Ex Post facto
The Washington Post Company-NBC News partnership joins a much-admired news
organization with two of the richest companies on earth. But what's good
for the media moguls is bad news for the rest of us.
by Dan Kennedy
Jack Welch, the autocratic chairman and CEO of General
Electric, was watching the evening news on NBC, the network his company owns.
It was October 19, 1987 -- Black Monday. GE's stock had been hammered along
with the rest of the market. And there was Tom Brokaw, the anchorman whose
generous salary was paid for by GE's shareholders, whipping viewers into a
Welch was incensed. He picked up the phone and got NBC News chief Lawrence
Grossman on the line. "You're killing all the stocks," Welch angrily informed
him. Replied Grossman: "This is not an appropriate discussion to be having."
Within a year, Grossman was gone.
The tale is ominously instructive in light of a blockbuster announcement made
on November 17. The Washington Post Company and NBC News are now partners. The
deal brings together one of the most admired organizations in journalism -- the
Post of Katharine Graham and Ben Bradlee and Woodward and Bernstein and
All the President's Men -- with GE's Welch and Bill Gates, whose
Microsoft Corporation collaborates with NBC on the MSNBC cable news network and
the MSNBC.com Web site. Reporters from the Washington Post and
Newsweek, which the Post Company owns, are already appearing on MSNBC's
newscasts. MSNBC.com and the Post's Web site are featuring each other's
content. Soon, Newsweek's Web site will be incorporated into
These collaborations are far more extensive than the ones MSNBC previously had
with the New York Times, whose partnership deal was dropped last week.
Yet in this Age of Synergy, the Post Company-NBC News deal was a one-day story,
and not a very prominent one at that. In fact, it deserves far closer
Media combinations inevitably lead to diminished competition, fewer voices,
a blander, more sterile type of journalism -- and a less well-informed public.
Though reportedly little or no money has changed hands in the NBC News-Post
Company deal, the partnership is not, at least when it comes to the public
interest, all that different from a merger. The idea, after all, is for each of
the partners to increase its profits -- which means that each has an interest
in the other's well-being. "When someone's your partner, they're your partner.
And if that partner is helping you make money, you will protect the partnership
as jealously as you might protect your own interests," says Mark Crispin
Miller, a professor of media studies at New York University and the director of
the Project on Media Ownership.
The Post -- which dominates the Washington area but which, unlike
competitors such as the New York Times and the Wall Street
Journal, has scant national distribution -- is understandably eager to
expand its base. In doing so, however, it has jumped into bed with the two
companies whose stock-market valuations are the highest in the world: General
Electric ($451.3 billion as of November 19) and Microsoft
($443.8 billion). When measured against those giants, the Post Company's
market capitalization of $5.7 billion barely qualifies as a rounding
More important, GE and Microsoft are controversial, predatory corporations. GE
is a major military contractor and nuclear-power-plant manufacturer that is
often embroiled in disputes, legal and otherwise, over the way it conducts its
business. Microsoft, of course, is involved in a highly publicized anti-trust
case. Both companies ought to be subject to tough, independent scrutiny. But
now, every Post or Newsweek journalist who covers GE or Microsoft
will have to wonder what Jack Welch and Bill Gates will think. (And Welch, in
particular, has never been shy about expressing his views; see "The Wages of
Synergy," right.) Maybe those journalists will pull their punches; maybe
they'll be a little tougher than they otherwise might, hoping to show their
colleagues that they can't be intimidated. Either way, something will have been
"I would like to think that these are all news organizations of great
integrity, and I'm sure they are. But the whole pernicious effect that these
sorts of things have is disturbing," says Thomas O'Boyle, an assistant managing
editor at the Pittsburgh Post-Gazette, who reported the Welch-Grossman
Black Monday confrontation in his 1998 book At Any Cost: Jack Welch, General
Electric, and the Pursuit of Profit. "Anyone who says that corporate
ownership and corporate links do not have some influence in news coverage is
(Synergy aside #1: in November 1998 the New York Times Book Review
published a negative review of O'Boyle's book by Roger Lowenstein, who called
it "fatally out of focus from the very start." Lowenstein is the author of an
admiring 1996 biography of super-investor Warren Buffett, Buffett: The
Making of an American Capitalist. Buffett, in turn, is a friend of Jack
Welch's, which O'Boyle believes should have disqualified Lowenstein from
reviewing At Any Cost. It gets worse: Buffett is also a member of the
Washington Post Company's board of directors -- and a close friend of Bill
Gates's as well.)
