Mafia Tactics: FCC vs. DIS
Mafia Tactics
“Democrat or Republican, we cannot have the government arbitrating truth or opinion,” said Sen. Ted Cruz (R-Texas) at a hearing ten days ago.
This truth should be self-evident.
Even Ted Cruz can understand it and he’s not the sharpest knife in the drawer (as Tucker Carlson demonstrated conclusively last summer).
Cruz was addressing Brendan Carr, chair of the Federal Communications Commission – and spearhead of the Trump administration’s approach to the media industry.
It was Carr who strong-armed Walt Disney Co. (DIS) in September to suspend ABC’s late-night host Jimmy Kimmel for some asinine remarks about the murder of conservative activist Charlie Kirk.
Disney wound up reinstating Kimmel less than a week later – but along the way Carr’s pressure tactics affected the fortunes of DIS as well as three other publicly-traded companies.
Cruz is hardly alone in his stance. In fact, the guy who made Rush Limbaugh’s career possible thinks the Trump-Carr media policy is “a disgrace.”
We’ll introduce you to him in a bit, but first…
Ponder the pivot from the Biden years – when conservatives understood it was a bad thing for government to browbeat business owners and silence speech it doesn’t like.
Conservatives like, well, FCC commissioner Brendan Carr.
In 2021, Democrats were pressuring cable, satellite and streaming providers to drop Fox News, Newsmax and One America News Network from their platforms. Carr correctly labeled the effort “a chilling transgression of the free speech rights that every media outlet in this country enjoys.”
In addition, Carr rightly rejected the usual big-government notions of the FCC’s role. “The FCC does not have a roving mandate to police speech in the name of the ‘public interest.’”
[I put that one in bold for a reason. Stand by...]
Last year, he reiterated his pro-First Amendment stance, denouncing a Democratic proposal he said “would empower the FCC to operate as the nation’s speech police.”
But when Donald Trump elevated Carr to FCC chair at the start of this year, Carr grabbed his badge and billy club — and got to work right away.
Few people outside government or media really noticed his heavy-handed enforcement tactics until September. That’s when Carr undeniably pressured Disney to muzzle Kimmel.
“We can do this the easy way or the hard way,” Carr told podcaster Benny Johnson. “These companies can find ways to change conduct and take action, frankly, on Kimmel, or there’s going to be additional work for the FCC ahead.”
The following day he told CNBC, “We’re reinvigorating the FCC’s enforcement of the public interest, and I think that’s a good thing.”
[You can’t make this stuff up…]
The pressure was every bit as in-your-face as when the Biden administration sent threatening emails to Big Tech companies, bullying them to take down users’ posts about COVID: “Wanted to flag the below tweet and am wondering if we can get moving on having it removed ASAP.”
The only difference is that Carr was exerting his mafia tactics out in the open. As Sen. Cruz said on his own podcast, “That’s right out of a mafioso going into a bar, and going: ‘Nice bar you have here, it would be a shame if something happened to it!’”
Brendan Carr: FCC chair, aspiring mafia don…
Key point: Disney needs FCC approval for a previously-announced deal between its ESPN unit and the NFL; the NFL would take a 10% equity stake in ESPN while ESPN would acquire NFL Network and other NFL media assets.
The Writing on the Wall
Disney might have stood up to Carr’s threats were it not for the ancillary threat to two much smaller companies ABC relies on.
Even before ABC suspended Kimmel’s show, Carr’s remarks prompted local station owners Nexstar Media Group (NXST) and Sinclair Inc. (SBGI) to pull Kimmel from their ABC affiliates. Together, Nexstar and Sinclair are how ABC reaches nearly a quarter of the U.S. population.
Do not underestimate the intimidation factor for Nexstar in particular.
Nexstar hopes to pull off an unprecedented acquisition in the broadcast biz — and needs FCC approval before it can happen.
