DUBIOUS ASSUMPTIONS
by Deborah Potter

If you look only at the bottom line, the idea makes a lot of sense. A merger between ABC News and CNN could save their parent companies millions, so it’s easy to see why the bosses are talking. But there’s more at stake here than a healthy balance sheet.

To Disney chairman Michael Eisner, the merger discussions are all about finding “more efficient ways to deliver the news.” No wonder. While its audience dwarfs that of CNN, ABC News is barely breaking even, thanks in part to a star-studded, multi-million dollar payroll and expensive union contracts. CNN, on the other hand, with its downscale pay scale and worldwide distribution system, makes a healthy profit. It also has three times as many bureaus overseas as ABC; a merger would boost ABC’s international coverage overnight.

What’s in it for CNN? A network that has reached deep into its pockets to hire a little star power (think Paula Zahn and Connie Chung) would be nuts to pass up a chance at putting Ted Koppel and Diane Sawyer into its line-up. Besides, just think of all that free cross promotion.

In the best of all possible worlds, a merger could result in a bigger, stronger news organization providing broader coverage and better quality journalism both on the air and on cable. But that outcome would depend on some assumptions that recent history suggests are wishful thinking.

Assumption number one: A merger would ensure that both companies have more resources available to cover the news. Maybe not. When CNN’s parent Time Warner merged with AOL a year ago, the network quickly found cost-saving “operating efficiencies.” CNN fired 400 people, ten percent of its workforce.

Assumption two: Everyone will pitch in for the good of the order. Don’t be so sure. A merged ABC-CNN would need its biggest stars to be more productive to justify their exorbitant salaries. But after reportedly resisting efforts to make him take a pay cut just for anchoring World News Tonight, why would Peter Jennings want to work harder without additional compensation?

Assumption three: ABC News and CNN are both in the TV news business so they won’t have any trouble working together. Who are we kidding? Nobody will say so out loud, but network news divisions have long looked down their noses at cable. We’re not talking oil and water here, but it’s certainly not a given that two news organizations with such different cultures will play nicely together.

When companies merge, the bean counters always look for redundancies and weed them out. Some cutbacks make sense, whether you’re producing jellybeans or journalism. Why would you need two sets of accountants, for example, when you only have one set of books? But when it comes to the product, journalism isn’t jellybeans. A merger in the news business effectively means fewer sources of information, not just fewer flavors. As former network correspondent Ken Bode wrote in the Los Angeles Times, a merger of ABC News and CNN would be “a major step toward that great nirvana to which we seem to be heading when all television news looks the same.”

Federal Communications Commisson barriers against this kind of concentration have been crumbling since deregulation swept the media in the mid-90s. The latest rule to fall is a prohibition against cross-ownership of broadcast and cable properties in the same market. The commission is reviewing several other rules with an eye toward lifting them in 2003, including one that bars television networks from merging with each other. Soon, the big could get even bigger.

FCC chairman Michael Powell believes the ownership regulations are outdated in today’s multi-channel world. But a multiplicity of outlets doesn’t guarantee variety. When the same company owns several channels, what you tend to see is repurposing. ABC already is practicing “instant reruns,” by featuring its newest entertainment shows on its Family cable network. NBC has been doing it with news content for years, re-airing stories and segments on its cable arms, MSNBC and CNBC. There’s every reason to believe that an ABC News-CNN merger would not give viewers more information, but rather more chances to see the same stuff.

If both companies stand to gain from a merger, what’s holding it up? It’s telling that similar talks between CNN and CBS News foundered months ago over concerns about who would control the new company. The same issue appears to be the biggest hurdle now. And while the companies quarrel about who would be in charge, the viewers don’t even have a place at the table. They should. They’re the ones who stand to lose the most.

This article was originally published by American Journalism Review, December 2002.