Yesterday, the Detroit Free Press and the Detroit Morning News, which operate their publication and distribution operations through a joint operating agreement, announced that they will cut back on the physical publication of their papers – publishing full editions delivered to homes only three days a week. On other days, the papers will publish an abbreviated version, available only on newsstands. The papers will not abandon news coverage the remainder of the week, but will instead concentrate on their on-line presence, showing the power of the Internet to disrupt traditional media. As we said years ago in one of our first posts on this blog – New Media Changes Everything, and it seems that this is just another indication of how true that is. The broadcast media, particularly radio, has often looked at the advertisers served by the daily paper as a ripe source of new business, and may well see the Detroit change as a major business opportunity. But does it also change the FCC’s consideration of the multiple ownership rules applicable to radio and television cross-ownership with newspapers?
The FCC’s multiple ownership rules prohibit the ownership of a broadcast station and a "daily" newspaper that serve the same area. The rules define a daily paper as one that is "published" at least four days each week, and is circulated "generally in the community." Here, the Detroit papers arguably will not meet that 4 day a week requirement – at least for a publication that is generally circulated throughout the community. Of course, some may argue that the abbreviated newsstand copy constitutes a daily publication but one would assume that, sooner or later, even that will disappear. Thus, while there has been so much controversy about the Commission’s decision of one year ago (summarized here) deciding that combinations of broadcast properties and newspapers in Top 20 markets were presumed to be permissible, while those in smaller markets were not, one questions whether this still makes any sense in today’s marketplace where seemingly few can profitably publish a daily paper in most markets, and no one seems to want to rescue the many papers that have fallen on hard times.
The rules adopted last year allow newspaper-broadcast combinations in markets smaller than the Top 20, if it can be shown that the broadcaster will add substantial new news programming, or that one of the participants is "failed or failing," FCC speak for operating at a financial loss for a sustained period. But any such showing takes months if not years to get through the FCC, and the recent economic news from both the broadcast and newspaper worlds makes one wonder if a failing property will be able to wait for such a review – or if the cost and delay are even necessary in today’s media environment where on-line media seems to be taking a bigger and bigger chunk of the advertising and viewing pie. I recently heard a reporter from one of the broadcast trade press outlets ask the rhetorical question – "will the FCC’s cross-interest rules banning broadcast-newspaper cross ownership outlast the newspaper industry itself." Unless the FCC changes course and adapts to today’s media reality, that may well be the case.