Eighteen months ago, David Ellison was mostly known as an ATM for Hollywood producers seeking to pencil out budgets for quarter-zip dadcore flicks like Jack Ryan: Shadow Recruit, Jack Reacher: Never Go Back, and Transformers: Rise of the Beasts. But now, thanks to a timely reallocation of his father’s money, he’s set to be one of the biggest news media moguls in American history. Having already taken control of CBS News — with little to show for it audience-wise but plenty ideologically — he now seems clear to add CNN to his roster of outlets.
His acquisition, through Paramount, of Warner Bros. Discovery has been held up by a lawsuit filed by blue-state attorneys general over antitrust questions. One reported goal of the AGs was to have Ellison sell CNN in order to close the deal, though California’s Rob Bonta labeled that speculation. But this morning, those AGs appear to have thrown in the towel. Here are Benjamin Mullin, David McCabe, Shawn Hubler, and Laurel Rosenhall at The New York Times:
A group of states, led by California’s attorney general, Rob Bonta, a Democrat, sued Paramount in July, arguing that an acquisition of Warner Bros. Discovery would concentrate too much power over cable TV and blockbuster films under one company.
After weeks of on-again-off-again negotiations, Paramount and the states agreed to a number of concessions to complete the deal, according to the people, who spoke on condition of anonymity to discuss details not yet made public. The entertainment giant has agreed to establish a board of journalists to ensure the editorial independence of CNN and CBS News and committed to distributing 30 movies in theaters every year. The company also pledged to spend an additional $1.5 billion on film production over the next five years.
So while another major national news outlet will be under the control of a major Donald Trump ally…at least there’ll be “a board of journalists to ensure [its] editorial independence”! (That this is all happening while the president Ellison supports bans all CNN reporters from the White House adds a tragicomic character to it all.)
If this particular move sounds familiar, it’s because it’s been a part of past news company acquisitions where concerns about antitrust or editorial control end up being downshifted into similar (and mostly toothless) “boards.” Their effectiveness has been, to be generous, extremely limited. Here are two of the most prominent examples — both involving Rupert Murdoch, and neither offering much reason for “independence” optimism.
1981: Murdoch acquires The Times and The Sunday Times
When Murdoch wanted to purchase The Times of London and The Sunday Times in 1981, he faced skepticism from both newspapers’ editors. In order to avoid an inquiry by the British antitrust authority, he agreed to empower a set of “Independent National Directors” who would have to sign off on the firing or hiring of a top editor, and who would also resolve any major disputes between Murdoch and editors.
How did it work? Here’s how the legendary editor Harold Evans put it in his 1983 book Good Times, Bad Times:
Murdoch is right. The guarantees are not worth the paper they are written on — unless the proprietor shares the spirit of them. If he does, they are merely ornamental; if he does not, they are unworkable. There is no point in trying to make them stronger. Internal freedom cannot be acquired by external rules, and at Times Newspapers and The Observer the State has gone as far as it ought in attempting to lay down rules for the conduct of a private enterprise. The true role for the State must be to administer the anti-trust laws honestly and effectively. Once an acquisition has been agreed, it is too late for petty bureaucracy. There is justification for firmness here, since there is a universal recognition that monopoly power represents a danger, in the words of the Fair Trading Act, to ‘the accurate reporting of news and the free expression of opinion’…
Editorial guarantees are a paltry defence and they may be delusive as well. At Times Newspapers their invention enabled an air of respectability to be given to an unnecessary and hazardous extension of monopoly power, and they suggest that The Times’s tradition has been maintained when behind the fake ivy it can so easily be plundered. The theory of the constitution is that the independent national directors would not permit this to happen. As one of the architects of the constitution, I believed this too. I found in reality that the national directors are incapable of monitoring the daily turmoil of a newspaper. This has nothing to do with their theoretical powers, and increasing or entrenching them would make no difference.
The Tory MP Woodrow Wyatt would later write about how he’d “had all the rules bent for” Murdoch in order to get his Times acquisition approved: “Through Margaret I got it arranged that the deal didn’t go to the Monopolies Commission which almost certainly would have blocked it.”
