Foundation for National Renewal     The "Model Constitution" Activity

Federal Election October 2004: Which Candidates Trust the People?

There is little doubt that one of the most powerful influences on our society is the mass media. Television and radio beamed directly into most households and mass circulation newspapers set the public agenda and shape our thinking more than does government, the courts or any other institution in our society. In fact, it often appears that the mass media is more influential in setting the government’s agenda than is the real needs of our society.

However, it is a fundamental tenet of our society that freedom of expression is paramount among the many freedoms we hold dear. It is therefore not an option to contemplate “control of the media” as a means of somehow ensuring that the vast influence of the media is always directed towards the public good.

Most media outlets are a business. They are in business to make a profit. The performance of those businesses (and the people who work in them) is judged on the profitability of the business and that in turn is governed by “customer satisfaction “ with the product.

Much as we might disagree with various Editors’ ideas on what should and what should not be included and made prominent, in the end it is the their decision. They are held accountable to their business for “getting it right” in terms of selling the product. It is not their concern what “should” be included or excluded. Unfortunately, it is often the case that what “shouldn’t” be broadcast is in fact what sells best.

There is widespread consensus that, if only we could “control” the media, we could foster a much “better” society. That is to say, if only there was some way to ensure that the media only broadcast what was in the best interests of society, we would all be better off.

The aim of this Task then, is to seek your views on how best this might be achieved. From my research prior to writing these Tasks, I usually form some idea of what might be a reasonable answer. In this particular task, I have arrived at no such enlightened conclusion. But perhaps there is someone in the Foundation who has an answer.

In considering this Task, Members are encouraged to research widely. In addition, consider the following articles.

The first is from an Internet debating forum.

“It seems to me that the media is the key to the problem, as Mary implies by lamenting the decline of journalism and Michael by including the article by Bev Conover, but I do not share BC’s optimism that we can counter the media's anaesthetic effects by posting fliers at bus-stops and striking up conversations in queues. As I see it, we absolutely need the mainstream media’s support if we’re to have any hope of initiating the necessary sea change, the revolutionary shift in perception and direction, in society. But that’s where I run into a brick wall. How on earth can we swing the mainstream media around? The only thought I have is to maybe work on individual journalists, or groups of them via their unions and associations.”

And this one:

“Your news is at the mercy of corporate interests.”
By Richard Ackland June 25, 2004

The delegates to the Australian Broadcasting Authority's Canberra conference over the past two days had the benefit of an earful of this columnist's views about the increasingly potent role played by institutional investors in the direction of media companies.

This is not simply confined to the province of investors choosing directors or the determination of executive share options, but potentially extends to influencing the selection of editors, program managers, news directors and ultimately editorial content itself.

You can see the messages all around us. Shares in Fairfax rose as much as 13 per cent over a month after the company announced not only a profit upgrade but also redundancies for journalists and the departure of Fred Hilmer. This is the sort of encouragement management gets from the market.

David Gyngell in his new job at the Nine Network suggested in an interview that after spending 85 per cent of his time on programming and advertising sales he'll then have "the joy of sitting more often with fund managers as they tell me what numbers Nine should be achieving".

It would be fascinating to know what goes on in these discussions. Do they make suggestions about how to get the numbers; do they say we think you should replace Jim Waley with Maria Venuti or Annalise Braakensiek?

To what extent now are editorial content decisions being run past the bloodless denizens of funds management?

It was the New York fund manager Tweedy, Browne who led the charge to get rid of Conrad Black from Hollinger. Black and his wife are alleged to have been gouging the shareholders' funds, even to the extent that Lady Black's tips to the doorman at Bergdorf Goodman were charged to the company.

So Tweedy, Browne in that case did no bad thing blowing the whistle in order to protect investors' money. Interestingly, it then used its 5 per cent stake in the Trinity Mirror Group in England to get rid of Piers Morgan, the editor of The Daily Mirror.

English newspaper reports say that the fund manager let it be known to the CEO of Trinity Mirror that it was unhappy that the editor had published the photos allegedly showing abuse of Iraqi prisoners by British troops.

Tweedy, Browne had already warned management that if the snaps turned out to be fakes the paper's "brand" would be damaged. Other institutional investors who expressed their displeasure over the photos included Isis Asset Management, with 4 per cent, Deutsche Asset Management and Fidelity.

Tweedy, Browne had earlier complained to Mirror management about the paper's opposition to the war in Iraq. The combination of that opposition and fact that the photos did prove to be bogus was enough to see the editor off.

