Sat | Sep 23, 2017

Kay Osborne: Why media ownership matters

Published:Sunday | August 16, 2015 | 8:00 AM
Kay Osborne
Gleaner Managing Director Christopher Barnes (left) with Radio Jamaica Managing Director Gary Allen at the recent signing of the media mega merger. If the partnership is approved, Barnes will become chief operating officer and Allen chief executive officer.
1
2

The announcement that Radio Jamaica Ltd (RJR) is set to acquire The Gleaner Company's media assets, subject to regulatory and shareholder approval, is stunning news to many stakeholders and non-vested Jamaicans alike.

RJR's controlling interests in the new venture are surprising to many who assumed that The Gleaner's media assets were more valuable than RJR's. The heritage and background of the transaction's key players, J.A. Lester Spaulding and Oliver Clarke, are also discussion topics given the transaction's emerged leadership and control centre. Both RJR and Gleaner leaders position the merger as being in the best interest of the companies, though the transaction raises important questions on whether the merger serves the interests of key stakeholders, including media workers and whether the decision best serves the public's interests.

Understandably, key stakeholders, including some media workers and shareholders of both publicly traded companies, are apprehensive about the deal's potential implications. Job security and opportunities for professional advancement are likely among the main concerns of staff members, freelancers and their unions. Whereas deserving workers can expect substantial career advancement opportunities to flow from the merger, the consolidation of support services and related job losses, along with a reduction in employer options, is an inevitable trade-off that media workers will have to consider, at least in the short to medium term.

Editorial stances

Future editorial policies are a set of broadly shared concerns, as traditionally The Gleaner and RJR have maintained starkly different newsroom policies that together have mostly served nation building and advanced democracy. The Gleaner has a 180-year history of taking clear and strident positions on matters of national importance, including many with political and human-rights policy and practice implications.

The Gleaner's editorial position on slavery, Marcus Garvey, independence, political leadership, corruption, crime, garrisons, human rights, education, childcare and protection, small farmers, rural communities, urban decay and downtown development, among other matters of national importance, are sometimes controversial and wrong-headed, but they are usually well-reasoned and unambiguous and mostly serve the nation's interests.

By contrast, 65-year-old RJR's editorial practice is to inform and educate the populace while desisting from taking editorial positions on related issues. This policy has also well served the populace as, on average, RJR delivers unbiased and accurate information that news consumers can use to form opinions, to create alliances, and to influence decisions, especially those concerning economics and politics.

Whether RJR/Gleaner maintains two separate newsrooms that pursue current editorial policies and practices or merge the newsrooms into a single entity with a firewall between The Gleaner and RJR newsrooms, or devise an altogether different structure with new editorial policies, is not yet clear.

Each scenario raises important implications for newsroom workers, for the RJR-Gleaner organisation and for the populace. A decision to maintain two separate newsrooms undercuts the main economic argument justifying the merger, which is the need to advance financial viability. A decision to merge the newsrooms is problematic on several counts, including the implications of culture change and that citizens will no longer benefit from the prior diverse editorial approaches, which could lead to bias, lowered quality, and social and cultural uniformity.

Additionally, having a single owner of both newsrooms raises public-interest issues of whether diversity of views will be maintained and whether independent journalism will remain a hallmark of the new entity's news-gathering and dissemination apparatus.

More pressing issues

Yet, the RJR-Gleaner leadership may not have to address these important matters in the short term, as other pressing issues such as customer relations and marketing, radio rationalisations, process improvements and support services consolidation necessarily take precedence over these decisions. In any case, gaining experience managing both newsrooms as independents is likely to yield valuable information for use in informing future editorial policy decisions.

In explaining the buyout, both RJR and Gleaner leaders, J. Lester Spaulding and Oliver Clarke, have focused on the main business driver that led to the decision: the need to remain viable within a stagnant economy with increased competition. A Gleaner editorial (August 9, 2015) heralds the takeover as the best opportunity for survival of a strong, independent Jamaican media, highlighting editorial credibility, high journalistic standards, and outstanding customer service. A full-page Gleaner advertisement lists key benefits that will flow from the takeover: multi-platform services delivery, innovation, leverage, talent pool development, financial sustainability.

