When mainstream companies like Disney and Comcast purchase significant business entities, these purchases are widely reported on and analyzed. As a result, the general public tends to understand the broad consequences that are born out of these major purchases. However, when less famous companies engage in major business deals, the public is neither notified nor educated about these purchases in the same way. This is often problematic, as major business and media mergers can affect many Americans without their knowledge.
For example, it is safe to assume that the majority of Americans are unfamiliar with both Gray Television and Raycom Media. Yet, Gray Television’s recent $3.65 billion purchase of Raycom Media will ultimately affect virtually all Americans in one way or another. Media mega mergers are both legally and practically unique in this way, as their transformations affect public access to information and the potential integrity of that information. This is where the government can get involved with media regulation.
Why These Companies Matter
Raycom Media is a broadcasting company. It either provides services for or owns outright both radio stations and television stations located in 22 states. In all, Raycom Media holdings affect 44 separate media markets. The company also controls a newspaper subsidiary that owns a number of papers in markets across the U.S.
Gray Television owns more than 100 stations in 29 states. This company’s stations influence 58 markets nationwide. Although names like CNN, The New York Times, Fox News and the Washington Post have far more name recognition and overall national exposure, local television, radio and newspaper outlets have a profound influence on local economies, news consumption and politics. Both Raycom Media and Gray Television impact a significant number of Americans directly on a regular basis.
Why the Purchase of Raycom Media Matters
By purchasing the stations owned by Raycom Media, Gray Television will own stations in 92 markets overall. According to Bloomberg, this media acquisition will make Gray Television the third-largest station owner in the country. That will make Gray that much more influential in a host of ways, given that American political and cultural opinions are significantly influenced by exposure to news and media. It is also now able to obtain significantly more revenue from cable and satellite providers which pay broadcasting companies for the rights to carry their signals. This is where media regulation comes into play.
This purchase is even more significant because it comes on the heels of the Sinclair Broadcast Group Inc.’s agreement to purchase Tribune Media Co. for just shy of $4 billion. These mega mergers are consolidating media influence in ways that are changing the very fabric of the ways in which Americans access news and entertainment. This is particularly true in election years, given how dependent station owners and broadcasters are on political ad spending.
The majority of Americans are likely unfamiliar with both Gray Television and Raycom Media. But soon, Americans in 92 markets will be regularly influenced by its megamerger. Democracy functions best when the electorate is informed. When mega companies control a significant portion of access to news and information, the integrity of that information is too easily compromised.
It may feel as if there is not much that the average American can do to respond to this reality. Thankfully, each individual can choose to both remain as informed as is possible and to reach out to elected officials in an effort to influence the future of media mega merger-related regulations. In addition, it is possible for companies in other industries to learn from the unique challenges and potential negative consequences of media mega mergers like this one.
If your company is looking to merge with another or to acquire another business, please consider speaking to the team at LawTrades about avoiding negative outcomes both from legal and public relations standpoints. Merging with or acquiring other companies is a tricky business and the team at LawTrades can help your company navigate this process successfully.