Wednesday, June 16, 2010
And just who are the true owners of Tribune Corporation? The employees, says Teamster General President Jim Hoffa.
However, despite the fact that the company was organized as an ESOP, Hoffa says that employees were shoved aside, with all power going to Sam Zell. He wants that to change.
The union argues that the employees are the true owners of Tribune, and putting the company’s television licenses under the control of Zell and his managers constitutes an unauthorized transfer of control to a third party.
While 100 percent ownership of the Tribune was transferred to employees through an employee stock ownership plan (ESOP), control was given to billionaire Sam Zell, who became chairman and CEO. Despite their ownership, the employees had no say in selecting the trustee of the ESOP or the members of the Tribune’s board of directors.
“The FCC wrongly allowed real estate mogul Sam Zell to force Tribune employee-owners to the sidelines as he saddled them with an untenable $13 billion of debt and took full control of the company they own,” said Hoffa. “This not only violated the law, it led to a wholesale slash and burn strategy that forced the company to eliminate thousands of good jobs, sell off valuable assets, and cut news resources to the bone.”
The union wants all FCC waivers to be stalled or denied “until Tribune's board has been reconstituted in accordance with commission requirements and the reconstituted board has had an opportunity to pass on the application.”
Tribune Broadcasting’s “Joint Plan of Reorganization for Tribune Company and its Subsidiaries” requires the transfer of all of its FCC licenses, and it exposes all relationships held by dint of a waiver to reconsideration. The FCC put the proceeding, listed under MB Docket No. 10-104, under ex parte permit-but-disclose procedure at the request of Tribune counsel.
To recap, there are three simple waiver-requiring cross-ownership situations include the pairings of WPIX-TV and Newsday in the New York City DMA, KTLA-TV and the Los Angeles Times in the Los Angeles DMA and WSFL-TV and the Sun Sentinel in the Miami DMA.
Chicago is a special situation: a three-entity market, and the iconic grouping of WGN-AM, WGN-TV and the Chicago Tribune. The combination has already been granted a permanent waiver by the FCC.A flagship/satellite relationship exists between WTTV-TV Bloomington IN and its satellite, WTTK-TV Kokomo IN; a waiver is required to keep that situation in place.
Finally, two waivers are required in Hartford CT. For starters, there are two television stations, WTIC-TV and WTXX-TV, combined with The Hartford Courant, requiring a cross-ownership waiver. And Tribune bought WTXX under a failed station waiver, which it needs to have renewed.
Although the FCC has long held that giving third parties control over station personnel, programming, and finances violates the Communications Act, the commission allowed precisely that when in 2007 it approved a change in control and granted waivers to the Tribune Co. needed to complete its going private transaction.
In order to emerge from bankruptcy as a reorganized company, the Tribune must secure FCC waivers to its broadcast cross-ownership rules in the Chicago and Hartford-New Haven markets. The FCC also must approve the transfer of ownership of the company, post-bankruptcy, to its creditors.
“We’re talking about creditors here, not broadcasters. What assurances do communities have that local news programming will be protected?” Hoffa said. “Tribune’s employees, who live and work in the affected communities, have an interest in the long-term survival and growth of this company as well as in the programming and coverage it provides their hometowns. As the outgoing owners, they should be given the opportunity to approve the application before it is considered by the FCC in order to best protect the public interest.”
Nothing in the proposed bankruptcy plan commits the creditors, who will emerge as the new owners, to maintain or improve upon the quantity of local news programming.
Media consolidation, and cross ownership in single markets are issues that strikes at the heart of freedom of speech.
"One of the challenges we face as a nation is having an informed public," says Heather Gray, chairwoman of WRFG-FM (89.3), a nonprofit station in Atlanta. "You need to have many voices to guarantee democracy and the free flow of information. That's why we protested four years ago. Now we have to have the same fight again. That's an outrage."
Bernie Lunzer of the Newspaper Guild said at an April 2010 FCC Workshop in Tampa, Florida that the FCC should encourage experimentation and consider new ways to support news, but that “diversity of delivery does not create diversity of content.”
“But if all the FCC does is lift the cross-ownership ban entirely, it will have done nothing to preserve or promote quality information. In fact, it will speed up the demise of journalism while preserving a cash flow for some,” said Lunzer, whose organization represents more than 28,000 media workers, including 15,000 journalists.
The FCC’s past attempts to dismantle ownership protections were stopped by the landmark Prometheus v. FCC as well as the thousands who spoke out against consolidation nationwide. The Third Circuit Court of Appeals recently lifted the stay on the FCC that resulted from that case, freeing the agency to modify its rules this year.
Big broadcasters claim that the Internet means that we don’t need to worry about local news coverage anymore. But it’s not true that the rules are no longer relevant in a digital age; the rules still matter.
What’s different is that just as media companies must learn to innovate, those who care about a democratic media must learn to fight on multiple fronts. From expanding broadband access to saving Net Neutrality to stopping the Comcast/NBC merger, activists and advocates are busy anticipating the challenges of media’s future.
Brandy Doyle of the Prometheus Radio Project said "Despite the under-the-radar events and the increasingly complex media landscape, it’s not hard to get caught up: Consolidation is still the problem. Independent media is still the solution."
In addition to the Teamster's complaint, petitions to deny the Tribune company's request for FCC Wavers were filed Monday night by Free Press, Media Alliance, NABET/CWA, IATSE, IBEW, National Hispanic Media Coalition, Office of Communication of the United Church of Christ and the Charles Benton Foundation.
Posted by Robert Daraio at 11:34 AM