GE have made peace, though it didn't come easily, while Time Warner's magazines have shown their independence, despite merciless second-guessing. But evidence suggests that two of Murdoch's print outlets, the Post and to a lesser degree TV Guide, have displayed some favoritism when reporting on Murdoch's television properties.

The Post's f/X coverage is the most blatant example. After the full-page spread for opening day, the newspaper followed up with a story headlined "Smooth Start for f/X" – the journalistic equivalent of reporting that a house did not catch fire. J. Max Robins, a TV columnist for Variety, was so struck by the puffery that he wrote that the Post went "embarrassingly overboard."

The Post also tried to shield Fox from negative ink, according to Bornfeld, the former reporter. When filmmaker Woody Allen told a gathering of TV writers that he had no plans to watch a Fox movie about Mia Farrow, Bornfeld filed an item but says it never made the paper.

The Post also neglected to report that Steve Powers, an on-air reporter fired by Fox-owned WNYW-TV Channel 5, filed an age discrimination suit against the station. Bornfeld says his editors told him to ignore it.

Adam Buckman, the Post's TV editor, denies any bias. About the f/X coverage, Buckman says, "We were told to cover the launch of f/X, but we also covered the launch of every other cable network, often in the same way. It was kind of a slow news day and there was nothing else going on."

He disputed the charge that he had squelched a story about Powers' suit against Fox, saying, "I have a vague recollection that we missed it." Post critics "feel completely and totally free to pan Fox shows," Buckman says, and in fact Fox shows have been slammed by the paper.

At TV Guide, Managing Editor Jack Curry says the Fox connection does not come into play when assigning or editing stories. "We have been given absolute independence," he says. He's backed up by former staffer Howard Polskin, who wrote a tough cover story on Fox's "Married..With Children" in 1989, the year after Murdoch bought the magazine. "There was absolutely no interference," Polskin says.

But two others familiar with the internal workings of TV Guide, who requested anonymity, say the Fox factor does make a difference. They cite the magazine's less than aggressive coverage of the embarrassing failure of Chevy Chase's late-night show on Fox. TV Guide ran only a single brief story during the show's six-week run, one that sounded an upbeat note, promising "radical surgery" and "a splashy relaunch of the program." Curry says there wasn't enough lead time for a longer piece and that TV Guide skewered Chase in its best-and-worst of TV year-end issue.

When Bernard Weinraub, a New York Times entertainment reporter, did a freelance piece for TV Guide about Don Rickles and his Fox sitcom, "Daddy Dearest," a Rickles wisecrack about Murdoch was edited out, insiders say. Weinraub says his memory of the incident was vague, but he recalled being told that the joke "cut a little close to the bone."

In contrast to the Post, TV Guide editors and writers haven't given any breaks to Murdoch's f/X. But the cable channel was aided in its early days by the 13-million circulation magazine's decision to list f/X programs in some editions when bigger networks, notably NBC-owned CNBC, a business and talk channel, weren't listed at all. Murdoch and NBC executives were engaged in a bitter feud at the time, after NBC complained to the Federal Communications Commission that News Corp. had acquired its Fox stations illegally.

"We were, by far, the largest network not being carried by TV Guide. This was a growing frustration," says Brian Lewis, a CNBC vice president. "F/X launched with 18 million and, bing, they were listed." CNBC was carried into 48 million homes before it was listed.

Only after NBC, one of TV Guide's biggest advertisers, threatened to pull its ads did CNBC shows get listed.

Few news organizations have come under as much scrutiny as Time Warner since Time Inc. and its magazines merged with Warner Bros. in 1990. The company owns movie studios, television, and book and music publishing businesses. The week the merger happened, Time blundered by choosing not to cover it except in an editor's note. Not long after, the magazine drew more criticism by doing a cover story on Warner Books author Scott Turow, just as the movie based on Turow's "Presumed Innocent" was being released by Warner Bros.

Since then the second-guessing has been nonstop. But there's scant evidence, at least in recent years, that Time Warner has gone easy on itself. Last June, for example, Richard Zoglin, a Time senior writer, was handed a sizzling potato: covering Time Warner's response to charges by Sen. Robert Dole and former Secretary of Education William Bennett that the company's music, movies and TV shows were contributing to America's moral decline. He produced an unsparing account that predicted, correctly, that Warner's music division would gradually back away from violent and misogynist rap. Among his observations: "The standards of taste at Warner labels..have at times seemed extraordinarily lax." Other Warner embarrassments, such as the tacky talk show "Jenny Jones" distributed by the company, also took a pasting.

The story was edited by James R. Gaines, Time's managing editor, and Norman Pearlstine, the editor in chief of the Time magazine group. According to Zoglin, they made it tougher. "They wanted to air more of the dirty laundry," he says. "We put in things that made others in the company very uncomfortable, I learned later."