The combined RJR-Gleaner entity owns free-to-air television (TVJ), cable television channels, radio, print, online, including social media assets, and over-the-top technology services, with TVJ being the prized pearl with substantial market share (72 per cent free to air) among a declining print audience, non-viable radio fragmentation, low digital returns on investments, and minimal cable television audience share.

In considering the buyout, a top-of-mind issue for both companies had to have been higher-than-usual media costs that result from media regulators requiring local broadcast media to switch over from analogue transmission to digital and HD transmission, consistent with new global standards. The switchover's high-cost hurdle challenges both media companies' financial capabilities in a stagnant economy and a highly fragmented market.

Additionally, two strategic business deals that occurred several months ago likely further propelled RJR and The Gleaner towards forming a new union: the US$3-billion Cable and Wireless Communications PLC (CWC) acquisition of Columbus Communications, the parent company of Flow Jamaica; and Digicel's earlier acquisition of competitor Claro's Jamaica business. These deals, coupled with Digicel's and C&W's extensive media acquisitions, underscore a convergence of the telecommunications and media markets.

Though largely unrecognised, both C&W and Digicel are now major, deep-pocket media players that aggressively compete with local media players. They were set to separately threaten RJR's and The Gleaner's market positions prior to the merger. Both telecoms companies have aggressively acquired various television assets in Jamaica and the Caribbean markets. Digicel's extensive media portfolio includes regional broadcaster, Digicel SportsMax TV, cable distributor, Telstar, Loop (news, entertainment, sports), cable TV and Internet service provider, Caribbean Cable Communications Holding Ltd, and companies that provide a range of TV and Internet services, SAT Telecommunications and WV Cable TV. Earlier this year, the company announced plans to build out an islandwide digital cable network and home broadband network within three years.

Additionally, Digicel owns or has interests in various prime-time programmes that are broadcast on free-to-air television, such as Digicel Rising Stars. Ownership of the media property positions Digicel to become a major media contender in Jamaica and the Caribbean. Achieving this goal is a major milestone towards achieving the ultimate goal of becoming Jamaica's dominant media entity.

Cable & Wireless (LIME), in addition to acquiring Columbus Communications, delivers content and advertising through its own LIMEstyle TV channel, and has acquired various media assets, including television over broadband channels, mobile TV in Jamaica, and digital TV in the Eastern Caribbean.

Both telecommunications companies use monopolistic and monopolistic competitive methods to pursue the commercial interests of their owners. Foreign-owned and privately controlled, Digicel is among Jamaica's most influential companies. Its owners have used influential connections to pursue its interests and use market power to mould market players' activities, both competitors and suppliers, using its power to exploit national icons and national pride, including leveraging Jamaican iconic sports and culture symbols for commercial interests.

Equally foreign owned and controlled, C&W (LIME) has an ugly track record of monopolistic behaviour that many Jamaicans recall as imperious and unconcerned with customer needs. This sustained experience serves as an object lesson in the dangers of concentrated cross-border power.

Why then is media ownership important? Does it make a difference whether Jamaica's media remain Jamaican owned and independent, or is largely controlled by foreign, special interests? Media ownership matters because individuals and corporations with substantial media interests wield enormous political and economic power and have the ability to leverage their power to act as influential cultural and social gatekeepers.

Powerful owners

Media ownership matters because media power provides owners with awesome power to entrench the interests of media owners, to distort and manipulate information, to exploit consumers, and to erode the ability of voters and consumers to make informed decisions, and ultimately undermine both democracy and markets.

Should media control in Jamaica become centralised in the hands of unscrupulous, special-interest owners, a real fear of abuse and threats to democracy loom large. With the inevitable convergence of telecommunications and media, it is vital that competition among financially viable media players is maintained, thus assuring that consumers, investors and voters continue to access, on average, unbiased and accurate information without undue influence of special interest parties.

This is why, all things considered, RJR's acquisition of The Gleaner assures the populace of the continuity of media independence and of local control which have so far well served the interests of the nation. Going forward, the populace and government need to be vigilant in ensuring that RJR does not abuse its consolidated power by reducing diversity of opinions, ignoring important interests, curtailing press freedom, and choking off dissent. It is in the public's interest for information on news and current affairs in the overall media environment to reflect a diversity of viewpoints.

- Kay M. Osborne is a management and communication consultant and former general manager of TVJ. Email feedback to columns@gleanerjm.com and kmosborne1990@gmail.com.