Sept 23

Media Merger Mania
Sun Review September 23, 2000

Time Warner swallows up CNN. AOL swallows up Time-Warner. Broadcaster CanWest Global Communications struck a $3.5-billion deal in July to buy half the National Post and 200 other dailies and weeklies from Hollinger Inc.

Just recently, Telus, Canada's second largest telecommunications company completed a $6.6 billion transaction to acquire Clearnet, thereby creating the largest wireless company in Canada in terms of annual revenue, customer growth and wireless spectrum position.

Canada's largest telecommunications company BCE snapped up CTV, our country's biggest private television broadcaster. And last week, BCE announced another merger - a $4 billion alliance with the Globe and Mail, Canada's newspaper, Globe Interactive, a leading Internet content provider, and Sympatico, Canada's number one Internet portal. This new entity will be the premier player in the hotly competitive media industry with the most impressive Canadian presence on the Internet, reaching one-third of on-line Canadians with more than 200 million page views per month.

But the effects of this merger will infiltrate all aspects of your daily dose of media: BCE, Thomson and Woodbridge have created a content triple play - print, broadcast and Internet. Conventional business wisdom says that mergers are good for business and good for shareholders. The media mergers are marrying industries like broadcasting, telecommunications and computers into an efficient new digital age.

But mergers are not necessarily all good. With each merger, media power becomes concentrated in the hands of fewer and fewer corporations. We know what it means when two companies (Coke & Pepsi) dominate the worldÕs soft drink market, or when one corporation (Microsoft) has a near monopoly on the worldÕs operating systems, or when half a dozen companies (Exxon, Chevron, Texaco, BP, Total Fina and Shell) control the bulk of the global oil supplies.

But what does it mean when a handful of media corporations gain control of the worldÕs news, entertainment and information flows? Will we have access to the information we need, or will we be spoon-fed whatever the media corporations deem to be appropriate for us?

A case in point: GE and its subsidiary, NBC. Fortune Magazine's Most Admired Company for the past 3 years, GE is a diversified services, technology and manufacturing corporation which operates in more than 100 countries, employs nearly 340,000 people worldwide, and generated $111.6 billion US in revenue in 1999. When NBC's Saturday Night Live featured a live skit sarcastically portraying the vast reach of GE and its global holdings, GE executives took offence and the skit was never seen again.

So next time you grab a newspaper, sit down at your computer, turn on the radio or catch the 6 o'clock news, take a minute to think about who decides what you read, where you surf, what you listen to and what you see... every day.