Ostensibly, the basis for the exercise of this power by institutional investors is the protection and promotion of the stock price, a priority that is pretty well insensitive to journalism's guardianship of, or duty to, informing the public.

In the marketplace of capital, that guardianship has no more importance than if the product was tinned pineapple, rather than news. This is the process which, steadily, surely is leading to the commodification of journalism.

A fascinating bellwether is the proposed wholesale purchase by Macquarie Bank of Reg Grundy's RG Capital Radio. Macquarie's plan is to put the radio network into a trust and the management into a separate company that charges the trust fees to be paid out of the business.

As Alan Kohler explained in the Herald this month, to meet Macquarie's fee on top of all the other costs, one or more of the following has to happen: there has to be growth, advertisers will have to pay more, employees and supplies will have to be paid less, investors who fund the takeover will have to get lower dividends.

No one could suggest that RG Capital Radio's 35 stations are at the forefront of investigative journalism, but this is a beginning. What is likely is that more assets will be added to the Macquarie Media Fund, because the bigger the market capitalisation the bigger the fees.

Markets have made managers and proprietors nervous, risk averse and susceptible to pressure. One such pressure comes in the form of operators like Richard S. Levick, the American guru of "stop press" techniques.

He claims to be able to make investigations of unattractive corporate conduct by journalists "go away". His latest book, Stop the Presses: The Litigation Desk Reference, is the new bible of how pressure can be applied.

If this sounds a bit remote from our experience, then consider again. The advertised guest speaker at an Australian Corporate Lawyers' Association jamboree last month was Richard S. Levick. Free copies of his book were available to those who attended.

Richard Ackland addressed the annual conference of the Australian Broadcasting Authority this week.

This article is on a slightly different tack.

Corporate influence on the Media

In the case of most large listed companies, non-institutional shareholders only receive information about the company from the board through the Communications Department or through the press. The press, then, is critical to a working corporate governance process.

I would be interested if the debate were to address the role of the media with respect to the article in today's Sydney Morning Herald regarding corporate influence on the media: http://www.smh.com.au/articles/2004/06/24/1088046221538.html?from=storylhs

The article said, amongst other things that ...

"[Richard S. Levick] claims to be able to make investigations of unattractive corporate conduct by journalists "go away". His latest book, Stop the Presses: The Litigation Desk Reference, is the new bible of how pressure can be applied.

If this sounds a bit remote from our experience, then consider again. The advertised guest speaker at an Australian Corporate Lawyers' Association jamboree last month was Richard S. Levick. Free copies of his book were available to those who attended..."

I consider interest in this response to media criticism of corporate governance very disturbing ... not surprising, disturbing.

The following article is from the USA. However, given the ever-closer ties between our two societies, it also could be relevant to our debate.

On February 14, a Florida Appeals court ruled there is absolutely nothing illegal about lying, concealing or distorting information by a major press organization. The court reversed the $425,000 jury verdict in favour of journalist Jane Akre who charged she was pressured by Fox Television management and lawyers to air what she knew and documented to be false information. The ruling basically declares it is technically not against any law, rule, or regulation to deliberately lie or distort the news on a television broadcast.

On August 18, 2000, a six-person jury was unanimous in its conclusion that Akre was indeed fired for threatening to report the station's pressure to broadcast what jurors decided was "a false, distorted, or slanted" story about the widespread use of growth hormone in dairy cows. The court did not dispute the heart of Akre's claim, that Fox pressured her to broadcast a false story to protect the broadcaster from having to defend the truth in court, as well as suffer the ire of irate advertisers.

Fox argued from the first, and failed on three separate occasions, in front of three different judges, to have the case tossed out on the grounds there is no hard, fast, and written rule against deliberate distortion of the news. The attorneys for Fox, owned by media baron Rupert Murdoch, argued the First Amendment gives broadcasters the right to lie or deliberately distort news reports on the public airwaves.

In its six-page written decision, the Court of Appeals held that the Federal Communications Commission position against news distortion is only a "policy," not a promulgated law, rule, or regulation.

Fox aired a report after the ruling saying it was "totally vindicated" by the verdict.

Then there is this extract from an interview with Peter Lewis, Speaker of the South Australian Parliament by Davydd Williams.

Most readers will be unaware of the fact that a Constitutional Convention was held in Adelaide in August 2003. The reason for the widespread ignorance about such an historical and important event is that the Convention was largely ignored, both by party politicians and by the media.

‘The media was deliberately obstructive’, said Peter Lewis, the man who was responsible for the Convention being established and funded by the Government.

