No More Learning

Ganuary-February 1994); Vicente Navarro, The Politics of Health Policy: The US. Reforms, I98O-I994 (Oxford: Blackwell, 1994).
143. See Bagdikian, Media Monopoly, pp. xxvii-xxix.
144. See Dean Baker and Mark Weisbrot, Social Security: The Phony Crisis (Chicago: University of Chicago Press, 2000).
145. Noam Chomsky, Deterring Democracy (London: Verso, 1991), pp. 114- 2I.
146. Noam Chomsky, "The Media and the War: \Vhat War? " in Hamid Mowlana et aI. , Triumph of the Image: The Media's War in the Persian Gulf-
A Global Perspective (Boulder, Colo. : Westview, 1992); Douglas Kellner, The Persian GulfTV war (Boulder, Colo. : Westview, 1992); Chomsky, The New Military Humanism (Monroe, l\. 1. aine: Common Courage Press, 1999); Edward Herman, "The Media's Role in U. S. Foreign Policy: The Persian Gulf War," in Herman, Myth of the Liberal Media, chapter 12; Philip Ham- mond and Edward Herman, eds. , Degraded Capability: The Media and the Kosovo Crisis (London: Pluto, 2000).
Preface
lr.
Perhaps this is an obvious point, but the democratic postulate is that the media are independent and committed to discovering and reporting the tTUth, and that they do not merely reflect the world as powerful groups wish it to be perceived. Leaders of the media claim that their news choices rest on unbiased professional and objective criteria, and they have support for this contention in the intellectual cornrnunity. 2 If, however, the powerful are able to fix the premises of discourse, to decide what the general populace is allowed to see, hear, and think about, and to "manage" public opinion by regular propaganda cam- paigns, the standard view of how the system works is at serious odds with reality. )
The spedal . imponance of propaganda in what Walter Lippmann referred to as the "manufacture of consent" has long been recognized by writers on public opinion, propaganda, and the political require- ments of social order. 4 Lippmann himself, writing in the early 1920S, claimed that propaganda had already become "a regular organ ofpopu- lar government," and was steadily increasing in sophistication and im- portance. 5 We do not contend that this is all the mass media do, but we believe the propaganda function to be a very important aspect of their overall service. In the first chapter we spell out a propaganda model, which describes the forces that cause the mass media to playa
. ? THIS BOOK, WE SKETCH OUT A "PROP AGANDA MODEL" AND apply it to the performance of the mass media of the United States. This effort reflects our belief, based on many years of study of the workings of the media, that they serve to mobilize support for the special interests that dominate the state and private activity,l and that their choices, emphases, and omissions can often be understood best, and sometimes with striking clarity and insight, by analyzing them in such terms.
Ix PREFACE
propaganda role, the processes whereby they mobilize bias, and the patterns of news choices that ensue. In the succeeding chapters we try to demonstrate the applicability of the propaganda model to the actual performance of the media.
Institutional critiques such as we present in this book are commonly dismissed by establishment commentators as "conspiracy theories," but this is merely an evasion. We do not use any kind of "conspiracy" hypothesis to explain mass-media performance. In fact, our treatment is much closer to a "free market" analysis, with the results largely an outcome of the workings of market forces. Most biased choices in the media arise from the preselection of right-thinking people, internalized preconceptions, and the adaptation of personnel to the constraints of ownership, organization, market, and political power. Censorship is largely self-censorship, by reporters and commentators who adjust to the realities of source and media organizational requirements, and by people at higher levels within media organizations who are chosen to implement, and have usually internalized, the constraints imposed by proprietary and other market and governmental centers of power.
There are important actors who do take positive initiatives to define and shape the news and {Q keep the media in line. It is a "guided market system" that we describe here, with the guidance provided by the government, the leaders of the corporate community, the top media owners and executives, and the assorted individuals and groups who are assigned or allowed to take constructive initiatives. I; These initiators are sufficiently small in number to be able to act jointly on occasion, as do sellers in markets with few rivals. In most cases, however, media leaders do similar things because they see the world through the same lenses, are subject to similar constraints and incentives, and thus feature stories or maintain silence together in tacit collective action and leader- follower behavior.
The mass media are not a solid monolith on all issues. Where the powerful are in disagreement~there will be a certain diversity of tactical judgments on how to attain generally shared aims, reflected in media debate. But views that challenge fundamental premises or suggest that the observed modes of exercise of state power are based on systemic factors wilJ be excluded from the mass media even when elite contro~ versy over tactics rages fiercely.
