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OpEdNews Op Eds    H2'ed 8/31/10

Why US Media Is Soft on Wall Street

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Danny Schechter
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The next category on the chart is Institutional and Mutual Fund owners. They control 68 percent. And who are they? Fidelity, State Street Corporation, JP Morgan Chase and Company, Price T Rowe Associates, etc.

The next category is "Top Mutual Fund holders" with the Fidelity Contra Fund owning $1.2 billion in holdings; more than 36 million shares. In all, 1,095 institutions own shares. But a few are more equal than others.

The role that these largely unaccountable mutual funds play is rarely examined. Just listing their holdings doesn't explore their influence.

Some mutual funds get an added benefit -- access to employee retirement withholdings. So, they are not just funding Disney, but being funded by Disney with a guaranteed income stream even though the Funds often do not perform well.

Explains Barry Dyke: "It's about control. Mutual fund companies get other people's money through payroll deductions on their 401[k]s, and those fund companies, and the funds they control, own large stakes in companies like Disney.

"Through lobbying, essentially with the Pension Protection Act of 2006, employers are exempt from liability-fiduciary responsibility as long as they use a mutual fund; a target date mutual fund more specifically.

"Employers are exempt from liability, mutual fund companies are exempt from liability from the get-go, and do a lousy job of looking out for shareholders."

What he means here is their returns have been relatively low -- and many funds have blown up. Forcing employees to invest with them is hardly fair if they are losing money.

Back on our list, there follows, "insider transactions." Some of the information is considered N/A -- not available.

Why is that?

I was at ABC News when Disney swooped in to buy the company in 1995 for $19 billion. It had been for sale for $11 billion just two years earlier. The deal was the largest media merger in history, to that point, and the second largest sum of money ever paid for a U.S. company.

Back in 1940, Walt Disney had first sold stock to lower the debt. The newer Disney took on billions in debt to finance its deals. Where did the money come from?

Why, no surprise, the very Wall Street banks and financial institutions they work with. Call it synergy, or call it collusion, but not the kind that leads to better programming or media responsibility.

The final phase-out of ABC as a separate company occurred at a final shareholders meeting I attended in a New York TV studio on Jan. 4, 1996. I wrote about it in my book, The More You Watch, The Less You Know, noting that the vote to sell the company to the "Mouse House" (and, in the process, enrich its shareholders) passed by a vote of 121,000,000 to 437,000.

It was only after the deal was done that questions from the floor were permitted.

So much for corporate democracy! I managed to get a question in called on as "the man in the back of the room." It annoyed my bosses.

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News Dissector Danny Schechter is blogger in chief at Mediachannel.Org He is the author of PLUNDER: Investigating Our Economic Calamity (Cosimo Books) available at Amazon.com. See Newsdisssector.org/store.htm.
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