Journalism in Crisis: Corporate Media and Financialization. Núria Almiron, trans. by William McGrath. New York: Hampton Press, Inc., 2010. 212 pp.
This is the most important available analysis of the crisis of journalism, exhibiting critical skills of which alarmingly few North American analysts are capable. Núria Almiron is lecturer and researcher in communication at Universitat Pompeu Fabra, Barcelona. Her political economy approach goes well beyond the platitudes of death-by-Internet sermonizing, even beyond the themes of concentration and overreach so well-rehearsed by Robert McChesney. McChesney and Nichols (2010) regret the passing of a Golden Age that preceded advertising. For Almiron, journalism is in perpetual crisis, hapless child of bourgeois parents—freedom of the press as formulated in the Declaration of Rights of the State of Virginia (1776) and in the French Revolution’s Declaration of the Rights of Man (1789), eternally abused by the “instrumentalization” of dominant classes.
Journalism remains caught in the contradiction between its emancipating potential and the conditions imposed on it by financial globalization. No longer even the plaything of erratic conglomerates and moguls, it has entered a post-corporate era characterized by the supremacy of the capital (finance) over the industrial sphere (production) “inherent to the evolution of modern capitalism.” The term “financialization” (first employed by Andre Orlean in 1999) is identified by Gerald Epstein (2005) as one of three main trends in global economics of the past thirty years, the others being neoliberalism and globalization, and defined as “the increasing role of financial motives, financial markets, financial actors, and financial institutions in the operation of the domestic and international economies.” It is the product of the ending of fixed international Exchange rates, disorganization of raw-materials markets, privileged position of transnational corporations, budget deficits, deregulation, liberalization, and monetary disintermediation. The result is conversion of the financial sector into one of today’s principal sources of profit, but also of global instability—manifest in overinvestment and financial engineering as egregiously illustrated by “tax havens” that hold a third of the wealth of high net-worth individuals, and by other forms of money hiding, laundering, and extreme speculation. These lead to overcapacity, concentration, and implosion. These basic capitalist cycles are far more enduring and predictable than the information, digital, ICT, and other “revolutions” that bedazzle those who should know so much better.
Media and finance are closely interlinked, illustrated by the development in the mid-nineteenth-century of Reuters, not long after the London Stock Exchange, providing financial, business, and economic information flows that have become the bedrock of the very structure of modern capitalism. The technology of information flows is dependent on the raising of capital in financial markets, which are also insatiable consumers of communication technologies and financial news. Banks exert a fundamental influence on information corporations: they determine which and how many media will survive, their degree of concentration, autonomy, and diversity. These relationships bind concentration, internationalization, industrialization, and financialization, this latter passing through three main stages of absolute family control, relative family control, and managerial control.
Financialization coexists with media moguls, but moguls’ empires have fallen to its logics, just as the financial industry in turn has become dependent on the favorable spinning of the media friends it controls. The consequences are media gigantism—justified by synergies and the competition-driven needs for technology investment and global expansion, and executed in partnership with financial capital, mostly banks, private equity firms, and stock markets. The result is unsustainable indebtedness, declining profit, complicity in securitization fraud, and domination of media boards by representatives of the finance industry. The financial industry partners with media in many ways: It is a major topic for coverage, a client and advertiser—amounting to totally irreconcilable conflicts of interest. These account for the abject failure of mainstream media to predict the totally predictable collapse of modern capitalism from 2008.
News media owners are highly interlocked with the power elite. Of the forty-one media conglomerates with more than $2 billion in news-media assets in 2008, 41% are American; 93% are North American or European Union. Finance-dominated institutional investors control more than 60% of GE, 64% of Disney, and 82% of Time Warner. Almiron’s study updates an old controversy about the “managerial revolution”—it is not that managers exercise influence independent from shareholders, but that managers are co-opted into the financial logics imposed by bondholders, those who lend to the issuers of the debt on which the modern media conglomerate depends. The majority of top media owners finished 2008 with a debt/equity ratio of more than 1, indicating that a company has been aggressively financing its growth with debt. By 2009, media companies everywhere were seeing that debt turn into junk status, depriving them of their only source of redemption: refinance. “The reason for the crisis wasn’t the global financial crisis but business strategies based on growing as much as possible as fast as possible regardless of the consequences,” Almiron observes.
This impacts media corporate goals through financialization of the core business—financial services get priority above media services; or financial information and markets become the core business; or media corporations become speculative actors in the financial markets, desperate to grow revenues and profit. Other aspects include the financialization of labor through market dependent pensions, and of the workplace (using financial schemes to compensate labor). Almiron concludes that “financialization has increased the proximity of the financial power elite to the management of media companies at the same time that is has increased the distance between management and journalistic concerns,” inaugurating “a renewed estrangement from the criteria of social responsibility of the financialized news firm,” since all the actors are compromised by the penetration of financial industry logics. More and more, news content is about the financial sector, targeted to investors and entrepreneurs, with no independent journalistic investigation, and no adequate resources for coverage of topics of unparalleled public concern, including (I would add) U.S. universalization of war crime, and global climate catastrophe.
OLIVER BOYD-BARRETT
Bowling Green State University