We will study a number of such cases as we proceed, but the pattern is, in fact, pervasive. To select an example that happens to be dominat~ ing the news as we write, consider the portrayal of Nicaragua, under attack by the United States. In this instance, the division of elite opin~ ion is sufficiently great to allow it to be questioned whether sponsorship
I
of a terrorist army is effective in making Nicaragua "more democratic" and "less of a threat to its neighbors. " The mass media, however, rarely if ever entertain opinion, or allow their news columns to present materi- als suggesting that Nicaragua is more democratic than E1 Salvador and Guatemala in every non-Orwellian sense of the word;? that its govern- ment does not murder ordinary citizens on a routine basis, as the governments of E1 Salvador and Guatemala dO;8 that it has carried out socioeconomic reforms important to the majority that the other two governments somehow cannot attempt;9 that Nicaragua poses no mili- tary threat to its neighbors but has, in fact, been subjected to continu- ous attacks by the United States and its clients and surrogates; and that the U. S. fear of Nicaragua is based more on its virtues than on its alleged defects. 1o The mass media also steer clear of discussing the: background and results of the closely analogous attempt of the United States to bring "democracy" to Guatemala in 1954 by means of a CIA-sponsored invasion, which terminated Guatemalan democracy fot an indefinite period. Although the United States supported elite rule and helped to organize state terror in Guatemala (among many other countries) for decades, actually subverted or approved the subversion of democracy in Brazil, Chile, and the Philippines (again, among oth- ers), is "constructively engaged" with terror regimes on a global basis, and had no concern about democracy in Nicaragua as long as the brutal Somoza regime was firmly in power, nevertheless the media take gov- ernment claims of a concern for "democracy" in Nicaragua at face
value. l I
Elite disagreement over tactics in dealing with Nicaragua is reflected
in public debate, but the mass media, in conformity with elite priorities, have coalesced in processing news in a way that fails to place U. S. policy into meaningful context, systematically suppresses evidence of U. S. violence and aggression, and puts the Sandinistas in an extremely bad light. 12 In contrast, El Salvador and Guatemala, with far worse records, are presented as struggling toward democracy under "moder- ate" leaders, thus meriting sympathetic approval. These practices have not only distorted public perceptions of Central American realities, they have also seriously misrepresented U. S. policy objectives, an es-
sential feature of propaganda, as Jacques Ellul stresses:
The propagandist naturally cannot reveal the true intentions of the principal for whom he acts. . . . That would be to submit the projects to public discussion, to the scrutiny of public opinion, and thus to prevent their success. . . . Propaganda must serve instead as a veil for such projects, masking true intention. 13
PREFACE lxi
Ixii PREFACE
I
The power of the government to fix frames of reference and agendas, and to exclude inconvenient facts from public inspection, is also im- pressively displayed in the coverage of elections in Central America, discussed in chapter 3, and throughout the analysis of particular cases in the chapters that follow.
When there is little or no elite dissent from a government policy, there may still be some slippage in the mass media, and facts that tend to undermine the government line, if they are properly undersrood, can be found, usually on the back pages of the newspapers. This is one of the strengths of the U. S. system. It is possible that the volume of inconvenient facts can expand, as it did during the Vietnam War, in response to the growth of a critical constituency (which included elite:
elements from 1968). Even in this exceptional case, however, it was very rare for news and commentary to find their way into the mass media if they failed to conform to the framework of established dogma (post- ulating benevolent U. S. aims, the United States responding to aggres- sion and terror, etc. ), as we discuss in chapter 5. During and after the Vietnam War, apologists for state policy commonly pointed to the inconvenient facts, the periodic "pessimism" of media pundits, and the debates over tactics as showing that the media were "adversarial" and even "lost" the war. These allegations are ludicrous, as we show in detail in chapter 5 and appendix 3, but they did have the dual advantage of disguising the actual role of the mass media and, at the same time, pressing the media to keep even more tenaciously to the propaganda assumptions of state policy. We have long argued that the "naturalness" of these processes, with inconvenient facts allowed sparingly and within the proper framework of assumptions, and fundamental dissent virtu- ally excluded from the mass media (but permitted in a marginalized press), makes for a propaganda system that is far more credible and effective in putting over a patriotic agenda than one with official censor- ship.
In criticizing media priorities and biases we often draw on the media themselves for at least some of the facts. This affords the opportunity for a classic non sequitur, in which the citations of facts from the mainstream press by a critic of the press is offered as a triumphant "proof" that the criticism is self-refuting, and that media coverage of disputed issues is indeed adequate. That the media provide some facts about an issue, however, proves absolutely nothing about the adequacy or accuracy of that coverage. The mass media do, in fact, literally suppress a great deal, as we will describe in the chapters that follow. But even more important in this context is the question of the attention
given to a fact-its placement, tone, and repetitions, the framework of analysis within which it is presented, and the related facts that accom- pany it and give it meaning (or preclude understanding). That a careful reader looking for a fact can sometimes find it with diligence and a skeptical eye tells us nothing about whether that fact received the attention and context it deserved, whether it was intelligible to the reader or effectively distorted or suppressed. What level of attention it deserved may be debatable, but there is no merit to the pretense that becaus. e. ,-enain- facts. m~ he. . fJUUld. in. thJ'. . me. d. ia. . h. ~ ~ etiJiv. rJ1r. JUld. .
skeptical researcher, the absence of radical bias and de facto suppres- sion is thereby demonstrated. 14
One of our central themes in this book is that the observable pattern ofindignant campaigns and suppressions) ofshading and emphasis, and of selection of context, premises, and general agenda, is highly func- tional for established power and responsive to the needs of the govern- ment and major power groups. A constant focus on victims of communism helps convince the public of enemy evil and sets the stage for intervention, subversion, support for terrorist states, an endless arms race, and military conflict-all in a noble cause. At the same time) the devotion of our leaders and media to this narrow set of victims raises public self-esteem and patriotism) as it demonstrates the essential humanity of country and people.
