By Ron Kaufman

"Globalization is not only striving to grow revenues by selling goods and services in global markets. It also means globalizing every activity of the company, including the sourcing of raw materials, components, and products."
-- part of the General Electric business strategy

"You do not understand the power of the Dark Side!" says Darth Vader in the 1983 film Star Wars: The Empire Strikes Back. Vader has just cut off the hand of Luke Skywalker and is trying to seduce the now-crippled hero to the Dark Side of the Force. Vader is pure evil with only universal domination on his mind. The message from Darth Vader is clear in the Star Wars films: Join him, or die. In a sense, this is what is happening to today's media companies. Each company is trying to expand its empire. The focus of today's large media companies is nothing short of global domination. Except, corporations do not slice off the limbs of their competition -- instead, they purchase their rivals.

In April 2004, General Electric Company's NBC division and Vivendi Universal Entertainment overcame their last hurdle to completing a $14 billion merger. The United States Federal Trade Commission rubber stamped the deal further reinforcing the government's approval of large media mergers. The Federal Communications Commission (FCC), which is supposed to review all media mergers in the United States, did not even make a comment.

This merger is unlike many others. The NBC-Vivendi deal is a global merger. Two media giants, one from the U.S. and one from France, are now united in the quest for industry supremacy. GE is obviously making a calculated powerplay to match the efforts by Rupert Murdoch's News Corporation. The worldwide holdings of Australia-based News Corp. are impressive . . .

. . . or as Darth Vader said to Luke, after one of Luke's acrobatic evasion tactics during the final showdown in The Empire Strikes Back: "Impressive . . . most impressive!"

News Corp. owns the Fox TV Network; Fox News; Fox Sports; FX Network; National Geographic Channel; 20th Century Fox movies and home entertainment (including, appropriately, all of the Star Wars films); Fox Sports Australia; the STAR Network in Asia (based in Taiwan); BSkyB (Great Britain), DirecTV (U.S.), FOXTEL (Australia), and Sky Italia (Italy) direct broadcast satellite television services; TV Guide magazine; 175 different newspapers in the UK, Australia, Fiji, Papua New Guinea and the U.S.; HarperCollins Publishers; the National Rugby League; Mushroom Records and more. The company says its 2003 revenue totaled $19 billion. News Corp. is big.

General Electric, however, is a giant. The company boasts 2003 revenue of $134.2 billion with operations in more than 100 countries and more than 315,000 employees worldwide. NBC, one of the original TV networks founded in 1926, has around 6,000 employees worldwide and is the largest TV network with 2003 revenue of around $4.46 billion. GE will not take a seat in second place in the wake of other proposed mergers (such as the failed attempt by Comcast Corp. to buy Disney in March 2004). This monstrous multinational corporation wants to control as much of the media throughout the world as possible.

"NBC Television Network broadcasts approximately 5,000 hours of TV programming each year, transmitting to more than 200 affiliated stations across the United States," says the network. "The NBC signal [is broadcast in] an estimated 99 percent of all homes in the United States with television sets."

In addition to the NBC TV programs, the NBC empire also includes 14 NBC-affiliated television stations in major U.S. television markets which cover approximately 30 percent of the nation's viewing households; Telemundo, a U.S. Spanish-language television network that reaches 92% of U.S. Hispanic viewers; and the Bravo cable network which reaches more than 70 million households in the United States.

The huge NBC network is also partnered with Microsoft Corporation (the multi-billion dollar company which owns the Windows computer operating system) to produce CNBC/MSN Money Financial News Network and the MSNBC News programming.

In addition to the vast amount of media outlets, GE also has business holdings in the areas of consumer finance (credit and insurance), medical systems, specialty materials (plastics), consumer products, power systems, aircraft engines, rail products, commercial construction and environmental management.

Globalization is a key to GE's long term growth strategy. In the 2003 GE annual report, the company states that "a new economic order of global competitiveness and growth" has developed. "Winning companies must think globally . . . only competitive companies can serve investors, employees and stakeholders during this dramatic phase of globalization."

On the acquisition of Vivendi, GE says it now has "a media company positioned for a digital future." The company says that "broadcast television will be impacted by changes in entertainment technology and distribution . . . VUE adds tremendous assets to NBC, including great content, attractive cable services, a leading film studio [and] diversified revenue streams."

The future, as seen by GE, is that in order to control the media, a company has to own not only the content itself, but the medium of distribution as well. "A move to consolidate distribution channels" is the direction in which GE will be moving.

