February 11, 2011
How Mayor Michael Bloomberg and Bloomberg LP helped fix the NBC-Comcast merger — winning terms that were especially favorable to the expansion of Bloomberg's media empire.
Last July, a group called the Coalition for Competition in Media wrote a letter to two key House subcommittee chairs on Capitol Hill, pleading for help in stopping the then-pending $30 billion megamerger of Comcast and NBC Universal.
The group identified itself as “a coalition of public interest
organizations, unions, small and minority media companies and
independent programmers,” and said the merger was “fundamentally
threatening to the public interest.” That may well have been a
sound contention, and any reader might have thought the letter —
part of an extensive PR and lobbying campaign — was distributed by a
grassroots consumer organization. The letter was signed by the
members of the coalition, including the media conglomerate
LP. What the letter did not say is that
Bloomberg LP was the driving force behind the PR campaign, and the
Coalition for Competition in Media was conceived, funded and staffed
by lobbyists for New York City Mayor Michael Bloomberg's $7
billion-per-year media company.
At the same time that
Bloomberg, the politician, seeks a stage larger than City Hall —
helping, for example, to found the political group “No Labels” late
last year, and imploring national Democrats and Republicans to put
aside party politics — his business empire continues to expand
aggressively as well. Though Bloomberg doesn’t run the
day-to-day affairs of Bloomberg LP, he still owns almost all the
shares, handpicks the firm’s managers, talks with them as much as he
feels he needs to, and therefore imposes his own will on the firm
when he likes. (New York’s ineffectual Conflicts of Interest
Board limited but never fully defined the mayor’s role at the
company he founded: the board allows him to “maintain the type of
involvement that he believes is consistent with his being the
majority shareholder.”) A spokesman for Mayor Bloomberg declined to
comment for this article.
Given Bloomberg’s push for a
national platform, any intersections between his corporation’s
interests and the government warrant scrutiny. And Bloomberg
LP runs an effective and sophisticated lobbying shop to promote the
firm’s interests with federal agencies and Congress. It’s
striking how, in a fully synergistic Bloomberg style, a news
organization, a financial information company and a team of
lobbyists often seem to be working in smooth concert.
This process was on vivid
display as Bloomberg LP faced the prospect of the Comcast-NBC
merger. A postmortem of the company’s vigorous efforts to
protect its interests in response to that challenge reveals the ease
with which the Bloomberg empire navigates and manipulates
From the beginning, Bloomberg
executives saw potential problems as well as exceptional
opportunities in the Comcast-NBC deal, a massive merger of a huge
cable and Internet company with a TV network, which sought Federal
Communications Commission approval. To understand the stakes
for Bloomberg LP in this deal requires a quick behind-the-scenes
glimpse at the company and how it functions.
Almost all of Bloomberg LP’s $7
billion yearly revenue still comes from the Bloomberg terminals —
the desktop software with floods of financial data that is
ubiquitous in Wall Street firms, despite its $20,000-a-year price
tag. “Eight-seven percent of the company’s revenue is
[Bloomberg] terminal revenue,” says
Douglas B Taylor,
who follows the company and the financial data industry for
Burton-Taylor International Consulting LLC.
But increasingly, the company
has been extending its journalism enterprises. “There is an
aggressive expansion going on in the consumer side of the Bloomberg
operation,” according to Andrew Schwartzman, senior vice president
Media Access Project.
Consider the breadth of the Bloomberg journalism empire: the company
BusinessWeek in 2009 as the
magazine was losing money, and has transformed it into Bloomberg
Businessweek. That comes in addition to the high-end glossy
monthly business magazine Bloomberg Markets. At the same time,
the company produces Bloomberg Radio on XM, Sirius and WBBR.
It also distributes Bloomberg News as a wire service with local and
national content on its website. Recently, the company hired
York Times editor David Shipley and ex–State
Department spokesman Jamie Rubin to oversee a new operation:
Bloomberg View, where Michael Bloomberg’s political, philosophical
and business opinions will be distilled in editorials that can be
distributed across all his news platforms.
But the major play for
Bloomberg LP, the potential crown jewel of the giant journalism
enterprise, is Bloomberg Television, which airs on cable. The
company hired Andy Lack, former president of
NBC News, in 2008, in an
effort to rejuvenate the channel. There was a massive purge,
in which Bloomberg laid off 100 workers, but the studios were
redesigned, new talent was hired, and it now appears to be on the
upswing. Bloomberg executives dream they will one day compete
directly with NBC’s influential
CNBC. Right now the
channel is barely watched, analysts say, but Bloomberg has been
pouring money into it.
One oddity of the Bloomberg
news empire is that without exception, all of its journalistic
operations lose money, and they always have, according to sources
with knowledge of the company. The news business at Bloomberg
is heavily subsidized by the rest of the company — paid for by those
terminals on the desks at Wall Street firms.
