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Comcast-NBC Merger: Media Consolidation In the Name of Diversity

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Photo from Free Press, which is pushing people to attend a public hearing in Chicago on July 13th on the Comcast-NBC merger and is opposed to the merger.

Congressman Bobby Rush (D-IL) put together a hearing on the possible merger of Comcast and NBC Universal on July 8th, which was held in Chicago at the Everett Dirksen Federal Building (the same building holding the US v. Blagojevich proceedings). The hearing, held by the Subcommittee on Communications, Technology and the Internet (a subcommittee of the Committee on Energy & Commerce in the House of Representatives), invited "witnesses" to testify and provide insight into who might benefit from the merge if it went through.

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The hearing held was not open to public comments. However, Rep. Rush, Rep. Rick Boucher (D-VA), Rep. Maxine Waters (D-CA) and Rep. Steve Buyer (R-IN) asked questions of all the invited witnesses after an hour of opening statements.

The witnesses present included: Samuel R. DeSimone, Jr., General Counsel, Earthlink, Inc; Will Griffin, President and Chief Executive Officer, Hip Hop on Demand, Jonathan Jackson, National Spokesman, Rainbow/PUSH Coalition, Inc.; Paula Madison, Executive Vice President, Chief Diversity Officer, NBC Universal; Joseph W. Waz, Jr., Senior Vice President, External Affairs and Public Policy Counsel, Comcast Corporation. (Ms. Shirley Franklin, Senior Adviser for the Alliance for Digital Equality was invited but did not attend the hearing).

Initially, it appeared the merger would be framed as a debate about how it would impact consumers. The opening statements from representatives at the hearing highlighted how the merger could eliminate competition and limit choices in the marketplace. The statements made note of the fact that Comcast is "the nation's largest video programming distributor, the largest residential broadband provider, and the third-largest home telephone service provider" as well as the fact that, "as measured by annual revenue, NBC is the fourth-largest media and entertainment company." The opportunity for a discussion of media consolidation presented itself.

But, Rep. Buyer seemingly headed off a real discussion on consolidation and said people needed to be careful to define what we think this merger will look like and get it wrong. He said there was a need to be careful because this is a dynamic industry. Rep. Buyer's remark, if translated from marketspeak possibly meant worrying about what it could do to the marketplace of entertainment, news, technology and ideas is beside the point. (*Rep. Buyer may have been using talking points from the Competitive Enterprise Institute.)

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So, instead of discussion on media consolidation, what emerged as the core of discussion and the wrapping that this merger would be packaged in so policy makers, industry representatives, concerned citizens and others would accept it was diversity. This was how it was framed and it became increasingly clear that Comcast and NBC Universal had been asked to make commitments to diversity by representatives if they wanted to get a merger deal and if they wanted representatives in Congress to work with them and make this merger happen without FCC or Department of Justice interference.

Griffin of Hip Hop on Demand [full statement] became the example of the type of media entrepreneur or mogul that representatives thought the merger could help produce more of. Griffin detailed his past, which included working at Time Warner during its post-merger integration with Turner, joining News Corp's Strategy and Marketing group for a brief period of time, being advised by former Motown Chairman Clarence Avant, having a faculty advisor in law school who was Dennis Hightower, the first African-American President of Walt Disney Television, producing film with Reuben Cannon and Bishop TD Jakes, and partnering with Russell Simmons and Stan Lathan to create an launch Hip Hop on Demand on Comcast.

Griffin's statement in support of the merger highlighted two reasons: "1) Comcast has the best Infrastructure of Inclusion to build upon in the media industry, and 2) African-American consumers and policy-makers have more potential leverage over Comcast than any other media company."

Griffin highlighted how Viacom's UP and Time Warner's The WB merged and "the first casualties were African-American shows" (Girlfriends, All of Us, Everybody Hates Chris). He attributed this to the fact that "advertisers have only been willing to pay for a limited amount of African-American impressions and will not pay for every African-American view generated." He further summarized, "The root of the problem is this: advertisers' unwillingness to allocate minority marketing budgets in proportion to viewership ratings."

Convinced that Comcast would correct this problem, Griffin added that "some of the very systems at the core of the Comcast media empire were birthed by African-American media owners" and how "thousands of minorities in leadership positions at Comcast have been invaluable" to him as an owner of African-American Media.

This all became a point of debate during the question period as Rep. Buyer singled out suggestions that minority ownership would relate to minority programming. Rep. Buyer thought this claim defied economic principles, that total audience must be enough to cover production. But, it was maintained by Griffin that, while advertisers may have paid for all 10 million viewers of Seinfeld, a show with a predominantly African-American audience would maybe pay only 8 million of its 10 million viewers because advertisers have traditionally had a limited budget for minorities and have built this "defect into the market."

Rainbow/PUSH spokesman Jackson's testimony [full statement] contrasted Griffin's faith in the merger to correct the landscape for minorities. Jackson put the merger in the "context of economic emancipation" and wondered what "Comcast's Return on Investment (ROI) in assisting in the economic empowerment of African American and underserved communities" would be and asked why it would be "good business for Comcast to address two of the nation's most important challenges: creating jobs and helping to connect every American, especially people of color, to vitally needed news information and broadband internet services."

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Jackson's statement commented on media ownership:

There are three minority owners in the market, controlling a total of three stations, or less than 5 percent of all the commercial radio stations in Chicago: WJOB-AM 1230, controlled by Hammond, Indiana-based Vasquez Development, a Latino- female-owned company; WLTH-AM 1370, controlled by WLTH Radio, an African- American-owned company; and WVON-AM 1690, controlled by Chicago-based and African-American-owned Midway Broadcasting. Vasquez Development, WLTH Radio and Midway Broadcasting each own just a single station.

Media ownership in Chicago doesn't reflect the diversity of its population. Racial and ethnic minorities are 37 percent of the population in the Chicago TV market; 38 percent of population in the Chicago radio market; and nearly two-thirds of the population in the city of Chicago. However, racial and ethnic minorities own less than 4 percent of Chicago's full-power commercial radio and television stations. Women own just 6 percent of Chicago's full-power commercial radio and television stations, despite comprising over half the population.

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Kevin Gosztola is managing editor of Shadowproof Press. He also produces and co-hosts the weekly podcast, "Unauthorized Disclosure." He was an editor for

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