Zoglin was equally biting in his assessment of Warner TV's new WB Network when it premiered in January. He wrote: "The first batch of shows on WB and UPN (the new Paramount network) will convince no one that they are bringing something new to TV... Is there room for two more networks offering another load of laugh tracks, retreads and raunchy wisecracks?"

One Time Warner insider says such reporting reflects the split in the huge conglomerate between the respectable East Coast magazines and the freewheeling West Coast music, movie and TV operations. Even if true, that only goes to show that, in fact, the magazines are free to take on their corporate brethren.

How else to explain the fact that Entertainment Weekly, another Time Inc. magazine, told its readers that Warner Bros. movie executives Robert Daly and Terry Semel "reportedly can't stand" Michael Fuchs, the HBO chairman who was put in charge of Warner Music last May? Senior writer Dana Kennedy wrote: "Some say the job so consumed him that he has no life."

Entertainment Weekly strives to treat Warner "like any other studio," says Managing Editor James W. Seymore. Sometimes that can be tricky – last fall, feuding Warner music executives Robert Morgado and Doug Morris furiously lobbied the magazine to gain primacy on EW's list of the most powerful people in entertainment. "People were trying to manipulate us, but they do that all the time," Seymore says. "We got caught in a power struggle."

Time's vaunted tradition of separation of church (editorial) and state (business) has helped the magazine group. "In a sense, the arrogance of Time works to its advantage," Zoglin says. "We don't feel we can be pushed around."

The GE-NBC marriage began testily, in part because GE-appointed managers curbed spending and demanded layoffs at NBC News. GE executives showed little appreciation for the news division's independence and, as a result, helped bring about several incidents of self-censorship and meddling.

The tone was set at the top by GE Chairman Jack Welch. In an interview with Electronic Media, former NBC News President Lawrence Grossman said Welch told him, "Don't bend over backwards to go after us just because we own you." Grossman also said Welch urged him to have NBC reporters avoid using the phrase "black Monday" after the 1987 stock market crash, to avoid spooking the markets. Grossman was fired in 1988.

A 1990 "Today" show segment on consumer boycotts excluded any mention of the far-reaching boycott of GE products by the group INFACT, over GE's role as a producer of nuclear weapons. Todd Putnam, editor of National Boycott News and a guest on the segment, says a "Today" producer warned him not to discuss the boycott against GE. NBC said afterwards that the producer was exercising her independent news judgment.

Other incidents also raised doubts about self-censorship. A 1989 "Today" show segment on defective bolts on planes, bridges and nuclear plants was edited to avoid mention of GE, which bought some of the bolts for its nuclear plants. Only after being criticized did "Today" mention GE's involvement in a follow-up segment.

In the last several years, though, GE has become supportive of NBC News, recognizing its profit-making potential. GE spent $15 million on a new studio for "Today," helped NBC News expand distribution into Europe and Asia, and brought in a strong leader in NBC News President Andrew Lack. While GE continues to make news – the company has been touched by several scandals, ranging from charges of fraud and money-laundering in connection with military jet engine sales to gross mismanagement of its former subsidiary Kidder Peabody – NBC has covered these stories without controversy.

Still, all the networks struggle over how to cover themselves and their corporate interests. When Congress debated telecommunications policy last summer, the broadcast networks provided scant coverage. ABC News' "Nightline" was a notable exception: Anchor Ted Koppel and reporter Jeff Greenfield delivered a thorough look at the biggest change in communications law in 60 years, one that would reduce or abolish government regulation of local and long distance phone companies, cable operators, radio and television. As businesses, the networks had plenty to like about the bill, which would increase the license terms for TV stations from five to 10 years and ease local and national limits on how many stations any one company can own.

"The major commercial networks, ABC among them, stand to make a great deal of money," Koppel reported. "You have probably not heard a great deal about that, though, on television, not because anyone has told us not to cover the story – truly, the people we work for wouldn't do that – but neither is any one of us under the impression that they are especially happy that we have chosen to critically examine the hand that feeds us."

ABC, CBS, NBC and Fox all declined to comment for the "Nightline" piece, Koppel reported. Nor had any of the network news organizations paid much attention to the "significant political contributions by the telecommunications industry, some $18 million in this decade, to current members of the House and Senate," according to Greenfield.

Jeff Chester, with the Center for Media Education, says the networks did a terrible job covering the bill, with the exceptions of "Nightline," PBS' "MacNeil/Lehrer NewsHour" and a segment on ABC's "Good Morning America."

"Nowhere did any of the TV nightly newscasts identify, even once, that their companies were lobbying to influence this legislation," says Chester. "It's not censorship, but self-censorship," he adds, predicting that aggressive reporting will become even more scarce as the companies grow bigger. "How will Disney-ABC News treat the phone companies when they are delivering programming over Ameritech's lines?"

