According to Media Management in the Age of Giants; Business Dynamics of Journalism, in the 1980s there was a dramatic change to how media companies received their funding. This change was started by institutional investors that blocked an allotted amount of stocks for media companies to raise cash by being publicly traded on Wall Street. This allowed the companies to have a quick and considerable money return while creating national exposure to their developing companies. This trend has not shown signs of slowing down in today’s times with public companies now dominating the media we see; GE, Newscorp, Disney, Viacom, Time Warner and CBS. GE brings in around $157 billion annually with big networks like NBC, MSNBC, and Bravo. Disney comes next with bring forth $36.1billion annually. Next, Newscorp has an estimated $30.4 billion annually mainly generated from their network Fox and the Wall Street Journal. Time Warner gets around $25.8 billion annually, with ownership of HBO, TBS, and CNN. Lastly Viacom generates $13.6 billion a year with their main network being CBS.
With the change has come media consolidation – the ownership of the media concentrated in the hands of a few companies or individuals, rather than many. This is requiring the media being produced to be more innovative and companies are providing what the majority wants to see. This can cause problems of looking out for the money rather than the good of the public. Many media corporations argue this being the biggest fault to public media companies.
Stockholder companies have a fiduciary responsibility and the constant pressure to grow. While private companies thrive on the value of their media and have the flexibility in business decisions because of not having pressure to grow. The motivation of private media companies are so focused on the intent to attract readers through compelling journalism.
Should you take your company public? Only you as an owner can answer, if you feel you need big money now, don’t mind government regulations, and will expand successful with national exposure; going public might help. However, if you seek for no fiduciary responsibility, thrive on creating valued journalism, and want the ability to have flexible guidelines; a private company might be best.
Erin Kirk is a senior at the University of New Mexico, majoring in communication and minoring in management.