Less than a month before Kimmel’s comments about Charlie Kirk, NXST announced plans to buy rival Tegna Inc. (TGNA) for $6.2 billion. Nexstar’s share price zoomed 14% higher in the days before the announcement, as buzz surrounding the deal swept through the financial media.
If approved, the takeover would result in a level of consolidation never before seen in local TV.
For instance, Nexstar would own both the NBC and CBS affiliates in Tampa. It would own both the NBC and Fox affiliates in Denver. And in Indianapolis, the combined firm would control the NBC, CBS and Fox affiliates.
In a splintered media age, when broadcast television commands a fraction of the audience it did a generation ago, there’s no plausible argument against a Nexstar-Tegna tie-up. Still, the FCC will have to rewrite current regulations or issue a waiver for the deal to go through.
Now does it make sense why Nexstar was so quick to pull Kimmel from its ABC stations?
"The decision to preempt Jimmy Kimmel Live! was made unilaterally by the senior executive team at Nexstar,” a company flack told Communications Daily at the time — “and they had no communication with the FCC or any government agency prior to making that decision.”
They didn’t have to. They saw the writing on the wall.
➢ Sinclair’s case is different. Sinclair has always been a partisan animal. In 2004, ABC’s 11:35 p.m. Eastern timeslot was still occupied by the news program Nightline. Sinclair’s ABC affiliates preempted it one night when anchor Ted Koppel read aloud the names of the 721 U.S. troops killed in Iraq up to that point. Sinclair management said the broadcast seemed “designed to undermine the efforts of the United States in Iraq." But even the warmongering Sen. John McCain thought Sinclair’s posturing did “a grave disservice to the public.”
No, I haven’t forgotten about the Limbaugh angle. Read on…
Reagan’s FCC Chief: Carr Is “a Disgrace”
About the guy who made Rush Limbaugh’s career possible: He was Ronald Reagan’s FCC chair, Mark Fowler.
It was at Fowler’s behest that the FCC did away with the “Fairness Doctrine” — and opened the way for a new, freewheeling era in talk radio.
Introduced in 1949, the Fairness Doctrine required the licensees of radio and TV stations to “afford reasonable opportunity for discussion of conflicting views on matters of public importance.”
Sounds sensible, right? In reality, however, “It gave politicians and pressure groups a tool to harass any station that transmitted views they found disagreeable,” recalled Jesse Walker, writing in The American Conservative in 2007. “Even when it wasn’t being deliberately deployed to suppress speech, it made broadcasters less willing to present ideas that might be controversial.”
Fowler believed the Fairness Doctrine flew in the face of the First Amendment. On Aug. 4, 1987, the FCC unanimously abolished it.
Free speech champion: Fowler justifying abolition
of the Fairness Doctrine to Congress in 1987
The rest is history.
"It is no accident that Limbaugh’s show did not receive national syndication until a few months after the repeal of the Fairness Doctrine,” broadcast historian Paul Matzko wrote for the Cato Institute after Limbaugh’s death in 2021.
Limbaugh himself frequently credited abolition of the Fairness Doctrine with aiding his rise to stardom. And whenever Democrats talked about reviving it, he called such attempts “the Hush Rush Law.”
Fowler is still around — he turned 84 in October. What does he say about Brendan Carr’s censorship regime?
“I know Brendan Carr well enough to know that he knows better. This is exceedingly disappointing… They’re trying to undo everything President Reagan did.” Fowler told the trade publication Variety this summer.
And this was before the Kimmel imbroglio.
At the time, Carr was helping Trump engage in his successful shakedown of CBS. Trump had sued the network on the grounds that the editing of a 60 Minutes interview with Kamala Harris last year amounted to “consumer fraud.”
Under ordinary circumstances, the suit would have been laughed out of court. But at the time, CBS parent Paramount Global needed FCC approval to merge with Skydance Media. As such, Paramount settled for $16 million and Carr’s FCC gave the merger its blessing days later.
“It looks like it’s corrupt — and I say that as a Trump donor and supporter… The law doesn’t seem to matter,” Fowler said of the CBS case. “It feels a bit like the wheels are coming off.”