Enter Vivendi Universal Entertainment (VUE) which is also a massive corporation. The company estimates its 2003 revenue at around €2.5 billion ($3 billion). This entertainment colossus has 55,451 employees working in 71 countries. Vivendi's holdings include Canal+ Cable with 8.1 million subscribers in France; StudioCanal film distribution with a library of 5,000 films; Universal Pictures movie production studio; Universal Studios Home Video; Universal Television Group (Law & Order TV show and others); USA Network cable channel which reaches 87 million households; the Sci Fi Channel; Universal Theme Parks & Resorts; Universal Music Group (the company says one out of every four albums sold worldwide in 2002 was a UMG album); SFR Cegetel Group (the No. 2 telecommunications operator in France with more than 18 million customers which includes the popular Vodafone brand); and Vivendi Universal Games (includes Blizzard and Sierra).

One main question in all of this, is who benefits? Does globalization and corporation consolidation benefit workers? One thing is for sure, those at the top do extremely well. For example in 1997, GE CEO John Welch's total income, $83 million, exceeded the aggregate of all of GE's 10,000 workers in Mexico. Jeffrey Immelt, who became GE's CEO in September 2001, received $6.9 million in pay and stock options potentially worth $43 million in 2002 -- this when GE stock market shares fell 39 percent. Immelt gets a $3 million base salary, receives a bonus ($3.9 million in 2002), and collects over $200,000 in dividends on his 550,000 shares. Not to mention 4 million other stock-appreciation rights and stock options. In 2003, the CEO's annual payment was around $7.5 million.

Since 1997, GE has created 20,000 jobs in India and has added 100,000 jobs outside the U.S. over the past decade. General Electric's U.S. workforce has held at around 160,000 and median wages have increased an average 4.5 percent annually since 1993. GE's basic premise is that exporting jobs from the U.S. is good for business and good for the United States. Clearly, becoming a successful multi-national corporation is an important goal for the company.

The main benefit of media consolidation is-- ultimately -- the expansion of influence for the parent company. GE wanted its NBC network to merge with Vivendi to gain more power in the mass media marketplace. And the bottom line of a corporation is to make money. This is not inherently bad, after all, everybody needs to make money. However, television is a form of media transmitted over the public airwaves. Technically, the public owns a TV network's broadcast ability -- not corporate stockholders. This is why the FCC and FTC are supposed to have oversight over consolidations and mergers.

Yet, since the Telecommunications Act of 1996, the industry has seen constant deregulation. In the case of NBC-Vivendi, the FCC didn't even issue a comment on the merger. So is the merger of NBC and Vivendi in the public interest?

"Corporations are being judged on how much money they make for their stockholders, and that's the way they should be judged. And so while they have, of course, public responsibilities . . . nonetheless, if you're a commercial enterprise, your job is to make money, not to serve the public interest in its broadest sense on a continuing basis," says Lawrence K. Grossman, president of NBC News from 1984-1988, in an interview with Harry Kreisler of the Institute of International Studies at UC Berkeley in 2001.

Grossman says that in the television business of today "you have, again, a paradoxical situation, where we get many, many more channels, many more news outlets on the air, owned by fewer and fewer multimedia global corporations. Where news used to be the major centerpiece of a broadcast operation, it's now very minor and relatively insignificant in terms of the balance sheet of Time Warner, Turner, Disney, ABC, Viacom, CBS, GE, NBC. News is just a small player in those companies. So the whole set of priorities and focus becomes very different. While you get many more channels that you can tune in to see news happening, what is happening now is you get fewer and fewer news-gathering operations."

According to Grossman, TV news of today is less about investigative journalism and more about entertainment. "What surprised me when I came to NBC News, and it was true of the others as well, is how little really original reporting and thinking goes on. It's much easier and much cheaper and much more direct if there's a press conference, to cover the press conference.

"But really strong journalism, not just investigative journalism but penetrating journalism that gives you an insight into what's going on in the world, requires much more initiative. And because of the demands of the job, and because you have to do so much in such a short period of time, there was very little original, initiative reporting going on, far too little. And today, it's worse."

Grossman, who arrived at NBC after eight years as president of PBS, says that corporate control of networks changes the focus of programming. "All of the major networks, which had strong, long traditions as responsible broadcasters, partly because of the government policy of operating in the public interest, were sold to outsiders, in a sense. To General Electric, in the case of NBC; in the case of CBS, to somebody who owned an investment portfolio, Larry Tisch, who saw the front-loaded losses that news was taking and said, 'Why do we need all of that? Why do we need to spend all that money? It's interfering with our bottom line,' -- even though it's an enormously profitable business overall . . . there was a sense of strong effort to deregulate television, to get the FCC out of this public interest notion, and to let the broadcasters to compete along with everybody else."

