Researchers often assume that a firm’s media coverage is an exogenous result of actual news about the firm. In this paper I show that firms actively manage the quantity of media coverage they receive, increasing coverage of good news and decreasing coverage of bad news. Firms do this media managing by including “media experts” on their board of directors. That is, coverage in the news media is, in part, a choice that firms make. Here is an example that describes the expectations of firms from media experts I consider in this paper:
In 1985, former Philip Morris chief executive Hamish Maxwell wrote the following in an internal memo: “A number of media proprietors that I have spoken to are sympathetic to our position – Rupert Murdoch
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Asset pricing literature argues that information asymmetry of this sort should cause discount rates to rise through liquidity channel (Kelly and Ljungqvist, 2009). I present evidence consistent with this interpretation using a difference-in-difference design — firms with media experts suffer an increase in cost of capital by 120 to 300 basis points per year that is attributed to liquidity beta. The finding that board member induced managed media coverage reduces liquidity beta complements the findings of other papers studying the liquidity impact of press coverage in other contexts (see Bushee, Core, Guay, and Hamm,2010; Solomon, 2009; and Soltes, 2009).
If having media on board increases future press coverage, but dampens asset prices through the liquidity channel, why would firms actively seek such board members? A simple cost/benefit analysis suggests that firms should get something out of having such people on board. Media experts may help hire better public/investor relation firms or consultants. In other words, such board members may provide connections to media and related industries (e.g., advertising, public relations). Given that advertising spending is also a big revenue item for media companies, firms would benefit from media expertise on board through efficient allocation of advertising expenditures. Consistent with this interpretation, I find reduction in cost of capital as measured by reduced exposure to Fama and French's HML factor. Because
It being the leading source of news since the printing press. We put our faith in the media to report accurate facts unbiasedly. Between 1983 and now the media industry has consolidated from 50 individual companies to 6. That means that though the impression given is that there are a multitude of sources to attain information, the messages being communicated are all one in the same. The limitation of media sources cause a ripple effect of limited information, allowing these companies to control the public’s perception on
Consequently, the political sphere is now being colonised by the media, and politics has begun re-orientating itself to satisfy the logic of media organisations (Meyer, 2002, p. 71). Therefore, the media are active participants in the policymaking process and the ability to stimulate change or maintain the status quo depends on their choice of subject or policy issue and how they frame it. Active investigative reporting attempts to shape policy outcomes, but this does not necessarily mean that it always represents the most successful approach for gaining policy changes (Spitzer, 1993, p. 7). In fact, sometimes passive, straight reporting can have a greater influence on policy choices. When this occurs, media independence is largely bypassed, as the news generated depends solely on the information released (as public relations material) from legitimate news sources. For example, in the United States, White House staff routinely make ‘leaks’ - expressively to influence policy decisions (Davis, 1992, p. 143; Robinson, 2001, p. 948). Robinson noted that journalists regard “leaks… as indispensable to their work” and that they are aware of their use by officials in return for scoops (2001, p. 949).
Next, the media is the fourth most invested external stakeholder in the White Sox organization. They make a living out of news that comes out of the White Sox organization, among other organizations. The White Sox realize the importance of having news about them in the media; therefore, they value their relationship with the
The advancement and development in delivery of media content has also affected the audience’s behavior in certain manner. In distant past, families use to gather around the only television screen in home and enjoy the prime time programs aired by these limited broadcasters. “Millions of households already have cancelled pay-TV subscriptions - up to 10 million U.S. households are currently broadband-only. And about 45 percent of Americans stream television shows at least once a month, according to research firm eMarketer. That number is expected to increase to 53 percent or 175 million people by 2018.” Anderson, Mae, and Michael Liedtke. "HBO Unleashes Streaming from Cable Contracts." The Charleston Gazette, 16 Oct. 2014. Web.