The public does not notice the silence on victims in client states) which is as important in supporting state policy as the concentrated focus on enemy victims. It would have been very difficult for the Guatemalan government to murder tens of thousands over the past decade if the U. S. press had provided the kind of coverage they gave to the difficulties of Andrei Sakharov or the murder of Jerzy Popie- luszko in Poland (see chapter 2). It would have been impossible to wage a brutal war against South Vietnam and the rest of Indochina,
leaving a legacy of misery and destruction that may never be over- come, if the media had not rallied to the cause, portraying murderous aggression as a defense of freedom) and only opening the doors to
lal,;lll:al"ufsagreemeni wnen Ine COSIS IO Ine liueresrs triey represent became too high.
The same is true in other cases that we discuss, and too many that we do not.
We would like to express our thanks to the following people for their assistance in the preparation of this book: James Aronson) Phillip Ber- ryman, Larry Biros, Frank Brodhead, Holly Burkhalter) Donna Cooper,
PREFACE lxiii
-
lxiv PREFACE
Carol Fouke, Eva Gold, Carol Goslant, Roy Head, Mary Herman, Rob Kirsch, Robert Krinsky, Alfred McClung Lee, Kent MacDougall, Nejat Ozyegin, Nancy Peters, Ellen Ray, William Schaap, Karin Wil- kins, Warren Wine, and Jamie Young. The authors alone remain re- sponsible for its contents.
'I
I I
MANUF ACTURING CONSENT
,
A Propaganda Model
THE MASS MEDIA SERVE AS A SYSTEM FOR COMMUNICA TING messages and symbols to the general populace. It is their function to amuse, entertain, and inform, and to inculcate individuals with the values, beliefs, and codes of behavior that will integrate them into the institutional structures of the larger society. In a world of concentrated wealth and major conflicts of class interest, to fulfil this role requires systematic propaganda. 1
In countries where the levers of power are in the hands of a state
. . om:
"rluVCCi. liC . . . . . rt:o. f1d; uf\\:f1. -" appn! '" meoted by official censorship, makes it clear that the media serve the ends of a dominant elite. It is much more difficult to see a propaganda system at work where the media are private and formal censorship is absent. This is especially true where the media actively compete, peri- odically attack and expose corporate and governmental malfeasance, and aggressively portray themselves as spokesmen for free speech and the general community interest. What is not evident (and remains
u't:1reao:\:flIcy;" ute -lIronopon~n"C
. . .
I I
2 MANUFACTURING CO:\lSEKT
undiscussed in the media) is the limited nature ofsuch critiques, as well as the huge inequality in command of resources, and its effect both on access to a private media system and on its behavior and performance.
A propaganda model focuses on this inequality of wealth and power and its multilevel effects on mass-media interests and choices. It traces the routes by which money and power are able to filter out the news fit to print, marginalize dissent, and allow the government and domi- nant private interests to get their messages across to the public. The essential ingredients of our propaganda model, or set of news "filters," fall under the following headings: (1) the size, concentrated ownership, owner wealth, and profit orientation ofthe dominant mass-media firms; (2) advertising as the primary income source of the mass media; (3) the reliance of the media on information provided by government, business, and "experts" funded and approved by these primary sources and agents of power; (4) "flak" as a means of disciplining the media; and (5) "anticommunism" as a national religion and control mechanism. These elements interact with and reinforce one another. The raw mate- rial of news must pass through successive filters, leaving only the cleansed residue fit to print. They fix the premises of discourse and interpretation, and the definition of what is newsworthy in the first place, and they explain the basis and operations of what amount to propaganda campaigns.
The elite domination of the media and marginalization of dissi- dents that results from the operation of these filters occurs so natu- rally that media news people, frequently operating with complete integrity and goodwill, are able to convince themselves that they choose and interpret the news "objectively" and on the basis of pro- fessional news values. Within the limits of the filter constraints they often are objective; the constraints are so powerful, and are built into the system in such a fundamental way, that alternative bases of news
choices are hardly imaginable. In assessing the newsworthiness of the U. S. government's urgent claims of a shipment of MIGs to Nicaragua on November 5, 1984, the media do not stop to ponder the bias that is inherent in the priority assigned to government-supplied raw mate- rial, or the possibility that the government might be manipulating the news,2 imposing its own agenda, and deliberately diverting attention from other materiaJ. 3 It requires a macro, alongside a micro- (story- by-story), view of media operations, to see the pattern of manipula- tion and systematic bias.
Let us turn now to a more detailed examination of the main constitu- ents of the propaganda model, which will be applied and tested in the chapters that follow.
