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Absentee Ownership

The Battle for Control of Mindshare in Lafayette

Cox & BellSouth aren't the only major media corporations battling for control of the information channels of Lafayette and Acadiana

LUS Plan an antidote to absentee ownership of local media

Cox Communications and BellSouth have formed an unnatural alliance to fight the fiber to the premises plan that Lafayette Utilities Service (LUS) is developing. In order to understand the nature of the battle — and the significance of the LUS plan — you need to look to the state, national (even global) trend of concentration of media ownership that is now underway.

Viewed in that context, it becomes clear that Cox and BellSouth aren't the only companies with an interest in this fight. In fact, Gannett — the nation's largest newspaper company and owner of five daily newspapers in Louisiana — has business divisions (and therefore interests) that overlap and compete with those of both Cox and BellSouth. The largest television stations in Acadiana are owned by out-of-state media companies, while the largest radio station groups in the region are owned by large radio holding companies based in Nevada and Kentucky.

One of the traps we often fall into in Louisiana is the false belief that the challenges, problems and opportunities we find here are unique. Some are, but most are not. Think of educational reform, health care, economic development and environmental protection. The Louisiana version of these issues has aspects that are uniquely ours, but the forces which created the challenges and which hold the potential to produce solutions are more similar from state-to-state, region-to-region than they are different.

There is a sometimes subtle, sometimes overt attempt by opponents to tar the LUS plan by raising the specter of big gov'ment — that is, government getting information about the lives of its customers. That could be considered a fair issue, but only if the struggle over this LUS initiative is viewed in isolation. A far greater and more urgent threat to the well-being of this community is the near total loss of locally owned information channels. With the exception of the relatively new publication The Independent and a handful of small radio stations, all of the traditional media information channels in Lafayette and Acadiana are the properties of out-of-state corporations.

With the quality of decisions directly related to the quality of information available on the topics at hand, communities deprived of locally-owned information channels and media outlets are potentially cutoff from vital sources of local information that affect the quality of local decision making — and, ultimately, the quality of life in those communities.

The unprincipled assault being waged on LUS by Cox and BellSouth over the fiber to the premises plan is a major skirmish that is deflecting resources from the true war at hand — specifically, the battle for corporate control over the information channels in Lafayette and (by nature of the market) Acadiana.

What the LUS proposal has done is reveal the ferocity of the competition among the corporations and just how unaccustomed they are to having to pay any attention to the sensitivity of the customers/ratepayers/taxpayers whom they claim to serve.

At the very least, LUS should be commended for ripping away the veil that has concealed this battle. If you're wondering why this story has not been reported in the press, you'll soon find out — they're all engaged in the battle.

Who Owns Lafayette Media

Let's start with Cox Communications, because they've been the most aggressive and the most reckless with the truth.

On August 2, Cox Enterprises, Inc., the family-owned parent company of Cox Communications, Inc., announced that it had had enough of the irrational gyrations of the stock markets, particularly with regard to cable stocks, and it was going to buy back the 38 percent of Cox Communications stock it had allowed the public to purchase. The announced price of the offering was $7.9 billion, putting the book value of Cox Communications somewhere in the neighborhood of $21 billion. Not bad for a subsidiary!

Columbia Journalism Review, which is connected to Columbia University's School of Journalism, has compiled a profile of Atlanta-based Cox Enterprises, Inc., the parent company which will soon subsume Cox Communications, Inc. It is a brief but terrific read.

Here's a brief summary: Cox owns 43 newspapers (including the Atlanta Constitution and the Austin American Statesman) in six states; 9 television stations; 74 radio stations; partial interests in the Discovery Channel and The Learning Channel; Manheim Auctions (including an auto auction in Scott), plus sundry other publications and holdings. Oh, yeah. They also own Cox Communications, Inc., the fifth largest cable system and 12th largest telephone company in the country. Cox is the largest cable system in Louisiana with a service area stretching just about all the way across south Louisiana and up to at least Natchitoches along I-49.

By comparison, BellSouth comes across as relatively small company — at least in terms of scope of ventures. The Atlanta-based company has had significant wireless telephone network holdings in South America, but is disposing of some of those in order to finance its portion of the multi-billion purchase of AT&T Wireless by Cingular, of which it is a 45 percent owner with SBC Communications. BellSouth has tried venturing into other venues such as an ill-fated "wireless cable" venture in New Orleans which tried to use broadband wireless as delivery vehicle for cable programming. Signal quality was poor and somehow the words "BellSouth" and "Entertainment" (the venture's name was BellSouth Entertainment) never seemed to really resonate with customers.