‘The media likes things the way they are’, he said, ‘with politicians and journalists deciding how things should be, to the exclusion of everyone else, particularly citizens, who are too hard to control’.

There is no doubt that the most damaging division in Australian society is not between the rich and the poor; between those east of the Great Dividing Range and those to the west of it; between the cities and the coun­try; between the industrious and the parasite; between those who produce and those who consume; between those who are proud of their history and those who are ashamed of it - although these are significant divisions in themselves. The most damaging division of all is between those who are able to exercise effective politi­cal participation - the politicians, political staffers, jour­nalists, some academics, party hacks, senior bureaucrats and union leaders - and the rest of us, who don’t matter much to the others.

According to Peter Lewis, that this is so reflects the failure of people generally to be politically involved un­less they suffer some direct personal injustice that serves as motivation for activism.

‘People accept the system as it is instead of challeng­ing it,” he said. ‘Until they are negatively affected they neglect to take an interest. This is dangerous because politicians are utterly indifferent to the plight of citizens unless they are put under pressure at the local level.’

 Relying on the media to keep politicians accountable is a futile exercise, according to the Speaker.

‘The media is not about information, but entertain­ment and profits,’ Mr. Lewis said. ‘Political coverage is mainly concerned with reporting disputes between jour­nalists and politicians on political issues. It is the private interest taking precedence over the public interest.’

 

All the above illustrate a situation with which we must deal. We might not get it right but we must try for a better outcome than is apparent within the current situation.

Purely as a basis for discussion, the following is offered as an attempt at what might be incorporated in the first draft of our Model Constitution.

The Media

This constitution recognises the vital part that the media plays in Australian society.

While enshrining “freedom of the press” and refraining from any tendency towards censorship, this Constitution places the following obligations on the media:

1. In deciding what to broadcast and what to make prominent, media outlets, editors and journalists shall put first the best interests of the society.
2. Media outlets shall strive to be fair and equitable and to present more than one side of any topic.
3. Media outlets shall devote a significant proportion of any article or programme to publicise what our Parliament is trying to achieve so as to promote informed debate.
4. Media outlets shall not broadcast that which they know to be false or misleading.
5. Media outlets shall declare their interest in cases where it is the intention of that particular outlet to promote a particular point of view.

To promote and oversee these obligations on the media there is established by this Constitution the Australian Media Commission.

The Australian Media Commission is to:

1. Licence authorised media outlets
2. Promote balanced media coverage
3. Promote media coverage that “is in the public’s best interest”
4. Investigate complaints
5. Impose sanctions on any media outlet that contravenes this Constitution.

The Australian Media Commission is a full-time public body established by this Constitution and is to consist of 11 eminent Australians. Namely:

1. A chairman appointed by the Parliament
2. A person appointed by an association of commercial print media
3. A person appointed by an association of commercial radio stations
4. A person appointed by an association of commercial television stations
5. A person appointed by an association of non-commercial radio stations
6. A person appointed by an association of non-commercial television stations
7. A person appointed by a non-commercial print media association
8. A person appointed by the Information Technology Industry
9. Three persons from society not connected with the media industry appointed by ‘non-party-political’ NGOs identified by the Chairman.

Appointments are to be for a period of not more than three years.

Community based watchdog bodies in the regions are encouraged and are eligible for modest public funding.

Council powers and procedures:

1. The council is to sit in plenary session at least once per week.
2. Complaints are to be investigated promptly but shall not be the only basis for investigation and action by the commission.
3. Because ownership and management of media is largely in commercial hands, the commission shall have the power to impose sanctions. Fines, cancellation of licences and bans on the import of printing equipment, broadcast equipment, etc and the laying of charges of “un-Constitutional behaviour” against the owners, editors and journalists are all within the powers of the Australian Media Commission.

 

Task 33 - The Media

With this task you are asked to consider the influence media outlets have in our society. The primary problem is to decide whether or not the society as a whole should have an influence over what the media publishes; if the society is able to exercise such influence without destroying “freedom of the press”; and if so, how would that best be done?

You are asked to answer the following questions.

Do you consider that the influence the media has on our society is detrimental or potentially detrimental to our society?__________________________________

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Should society make any attempt to influence what the media broadcasts?_____

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Should “control” of the media be included in our Constitution?_______________

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Do you consider the proposal in paragraphs 14-21 above suitable for inclusion in the first draft of our Model Constitution?____________________________________

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What modification to the proposal in paragraphs 14-21 do you suggest?_______

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Can you suggest a possible alternative to that in paragraphs 14-21? (Please attach a separate page if necessary.) _________________________________

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Last updated: 3 May 2006