I
I
1. 1. SIZE, OWNERSHIP, AND PROFIT ORIENTATION OF THE MASS MEDIA:
THE FIRST FILTER
In their analysis of the evolution of the media in Great Britain, James Curran and Jean Seaton describe how, in the first half of the nineteenth century, a radical press emerged that reached a national working-class audience. This alternative press was effective in reinforcing class con- sciousness: it unified the workers because it fostered an alternative value system and framework for looking at the world, and because it "promoted a greater collective confidence by repeatedly emphasizing the potential power of working people to effect social change through the force of 'combination' and organized action. "4 This was deemed a major threat by the ruling elites. One MP asserted that the working- class newspapers "inflame passions and awaken their selfishness, con- trasting their current condition with what they contend to be their future condition-a condition incompatible with human nature, and those immutable laws which Providence has established for the regula- tion of civil society. "5 The result was an attempt to squelch the work- ing-class media by libel laws and prosecutions, by requiring an expensive security bond as a condition for publication, and by imposing various taxes designed to drive out radical media by raising their costs. These coercive efforts were not effective, and by mid-century they had
been abandoned in favor of the liberal view that the market would enforce responsibility.
Curran and Seaton show that the market did successfully accomplish what state intervention failed to do. Following the repeal of the punitive taxes on newspapers between r853 and 1869, a new daily local press came into existence, but not one new local working-class daily was established through the rest of the nineteenth century. Curran and Seaton note that
Indeed, the eclipse of the national radical press was so total that when the Labour Party developed out of the working-class move- ment in the first decade of the twentieth century, it did not obtain the exclusive backing of a single national daily or Sunday paper. 6
One important reason for this was the rise in scale of newspaper enter- prise and the associated increase in capital costs from the mid- nineteenth century onward, which was based on technological
A PROPAGA~DA MODEL 3
l
4 MANUFACTURING CONSUlT
improvements along with the owners' increased stress on reaching large audiences. The expansion of the free market was accompanied by an "industrialization of the press. " The total cost of establishing a national weekly on a profitable basis in 1837 was under a thousand pounds, with a break-even circulation of 6,200 copies. By 1867) the estimated start-up cost of a new London daily was 50,000 pounds. The Sunday Express, launched in 1918, spent over two million pounds before it broke even with a circulation of ovcr 2. SQ,flQ. Q. ? '?
Similar processes were at work in the United States, where the start-up cost of a new paper in New York City in 1851 was 569,000; the public sale of the St. Louis Democrat in 1872 yielded $456,000; and city newspapers were selling at from $6 to $18 million in the 1920s. 8 The cost of machinery alone, of even very small newspapers, has for many decades run into the hundreds of thousands of dollars; in 1945 it could be said that "Even small-newspaper publishing is big business . . . [and] is no longer a trade one takes up lightly even if he has substantial cash-or takes up at all if he doesn't. "9
Thus the first filter-the limitation on ownership of media. with any substantial outreach by the requisite large size of investment-was applicable a century or more ago, and it has become increasingly effec- tive over time. lO In 1986 there were some 1,500 daily newspapers, II,OOO magazines, 9,000 radio and I,sao TV stations, 2>400 book publishers, and seven movie studios in the United States-over 25,000 media entities in all. But a large proportion of those among this set who were news dispensers were very small and local, dependent on the large national companies and wire services for all but local news. Many more were subject to common ownership, sometimes extending through vir- tually the entire set of media variants. a
Ben Bagdikian stresses the fact that despite the large media numbers, the twenty-nine largest media systems account for over half of the output of newspapers, and most of the sales and audiences in maga- zines, broadcasting, books, and movies. He contends that these "consti- tute a new Private Ministry of Information and Culture" that can set the national agenda. 12
Actually, while suggesting a media autonomy from corporate and government power that we believe to be incompatible with structural facts (as we describe below), Bagdikian also may be understating the degree of effective concentration in news manufacture. It has long been noted that the media are tiered, with the tOp tier-as measured by prestige, resources, and outreach-comprising somewhere between ten and twenty-four systems. u It is this top tier, along with the government and wire services, that defines the news agenda and supplies much of
the national and international news to the lower tiers of the media, and rhus for the general publk'4 Centralization within the top tier was substantially increased by the post-World War II rise of television and the national networking of this important medium. Pre-television news markets were local, even if heavily dependent on the higher tiers and a narrow set of sources for national and international news; the net- works provide national and international news from three national sources, and television is now the principal source of news for the public. '5 The maturing of cable, however, has resulted in a fragmenta- tion of television audiences and a slow erosion of the market share and power of the networks.