Nonetheless, BellSouth is not giving up on getting into the content delivery business. One of its leaders was on CNBC a couple of weeks ago talking about pilot programs to send cable content over Digital Subscriber Line (DSL). It's a final attempt to wring some more utility (read that "revenue") out of a cable infrastructure that is — in many areas — becoming an albatross around the company's neck. With a nine-state service area and facing competition from various cable providers in that region, coupled with demand for resources from things like the AT&T Wireless buy via Cingular, BellSouth may not have the resources to commit to a region-wide infrastructure upgrade at the time when — from a competitive standpoint — they need it most.

Sitting on the sidelines taking it all in — at least for now — in Lafayette is Gannett Company, Inc. Gannett is the largest newspaper company in the country. It is also the largest newspaper company in Louisiana, owning the Shreveport Times, the Monroe Star, the Alexandria Town Talk, and the Opelousas Daily World, in addition to The Daily Advertiser.

According to its website, Gannett publishes 101 daily newspapers in the US (including USA Today), in addition to owning more than 500 of what it calls "non-daily publications." Daily circulation for its US newspapers (it also owns papers in the UK) is 7.6 million. Gannett operates 22 television stations in the US, reaching 17.8 percent of the country. It also operates more than 150 web sites which are tied to its newspapers and television stations.

Like Cox, Louisiana has a role in Gannett's future plans. In addition to the papers it already owns in Louisiana, Gannett widely reported in the national press to be set to make Alexandria the site for one of the first tests of the Federal Communications Commission's relaxed media ownership rules before those rules were blocked by federal courts. Gannett was expected to buy KALB-5 in Alexandria, which would have given it the daily newspaper as well as the top ranked station in that market.

Last year, I was told by an editor at The Daily Advertiser that Gannett had been engaged in talks with the Manship family in Baton Rouge to buy both The Advocate and WBRZ-2 in the capitol city. Don't know what became of those talks. They, too, may have been derailed by the court intervention in the ownership rules. But, The Advocate is moving out of downtown Baton Rouge and it's taken a five-year lease on the property where it will move its offices (one of Jimmy Swaggert's buildings on Bluebonnet Road). So, Gannett's appetite for Louisiana marketshare and media does not appear sated.

Television

Lafayette's largest television stations are owned by out of state companies, too.

Long-time dominant station in the area, KLFY-10 has taken to looking a little threadbare of late, having lost significant chunks of its on-air talent to KATC-3. That could be due, in part, to the fact that the station's owner Young Broadcasting, Inc., has experienced earnings pressures as a result of an economic slowdown over the past couple of years. KLFY is one of 11 stations owned by Young Broadcasting. KLFY is one of several Young stations that are ranked first in viewership in their local markets. The other stations owned by Young Broadcasting include those in San Francisco (KRON), Green Bay, WI (WBAY), Nashville (WKRN), and Albany, NY (WTEN). The company is publicly traded.

KATC-3 is owned by privately held Evening Post Publishing Company of Charleston, South Carolina. This company does not have a website, although its holdings do. According to the KATC website, the company owns television stations in Arizona, Colorado, Kentucky, Montana and Texas, as well as newspapers in South Carolina, North Carolina, Texas, and Argentina (don't cry for them!). It also owns a Florida-based company that distributes newspaper feature material worldwide (no name provided) and manages some Southern Pine timberlands.

Radio! Radio!

Las Vegas-based Citadel Broadcasting owns nine radio stations in the Lafayette market. Openairwaves.org says that stake constitutes just under 27 percent of the total station ownership in the area. Citadel describes itself as "the sixth largest radio broadcasting company in the United States based on net broadcasting revenue." They own 150 FM stations and 63 AM stations in 44 markets spread across 25 states.

Citadel properties here include KVOL-AM, KSMB, KNEK AM-FM, KOOJ. These lists change with some frequency as radio broadcast groups like Citadel realign their holdings.

Regent Broadcasting owns 77 radio stations across the country, with six of those located in Lafayette. The Regent stations in this market include KTDY, KMDL, KFTE, KRKA, and KPEL (AM & FM). Regent is based in Covington, Kentucky, which is across the Ohio River from Cincinnati.

Together, these two companies own almost half of the stations in the area, but control more than half of the marketshare.

If Control is the Concern, LUS is Not the Problem

This brief overview provides a glimpse of the larger forces that are maneuvering to control the information flows into this region. The LUS fiber to the premises plan would provide a secure community-owned information channel that would further solidify Lafayette's status as a unique community in Louisiana and — if present ownership consolidation trends continue — increasingly unique in the country.

In an era where communities are trying to differentiate themselves in order to gain economic advantage, the LUS fiber to the premises plan would set Lafayette on a course for distinction.

— Mike Stagg
August 9, 2004
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