Media Ownership and the Impact on the Bottom Line

by Greentarget

Should a chief marketing officer care who owns the media company he and his PR reps pitch story ideas to?

LA Weekly first reported in March that the Koch brothers are “considering an offer on either the Tribune Co. newspaper group, which includes the LA Times, The Chicago Tribune and the Baltimore Sun or the entire Tribune Co., which includes more than 20 stations like WGN and KTLA Channel 5.” And on June 6 the Wall Street Journal reported that Charles Koch confirmed that Koch Industries may purchase newspapers for investment—not political—purposes. But Koch wouldn’t confirm if that meant an interest in Tribune Co.

This news is giving some readers and journalists fits. Tribune staff have been publicly expressing their distain over this potential new owner. They reportedly fear the Koch brothers will use these outlets to promote their Tea Party politics.

Some conservatives, convinced the media industry has a liberal bias, seem pleased, though. In the comments section on a Crain’s Chicago story on this topic, some readers said they were tired of the liberal views professed by today’s media and they would welcome the Koch brothers as owners of the Tribune Co.

The potential Koch ownership may have its biggest impact on the company’s newsrooms. Reporters and editors may be forced to cover stories in certain ways due to direct or indirect pressures from the owners. And this potential ownership may put a certain perception, whether deserved or not, on the political viewpoints the Tribune properties would possess. The old saying, perception is reality, would hold up.

Even if the Tribune newspapers began to lean conservative as a result of Koch ownership, readers could make due. With so many getting their news filtered through Internet sites, apps and services, they may never even encounter stories that don’t fit their politics anyway. Fewer people watch mainstream traditional television news broadcasts or read major newspapers these days.

But what if you are a CMO? Should it matter to you who owns the Tribune Co.?

News coverage does affect your company’s bottom line. A negative story can have a dramatic impact on your reputation with existing or potential clients and, of course, affect your stock price if your shares are publicly traded. Shares of life insurance companies are being roiled, for example, after The New York Times reported that state regulators in New York are calling on a nationwide moratorium on what they call “shadow insurance” transactions that bolster their balance sheets. The Wall Street Journal’s MarketWatch even ran a story in 2011 about the 10 companies burned the worst by negative news, putting BP and the coverage of its role in the Deepwater Horizon incident at No. 1. Even inaccurate stories can affect stock prices. In April, when the Associated Press’ Twitter account was hacked and a tweet was sent that an explosion occurred in the White House, the stock market plummeted. The incident briefly erased $200 billion of value from U.S. stock markets.

Media ownership can affect corporate positioning because the media owners may possess a preconceived notion about a topic or story idea related to your product, law firm or company. Maybe they don’t believe in same-sex marriage but your lawyers recently handled a pro bono case on the matter. Or maybe they own shares in a product that competes with the product your company makes or support a major advertiser that you consider a competitor. These are just some of the factors you’ll need to keep in mind as we see how media ownership shakes out for not only the Tribune, but for many other media companies. And as more of these media companies don’t find buyers, fewer and fewer of them will exist. That means fewer and fewer media companies will own the conversation that your company or law firm may find itself in. It will matter even more in the coming years as fewer of them exist in the marketplace.

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