Beyond the mogul: From media conglomerates to portfolio media

Abstract

The article shows that outside ownership of media moves in stages – from media properties as the mouthpiece for personal and business interests, to a second stage of conglomerates seeking economic “synergies” of performance, to a third stage dominated by financial portfolio diversification. These phases of outside media ownership correspond to the stages of economic development in that country.The article finds that in rich countries, the ownership of media by industrial companies as a way to create political influence has been declining. The second phase, based on economic synergies, has become a less significant driver, too. On the other hand, there has been a significant growth of cross-ownership through financial intermediaries. In contrast, the media systems of emerging and developing countries are still operating in the first two phases of cross-ownership, centered on projection of influence and on conglomerate business synergies.It is quite likely that these dynamics will lead to a “capture gap” between emerging and rich societies. Media in the former would be significantly more captured through the seekers of personal influence and conglomerate synergies, while media in the latter are subject to professional investors imperatives of profitability, growth, predictability, and fit into portfolio diversification. The same financial institutions from rich countries are also likely to seek acquisitions in the emerging markets by leapfrogging the two other stages. The likely responses are restrictions on foreign ownership of media. Domestic conglomerates will step in and assume control. Media capture will then become patriotic.The article is fact-based and provides details on the media assets of non-media companies in 26 countries accounting for about 60% of the world’s population and over 80% of its economy.