Democrats are aiming to scrutinize Murdoch’s $5B bid for Dow Jones

Media mogul Rupert Murdoch’s $5 billion bid for Dow Jones is striking some Democrats as an excellent oversight opportunity — but Murdoch’s archconservative politics, they add, are not the chief concern.

Although the prospect of the Wall Street Journal joining the Fox News Channel under Murdoch’s aegis has jolted the financial world, the public response has been muted from Democrats on the Hill and in the party’s grass roots. The lack of partisan outcry, however, does not mean that the new majority will let Murdoch escape scrutiny.

{mosads}“Fox News is a propaganda arm of the Republican Party,” said Sen. Bernie Sanders (I-Vt.), a Commerce Committee member. “But the fact that Murdoch is a right-wing Republican isn’t really the central issue here. The issue is media consolidation, and ownership of any company.”

The concentration of media holdings among a dwindling number of corporations recently has played second fiddle to “net neutrality” on Democrats’ communications policy agenda, but Murdoch’s eye-popping play for Dow Jones could bring media consolidation back to the forefront. The Federal Communications Commission (FCC) remains under court order to revisit its 2003 media ownership rules, which lawmakers in both parties have blasted as too loose.

Murdoch’s offer is unlikely to run afoul of antitrust rules at the Justice Department, analysts said. But Democrats can press the FCC to revisit the two ownership-limit waivers that it granted Murdoch in October. The waivers allow Murdoch’s News Corporation to own two local TV stations and one newspaper in the New York market.

Sen. Frank Lautenberg (D-N.J.) has long protested the waiver that gave Murdoch control of New Jersey-based WWOR-TV, successfully fighting Murdoch in 2004 to keep most of the station’s employees from moving to New York City. Lautenberg said he “would not be surprised” if Congress held hearings on the Dow Jones deal.

“I want to look at it,” he said. “The thing I want to be certain of is … if this isn’t a monopoly that prevents independent views.”

Lautenberg, who is also on Commerce, diplomatically called Murdoch “a daring fellow” for risking rejection by the Bancroft family, the majority owners of Dow Jones who have so far resisted his lucrative offer.

Commerce Committee member Sen. Maria Cantwell (D-Wash.) was more apolitical, avowing that her interest in a hearing is not partisan and noting that Murdoch lunched with the Senate Democratic Policy Committee in 2003.

“We should be having hearings about media consolidation in general,” Cantwell said, calling Murdoch’s bid “an example” of the industry’s trend toward waning diversity. “We haven’t really had an oversight hearing about how the broad dynamics have changed.”

Murdoch appeared confident of his position during an interview last week on Fox News. Asked whether he anticipated a backlash from Democrats opposed to the deal, Murdoch said: “I am not aware of that. I have good friends on both sides of the aisle.”

Democrats “are acting under pressure from outside organizations like MoveOn.org, who would like to marginalize us,” Murdoch added.

Andrew Schwartzman, president of the public interest law firm Media Access Project, said he believes Murdoch may have spoken too soon. Questions from Congress about whether controlling the Wall Street Journal would give Murdoch an improper foothold over the New York market, Schwartzman added, are highly appropriate.

“If I were a conservative, I’d be unhappy about going from two conservative voices to one on the editorial side,” Schwartzman said. “In terms of their editorial voices, Fox News and the Journal are a potent combination, and you’re talking about merging them.”

Schwartzman represents a local group that has joined Jesse Jackson’s Rainbow/PUSH Coalition in challenging the FCC on Murdoch’s New Jersey waiver. A source close to the FCC agreed that “the deal will, and it probably should” receive oversight attention from Congress.

“While the Wall Street Journal is considered a national newspaper, not a local daily per se, we also know that in New York City, the capital of financial markets, the Journal — the preeminent financial newspaper — has the second largest circulation,” the FCC source said. “That’s not by accident. So from that standpoint, the idea that [the deal] doesn’t have any impact at all and shouldn’t be factored into the FCC’s public interest analysis is questionable.”

Sanders and Rep. Maurice Hinchey (D-N.Y.) are putting the finishing touches on a draft bill that would stiffen limits on media ownership and restore the Fairness Doctrine, a mandate for media diversity that the FCC repealed in 1987. Hinchey praised the Bancrofts for fighting Murdoch, adding that Congress can certainly examine the deal should it proceed.

“Murdoch’s politics are his business,” Hinchey said. “But our business is to make sure that any one particular person’s politics are not allowed to dominate the information distribution system and not allowed to dictate ideas to the American people.”

Sanders framed the debate in terms appealing to both parties, describing current law as too lax on standards. “What is the responsibility of a network?” he asked. “Janet Jackson can’t take off her shirt, there has to be some children’s programming, and that’s it.”

Jessica Zufolo, a senior director at the independent Wall Street research firm Medley Global Advisors, said lawmakers have such sweeping concerns already with media consolidation that it would be difficult for any one deal to raise the stakes.

“This may just whet the appetite, but it can’t push people any further than they are,” said Zufolo, a former Democratic aide.

Democratic strategist and former Clinton White House aide Morris Reid had strategic advice for his party: Democrats should urge their wealthiest donors to make competing bids of their own for Dow Jones or risk losing political ground to an enemy.

“This is not about personally going after Rupert Murdoch, but it is about his politics, his track record, and looking out for your best interests,” Reid said. “It’s not in the interest of Democratic politicians and the Democratic establishment to let him get [the Journal].”