Viewpoint diversity and media consolidation: an empirical study.

• Author: Ho, Daniel E.

INTRODUCTION: THE DIVERSITY INDEX THAT DIDN'T INDEX DIVERSITY I. THE CONVERGENCE HYPOTHESIS A. Viewpoint Diversity and the Empirical Turn in the Law of Media B. Scholarly Dissensus II. LIMITATIONS OF EXISTING MEASUREMENTS OF VIEWPOINT DIVERSITY A. The FCC's Diversity Index B. Manual Content Analysis C. Language Processing D. Political Endorsements III. EMPIRICALLY CAPTURING SUBSTANTIVE VIEWPOINT DIVERSITY A. The Data: Supreme Court Editorials, 1988-2004 B. Coding of Editorials C. Statistical Inference of Viewpoint Diversity D. Mergers and Acquisitions E. Caveats IV. EMPIRICAL RESULTS A. Static Newspaper Viewpoints B. Time-Varying Newspaper Viewpoints 1. Atlanta Journal-Constitution 2. New York Times--Boston Globe 3. Chicago Tribune Los Angeles Times 4. Houston Chronicle--San Francisco Chronicle 5. USA Today--Arizona Republic V. CONVERGENCE OR MONOPOLY DIVERSIFICATION? AN IN-DEPTH VIEW A. Atlanta Journal-Constitution 1. Divergence in the face of common ownership 2. Viewpoint diversity in the face of convergence B. New York Times--Boston Globe CONCLUSION: POLICY IMPLICATIONS APPENDIX A. Editorial Data Collection B. Editorial Board Data Collection 1. Atlanta Journal-Constitution INDEX OF FIGURES AND TABLES Figure 1. Illustration of Diversity Index from Appendix C of Biennial Order Figure 2. Illustration of Word Frequency "Cosine (Dis)similarity". Figure 3. Halavais Dissimilarity Methods Applied to Supreme Court Editorials From Six Major Newspapers Figure 4. Presidential Endorsements of Major Newspapers, 1992-2004 Table 1. Newspapers, Abbreviations, and Supreme Court Terms Covered Figure 5. Supreme Court Editorial Publication Rates by Newspaper and Prominence of Case Figure 6. Editorial Coverage of the Supreme Court by Term Figure 7. Direction Position of Newspapers on the Legal Merits Figure 8. Fraction of Conservative Decisions on Cases from 1994-2004 Terms for Justices and Newspapers Figure 9. Fraction of Conservative Decisions by Term for Selected Justices and Newspapers, 1994-2004 Figure 10. Illustration of Model-Based Differential Weighting of Votes with Four Cases Figure 11. Editorial Viewpoints and Judicial Ideal Points from Pooled Analysis of 1994-2004 Data Figure 12. Dynamic Editorial Viewpoint Estimates for 25 Major Newspapers, 1988-2004 Figure 13. Viewpoint Estimates for the Atlanta Constitution (solid), Atlanta Journal (overlaid), and the Atlanta Journal-Constitution Figure 14. Viewpoint Estimates for the Boston Globe (solid) and the New York Times (overlaid) Figure 15. Viewpoint Estimates for the Chicago Tribune (solid) and the Los Angeles Times (overlaid) Figure 16. Viewpoint Estimates for the Houston Chronicle (solid) and the San Francisco Chronicle (overlaid) Figure 17. Viewpoint Estimates for the Arizona Republic (solid) and USA Today (overlaid) Figure 18. Circulation for the Atlanta Journal (top-left), the Atlanta Constitution (top-middle), and the Atlanta Journal-Constitution (top-right) Figure 19. Nationwide Circulation Trends in the Newspaper Industry Figure 20. Median Household Income in Atlanta Journal-Constitution Designated Market Area Figure 21. Geographic Readership Distribution of the Journal and Constitution Figure 22. Readership Substitution in Largest Counties Figure 23. Editorial Board Composition for the Journal and Constitution Table 2. Distribution of Editorial Positions on Supreme Court Cases for All Types of Opinion Pieces in the Atlanta Journal-Constitution Papers, 1994-2008 Figure 24. Viewpoint Estimates for Cynthia Tucker and Jim Wooten Figure 25. Circulation (in 10,000s) for the New York Times (left) and Boston Globe (right) Figure 26. Circulation (in 10,000s) for the Times (black) and Globe (gray) for Sunday (solid) and Weekday (dashed) Editions Figure 27. Editorial Board Membership of the Globe Figure 28. Editorial Board Membership for the Times INTRODUCTION: THE DIVERSITY INDEX THAT DIDN'T INDEX DIVERSITY