The Disney-Capital Cities/ABC combination will pose a special challenge for journalists inside the merged entity because its interests are so vast (see boxes on pages 39 and 40). And potential conflicts abound: "Good Morning America" covers movies, ESPN reports on Anaheim's Mighty Ducks, "World News Tonight" has examined violence in the movies, "PrimeTime Live" profiled "Pulp Fiction" star Samuel L. Jackson, and the Kansas City Star writes about the sitcom "Home Improvement." Soon those topics will be all in the family.

What's more, entertainment news has become political news. Sen. Dole and President Clinton have both called upon Hollywood to curb movie violence. Dole's wife, Elizabeth, sold $15,000 of Disney stock after she learned that Disney, through its Miramax subsidiary, distributed "Priest," a film about a gay priest and a sexually active straight priest that was originally scheduled for an Easter weekend release.

Disney Chairman Michael Eisner sent out all the right signals when the merger was announced, assuring employees that he wouldn't interfere with ABC News. "I don't see the Walt Disney Co. coming in and doing anything in news," he said.

That seemed to please ABC News President Roone Arledge, who told the Wall Street Journal that Eisner "knows that to be successful, we sometimes do stories that make people unhappy." While Eisner has a reputation as a hands-on, autocratic chief executive, network executives say that he knows his handling of the news division will be seen as a litmus test by many at ABC.

Film critic Joel Siegel told "Good Morning America" viewers that he expects no trouble. "Siskel and Ebert have been syndicated by Disney for 10 years, not a hint of any kind of pressure or impropriety," he said. "And, in fact, I face this problem here. Cap Cities produces Broadway plays which I have panned in this studio. They produced 'Cats' and right here I said I saw better choreography from people trying to run across Broadway than I saw on the stage. It's part of being a critic. It is integrity."

Jane Amari, managing editor for design and features at the Kansas City Star, says: "I don't really think it's a problem for the journalists." TV Critic Barry Garron agrees, saying he's written about ABC for years without thinking about their common ownership. The paper does have, however, a policy of disclosing to readers when it is covering one of its own companies' products.

At ESPN, John Walsh, senior vice president and executive editor of the network, expects no difficulties. The network's credibility, he says, is vital, and Disney won't squander it to hype a Disney-sponsored event or team. ABC's Marash, who spent a year working for ESPN, agrees, saying, "That is as straight up and honorable a journalistic organization as any of the network news divisions."

The CBS-Westinghouse merger is much smaller than the Disney-ABC deal, but concerns at CBS News have been heightened because of the way it is being handled. Westinghouse, for example, didn't make clear at the merger announcement who would actually run CBS. Then Michael Jordan, Westinghouse's CEO, waited more than a week before visiting CBS News, which set off more alarms among tradition-minded journalists. "He talked about the stations and about radio, about everything but news," says a CBS News producer who requested anonymity. "We feel like an afterthought."

Westinghouse's other businesses include electric-power generating equipment, such as for nuclear power plants, advanced electronic systems and mobile refrigeration. Reciting the Top 10 items on the Westinghouse "to do" list one night, CBS "Late Night" host David Letterman joked, "Lead story on every CBS newscast: Westinghouse appliances still dependable and affordably priced!" Actually, Westinghouse no longer makes refrigerators or toasters.

Westinghouse's nuclear interests are no joke, however, to liberal critics. "Westinghouse and GE are the Coke and Pepsi of nuclear power," says Karl Grossman, a veteran environmental journalist and a professor at the State University of New York at Old Westbury. "Now you have two of the four major networks owned by the nuclear industry."

Potential customers for Westinghouse and GE nuclear plants include China, Indonesia, South Korea and, if safety concerns can be overcome, utilities in the United States.

Will CBS' "60 Minutes" or NBC's "Dateline" investigate nuclear safety? Not likely, says Karl Grossman.

"Censorship in the United States really functions as a sin of omission," he says. "The reporters will know that this is a very, very sensitive issue in the eyes of management. The investigative reporting that is desperately needed, when it comes to nuclear technology, will just not happen."

The networks dismiss such talk. Don Hewitt, the executive producer of CBS' "60 Minutes," says his program has never ducked stories that might offend the company's owners and advertisers. This year, for example, "60 Minutes" did a powerful profile of Victor Crawford, a tobacco industry lobbyist who became an anti-tobacco activist after he was stricken with cancer. CBS Chairman, President and CEO Laurence Tisch owns Lorillard, a tobacco company.

"We've done a lot of things on cigarette smoking and cancer," says Hewitt, "and I never heard a peep. When Ford was our biggest sponsor, we took on the Ford Pinto as an unsafe car." Whether other newsmen without Hewitt's moxie will feel the same way remains to be seen. l