This new media attitude resulted in less hard news and more advertiser-driven entertainment. "It was very cheap to put on prime-time 'news magazines,' which really are a misnomer -- they're basically non-fiction entertainment magazines," says Grossman. "And so you get the idea: in order to attract an audience, in order to attract advertisers which follow the audience, instead of presenting hard news about government and about finance and about international affairs, we focus more on the entertainment aspects of news. And so it has been moving in that direction."

In an interview with PBS on October 8, 2003, New York Times reporter Bill Carter talked about the NBC-Vivendi deal. "NBC now gets to control both the distribution and the syndication, so the profits and the revenues are on both ends of most of these deals." he says. "They had a particular problem with the Law and Order franchise, one of the most important franchises that NBC has, three very successful shows. They were owned by Universal. Universal was threatening to offer them on the open market where another network to could take them away. Obviously now that won't happen because NBC owns them and that ownership stake really is what will control the future of an awful lot of broadcasting."

One possible impact will be a limiting of voices and ideas that make it through to a large audience. "I think the viewer won't normally notice any difference in what he sees on the air but clearly you can argue that there is going to be less option for creativity or choice," says Carter. "Most of the networks that have these big studios, they produce them themselves. They produce shows for their own network and it tends to be a little bit harder for the outside producer to get in and I think there is an argument that it stifles creativity."

Today, only three companies, Viacom (CBS and UPN), General Electric (NBC-Vivendi) and Walt Disney(ABC and ESPN) reach more than 50 percent of the prime-time television audience through over-the-air and cable broadcasts. With the addition of News Corp. (FOX), AOL/Time-Warner (WB, HBO and CNN), five companies have control over an estimated 80 percent of TV broadcasts. (Wall Street Journal, Sept. 15, 2003) This Big Five also now owns 20 of the top 25 cable channels.

Robert W. McChesney argues in the March 2001 Monthly Review that the new trend in globalization is creating a media oligopoly. An oligopoly is when only a few producers can affect a marketplace. "This global oligopoly has two distinct but related facets. First, it means the dominant firms—nearly all U.S. based—are moving across the planet at breakneck speed. The point is to capitalize on the potential for growth abroad—and not get outflanked by competitors—since the U.S. market is well developed and only permits incremental expansion," states McChesney.

"Second, convergence and consolidation are the order of the day. Specific media industries are becoming more and more concentrated, and the dominant players in each media industry increasingly are subsidiaries of huge global media conglomerates."

The result of this, according to McChesney, is that as "media conglomerates press for policies to facilitate their domination of markets throughout the world" they force their singular viewpoint on news and culture. Probing discussions and investigative journalism are replaced with light entertainment as media firms try to "encourage popular tastes to become more uniform." Any ideas that do not coincide with the corporation's goals will simply not receive airtime.

McChesney hopes the trend of  "developing independent and so-called 'pirate' media to counteract the corporate system" will become more widespread.

Though meant with humor, the Star Wars allusion used in this article may unfairly paint GE, NBC or News Corp. as evil companies. Surely, this may be unwarranted. The thousands of people who work for multinational corporations are not evil and the CEOs of these companies probably do not have malevolent intentions with respect to global expansion. The goal is money, power and control -- this is the American way -- this is capitalism. One could debate whether corporate financial interests and globalization are beneficial or detrimental for the United States and the world. In a study of the NBC-Vivendi deal, however, the real focus should be on media concentration.

Should the issue of media consolidation and globalization simply pass by without comment? If the TV networks no longer show news or programming for the public interest then how will the public learn about the truth? Doesn't the truth still matter?

Without a doubt, media conglomerates are not good. The airwaves are no longer the domain of the public. The interests of a few corporations control what appears on TV networks. And because scrutiny of media mergers may put the parent corporation in a negative light -- discussions of the issue will never appear in prime time.

The Empire has not only struck back -- it is winning. However, do not despair. In the Star Wars movies, though Darth Vader and the Galactic Empire are in control for almost the entire series, the small group of rebels and the good side of The Force triumph at the end.

Eventually, the peoples' voices will be heard again -- uncluttered by corporate logos, viewpoints or advertisements.

© 2004 by Ron Kaufman @ TurnOffYourTV.com

"Television is a one-way medium, and radio is going from one to many. But the Internet, with its e-mail and its chat groups and its ability to respond, and the new digital television technologies enable people to interact. And it's making profound changes. We're no longer just couch potatoes."
-- Lawrence K. Grossman, former president of PBS and NBC News

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