It is a rare federal rulemaking that unifies the National Rifle Association, Catholic Conference of Bishops, MoveOn, National Organization for Women, and Common Cause. Together this motley crew rallied its troops, leading to the submission of over 500,000 comments to the Federal Communications Commission's (FCC) review of media ownership regulations in 2002. The large majority of these comments opposed the proposed relaxation of the FCC's ownership regulations, which restrict the number and types of media outlets a single entity can own. FCC Chairman Michael K. Powell wasn't so much moved by the submissions: "You don't govern just by polls and surveys." (1)

Yet Powell proceeded to do just that, albeit in an unexpected fashion. Relying on a Nielsen poll to calculate market shares for all media outlets, the former Department of Justice (DOJ) antitrust lawyer adapted a well-known antitrust measure (the Herfindahl index) to index diversity. The so-called "diversity index" would be used to determine whether a merger or acquisition of a media outlet harms viewpoint diversity.

But the diversity index would be short-lived. Consumer groups assailed its validity, and the Third Circuit would have none of it on review. Despite the fact that the index was based on poll and survey data, the court held that the diversity index was unjustified. (2)

The result has left media regulation in a state of quandary. Over the course of the past decade, courts have increasingly demanded empirical justification for the Commission's ownership rules. At heart, these rules rest on what we call the "convergence" assumption that media consolidation reduces viewpoint diversity. By restricting consolidation, the theory goes, ownership regulations preserve diverse and antagonistic viewpoints that broadly further democratic goals. Others counter that media conglomerates do not speak in a single voice. Media consolidation may capitalize on efficiencies, ultimately increasing the quality of the content and viewpoints expressed. Indeed, monopolists might have an incentive to diversify viewpoints in a way that competing outlets would not. The intense disagreement between critics of media consolidation and regulatory critics, as Professor Waldfogel notes, may seem to some as "an argument between 'the sky is falling' versus 'we have a working missile shield.'" (3)

Our Article contributes to this important legal and policy debate in two principal ways. First, we fill the empirical void by developing a valid statistical measure of editorial viewpoint diversity for twenty-five top newspapers from 1988-2004. The measure--based on an exhaustive and new data collection of over 1600 editorial positions on every nonunanimous Supreme Court case decided during that period--is directly and substantively interpretable as the editorial viewpoint of a newspaper. To our knowledge, it is the first measure that directly quantifies, with valid uncertainty intervals, the political viewpoints of newspaper editorial boards at any given point of time. By capitalizing on modern statistical approaches to measurement and data collection, we address considerable shortcomings of previous approaches, which have ignored viewpoints, diversity, or both. Second, our Article directly assesses the overarching assumption that consolidation should lead to convergence in viewpoint diversity. Using finely tuned statistical methods, we examine the evolution of editorial viewpoints for all five mergers and acquisitions amongst our newspapers from 1988 through 2004: the New York Times Company's acquisition of the Boston Globe, the merger of the Atlanta Journal and Atlanta Constitution into the Atlanta Journal-Constitution, the Chicago Tribune Company's acquisition of the Los Angeles Times, Gannett's purchase of the Arizona Republic, and Hearst's acquisition of the San Francisco Chronicle. For each of these ownership changes, about which a cacophony of commentators have speculated, we provide direct measurements on editorial viewpoints of each paper pre- and postownership change, allowing us to directly test for breakpoints in views. (4)

With these measures and evidence, we are able to speak to a host of fundamental questions in regulation, media, markets, and the First Amendment: When the government intervenes to promote "diverse and antagonistic" voices, (5) is it successful? Does the empirical record reveal a trade-off between liberalizing media markets and preserving deliberative democratic values? Can we quantify regulatory benefits for diversity in a tangible way? How well-founded is populist hostility towards media consolidation? Do the media respond in meaningful ways on editorial pages to ownership changes? Can a solid foundation for statutory and doctrinal mandates for empirical evidence be built?

Our findings defy extant accounts. First, we show that the convergence assumption that underpins federal regulation receives little support from three of the five of the ownership changes we study. There is no evidence of convergence--i.e., a decrease in the difference of political viewpoints--between newspapers already owned by the acquiring party and the Los Angeles Times, the Arizona Republic, and the San Francisco Chronicle. Second, for two cases of consolidation, we detect marked shifts in editorial viewpoints that are consistent with convergence and, counterintuitively, divergence. Under common ownership (but with separate editorial boards), the Atlanta Journal and Atlanta Constitution diverged sharply in editorial viewpoints prior to the merger of their editorial boards. This provides some evidence for monopoly diversification. Yet upon merging, the editorial viewpoint of the Atlanta Journal-Constitution fell squarely between the positions of its parent papers, providing strong evidence for convergence. Lastly, while ideologically indistinguishable preacquisition, after consolidation of ownership the New York Times and the Boston Globe separated sharply into liberal and (relatively) centrist newspapers, respectively...