Cross ownership

Cross ownership refers to a situation in which a single entity, individual, or corporation holds ownership stakes in multiple businesses operating within the same industry or in related industries, often in different segments of the media, telecommunications, or financial sectors. This practice is most commonly discussed in the context of media ownership, where one company owns newspapers, television stations, radio stations, and digital platforms in the same geographic market, potentially concentrating control over information and limiting diversity of viewpoints.

Definition and scope

Cross ownership can be broadly categorized into horizontal cross ownership, where a firm owns multiple outlets of the same type (e.g., two newspapers in one city), and vertical cross ownership, where it controls different stages of production or distribution within a supply chain (e.g., a studio owning a production company and a streaming platform). In media, the term often describes the simultaneous ownership of print, broadcast, and digital media in a single market. It also extends to cross-industry ownership, such as a bank owning an insurance company or a technology firm owning a media outlet. The concept is closely tied to antitrust and competition policy, as it can create market dominance and reduce competition.

History and regulation

Regulation of cross ownership emerged in the 20th century, particularly in the United States, as concerns grew about the influence of powerful media conglomerates on public opinion and democratic processes. The Federal Communications Commission (FCC) established cross-ownership rules in 1975, prohibiting a single entity from owning a newspaper and a broadcast station (TV or radio) in the same market unless a waiver was granted. These rules were intended to preserve localism, competition, and viewpoint diversity. Over time, the rules have been relaxed: the Newspaper/Broadcast Cross-Ownership Rule was eliminated in 2017, and the FCC has also loosened restrictions on radio/television cross ownership. Other countries have similar regulations; for example, the United Kingdom’s Communications Act 2003 sets media ownership limits, and Australia’s media diversity rules restrict cross-media control in local markets. However, enforcement varies widely, and many jurisdictions have updated rules to reflect the rise of digital media.

Types of cross ownership

• Media cross ownership: Simultaneous control of newspapers, television stations, radio stations, and online news platforms in the same geographical area. This is the most scrutinized form due to its impact on news diversity.
• Financial cross ownership: When banks, insurance companies, or investment funds hold significant equity in multiple competing firms in a sector, potentially reducing competitive pressure.
• Industrial cross ownership: Common in conglomerates where a parent company owns subsidiaries in different industries that may share resources or supply chains, such as a car manufacturer owning a parts supplier and a financing arm.
• Diagonal cross ownership: A hybrid form where a firm owns assets in different but complementary industries, for example, a cable television provider owning a content production studio and a streaming service.

Economic implications

Cross ownership can yield economies of scale and scope, reducing operational costs through shared resources, combined advertising sales, and integrated newsrooms. It may also increase bargaining power with suppliers and advertisers. However, it can lead to market concentration, raising prices for consumers and barriers to entry for smaller competitors. In financial markets, cross ownership can create conflicts of interest, such as when a bank owns shares in a company it lends to, potentially distorting credit decisions. Antitrust authorities often evaluate cross ownership under merger guidelines to prevent substantial lessening of competition.

Media diversity and democratic concerns

The primary concern with media cross ownership is its effect on the plurality of voices in the public sphere. When a single owner controls multiple news outlets, editorial independence can be compromised, and coverage may be homogenized or biased toward the owner’s commercial or political interests. This can limit the range of perspectives available to the public, undermining informed citizenship. Empirical studies have shown that cross-owned newspapers tend to share content with their sister broadcast stations and reduce the diversity of local news topics. Proponents argue that integrated ownership allows for efficient news gathering and can sustain local journalism that might otherwise be unprofitable. Critics counter that without regulatory safeguards, consolidation leads to a “one-owner, one-voice” scenario, especially in smaller markets.

Examples

• Sinclair Broadcast Group in the United States owns hundreds of local television stations and has sought to acquire Tribune Media, raising concerns about its political leanings affecting news content.
• News Corp (formerly News Corporation) under Rupert Murdoch has long held cross ownership of newspapers (e.g., The Wall Street Journal, The Times), television (Fox News, Sky News), and book publishing (HarperCollins), illustrating global media cross ownership.
• Comcast owns NBCUniversal (television networks, film studios, cable channels) and also operates Xfinity (cable and internet services), a classic case of vertical and diagonal cross ownership.
• Bertelsmann in Europe is a media conglomerate owning publishing houses (Penguin Random House), television stations (RTL Group), and music rights (BMG), with cross ownership across formats and geographies.

Criticisms and debates

Critics argue that cross ownership enables undue influence over public discourse and can be used to promote owners’ political agendas or suppress dissenting views. The 2021 “Media Reform Act” in the U.S. and similar bills elsewhere reflect ongoing efforts to update regulations for the digital age, where platforms like Google and Facebook exercise enormous cross-sector influence without traditional ownership structures. Debates also center on whether current antitrust frameworks adequately address the power of conglomerates that own both content and distribution channels. Some scholars propose public interest tests for media mergers, while others advocate for complete separation of ownership between editorial content and other business interests. The growing role of algorithmic curation on digital platforms adds complexity, as the same entity may own both the content and the recommendation system, creating new forms of cross ownership beyond traditional media.