It almost seems as if, for
Michael Bloomberg, the profits don’t matter much in that sector.
There are various possible explanations for this mindset. “I
think Michael Bloomberg did something that was very shrewd and very
intelligent,” explains Taylor. “I think his approach was, ‘I
will accept losses in my media business,’ because he considers it
advertising rather than a profit center.” Taylor’s theory is
that Bloomberg’s news operations are a marketing effort rather than
a core function of the overall business. “He saw it as a place
to generate mind share,” Taylor says, “to generate advertising and
recognition in the industry.” “Mind share” is the current term
of art for brand awareness in the marketplace. If he is right,
expanding mind share not only advances the company’s larger business
interests but heightens Michael Bloomberg’s national profile.
Although for now the journalism
side of the house remains subsidized by other operations, Bloomberg
TV could one day churn a profit on its own. At first “it was
always regarded as just sort of one of Mike’s vanity projects,” a
company veteran told me, “and so it was sort of left alone.”
But now some believe it could be a cash cow. “It could produce
a quarter-billion dollars a year,” the source said, “if they could
figure out how to get people to watch it!”
Which brings us back to the
Comcast-NBC deal. Bloomberg was concerned about one thing:
once Comcast purchased NBC Universal, would it favor CNBC over
Bloomberg’s financial news channel? And what could that do to
the expansion plans for Bloomberg TV? Bloomberg’s solution to
the problem was “neighborhooding.” The concept involves
grouping similar channels together so viewers with an interest can
play with their remotes and find what they are looking for. A
parallel is the way diamond shops can be found on Forty-seventh
Street in Manhattan, or the way bail bondsmen are located next to
one another near courthouses.
But that plan would work only
if the FCC forced Comcast and NBC to cooperate. If not, the
executives at Bloomberg figured Comcast would try to punish
independent channels by making them hard to find. And so
Bloomberg’s lobbying of the FCC began.
The company’s tactical goal was
to block the Comcast-NBC deal unless the government required the
merged company to put Bloomberg TV on a station next to CNBC.
Schwartzman explains that it was an extremely “sophisticated”
operation. (Greg Babyak, Bloomberg’s in-house lobbyist,
referred The Nation’s call for information to Bloomberg’s new top PR
official in Washington, Sarah Feinberg, who left the Obama
administration to take the position in March 2010. The company
declined to comment.)
One of the first moves
Bloomberg LP made as it laid out its game plan against Comcast was
to hire Kevin Martin, who retired as head of the FCC in 2009, as its
lawyer for the issue. Martin, who works for the lobbying and
legal powerhouse Patton Boggs, is not listed as lobbyist for
Bloomberg because he performs legal work, but others at Patton Boggs
were registered as lobbyists, and Bloomberg LP has paid those
lobbyists $340,000 since last spring. Patton Boggs, of course,
is one of the largest and most effective firms on K Street.
The other big gun in
Bloomberg’s lobbying arsenal was
Glover Park Group.
This is a growing powerhouse in Washington, a Democratic shop on K
Street with excellent contacts in the Obama administration and the
Democratic establishment. Among its luminaries are Joe
Lockhart and Dee Dee Myers. Glover Park was partially owned by
Howard Wolfson, the Democratic political operative and former
Hillary Clinton spokesman who helped Mayor Bloomberg win his
historic 2009 third campaign for mayor in New York City.
Wolfson, like other top campaign workers, was paid a $400,000 bonus
by the grateful mayor after the vote, and a subsidiary of Wolfson’s
firm made $490,000 in the campaign.
Then, once he was reinaugurated
in January 2010, Bloomberg installed Wolfson as a deputy mayor.
(The strategist was seen to be replacing Deputy Mayor Kevin Sheekey,
a Bloomberg loyalist who was rotated out of City Hall and back to
the private Bloomberg LP by then.) By the time Bloomberg LP
hired Glover Park, Wolfson had sold his shares, he tells The Nation.
“I divested fully when I entered city government,” Wolfson says.
His financial disclosures reveal that his stake was worth more than
half a million dollars.
To sum it up: seven months
after Wolfson went to work for Mayor Bloomberg’s administration in
New York, Wolfson’s former company, Glover Park Group, registered as
a lobbyist for Bloomberg’s company in Washington.
Glover Park Group assigned
powerful, politically connected talent to the Bloomberg effort.
For example, Christina Reynolds had just left Obama’s White House,
where she had been the director of media affairs for a just over a
year. She quickly became one of the contacts for the
The group’s letters, all
written by Glover Park Group, were plastered all around Washington.
“As a diverse group of 24 public interest groups and private
organizations,” the group wrote to President Obama, for example, “we
urge your administration to ensure this unprecedented combination
receives the scrutiny that it deserves.”