Evans lasted only a year under Murdoch’s ownership. A longer run was had by the conservative editor Andrew Neil, who edited The Sunday Times from 1983 to 1994. Giving parliamentary testimony in 2007, Neil said that the “independence” offered by these outside board members was not about real authority — it was about smoothing the path of an important news outlet into regime-friendly hands:
Then you look at the kind of people who became these trustees, and I do not know who they are today, but in my time they were really just a bunch of establishment worthies and Murdoch policemen and they had no real role. There was one exception which was Alistair Burnet who really did know and helped me on one occasion. When I rather foolishly, although the story was entirely accurate, published the story, “Queen dismayed by uncaring Thatcher,” which meant I had managed to pick a fight with both the Prime Minister and the Monarch in one day, the trustees then came into action. The trustees wanted my resignation and they petitioned Murdoch to get rid of me, and it was Alistair Burnett that dug his heels in and said, “Excuse me, the story’s true and it is not our job to get the resignation of the Editor, it is our job to protect the Editor,” so that was my only experience of them.
Even if they had a more worthwhile role to play, as I say, in reality, in practice, no matter how good the trustees are or how supportive, if you and the proprietor have fallen out of love, your position is untenable over time.
(That Sunday Times story may be familiar to fans of “The Crown.”)
Neil — arguably the most prominent conservative British journalist of the past half-century, and thus no fellow traveler of the left-wing Guardian — contrasted its control by the Scott Trust with the kabuki theater of an “independent board”:
2007: Murdoch acquires The Wall Street Journal
In 2007, Murdoch made an unsolicited offer to the Bancroft family to acquire Dow Jones and its flagship newspaper, The Wall Street Journal. Several family members were concerned about what Murdoch ownership might do to the newspaper’s quality, and as part of the eventual sale, Murdoch agreed to the appointment of a “Dow Jones Special Committee” that would — much like its London predecessor — have final say over the hiring and firing of top editors, as well as changes that could be construed as forcing an editor out. (Things like “material reduction in compensation, relocation of principal place of employment, material change in duties or responsibilities…changes to the authority, reporting relationship and consultation rights,” and such.)
With that guarantee in place, enough hesitant Bancrofts were convinced to sell — though not everyone was on board. “Although I’m convinced that News Corp. offer is very generous in financial terms,” Dow Jones director Dieter von Holtzbrinck wrote in his resignation letter, “I’m very worried that Dow Jones unique journalistic values will long-term strongly suffer after the proposed sale…I do not believe that the Special Committee can finally prevent Mr. Murdoch from doing what he wants to do, from acting his way.”
Barely four months after the transaction closed, he was proved right. Murdoch managed a nifty end run around the “special committee” and ousted the newsroom’s top editor, Marcus Brauchli. Murdoch didn’t fire Brauchli. Instead, he layered over him, naming former Times of London editor Robert Thomson as publisher — but giving him direct oversight of the newsroom rather than the position’s usual business-side responsibilities. Brauchli, frozen out of major decisions in the newsroom he allegedly led, sent a note to staff saying he had “come to believe the new owners should have a managing editor of their choosing.” Brauchli was well compensated with a nice “consulting” gig for Dow Jones.
Because Brauchli had resigned rather than be fired, the approval of the “special committee” was not required. Murdoch informed its members as a fait accompli, telling one “I have no doubt that the New York Times will make trouble with it for a day or two, but I’m not too bothered by it.” The committee later issued a statement in which members “expressed the view that learning of the Brauchli matter after the fact failed to meet the letter and the spirit of the agreement.” But alas, the committee “decided there was no practical way to ‘unresign’ Brauchli and start the process over.”
Sarah Ellison1, in her book on the Murdoch takeover of the Journal, described the special committee as “an artificial set of rules he would inevitably circumvent,” which seems dead on.
Right now, we don’t know much about what a CNN (or CBS News) “independent editorial board” will look like. Bloomberg reports that it “will be composed only of journalists, with no executives or shareholders allowed to join” and that “the board will be required to have political balance.” The deal does not appear to have any sort of hard enforcement mechanism built in for any violations of the “the letter and the spirit” of the editorial independence agreement. (By contrast, it does include a $30 million penalty for each film Paramount promises to release to theaters but doesn’t.)
But let’s be blunt. No matter how well-intentioned the members of these committees may be, if David Ellison wants to get around them, he will. It’s an artificial set of rules that a billionaire owner will inevitably circumvent. These “independent” boards are PR gestures, not vehicles for editorial protection. As Andrew Neil said, they are tools to get a controversial deal across the finish line. And at that, they seem to have succeeded once again.
- Sarah Ellison, the longtime Wall Street Journal, Washington Post, and Vanity Fair reporter, is no relation to David Ellison. Neither is Minnesota attorney general Keith Ellison, who was among the final holdouts for this Paramount settlement. Lots of Ellisons everywhere.