Table 1-1 provides some basic financial data for the twenty-four media giants (or their controlling parent companies) that make up the top tier of media companies in the United States. l6 This compilation includes: (I) the three television networks: ABC (through its parent, Capital Cities), CBS, and NBC (through its ultimate parent, General Electric [GEl); (2) the leading newspaper empires: New York Times, Washington Post, Los Angeles Times (Times-Mirror), Wall Street Journal (Dow Jones), Knight-Ridder, Gannett, Hearst, Scripps-Howard, New- house (Advance Publications), and the Tribune Company; (3) the major news and general-interest magazines: Time, Newsweek (subsumed under Washington Post), Reader's Digest, TV Guide (Tdangle), and U. S. News & World Report; (4) a major book publisher (McGraw-Hill); and (5) other cable-TV systems of large and growing importance: those of Murdoch, Turner, Cox, General Corp. , Taft, Storer,l7 and Group W
I 01/estinghouse). Many of these systems are prominent in more than one field and are only arbitrarily placed in a particular category (Time, Inc.
, is very important in cable as well as magazines; McGraw-Hill is a major publisher of magazines; the Tribune Company has become a large force in television as well as newspapers; Hearst is important in magazines
I as well as newspapers; and Murdoch has significant newspaper interests as well as television and movie holdings).
These twenty-four companies are large, profit-seeking corporations, owned and controlled by quite wealthy people. It can be seen in table I-I that all but one of the top companies for whom data are available have assets in excess of $1 billion, and the median size (middle item by size) is $2. 6 billion. It can also be seen in the table that approximately three-quaners of these media giants had after-tax profits in excess of $100 million, with the median at $183 million.
Many of the large media companies are fully integrated into the market, and for the others, too, the pressures of stockholders, directors, and bankers to focus on the bottom line are powerful. These pressures
A PROPACA~DA MODEL 5
6
MANUfACTURING CONSENT
COMP ANY
Advance Publications (Newhouse)l
Capital Cities/ABC
CBS
Cox Communi-
cations2 Dow Jones &
Co. Gannett
General Eleetric (NBC)
Hearst3
Knight-Ridder McGraw-Hill News Corp.
(Murdoch)? New York
Times Reader's
Digest~
Time, Inc. Times-Mirror TriangleS Tribune Co. Turner
Broadcasting U. S. News &
World Report9
PROFITS PROFITS
TOT AL BEFORE AFTER TOT AL
ASSETS TAXES TAXES REVENUE ($ MILLIONS) ($ MILLIONS) ($ MILLIONS) ($ MILLIONS)
TABLE 1-1
Financial Data for Twenty-four Large Media Corporations (or Their Parent Firms), December 1986
2,200
4,124
4,754 743
1,135
2,BOI
36,725
2,100 (1983) 1,911 1,517 3,822
1,565
1,400 (1985) 1,062 (-17) 537 Toft 1,257 (-II) (-53) 500
2,500
5,191
3,370 1,111
1,236
3,365 34,591
4,040
1,947 1,463 8,460
1,405
NA
4,23<> 2,929 NA 2,589 1,904
200+
. . .
448
NA NA
. 7. 370 17. 87
331 183
540 27' 3,689 2,492
NA 215 (1983) 2. 7 140 296 154 377 170
256 132
75-110 NA (1985)
Scripps-Howard6 Storer7
NA 1,242
NA NA . .
. . . . . .
NA NA 140
62l> 37. 3,762
2,948 NA NA 73<J 523 293 2,030 (-185) (-187) 570
=
A PROPAGA~DA MODEL 7
PROFITS PROFITS
TOT AL BEFORE AFTER TOT AL
ASSETS TAXES TAXES REVENUE ($ MILLIONS) ($ MILLIONS) ($ MILLIONS) ($ MILLIONS)
1,145 205 100 1,215 8,482 801 670 10,731
COMPANY
W ashington POst
W estinghouse
NA = not available
to The :l$Ct tOtal is taken from Forbes magazine's wealth total for the New- house family for 1985; the total revenue is for media sales only, as reported in Advem:sing Age, June 29, 1987.
:z. . Col: Communications was publicly owned until 1985, when it was merged into another Cox family company, Cox Enterprises. The data presented here are for year-end 1984, the last year of public ownenhip and disclosure of substantial financial information.
~ Data compiled in William Barrett, "Citizens Rich," FO'1'bes, Dec. 14, 1987. 4. These data are in Australian dollan and are for June 30, 1986; at that date
the Australian dollar was worth 6 8 /100 of a u. S. dollar.
5- Data for 1985, as presented in the NefJ) YO'1'k Time; Feb. 9, 1986.
6. Total revenue for media sales only, as reported inAdvertising Age, June 29, 1987.
7- Storer came under the control of the Wall Street firm Kohlberg Kravis Roberts &. Co. in 1985; the dan here are for December 1984, the last period of Storer autonomy and publicly available information.
s. Total revenue for media sales only; from Advertising Age, June 29, 1987.