Although the deal raises significant macro questions about competition and
conflicts of interest, the most immediate concern was over a micro issue: the
future of Howard Kurtz, the high-profile Post media reporter who also
works for CNN as the co-host of Reliable Sources. NBC and the Post
Company both announced they would not force their staff members to renege on
existing freelance agreements with media organizations that are now
competitors, such as CNN. But Post executive editor Len Downie told the
Wall Street Journal, "We will urge them to think about NBC, which is our
partner now." (Synergy aside #2: the Journal is owned by Dow Jones &
Company, which has a partnership deal with CNBC, a corporate cousin of NBC and
"I've had no discussions with anybody," Kurtz told the Phoenix when
asked if he would be forced to switch networks. "As of now, I have no plans to
change my current arrangements."
Kurtz makes it clear he's less than pleased that the Post is now
partnering with companies the paper also covers. "For my beat, I need this like
I need a hole in the head," he says. "Readers will inevitably be skeptical,
even though I've been very tough in writing about the Post and certainly
will continue to be tough on NBC. There is a fair amount of uneasiness in the
newsroom about the perception problem created by this deal, although I don't
believe there will be any pressure to change our reporting on these other
companies. But, you know, perception is important in the media age, and it's
something we'll have to deal with."
The collaboration comes at a time when media concentration is under increased
scrutiny. About a half-dozen corporations control most of the broadcast and
cable networks, television and radio stations, newspapers, magazines, book
publishers, and film and music studios. Media concentration is on the cover of
the current Brill's Content, although the story inside is decidedly
measured -- as befits a magazine whose owner, Steven Brill, counts a smattering
of media moguls among his softball buddies. It's the cover story, too, of this
week's Nation, which has been railing against the media oligopolies for
years. And the new Columbia Journalism Review features a piece by Mark
Crispin Miller on the tangled interests of Viacom-CBS, the
TV/radio/cable/film/book behemoth created earlier this year.
The wages of synergy
Fortunately, The Washington Post Company is merely collaborating with NBC News;
it remains an independent company. Good thing, too, because the Graham family's
new best friend, General Electric chairman and NBC overlord Jack Welch, has
earned a reputation as a fearsome media bully.
Not only did Welch all but order NBC News chief Lawrence Grossman to tone
down coverage of the 1987 stock-market crash (see "Ex Post Facto," page
16), but he has reportedly inspired numerous acts of self-censorship and abject
surrender as well.
Katharine Graham, who chairs the Post Company's executive committee, and her
son, Donald, the chairman and CEO of the company, made their reputations by
standing up to Richard Nixon. They may find that Welch is more than a match for
the Trickster. Some lowlights:
* November 1989. NBC's Today show reportedly deletes references
to General Electric in a story on defective bolts used in airplanes and other
* November 1991. In an article in the magazine Electronic Media,
Grossman -- at this point the former chief of NBC News -- reveals that
Welch once warned him, "Don't bend over backwards to go after us just because
we own you." Grossman also wrote that Welch told him to allow Today show
weatherman Willard Scott to keep plugging GE light bulbs on the air.
* March 1992. Deadly Deception, a film about environmental
contamination at nuclear power plants (some owned and operated by GE), wins an
Oscar for best short-subject documentary. Filmmaker Debra Chasnoff uses her
speech to blast GE and Jack Welch, and to urge viewers to join an ongoing
boycott of the company that "falsely claims it brings good things to life."
During the following morning's Oscar round-up on the Today show, host
Bryant Gumbel asks movie critic Gene Shalit about "the unusual social speeches"
-- and Shalit, in his response, fails to make any mention of Chasnoff's
* August 1994. SuperChannel, an NBC-owned cable channel in Europe,
cancels the human-rights show Rights & Wrongs after it examines poor
working conditions at GE plants in Mexico.
* August 1996. During the Olympics, sportscaster Bob Costas makes an
accurate reference to China's revolting record on human rights. Within days, an
NBC spokesman issues an apology, saying, "We wanted to make it clear that we
didn't intend to hurt their feelings." Observes the New Yorker's Ken
Auletta at a Columbia Journalism Review seminar: "Now, presumably, NBC
also didn't want to hurt the business interests of the corporate parent,
General Electric, which is bidding for business in China."
* May 1999. NBC creates an outcry when it's revealed that it redubbed a
two-part miniseries, Atomic Train, about a runaway train carrying
nuclear waste across the United States. All references to "nuclear waste" were
changed to "hazardous waste," leading to accusations -- denied by the network
-- that it had acted at the behest of GE.
Sources: At Any Cost: Jack Welch, General Electric, and the Pursuit of
Profit, by Thomas O'Boyle (Knopf, 1998); Fairness & Accuracy in
Reporting; the Columbia Journalism Review; and the New York
At the heart of these deals is a dirty little secret: for many media
executives, the term "synergy" is just an excuse to hide the fact that they
really don't want to compete. Competition, you see, costs money and drives down
profits. The New Yorker's legendary media critic A.J. Liebling, in his
book The Press (1964), put it this way: "The function of the press in
society is to inform, but its role is to make money. The monopoly publisher's
reaction, on being told that he ought to spend money on reporting distant
events, is therefore exactly that of the proprietor of a large, fat cow, who is
told that he ought to enter her in a horse race."
