Traditional news networks face rough times
This isn’t a good time to be a traditional broadcast news network. Donald Trump seems to be winning victory over victory against them.
ABC News, owned by Disney (NYSE:DIS), agreed to the settlement of a defamation suit, requiring it to hand over $15 million to fund Trump’s presidential library. It did so because anchor George Stephanopoulos said Trump was liable in a civil rape case, when actually it was sexual abuse.
Trump also sued CBS for $20 billion, because it didn’t air a Kamala Harris interview in full. Trump alleged that the editing was politically biased. The Federal Communications Commission ordered the network to hand over a video and a transcript of the interview. CBS complied, and the FCC released the video to the public.
It’s unclear whether CBS will settle the lawsuit with Trump. CBS owner Paramount Global (NASDAQ: PARA), wants to sell itself to David Ellison’s Skydance Media. And the Trump administration can obviously scuttle that deal if it wants. So the president has leverage.
The Trump administration also has kept some mainstream media out of press conferences and briefings, bringing in more conservative journalists instead.
Furthermore, in a possible move to placate Trump, CNN — owned by Warner Bros. Discovery (NASDAQ: WBD) — was going to move Trump-antagonist anchor Jim Acosta from his 10 a.m. slot to midnight, before he quit last month.
Nixon sets a precedent
Trump isn’t the first president to try to restrain the media. The Richard Nixon administration hit the major broadcast networks — ABC, CBS and NBC, now owned by Comcast (NASDAQ: CMCSA) — in 1973, threatening to revoke their broadcast licenses if they didn’t provide more favorable coverage of the president. The effort succeeded.
Returning to the present, it’s unlikely news networks are in much of a mood to challenge Trump. Through the FCC, he controls their broadcasting licenses, and other executive agencies must approve mergers. So the networks don’t have much to gain by resisting.
Whether the mainstream news networks lose viewers by caving to Trump remains to be seen. Given his popularity, they may even gain viewers.
While ABC, CBS, CNN and NBC are important elements of the companies that own them, it’s not clear that the networks would influence the companies’ stock price unless something very big happens.