9. Total assets as of 1984-85, based on "Mort Zuckerman, Media's New Mogul," FO'1'tune, Oct. 14, 1985; total revenue from Adwrlising Age, June 29, 1987.
have intensified in recent years as media stocks have become market favorites, and actual or prospective owners of newspapers and televi- sion properties have found it possible to capitalize increased audience s. ize and adverti"iing revenues. into multiQlied values of the media fran- chises-and great wealth. 18 This has encouraged the entry of specula-
tors and increased the pressure and temptation to focus more intensively on profitability. Family owners have been increasingly di- vided between those wanting to take advantage of the new opportuni- ties and those desiring a continuation of family control, and their splits
8 MANUFACTURI~G CO~SENT
have often precipitated crises leading finally to the sale of the family interest. 19
This trend toward greater integration of the media into the market system has been accelerated by the loosening of rules limiting media
door to the unrestrained commercial use of the airwaves. 21
The greater profitability of the media in a deregulated environment has also led to an increase in takeovers and takeover threats, with even giants like CBS and Time, Inc. , directly attacked or threatened. This has forced the managements of the media giants to incur greater debt and to focus ever more aggressively and unequivocally on profitability, in order to placate owners and reduce the attractiveness of their proper- ties to outsiders,22 They have lost some of their limited autonomy to bankers, institutional investors, and large individual investors whom
they have had to solicit as potential "white knights. "23
While the stock of the great majority of large media firms is traded on the securities markets, approximately two-thirds of these companies are either closely held or still controlled by members of the originating family who retain large blocks of stock. This situation is changing as family ownership becomes diffused among larger numbers of heirs and the market opportunities for selling media properties continue to im- prove, but the persistence offamily control is evident in the data shown in table 1-2. Also evident in the table is the enormous wealth possessed by the controlling families of the top media firms. For seven of the twenty-four, the market value of the media properties owned by the controlling families in the mid-I98os exceeded a billion dollars, and the median value was close to half a billion dollars. 24 These control groups obviously have a special stake in the status quo by virtue oftheir wealth and their strategic position in one of the great institutions of society. And they exercise the power of this strategic position) if only by establishing the general aims of the company and choosing its top
management. 2S
The control groups of the media giants are also brought into close
relationships with the mainstream of the corporate community through boards of directors and social links. In the cases of NBC and the Group W television and cable systems, their respective parents, GE and West- inghouse, are themselves mainstream corporate giants, with boards of directors that are dominated by corporate and banking executives. Many of the other large media firms have boards made up predomi-
<:1;:>'OC~'I,\t"'2. t~'I,\, ~"%",--'Vw'M.
. . ,,,h\p, 'dnd 'C'i)1\t'rm by m:m-mt;dia cmnpa- nies. 20 There has also been an abandonment of restrictions-previously quite feeble anyway--on radio-TV commercials, entertainment- mayhem programming, and "fairness doctrine" threats, opening the
TABLE 1-2
Wealth of the Control Groups of Twenty-four Large Media Corporations (or Their Parent Companies), February 1986
PERCENT AGE OF VOTING STOCK
V ALUE OF CONTROLLING STOCK
CONTROLLING HELD BY
FAMILY CONTROL INTEREST
A PROP AGANDA MODEL 9
OR GROUP
Newhouse family
Cox family
Bancroft-Cox families
00,
00,
Hearst family Knight and Ridder
families McGraw family Murdoch family Sulzberger family Wallace estate
managed by trustees; no personal beneficiaries
Scripps heirs
00, 00, 00,
Chandlers Annenbergs McCormick heirs Turner
GROUP (%)
Closc:ly hc:ld
36
54
(5
MILLIONS) 2,200F
P
7l1 551P
F P
F F F
F
COMP ANY
Advance Publications
Capital Cities
CBS 00, 20. 61
Officers and directors (ODs)
20. 7 (Warren Buffett, 17. 8)
Cox Com? IOunications
Dow Jones & Co. Gannett
General Electric Hearst Knight-Ridder
McGraw-Hill News Corp.
New York Times Reader's Digest
Scripps. Howard
Storer
T. rt
Time, Inc.
Times-Mirror Triangle Tribune Co. Turner
Broadcasting
I,900 1,500
. 5' ]7] P
1. '
Under 1
33 I,SOOF 18 447'
<. 20 450 4' 300 80 450 NA NA
NA I,400
8. 4 143P 4. 8 37'
10. 7 (Luce 4. 6, Temple 3. 2)
406'
I,200P 1,600 F
35 Closely 16. 6
80
held
273 222
P P
10 MANUfACTURING CONSENT
PERCENTAGE OF VOTING STOCK
VALUE OF CONTROLLING STOCK
CONTROLLING HELD BY
FAMILY CONTROL INTEREST
COMPANY
U. S. News & World Report
Washington Post Westinghouse
OR GROUP Zuckerman
Graham family 00,
GROUP (%)
Closely held
50+ Under I
(I MILLIONS) 1762
350" 42'
Sources: P means taken from proxy statements and computed from stock values as of February 1986; F means taken from Forbes magazine's annual estimate of wealth holdings of the very rich.
I. These holdings include William Paley's 8. 1 percent and a 12. 2 percent holding of Laurence Tisch through an investment by Loews. Later in the year, Loews increased its investment to 24. 9 pen. :ent, and Laurence Tisch soon thereafter became acting chief executive officer.
