Comcast Eyes the Magic Kingdom
Forget the merger of AOL and Time Warner. If the King of Cable buys the keys to the Magic Kingdom, Comcast will become the largest media conglomerate in the country.
Even as oral arguments in a crucial lawsuit concerning media ownership limits are being heard in a federal appeals court in Philadelphia, Comcast has announced its 'unsolicited' proposal to merge with Disney. The union of the nation's largest cable provider with the entertainment industry giant would create a mega-corporation that would dwarf existing titans of media, including Rupert Murdoch's News Corp, Time Warner, and Viacom. It's a move that media reform groups describe as a serious "threat to American democracy."
With a combined total of $46 billion in revenues in 2003, Comcast-Disney would unseat Time Warner (less than $40 billion in 2003), which is currently the largest media corporation in the U.S. Just as important, perhaps, is the fact that Comcast-Disney would own more pieces of the media pie than any other corporation. Its holdings would include not just TV and film production and cable and broadcast TV networks, but also sports teams, theme parks, radio, music, publishing, and even a film library.
As the Wall Street Journal describes it, "(B)y owning each step of the television food chain...a combined Comcast-Disney would affect what people watch on TV as well as how much they pay." The Center for Digital Democracy (CDD) predicts that this new mega-corporation will dominate cable systems in 8 of the nation's 10 largest markets, creating a virtual monopoly, besides controlling hundreds of stations affiliated with the ABC network.
Steve Burke, a former Disney executive, now president of Comcast, told the Washington Post that he was confident that the deal would produce "significant opportunities to produce compelling returns for shareholders." CDD Executive Director Jeff Chester says "It's clear that (Comcast CEO) Brian Roberts knows no limits to his media ownership ambitions, having already swallowed AT&T Broadband (which in turn had gobbled up both TCI and MediaOne)."
Restricting media ownership has long been an essential tool to maintain diversity of content and democratic access. In an ABC News.com article, Mark Cooper of the Consumer Federation of America provides two recent examples of the potential problems of media consolidation: Comcast's rejection of an anti-war ad from the Princeton, N.J., based Antiwar Video Fund around the Bush State of the Union address; and CBS' refusal to sell time during the Super Bowl to Moveon.org to run an ad criticizing the Bush deficit.
This proposed mega-merger is the direct result of a recent Federal Communications Commission ruling currently facing a challenge in the courts. Last June, the Michael Powell-led FCC weakened restrictions on the size and reach of media conglomerates, effectively reducing competition and allowing these corporations ever-increasing control of what is, and what is not, broadcast in any given market.
Chester believes the FCC is unlikely to nix the Comcast proposal: "(I)t should come as no surprise that Comcast's (CEO Brian) Roberts is backing president Bush for reelection and that the company's president, Stephen Burke, is a $100,000 'Pioneer' for Bush-Cheney." Chester says that Roberts' generosity is clearly aimed at ensuring that the federal government looks to the other way even as media corporations pad their profit margins at the expense of public interest.
The deal, while bad news for the average citizen, is not surprisingly music to the ears of investment bankers. Louis Bevilacqua, a lawyer in the industry, was quoted in the Wall Street Journal as saying, "There will be a lot of smiles as people go out and have a drink at one of the bars tonight."