|June 5, 2006|
Big Media Bids Sayonara to Synergy, Top Exec Call is "Bull...."
A BUZZFLASH GUEST CONTRIBUTION
New York, New York: Welcome to another edition of TV Smackdown. Only this imaginary wrestling super match is not on TV but about it. In one corner stands the mighty media business. In the other corner, the law of gravity.
One is relentless in its pursuit of dominance and an ever-upward curve of revenues. The other just stands by shaking its head, reminding even those who won't listen, that what goes up must come down.
Everyone knows that market capitalism is a cutthroat business but it's always bizarre when media executives cut their own throats too as one conventional wisdom gives way to another. Like out of control bulimics, media moguls merge to purge.
For years, we have all stood by and watched what should have been a TV Game Show called Media Concentration. Time and again, the avaricious M&A wheeler-dealers at the investment banks covertly encouraged one company to devour another in multi-billion dollar deals while their fees billowed into billions. They dismissed the "downside risks" and beat the drums for consolidation while singing the praises of "synergy."
Groupthink is seductive. One by one, the networks drank the kool aid of synergy with RCA gobbled up by GE and ABC turned into a division of Disney. Westinghouse bought CBS only to wither away after flipping the ‘House that Paley Built' into a property of the Viacomese.
The mantra in these go-go years was bigger is better in the race for "vertical integration." Overvalued companies begat overcompensated "media heavies" who supped at the trough by sucking up tens of millions in personal salaries and benefits and options and houses in the Hamptons. They fought like banshees for status and standing, position, and power. Their competitive compulsions knocked each other off, even though they were ostensibly just seeking more efficiency through consolidation and combination.
In many ways, the "market logic" that drove the synergy push, was expressed back in l984 by Mark Fowler, the chairman of Ronald Reagan's FCC who made clear that broadcasting was NOT then, if it ever was, about serving the public interest.
"Its time to move away from thinking of broadcasters as trustees and time to treat them in the way that almost everyone else in the society does -- that is, as a business," he said. "Television is just another appliance. It is a toaster with pictures."
Hunter S. Thompson, the late and lamented wordsmith, translated this analysis into a gonzo language everyone could understand concluding, "The TV business is a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free and good men die like dogs."
While hundreds of millions was pumped into "branding" exercises, media boondoggles and unending hype, the actual quality of media declined with consumers in droves no longer watching network news in the numbers they once did or buying newspapers. The dumbing down of media by media sent their own sales in the same direction.
Soon, the TV world fragmented into more and more channels and alleged choices with fewer and fewer real voices. Viewers spent hours clicking away on their remote controls hoping to find something worth watching.
And then, after a decade or more of countless experts and journalists marveling over the brilliance of these masters of the universe and their strategies for media aggregation, reality intruded, as it often tends to do.
The Wall Street Journal, the house organ of business (including the media business) played taps on page one Friday for the synergy era with words borrowed from a Warner Brothers Bugs Bunny cartoon, "That's All Folks."
The headline: "AFTER YEARS OF PUSHING SYNERGY TIME WARNER INC, SAYS ENOUGH".
"Media Titan Is Selling Units, Downplaying Cooperation, Rivals Make Similar Moves."
The largest media enterprise in the world was throwing in the towel. Time Warner President Jeffrey Bewkes forcefully dismissed the gospel of synergy that his own company had been preaching ever since Steve Ross parlayed a parking lot and funeral home business into a media colossus.
Just five years ago, Time Warner bought AOL for a mere $103.5 billion. Ten years ago the company shelled out $7.6 billion to take over Ted Turner's empire, including CNN. Just sixteen years ago, Time bought Warner Communications for $14 billion.
Now Bewkes -- get this -- tells the Wall Street Journal it was all -- real quote coming, stand by -- "bullshit." The modest WSJ abbreviated his quote to "It's bull---," noting that this "is an unusual enough sentiment in rapidly consolidating corporate world." This is also an unusual enough word publicly out of the mouth of a media leader, and not the kind of word used often on the front page of newspapers or in polite company.
Today it seems as if truth only comes out in a bleeped form.
If Bud Collyer was still alive, he would have made Bewkes BS the "magic word" on his hit game show, "To Tell The Truth." By the way, the media business has already replaced the 20th Century buzzword "synergy" with the 21st Century term "adjacencies."
It is not such a loss. If these companies could get their acts together, good programming might have been sacrificed. The Wall Street Journal reports that Michael Moore's "Roger & Me" was almost a casualty of synergy when other Time Warner executives harangued the man who ran the movie studio distributing the picture not to do it because General Motors was of Time Magazine's biggest advertisers. The two sides couldn't agree, in another case, CNN's attempt to do a joint TV magazine with TIME failed because the corporate cultures were too often dueling.
Already Viacom has split in two. Says CEO Sumner Redstone. "We had lots of clout from size. Look at where it got us -- Nowhere."
Of course, there is no admission of corporate failure to the shareholders who paid for their buying binge in reduced earnings or the consumers who have been deluged with low cost crap on the channels. Like the Bush Administration that Redstone admires, though once a Democrat, no one in the upper reaches of Medialand apologizes for nothin'.
What's stunning is how their ambitions for Media Empire outdistanced their ability to manage their businesses and achieve the very efficiencies they bragged about. Adding and abutting their greed and overreaching was the absence of real regulators in an FCC that believes it can stop excesses only by fining stations for inadvertently showing Janet Jackson's assets in prime time.
Forget the viewers and the rest of us. We are treated as suckers and spectators just as the "bull…" boys milked the golden goose while snubbing their noses at their responsibilities to the public interest and our democracy.
Making money is their mission -- always has been. If big companies won't make it for them, smaller ones will do. Guaranteeing their personal "exit strategies" has always come before building companies to serve the diverse needs of consumers. Social responsibility has always been secondary. Cynicism informs their raison d'etre; contempt remains the vibe they share.
Cooperation was never a value that enjoyed respect from cutthroat mogul. If they were in kindergarten -- and some act as if they are -- their report cards would show them flunking "works well with others." That is why there is so much arrogance and know-it-all-ism among media execs who insist only they know what people want when the public keeps telling them they don't want it.
Fortunately, and increasingly, the public knows "bull----" when they see it.
President Kennedy said after the Bay of Pigs fiasco that victory has a hundred fathers but defeat is an orphan. To paraphrase the Miami Herald last week, victory in the media world spews a hundred PR releases; defeat is ignored to be buried in talk of "adjacencies."
A BUZZFLASH GUEST CONTRIBUTION
News Dissector Danny Schechter edits Mediachannel.org; His latest book is "The Death of Media." His new film is "In Debt We Trust." Comments to Dissector@mediachannel.org.
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