Of Carr’s conduct in the Kimmel situation, Fowler is even more scathing. “First of all, his views on the First Amendment are totally wrong, and the worst is, he knows it,” he tells Communications Daily. “If you look back two or three years, he sang quite a different tune, fully First Amendment first.
“His approach now is that freedom of speech is ensured by government oversight, really trampling the First Amendment rights of broadcasters for which President Reagan fought so long and hard.
“To me, it's personal as well as legal and public policywise. And he is a disgrace. What he is saying, no other Republican chairman, in my view, and even Democratic chairman, has ever said.”
Who Decides?
Fowler – as well as Sen. Cruz – gets to the heart of the issue: Government has no role as the arbiter of truth.
Independent journalist Matt Taibbi, who shone a bright light on the Biden administration’s censorship regime, put it this way in 2023: “The authors of the Constitution understood that giving anyone the authority to decide questions of fact would create incentives for censorship, especially since government offices tend to be occupied by people with strong political beliefs.”
But too many conservatives, traumatized by Charlie Kirk’s murder, seem ready to ditch the principles they held dear as recently as last year. Fowler, they might say, is a fuddy-duddy out of step.
It’s time, they say, for gloves off and scorched earth.
“Under normal times, in normal circumstances, I tend to think that the First Amendment should always be sort of the ultimate right,” said Sen. Cynthia Lummis (R-Wyoming) in September. “And that there should be almost no checks and balances on it.
“I don’t feel that way anymore,” she told the Semafor news site.
Stuff like this makes your editor sick to his stomach.
I broke into the TV news biz during the same summer of 1987 as the Fairness Doctrine was rescinded. I’ve spent literally every working day of my adult life exercising the right to freedom of the press — a right bestowed by the Creator and secured by the First Amendment. That’s 20 years in broadcast news, 18 years and counting in financial publishing.
The First Amendment is how the Paradigm editors can speak freely to you. They tip you off to investments they think could change your life. They warn you off investments they think could ruin your life. They do so without fear or favor.
Most important of all, newsletter editors traffic in ideas outside the mainstream. We were the original “alternative media.” A century ago, people thought Roger Babson was nuts for warning that the Roaring ’20s would end in tears. But in the end, he was right.
Turnabout Is NOT Fair Play
If American conservatives can’t see the dangers of gloves-off and scorched earth, the acerbic Australian media critic Caitlin Johnstone does.
Her response on X last fall to the “Turnabout is fair play!” stance…
That only sounds like a cool argument if you believe the two-party puppet show is real.
In reality you're both lining up to give more and more of your power to the empire which remains in power regardless of who won the last election. They surrender some, you surrender some more, repeat.
Obviously American liberals should have known they were opening themselves up to return fire with their support for censorship when they were in power. Obviously they should not have done that, and people like me told them this the entire time.
That doesn't change the fact that you're handing the nonpartisan oppression machine more power that you will never get back every time you throw your support behind retaliatory acts of speech suppression.
You think you're hurting the libs, but you're just hurting yourself. You're just making your society more tyrannical and dystopian in ways that will inevitably affect you. You're clapping along with the two-handed puppet show like a toddler while your real oppressor picks your pockets.” [Emphasis mine]
And there’s nothing new about this dynamic. The late, great George Carlin saw it way back in 1992.
From his Jammin’ in New York appearance: “That’s all you ever hear about in this country, is our differences. That’s all the media and the politicians are ever talking about: the things that separate us, things that make us different from one another.
“That’s the way the ruling class operates in any society: They try to divide the rest of the people; they keep the lower and the middle classes fighting with each other so that they, the rich, can run off with all the ****ing money. Fairly simple thing… happens to work.
“You know, anything different, that’s what they’re gonna talk about: race, religion, ethnic and national background, jobs, income, education, social status, sexuality, anything they can do to keep us fighting with each other so that they can keep going to the bank.”
Or as a meme this year put it even more succinctly…