Media corporations have been merging into fewer (and larger) entities which are better able to control the flow of information to the public. Because of their size and power, they can prevent unfavorable coverage of their activities in the media outlets they own. In 1983, 50 corporations controlled the vast majority of all news media in the U.S. In 1992, fewer than two dozen of these corporations owned and operated 90% of the mass media; controlling almost all of America's newspapers, magazines, TV and radio stations, books, records, movies, videos, wire services and photo agencies. Now only 5 huge corporations - Time Warner, Disney, Murdoch's News Corporation, Bertelsmann of Germany, and Viacom (formerly CBS) - now control most of the media industry in the U.S. General Electric's NBC is a close sixth. Democracy can't exist without an informed public. We rely on unbiased news from independent
This article is about the threat of merger and the influence of a monopolistic media. The
Augie Fleras and John Lock Kunz further the argument, pointing out that what appears as mainstream and unbiased is, in actuality, socially constructed. Fleras and Kunz point out that news items (i.e. the events or issues that are covered) are chosen by personnel (such as editors) on the basis of personal, institutional, corporate, and commercial priorities. 7 In other words, the news media is market driven. The mainstream news media, therefore, are not merely
Baum, I 2003, The impact of ownership concentration in the media business on the quality of information delivered to the consumer, viewed on 15 October 2004, , pp. 15 & 17.
Specifically, the term ‘media’ in the context of this article refers to journalistic news sources that are
Today’s media is far too consolidated. In 1983, fifty companies owned 90% of the media, but in 2011, that same 90% was owned by just 5 (1). This is why I propose that the Federal Communications Commission (FCC) lower the limit on the amount of market share that an organization can own; moving us closer to an ‘ideal democracy’. I also add the stipulation that if media was struggling to find a foot hold in the market, the FCC could grant all media outlets non-profit status; however, this stipulation is simply a clause in case breaking up outlets had unintended consequences and this will not be explored through this paper.
Until the 1980s, the control of the media was in the hands of the national government. From then, the control shifted to private outlets and by the 1990’s, there were more than fifty multinational companies who controlled it (“Mass Media”). Today, only about six major companies control the larger fraction of media in America (Williams, Par. 1). Norman Solomon wrote in the New Political Science Journal that most reporters and editors work for just a few huge companies. These journalists and editors are on the payroll for “mega-media institutions”, of which, only about six exist (Solomon 297). How much will the public learn if these companies generally control the output of information?
Demographics point to a decidedly female market with wide aged range 25-54, they could be the professional or wives of professional. Living in city or suburban area due to the store placement will be near the major cities. The income should be in upper middle class. The target market could be healthy conscious and high quality expectation. Conclusion of demographic detail as followed.
A classical example would be that of controversial SABC (COO) Hlaudi Motsoeneng who proposed to license journalists and increase government regulation of the media. In a letter to Motsoeneng, committee to protect Journalists ( CPJ ) expressed concern at what it said were the COO’s “recent statements against media
There are implications regarding production and distribution of media content to a public audience. “In the media, as in any industry, big corporations play a vital role, but so do small, emerging ones. When you lose small businesses, you lose big ideas. People who own their own businesses are their own bosses. They are independent thinkers. They know they can’t compete by imitating the big guys–they have to in- novate, so they’re less obsessed with earnings than they are with ideas. They are quicker to seize on new technologies and new product ideas. They steal market share from the big companies, spurring them to adopt new approaches. This process promotes competition, which leads to higher product and service quality, more jobs, and greater wealth. It’s called capitalism” (Ted Turner). “Today, the only way for media companies to survive is to own everything up and down the media chain” (Ted Turner). I believe that conglomerates thrive better when they aren’t in the hands of many, because the idea of the company can get changed into something it was not intended to be. With more people in the ownership, ideas can flow and possibly broaden the company, but I feel that too many people are unnecessary. In the sense of large companies, many advisors may be needed. “The
In addition CNN ran a story on Vietnam that was proven inaccurate. The radio waves and television sets are flooded with sensationalized shows featuring beautiful young women and handsome men. The news watched today is sensationalized with one catastrophe after another. Is excitement what the market wants, or is the excitement expected because of a precedent set by the corporate owned media? Even in the reporting of sports, sensationalism rules. Channels like ESPN, owned by Disney , report homeruns, slam-dunks, and touchdowns with a dramatic twist. What effect does sensationalism have on the media¡¦s market? A survey done by the American Society of Newspaper Editors reports that ¡§spelling errors, bias, and sensationalism are corroding the credibility of newspapers.¡¨ The survey shows: