Primetime Propaganda

by Ben Shapiro

  In the aggregate, the networks received a household rating of 16.3. It was a dramatic ratings drop for Obama, who had held a press conference February 9, 2009, that received a combined household rating of 30.8, one in March that scored 25.9, and one in April that hit 18.8.53

  The networks had been unhappy about broadcasting Obama’s fourth primetime news conference altogether. “It’s an enormous financial cost when the president replaces one of those prime-time hours,” said Paul Friedman, CBS’s senior vice president. “The news divisions also have mixed feelings about whether they are being used.” Nonetheless, the networks complied. Howard Kurtz suggested that they did so because they “have deemed Obama a box-office draw, featuring him on everything from ‘60 Minutes’ to ‘The Tonight Show’ to a 90-minute ABC town meeting on health care.”54 That clearly wasn’t the case, as the numbers showed. The real reason they did it was for the payoff from the Obama administration.

  Rahm Emanuel, Obama’s hatchet man, began calling the networks shortly before Obama spoke. He didn’t call the program chiefs at the various networks, however—he called their bosses at the corporate level. Normally, such requests should have been channeled through Nancy Tellem at CBS, Jeff Zucker at NBC, and Anne Sweeney at ABC. Tellem and Zucker both donated to the Obama campaign. But instead of going to the television executives, Emanuel went over their heads. According to Kurtz of the Washington Post, Emanuel called up Les Moonves, chief executive of CBS, Jeff Immelt of GE, and Bob Iger, chief executive of Disney, which owns ABC.55 Soon Obama was booked on all three networks (though not on Fox).

  So what was the payoff? There were two. First, the Obama Administration has made it crystal clear that Obama will only reach out to networks that treat him well. He has largely frozen Fox’s access to administration officials because he dislikes the Beck-O’Reilly-Hannity lineup.

  The second reason is less direct—and more troubling. It involves the pharmaceutical companies. On August 8, 2009, just days after Kurtz revealed the pressure the White House levied against the networks to put his health care primetime talk show on the air, the New York Times revealed another Obama White House shakedown. This time, the subject of the shakedown was the drug companies, who feared the consequences of Obama’s health care overhaul. In return for the Obama administration’s commitment that the drug industry’s costs would be capped at $80 billion over ten years under the health care bill, Obama extracted a key concession: The drug companies would underwrite a $150 million television commercial campaign in favor of Obama’s health care overhaul. By way of comparison, the Obama campaign spent a grand total of $236 million on television ads during the 2008 cycle; John McCain spent $126 million.56

  Could the networks’ willingness to run Obama’s infomercial for healthcare have had anything to do with the fact that Obama was pushing the drug companies to spend $150 million on television advertising? Of course not.

  The relationship between the television industry and the Democratic Party grows ever stronger. As of June 2010, 73 percent of entertainment industry donations during the 2010 election cycle had gone to Democrats. Comcast had given approximately $1.3 million to Democrats and $756,000 to Republicans, a 64-to-35 percent advantage to the Democrats. Senator Chuck Schumer (D-NY) grabbed $329,800 in Hollywood donations. Not surprisingly, Representative Henry Waxman (D-CA), who chairs the House Commerce and Energy Committee, which has jurisdiction over communications issues, gathered $82,500 from the industry.57

  And so the circle of cash and favors continues.

  THE CABLE OLIGARCHY

  One of the biggest cash cows for the television industry is cable. And cable continues to benefit from the government’s helping hand.

  Today, the FCC allows television companies to vertically integrate, resulting in the total dominance of the corporate Six Pack (GE, Time Warner, Disney, NewsCorp, CBS, and Viacom). Worst of all, the FCC and local government allowed a few market players to monopolize the cable industry. This doesn’t just mean that a few players make the programming some of us watch—it means that in a given area, one or two players may be deciding what everyone watches.

  The cable system is currently run by the same players who participate in the programming arena. The two biggest players in the cable industry are Time Warner Cable and Comcast (which is currently seeking to buy GE, leading to even further vertical integration). Consumers pay the cable companies to provide channels hand-picked by the cable companies—that’s why you can’t choose not to take TBS or Comedy Central. Programmers provide the cable companies with their programming and in return receive a chunk of revenue. Becoming a cable programming provider is expensive and difficult—second-tier programmers generally have to pay cash to the cable companies or take a far smaller chunk of revenue.58

  So why isn’t there competition among cable companies? In a normal market system, outside cable companies would be able to compete with larger cable companies by offering channel selection, faster service, etc. But local governments have worked with the cable companies to create carve-outs that guarantee certain areas to certain cable companies. As Congress recognized in 1992, “For a variety of reasons, including local franchising requirements . . . most cable television subscribers have no opportunity to select between cable systems.”59 The franchise requirements mentioned by Congress are largely a local regulatory invention. In essence, local regulators, very often subject to the lobbying of particular cable companies, hand out monopolistic exclusive franchises to certain cable operators. The U.S. Public Interest Research Group explained, “Cable operators have successfully used regulatory lobbying and a variety of pricing and other tactics to deter competitive entry and maintain their monopolies.”60 One of the most effective tactics has been cable operators’ insistence that new cable operators be required to invest enough money to cover entire markets. This requirement obviously raises the bar on entry costs, making competition prohibitive.61

  Just like the federal government with the network conglomerates, local governments work with cable operators because they expect kickbacks. “Local politicians have cut deals, written and unwritten, with their chosen cable operator to keep out competition,” wrote former FCC official Sol Schildhause. Local communities extract concessions from high-bidder cable operators seeking to enter particular markets.62

  Attorney David Saylor states that cable operators have been gouged by the government in order to receive their monopoly: “Cable operators have had to participate in auctions to balance local budgets. They have been forced to disgorge five percent (and sometimes more) of their gross revenues in the form of ‘franchise fees.’ . . . Cable operators have even given city councils absolute programming control over certain cable channels.”63

  These are prices cable companies are willing to pay. Because cable operators are able to foreclose all competition in local marketplaces, they are also able to decide which programming to carry for entire swaths of the country. “The cable marketplace is choked to death because would-be competitors are prevented from being in the game,” observed then-Senator Al Gore (D-Tennessee) in 1992. “Any new programmer who comes into the cable business is going to be coughing up a share of his company [to a cable operator] as the price of showing his wares to the public.”64

  Yet Gore’s tough talk died once he became vice president. In 1996, he spoke to the cable industry’s national conference. His speech praised the cable companies to high heaven; Gore told them that they had shown “good judgment, vision and a willingness to compromise.” “The cable television industry is picking up some friends in high places, just when it needs them most,” the New York Times gushed. “Mr. Gore’s speech amounted to a pep rally for the cable industry.”65

  The industry became centralized in the first place not merely because local governments restricted entry, but because Congress and the FCC prevented telephone companies and satellite companies from becoming cable companies. In 1956, the government entered into a consent dec
ree with AT&T whereby the nation’s largest telephone company was forced to demolish any cable efforts.66 In 1968, the FCC ruled that FCC permission was required in order for any telephone company to engage in cable television operation. In 1970, the FCC declared that telephone companies could not provide “cable television service to the viewing public in its telephone area, either directly, or indirectly through an affiliate.” The idea behind that decision was that telephone companies would attempt to create their own monopoly by preventing aspiring cable operators from using their telephone poles. As with most antitrust measures, the result was counterproductive—now there was no competition among cable companies.67

  Congress has ostensibly attempted to end such coordination between government actors and cable companies, but their action has been utterly feckless, leaving in place the regulatory regimes they so love. The 1992 Cable Act passed by Congress over President George H. W. Bush’s veto, for example, increased FCC control over cable companies, placing tremendous regulatory burdens on those cable companies in order to cure monopoly—all while leaving the monopolies in place. One of those regulations required the cable companies to pay for and carry local broadcast station signals. That regulation forced the FCC to decide which local broadcast station signals served the “public interest.” This led to ridiculous results—one 1993 FCC ruling decided that home-shopping programs served the public interest and had to be carried by the cable companies.68

  In 1994, the Supreme Court upheld the 1992 Cable Act based on the liberal desire to “ensure that private interests not restrict, through physical control of a critical pathway of communication, the free flow of information and ideas.” Justice Sandra Day O’Connor dissented convincingly, but not convincingly enough: “The First Amendment as we understand it today rests on the premise that it is government power, rather than private power, that is the main threat to free expression.”69 Liberals on the court overruled her, stating that the government could effectively restrict free speech so long as it had good intentions.