2. This is the price paid by Zuckerman when he bought U. S. Nf! 'WS in 1984. See Gwen Kinkead, "Mort Zuckerman, Media's New Mogul," Forlune, Oct. 14, 1985, p. 196.
nantly of insiders, a general characteristic of relatively small and owner-dominated companies. The larger the firm and the more widely distributed the stock, the larger the number and proportion of outside directors. The composition of the outside directors of the media giants is very similar to that of large non-media corporations. Table 1-3 shows that active corporate executives and bankers together account for a little over half the total of the outside directors of ten media giants; and the lawyers and corporate-banker retirees (who account for nine of the thirteen under "Retired") push the corporate total to about two-thirds of the outside-director aggregate. These 95 outside directors had direc-
torships in an additional 36 banks and 255 other companies (aside from the media company and their own firm of primary affiliation). 26
In addition to these board linkages, the large media companies all do business with commercial and investment bankers, obtaining lines of credit and loans, and receiving advice and service in selling stock and bond issues and in dealing with acquisition opportunities and takeover threats. Banks and other institutional investors are also large owners of media stock. In the early 1980s, such institutions held 44 percent of the stock of publicly owned newspapers and 35 percent of the stock of
A PIlOPAGANDA MODEL 11
TABLE 1-3
AFFILIATIONS OF THE OUTSIDE DIRECTORS OF TEN LARGE MEDIA COMPANIES (OR THEIR PARENTS) IN 1986*
PRIMARY
AFFILIA TION
NUMBER PERCENT
39 41. 1
8 8. '
? ' . 2 15 15. 8
Corporate executive
Lawyer
Retired (former corporate eltecutive or banker) Banker
Consultant
Nonprofit organization
Other
Total
RELA TIONSHIPS
Other directorships (bank directorships) Former government officials
Member of Council on Foreign Relations
8. '
8
13 (9) 13. 7 (9. 5)
OTHER
8
95 100. 0
255 (36) 15
20
8. '
'* Dow Jones & Co. ; Washington Post; New York Times; Time, Inc. ; CBS; Times-Mirror; Capital Cities; General Electric; Gannett; and Knight~Rid- der.
publicly owned broadcasting companies,27 These investors are also frequently among the largest stockholders of individual companies. For example, in 1980-81, the Capital Group, an investment company sys- tem, held 7. 1 percent of the stock of ABC, 6. 6 percent of Knight- Ridder, 6 percent of Time, Inc. , and 2. 8 percent of Westinghouse. 28 These holdings, individually and collectively, do not convey control, but these large investors can make themselves heard, and their actions can affect the welfare of the companies and their managers. 29 If the managers fail to pursue actions that favor shareholder returns, institu- tional investorS will be inclined to sell the stock (depressing its price), or to listen sympathetically to outsiders contemplating takeovers. These
12 MANUFACTURING CONSENT
investors are a force helping press media companies toward strictly market (profitability) objectives.
So is the diversification and geographic spread of the great media companies. Many of them have diversified out of particular media fields into others that seemed like growth areas. Many older newspaper-based media companies, fearful of the power of television and its effects on advertising revenue, moved as rapidly as they could into broadcasting and cable TV. Time, Inc. , also, made a major diversification move into cable TV, which now accounts for more than half its profits. Only a small minority of the twenty-four largest media giants remain in a single media sector. 30
The large media companies have also diversified beyond the media field, and non-media companies have established a strong presence in the mass media. The most important cases of the latter are GE, owning RCA, which owns the NBC network, and Westinghouse, which owns major television-broadcasting stations, a cable network, and a radio- station network. GE and Westinghouse are both huge, diversified mul- tinational companies heavily involved in the controversial areas of weapons production and nuclear power. It may be recalled that from 1965 to 1967, an attempt by International Telephone and Telegraph (lIT) to acquire ABC was frustrated following a huge outcry that focused on the dangers of allowing a great multinational corporation with extensive foreign investments and business activities to control a major media outlerY The fear was that ITT control "could compro-
mise the independence of ABC's news coverage of political events in countries where lIT has interests. "32 The soundness of the decision disallowing the acquisition seemed to have been vindicated by the later revelations of ITT's political bribery and involvement in attempts to overthrow the government of Chile. RCA and Westinghouse, however, had been permitted to control media companies long before the lIT case, although some of the objections applicable to ITT would seem to apply to them as well. GE is a more powerful company than ITT, with an extensive international reach, deeply involved in the nuclear power business, and far more important than lIT in the arms industry. It is a highly centralized and quite secretive organization, but one with a vast stake in "political" decisions. 33 GE has contributed to the funding of the American Enterprise Institute, a right-wing think tank that sup- ports intellectuals who will get the business message across. With the acquisition of ABC, GE should be in a far better position to assure that sound views are given proper attention. 34 The lack of outcry over its takeover of RCA and NBC resulted in part from the fact that RCA control over NBC had already breached the gate of separateness, but
J
A PR. OPAGANDA MODEL 13
it also reflected the more pro-business and laissez-faire environment of the Reagan era.