The networks are, in many ways, the modern equivalent of those Liebling-era
newspaper publishers. ABC has downsized and replaced much of its foreign
coverage with footage from CNN. (Synergy aside #3: this partnership joins the
two biggest media companies in the world. ABC is owned by Disney, and CNN by
Time Warner.) And NBC can now replace its own correspondents with talking heads
from the Washington Post and Newsweek. Indeed, the New
Yorker's current media reporter, Ken Auletta, speculates that NBC and MSNBC
might actually improve, since they'll have access to journalists the network is
too cheap to hire itself. The trend in foreign reportage in recent years,
Auletta notes, is to obtain video from, say, the Balkans, and to have a
London-based correspondent do a voice-over. "It's not reporting, it's coverage.
The networks have done much too much of that," Auletta says. "If this [putting
Post and Newsweek reporters on the air] replaces that, it's not
as good as if they hired their own reporters, but it's better than the coverage
they often do."
If the urge to merge and to form partnerships is driven by sloth and greed,
so, too, is it driven by fear. Cable television and, especially, the Internet
have created a plethora of choices that didn't exist 10 or even five years ago.
The number of people who read daily newspapers and watch network newscasts has
fallen sharply. Fear is certainly a motivating factor for the Washington Post
Company: the Post's circulation is in decline, and since it has one of
the highest local-penetration rates in the country, the only way it can grow is
to go national.
"They have this very powerful brand, but no way to reach out with it. For them
to be creating alliances makes sense to me," says David Carr, editor of the
Washington City Paper and a veteran Post watcher. "What the
Post is trying to do is get a national p.m. edition of their paper out
there. They want their news on the desktops of Americans during peak Web-use
hours, which is after lunch, when we start zooming around and getting a lot of
our news consumption before we even go home for the day." Nevertheless, Carr,
like other critics, is concerned about the conflicts the Post Company is
embracing. "When you have a company of this size partnering with a company of
Microsoft's size, it creates adjacencies, and I mean personal ones," Carr says.
"Don Graham [the Post Company's chairman and CEO] and Bill Gates will become
familiars. They will have the kind of conversations that people who run the
The result of such mergers and partnerships is that the Web -- where a new
independent, grassroots media should be able to grow and prosper -- is instead
being colonized by the same big companies that dominate other forms of media.
Indeed, according to Media Metrix, most of the top 15
news-information-and-entertainment sites on the Web are owned by corporate
giants such as AOL (which buys most of its journalism from traditional content
providers), GE and Microsoft (MSNBC), Time Warner (CNN and Pathfinder), and
Disney (Disney Online and ESPN).
Unlike the broadcast and cable models, the Web represents a theoretically
infinite capacity, which means that independent projects can coexist with
corporate media -- and, indeed, there are a number of excellent small news and
opinion sites. But as big media come to dominate the Web, it will become
increasingly difficult for the average user to find these independent sites.
NYU's Miller, for instance, predicts that the all-important portal sites will
increasingly be modeled after chain bookstores, in which big companies pay for
advantageous positioning, and important books from small publishers are buried
somewhere in back.
Not everyone is so pessimistic. John Perry Barlow, a founder of the Electronic
Frontier Foundation and a respected Internet visionary, sees the Post
Company-NBC News deal as a desperate act by doomed Industrial Age "dinosaurs"
that fail to understand the Information Age. "The whole point of cyberspace is
not about broadcasting information, it's about conversation," Barlow says. "As
soon as something's going on in the world that I actually want to know about, I
find out how to get in touch with people who are on the ground." During the war
in Kosovo, for instance, Barlow tracked down organizations in Serbia and Kosovo
and corresponded with them. "I could learn a hell of a lot more from direct
interaction with those folks than I possibly could from the news," he says.
Unfortunately, Barlow's example demonstrates not just the promise of the Net,
but its limits as well. For a hyperengaged citizen such as Barlow, media
concentration is irrelevant, because the Internet provides a means for skipping
the mediator and going right to the source. For the average citizen who merely
wants some reliable way of keeping up with the world, media concentration means
fewer sources of information, less competition, and more conflicts of interest
that viewers and readers may or may not be told about.
Perhaps the Post-NBC-MSNBC-GE-Microsoft partnership, Disney-ABC, Time
Warner-CNN, Viacom-CBS, and the other media giants are indeed the dinosaurs
Barlow thinks they are, although that's by no means certain.
But dinosaurs, even in their death throes, can thrash around -- and cause a
lot of damage -- before they finally breathe their last.
Dan Kennedy can be reached at dkennedy[a]phx.com.
Articles from July 24, 1997 & before can be accessed here