John Taylor, Professor of Economics at Stanford University and developer of the "Taylor Rule" for setting interest rates | Stanford University
John Taylor, Professor of Economics at Stanford University and developer of the "Taylor Rule" for setting interest rates | Stanford University
Social media's emergence as a primary news source has challenged traditional media, but television remains the most favored medium for local news in the United States. Gregory Martin, an associate professor at Stanford Graduate School of Business, emphasizes that "TV is still one of the most important sources of news in the U.S."
However, consolidation within the broadcast industry is altering the landscape. Over $23 billion in TV ownership deals have occurred in recent years, with three major companies controlling 40% of local stations and reaching over 80% of media markets. This trend raises concerns about potential declines in local news quality.
Martin's research with Joshua McCrain from the University of Utah previously examined Sinclair Media Group's acquisitions and found a shift towards national politics coverage. A new study by Martin, McCrain, Nicola Mastrorocco from the University of Bologna, and Arianna Ornaghi from the Hertie School expands this analysis to other conglomerates. They discovered increased advertising during newscasts post-acquisition and varied changes in local coverage depending on ownership.
The researchers suggest that station owners might interpret steady viewership as freedom to prioritize financial or political interests over quality local news. Martin stresses that "the news industry is unlike others... its product is a fundamental input to any well-functioning democratic society."
Since the 1990s, Sinclair, Gray Television, and Nexstar Media Group have dominated U.S. TV through numerous acquisitions. The study analyzed over 215 such deals between 2010 and 2020 using transcripts, advertising records, viewership data, and political knowledge surveys.
A key question was whether these acquisitions affected local news coverage. Results showed varying impacts: Sinclair reduced local content by about 10%, Nexstar increased it significantly, while Gray saw no change.
Despite limited data on viewers' political knowledge post-acquisition changes, Martin highlights that stations tend to cover congressional representatives closely aligned with their market areas more extensively. Viewers were better informed about their representatives when their district overlapped with their station's market.
Martin cautions against assuming regulators have no role amid consolidation trends. He argues for preserving media diversity through direct regulation rather than focusing solely on ownership caps.
"If the goal is really to preserve locally important coverage," Martin suggests focusing on enforcing public-service programming requirements instead.
This article was originally published by Stanford Graduate School of Business.
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