The non-media interests of most of the media giants are not large, and, excluding the GE and Westinghouse systems, they account for only a small fraction of their total revenue. Their multinational out- reach, however, is more significant. The television networks, television syndicators, major news magazines, and motion-picture studios all do extensive business abroad, and they derive a substantial fraction of their revenues from foreign sales and the operation of foreign affiliates. Reader's Digest is printed in seventeen languages and is available in over 160 countries. The Murdoch empire was originally based in Australia, and the controlling parent company is still an Australian corporation; its expansion in the United States is funded by profits from Australian and British affiliates. 35
Another structural relationship of importance is the media compa-
nies' dependence on and ties with government. The radio-TV compa-
nies and networks all require government licenses and franchises and
are thus potentially subject to government control or harassment. This
technical legal dependency has been used as a club to discipline the I media, and media policies that stray too often from an establishment
orientation could activate this threat. 36 The media protect themselves
from this contingency by lobbying and other political expenditures, the
cultivation of political relationships, and care in policy. The political
ties of the media have been impressive. Table 1-3 shows that fifteen of
ninety-five outside directors of ten of the media giants are former
government officials, and Peter Dreier gives a similar proportion in his
study of large newspapers. 37 In television, the revolving-door flow of
personnel between regulators and the regulated firms was massive dur-
ing the years when the oligopolistic structure ofthe media and networks I was being established. 38
The great media also depend on the government for more general policy support. All business firms are interested in business taxes, inter- est rates, labor policies, and enforcement and nonenforcement of the antitrust laws. GE and Westinghouse depend on the government to subsidize their nuclear power and military research and development, and to create a favorable climate for their overseas sales. The Reader's Diges4 Time, Newsweek, and movie- and television-syndication sellers also depend on diplomatic support for their rights to penetrate foreign cultures with U. S. commercial and value messages and interpretations of current affairs. The media giants, advertising agencies, and great multinational corporations have a joint and close interest in a favorable
climate of investment in the Third World, and their interconnections
14 MAN\JFACTURISG CONSENT
and relationships with the government in these policies are symbiotic. 39 In sum, the dominant media firms are quite large businesses; they are controlled by very wealthy people or by managers who are subject to sharp constraints by owners and other market-profit-oriented forces;40 and they are closely interlocked, and have important common interests, with other major corporations, banks, and government. This is the first
powerful filter that will affect news choices.
1. 2. THE ADVERTISING LICENSE TO DO BUSINESS: THE SECOND FILTER
In arguing for the benefits of the free market as a means of controlling dissident opinion in the mid-nineteenth century, the Liberal chancellor of the British exchequer, Sir George Lewis, noted that the market would promote those papers "enjoying the preference of the advertising public. "41 Advertising did, in fact, serve as a powerful mechanism weakening the working-class press. Curran and Seaton give the growth of advertising a status comparable with the increase in capital costs as a factor allowing the market to accomplish what state taxes and harass- ment failed to do, noting that these "advertisers thus acquired a de facto licensing authority since, without their support, newspapers ceased to be economically viable. "42
Before advertising became prominent, the price of a newspaper had to cover the costs of doing business. With the growth of advertising, papers that attracted ads could afford a copy price well below produc- tion costs. This put papers lacking in advertising at a serious disadvan- tage: their prices would tend to be higher, curtailing sales, and they would have less surplus to invest in improving the salability of the paper (features, attractive format, promotion, etc. ). For this reason, an adver- tising-based system will tend to drive out of existence or into marginal- ity the media companies and types that depend on revenue from sales alone. With advertising, the free market does not yield a neutral system in which final buyer choice decides. The advertisers' choices influence media prosperity and surviva1. 43 The ad-based media receive an adver- tising subsidy that gives them a price-marketing-quality edge, which allows them to encroach on and further weaken their ad-free (or ad- disadvantaged) rivals. " Even if ad-based media cater to an affluent
(<<upscale") audience, they easily pick up a large part of the "down-
I
A PROP AGANDA MODEL l j
scale" audience, and their rivals lose market share and are eventually driven out or marginalized.
In fact, advertising has played a potent role in increasing concentra- tion even among rivals that focus with equal energy on seeking advertis- ing revenue. A market share and advertising edge on the part of one paper or television station will give it additional revenue to compete more effectively-promote more aggressively, buy more salable fea- tures and programs-and the disadvantaged rival must add expenses it cannot afford to try to stem the cumulative process of dwindling market (and revenue) share. The crunch is often fatal, and it helps explain the death of many large-circulation papers and magazines and the attrition in the number of newspapers. 45
From the time of the introduction of press advertising, therefore, working-class and radical papers have been at a serious disadvantage. Their readers have tended to be of modest means, a factor that has always affected advertiser interest. One advertising executive stated in 1856 that some journals are poor vehicles because "their readers are not purchasers, and any money thrown upon them is so much thrown away. "46 The same force took a heavy toll of the post-World War II social-democratic press in Great Britain, with the Daily Herald, News Chronicle, and Sunday Citizen failing or abSorbed into establishment systems between 1960 and 1967, despite a collective average daily read- ership of 9. 3 million.