  The effect of monopolistic dealings between cable operators and government is devastating. Local cable operators remain dominant, with 68 percent of local consumers controlled by single local cable operators as of 2007.70 As of 2003, according to the U.S. Public Interest Research Group, vertically integrated programmers owned just “40 percent of the most popular programming,” but owned twenty-five of the top twenty-six channels in terms of subscribership and prime-time ratings (the lone exception was the Weather Channel). Eighty-six percent of regional sports fell under the ownership of the major cable companies, too. Just 2 percent of cable households have access to cable competition.71

  Consumers are the ones who lose when cable companies hold monopolies. Last year, for example, Cablevision, the cable operator for New York City, engaged in a knock-down drag-out battle with Fox because Fox wanted Cablevision to pay fees to carry its programming. Fox was blacked out for two weeks on Cablevision, preventing New York viewers from watching the live broadcast of the World Series. A few months earlier, Cablevision had blacked out ABC during contract negotiations, preventing the live broadcast of the Academy Awards. Cablevision, predictably enough, pushed for government intervention, hoping that the feds would force Fox to kowtow. Due in all likelihood to the nearing 2010 Congressional elections, the feds didn’t intervene. Cablevision was forced to pay Fox’s asking price, whining all the while. Fox pointed out that “this entire dispute was solely about Cablevision’s misguided efforts to effect regulatory change to their benefit.”72 Fox was absolutely right—Cablevision and other cable providers rely inordinately on government regulation to maintain their market share and profit margin.

  In fact, total deregulation of the system would serve everyone better. Government creates monopolies in order to control them; corporations are happy to go along for the ride, since they are guaranteed market share. This is corporatism at its finest, and the end result is that the American consumer pays the price, in terms of freedom of selection, higher pricing, and freedom from government-controlled messages on television.

  “SHOW ME THE MONEY”

  Beyond monopoly and restriction of competition, there’s another benefit that government hands over to Hollywood’s executive establishment—a benefit that Hollywood liberals are loath to admit they enjoy. That benefit is tax cuts.

  In 2009, Ohio’s Democratic Governor Ted Strickland offered a $10 million tax incentive for Hollywood moviemakers and television creators to film in the state. In 2004, Maryland and Pennsylvania (both blue states) waged an ongoing tax break race in an attempt to woo filming of the James Franco dud Annapolis. Wisconsin and New Mexico offer incentives to film- and television-makers to bring their cameras. During 2009, Texas considered tax rebates of up to $60 million to those filming in the state; in Michigan, such tax breaks cost the state $48 million in 2008.

  California, of course, is attempting to keep the film industry at home, carving out an enormous $500 million tax credit for Hollywood filmmakers. Los Angeles sought out a full-time film czar dedicated to keeping filmmakers in the city—and dedicated to lobbying Sacramento for more cash.

  At least when it comes to states, there’s an honest attempt to woo business. The federal government has no such excuse. Nonetheless, in the October 3, 2008, spending bill passed by a Democratic Congress and signed into law by President Bush, Hollywood received a $470 million tax break. President Obama’s stimulus package had a $246 million tax break for Hollywood in the first draft; only Republican blowback prevented it from becoming law.

  What ever happened to Hollywood’s complaints about George W. Bush’s tax cuts for the rich? “The rich,” apparently, is a label to be applied to a select group of Republican fat cats. It is never to be applied to Hollywood’s jet-set crowd. At least that’s the impression you’d get by looking at George Lucas, one of President Obama’s biggest financial supporters. He personally donated $50,000 to the Obama Inauguration Fund, as well as another $4,600 to Obama’s presidential campaign and another $28,600 to the Democratic National Committee—a whopping total of $83,200 during the 2008 election cycle. Obama campaigned on the promise not to raise taxes for those making under $250,000 per year; obviously implicit in that promise was the caveat that he would likely raise taxes on those making more than $250,000 per year.

