Justice Department Must Stop Liberty Media’s Dangerous iHeartMedia Plans
April 15, 2020
Washington, DC — Liberty Media is seeking permission to increase its stake in iHeartMedia, with The Wall Street Journal reporting in December that “the deal now under consideration could give it control or outright ownership of the broadcaster.” New reports continue to indicate that Liberty Media is consulting with the Department of Justice (DOJ) to structure the transaction so as to win DOJ approval.
The Center for Journalism and Liberty at the Open Markets Institute calls on the DOJ to immediately make clear that it will not allow any large-scale deal between Liberty and iHeartMedia. Any such deal would harm American journalism by further concentrating power in local radio markets nationwide, reducing the outlets for news as well as artists, and such a deal would threaten local businesses with higher advertising rates.
The proposed deal will likely lead to further cutbacks in America’s local newsrooms, just as the COVID-19 crisis is leading to large and growing job losses – at last count, more than 28,000 – in a news industry already under pressure from the business models of Facebook and Google. In New Orleans, for instance, even as the city must deal with the disruptions and deaths caused by the pandemic, the sharp drop in advertising has forced the city’s lone daily newspaper to furlough staff.
The deal would also harm Americans at the national level. Both Liberty and iHeartMedia already hold powerful positions in the fast-growing market for news and information podcasts.
This is a moment for federal and state governments to work to protect journalism, as our friends at Free Press have made clear, just as the government acts to protect airlines and other essential services. But any Liberty-iHeart deal will almost surely result in the closure of stations, newsrooms, and reductions in news staff. Fewer local stations mean citizens who are less informed about their own communities and the world immediately around them.
The proposed deal would also harm local advertisers. Talk radio and news-only stations are important advertising channels for local businesses. The deal could create a single dominant player in many local markets, raising the costs of advertising and limiting the promotional aspirations of small local companies looking to advertise their products and services.
Any Liberty-iHeart deal also would harm musicians and other performers, as the Artist Rights Alliance makes clear in a separate statement. Further concentration in local radio markets likely would mean fewer broadcast outlets, which would reduce artist incomes. The Center for Journalism and Liberty endorses the compelling case made by the Artist Rights Alliance and agrees that this proposed deal is a threat to artists across the country.
This proposed deal by Liberty Media CEO John Malone, who has built Liberty into a conglomerate on mergers and acquisitions, also underscores the importance of Open Markets’ recent call for a merger moratorium for the duration of the COVID-19 crisis. Corporations such as Liberty should not be allowed to expand their empires by taking advantage of the government’s limited capacity to review and stop deals during the pandemic.
Antimonopoly law is one of the foundations of American democracy. The Center for Journalism and Liberty, part of the Open Markets Institute, urges the DOJ to reject any effort by Liberty Media to increase its stake in iHeartMedia.