Coalition building is a normal
feature of Washington’s influence efforts. Still, Lisa Graves,
executive director of the Center for Media and Democracy, says this
case stands out. “I would say that it is clever and somewhat
deceptive because the assembly of the groups is mainly meant to
further Bloomberg’s interest.” Strictly speaking, she points
out, it is not a front group, but it is similar. “It is like a
front group because the name of the group and the superficial
appearance obscure the primary intent, which is to further this
company’s corporate interest.”
In the jockeying over the
Comcast-NBC merger, Bloomberg corporate synergy also came into play.
On October 19, Bloomberg Businessweek published a well-researched
story exposing how Comcast had boosted its donations to politicians
as it pushed for the merger. Reviewing Federal Election
Commission records, Bloomberg reporters found that Comcast’s
political action committee had increased its donations to
politicians by more than $400,000, to a staggering $1.1 million.
Comcast’s massive lobbying and PR campaign to push for FCC approval stood in direct tension with Bloomberg LP’s own lobbying and PR campaign around the merger.
Bloomberg’s lobbyists quickly
told the coalition members that it intended “to capitalize on the
great Business Week/Bloomberg story this morning,” according to an
e-mail obtained by The Nation from a member of the coalition.
The lobbyists wrote, “We’d like to flag it for reporters with a
quick quote and topper.” The coalition’s press statement said
of the article, “These donations…are part of a calculated attempt to
buy approval for a merger that offers too many dangers for consumers
and media organizations.”
There is no evidence that the
Bloomberg reporters wrote the story as part of a companywide
strategy or were assigned the story because of corporate influence.
A Bloomberg spokeswoman says there is an “impenetrable firewall”
between editorial decisions and the other parts of the company.
Still, it was a captivating confluence of forces: Glover Park Group,
paid by Bloomberg LP, and acting with the coalition it had created
on Bloomberg’s behalf, was on the warpath to distribute a news story
Bloomberg Businessweek had written about the issue that was the most
important pending matter in Washington for the Bloomberg brand.
Glover Park Group, for its part, readily concedes that it organized the coalition and that Bloomberg was its paying client but insists that the coalition was not technically a lobbying operation. “Any lobbying work that’s done is registered and fully disclosed,” a spokesman wrote in an e-mail to The Nation. “The Coalition never did any lobbying.” Here is the way to parse that: Senate lobbying definitions make it clear that lobbying includes “any oral or written communication” with White House or Congressional officials. But material “that is distributed and made available to the public” gets an exemption.
In a subsequent statement to
The Nation after a request for clarification, a Glover Park
spokesman said the coalition letters and other releases “are simply
But Bloomberg’s lobbying had
paid off. The FCC ruled that Comcast would have to
“neighborhood” channels together, in the exact same language
Bloomberg and its lobbyists had pushed for. “Whenever Comcast
carries news channels near each other, it will have to include all
independent news channels in all of these neighborhoods,” the FCC
announced. “Bloomberg,” says the Media Access Project’s
Schwartzman, a member of Bloomberg’s coalition, “got what it
wanted.” Bloomberg LP’s president, Daniel Doctoroff, who had worked
as a deputy mayor in Bloomberg’s administration until late 2007, put
out a press release in celebration: “The FCC has taken strong action
to preserve independent news programming, and protect competitors
against discrimination.” “Bloomberg TV a winner in Comcast-NBC
deal” was the headline on Politico.
Corie Wright, policy counsel
for Free Press, defended Bloomberg and the coalition in an interview
with The Nation. “To say that Bloomberg got what it wanted at
the expense of the interests of the other groups in the coalition, I
don’t think that’s the case.” Still, the fact is that
Bloomberg LP, the company that funded the “coalition,” scored in the
end, and the other members didn’t.
Michael Bloomberg’s company is
now getting into federal policy in an even more powerful way: it has
launched an information service about political influence that
wealthy DC players must pay for. It is called simply Bloomberg
Government, and it caters to lobbyists, government officials and
federal contractors. “Finding the right path through
Washington’s maze of regulations, legislation and spending trends
can boost your business strategy,” according to the website.
“Let Bloomberg Government be your guide.” It promises the
inside dope for Beltway insiders who depend on it: “We give you the
headlines, players, financials, spending and more, defining and
clarifying the complex intersection of government and business.”
by Aram Roston
Latest Burton-Taylor News
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Il Sole 24 Ore
Offuscato Il Modello Bloomberg
Giornalismo, scoop e una rete di dati
funzionano se vangono mantenuti separati
Il sogno di Michael Bloomberg è rosa ed è una celebrità in tutti i continenti. Un sogno scosso da uno scandalo che proprio per questo motivo crediamo stia irritando il sindaco di New York assai più del previsto. Avvicinare il suo nome a pratiche giornalistiche a dir poco eterodosse rischia di allontanarlo dall'ambito frutto che siede in un cubo nero e luccicante sulla sponda del Tamigi: il Financial Times. Full Story
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