  But that didn’t stop Lucas from complaining in the media when Obama actually pursued such taxes. He also suggested that it would be unfair for Obama to cap executive salaries in Hollywood, even as Obama capped executive salaries in other industries. “Hollywood isn’t asking for a bailout,” said Lucas. “So, you know, they are not using taxpayer money, and obviously the cornerstone of American capitalism is that you can make as much money as you want when you work for a company.”

  A praiseworthy sentiment, to be sure. Except that Hollywood has received government largesse, from tax cuts to beneficial regulation, at every turn. They just don’t want to be held accountable for it, even though they complain incessantly about the benefits “the rich” receive in America. Score another one for Hollywood’s limousine liberals.

  THE TELEVISION CANDIDATE

  If the relationship between the Obama administration and the television industry is hot and heavy, there’s a reason for that: The television industry made Obama. Never before has there been a candidate fêted, celebrated, and coddled like Senator Barack Obama (D-IL). Simply put, the television community loves him with the unmitigated ardor of a teenage boy watching his first episode of Baywatch.

  Even with President Obama’s approval ratings dipping precipitously, members of the Hollywood contingent stand by Obama with a fervid loyalty that can be described only as religious. When I visited the writers’ office of Lost, at ABC’s studio in Burbank, I walked in to find Carlton Cuse’s assistant wearing a T-shirt that mashed together the show’s imagery with Obama’s cult of personality. For those who aren’t Lost devotees, one of the key organizations in the Lost universe was t
he Dharma Initiative. This was its symbol:

  DHARMA

  Cuse’s assistant was wearing a shirt that had this insignia instead:

  OBAMA

  When I asked Cuse’s assistant where he’d gotten the shirt, he replied, “Damon [Lindelof, co-creator of the show] handed them out to everybody on the staff right before the election.” The shirt wasn’t the only contribution Lindelof made to the Obama run—he also donated $5,600 over the course of two years to the Obama campaign, as well as another $8,700 to the DNC Services Corporation during the 2008 election cycle.

  I didn’t bother asking whether anyone in the Lost office had been a McCain supporter. The fact is, as Barbara Fisher, vice president of original programming for Hallmark Channel, told me, if anybody wore a McCain T-shirt on the set of a show, they’d be treated far worse than if they wore an Obama shirt. “I’m sure that’s true,” she said. “You know what, that’s a real example. It’s a real example. There would be an uproar if it had been McCain. You’re right. I can’t deny it.”73 Here was a real-life example in action, although we can certainly hope that Mr. Lindelof would be tolerant of opposing viewpoints (I didn’t have the opportunity to speak with him).

  The Hollywood assumption couldn’t be clearer—if you’re working in this town, you must be an Obama supporter.

  And the assumption is almost universally correct. Of the dozens of people I interviewed, only a handful did not vote for Obama during the 2008 election cycle. Earl Hamner, creator of the family-friendly show The Waltons, had a JFK-like picture of Obama staring into the distance hanging from his wall. Hamner pointed at it and said, smiling, “My hero.” Nicholas Meyer, director of Star Trek II, Star Trek IV, and Star Trek VI, as well as the made-for-television blockbuster The Day After, had framed front pages from the Obama election day coverage lining the walls of his sizeable Sunset Boulevard estate. Gary David Goldberg, the man responsible for Family Ties and Spin City, was kind enough to meet me for coffee in Santa Monica, where he regaled me with Obama campaign stories. “I was deeply involved for Obama, went to work for him in Florida,” he gushed. “[My daughter] Cailin was in Nebraska in the one district that he won. We were in Florida, Cailin was in Pennsylvania. She started out as a Hillary supporter, a big feminist, but she made the turn, she really made the turn. And I love Obama—we met him here, big dinner, and I thought he’s the most gracious politician I’ve ever met.”74 I didn’t have the heart to suggest that Obama’s graciousness springs from the fact that he was at a fundraiser.