purchased silence

[Lynne Henderson]

I disagree that purchase of major media won't influence the product.  Just
look at the influence Rupert Murdoch has had on the newspapers and networks
he's purchased.  As for pornography, yes it is a lucrative
business--*the*most lucrative Net business, but nonetheless Yahoo dropped
access to porn sites when it was trashed for opening up on that front.
Lynne

At 07:25 PM 10/28/2001 -0800, you wrote:

>         1)  I'm no antitrust expert, but I'm not sure how any of these
> are antitrust violations.
>
>         2)  Say a company is willing to publish Frank's
> magazine.  Someone buys Frank's company to "silence" the magazine for a
> few million dollars.  Now the former owners of the company have these few
> million dollars, and Frank comes to them and says:  "Look, you were
> willing to publish my magazine before; you made a nice chunk off change
> from it; why don't you start a new company with these few million
> dollars, and we'll publish the magazine again.  In the best case
> scenario, we'll get another hostile but profitable buyout.  But if the
> guy doesn't buy us out again, you'll be doing what you were willingly
> doing before -- publishing my magazine."  That's why I say the "buy it
> up" scenario is pretty much self-limiting and unlikely to actually
> silence much.
>
>         3)  More generally, if companies -- from a magazine publisher for
> CBS -- that produce speech X tend to become takeover targets, this will
> generally (though admittedly perhaps not immediately) *increase* the
> production of speech X, because investors will recognize that if you
> invest in X, you'll get the premium associated with these sorts of
> buyouts.  This is true if speech-X-producers are in demand because
> consumers like X or because the buyers hate X.  One way or another,
> investing in speech-X-producers becomes more profitable; either new
> speech-X-producers will start up, or other companies will shift to producing X.
>
>         To given an example, let's say that Jerry Falwell announced that,
> armed with funds from some Christian gazillionaires, he's going to buy
> Hustler (assuming it's publicly traded) and shut it down.  Investors
> would see that investing in pornography is an even more lucrative
> business than they had thought, so they'd invest *more* in pornography,
> thus creating more and more appealing pornography.  (At worst Falwell
> will announce "No, I'm taking over Hustler and I'm stopping there," in
> which case there won't be such a positive effect, but there won't be much
> of a negative effect, either, because the former Hustler investors, who
> presumably are happy to invest in porn, would have no qualms about taking
> their profits and reinvesting them in Larry Flynt's new porn enterprise.)
>
>         This is obviously a somewhat stylized story, and there are likely
> to be some glitches along the way, because the market isn't perfectly
> competitive -- though it is quite competitive, and has gotten more so in
> recent decades -- and therefore there might be some delay before a new
> company can fill Hustler's old niche.  Also, copyright law, which I fully
> admit is a speech restriction, may take some intellectual property off
> the market permanently.
>
>         But generally, I think these mechanisms will in the aggregate
> work quite well, which is one reason why buying up media enterprises to
> silence them isn't a very good bet.  Any conservative who tries to buy up
> the L.A. Weekly or the Nation -- and even if they aren't publicly traded
> (I don't know whether or not they are), I suspect the owners will have
> *some* price -- will quickly realize that he's spent a lot of money and
> hasn't really shut up the ideas he wants to shut up.
>
>         None of these mechanisms would operate when people can just
> destroy, say, the L.A. Weekly's papers rather than buying them up, or
> buying up the company.  Investing in companies that get bought up is a
> good bet, so when companies that produce speech X get bought up, the
> result will be more investment in producing speech X.  Investing in
> companies whose product is seized and destroyed is a bad bet, so when
> newspapers containing speech X get thrown out, the result will be less
> investment in producing speech X.
>
>         Eugene
>-----Original Message-----  From:   John Noble
>[SMTP:jnoble at DGSYS.COM]  Sent:   Sunday, October 28, 2001 6:03
>PM  To:     CONLAWPROF at listserv.ucla.edu  Subject:        purchased silence
>
>But Frank is on to something in pointing out that it is silencing
>speech,  not theft of property or infringement of an implied license, that
>is the  speech interest at stake. Alter the hypo and consider a guy with a
>few  million dollars who purchases the company that publishes Frank's
>small  magazine in order to silence it. Or an investment syndicate,
>discretely led  by the same bunch that back Bush (or the same bunch that
>back Taliban),  making a tender offer for a majority of the publicly held
>shares of CBS  because they are unhappy with its coverage of the war.
>Hardly  self-limiting, very effective, and perfectly legal, with none of
>the  side-effects of casting a spotlight on the offending speech or the
>public  offense against freedom of speech.
>
>The point only reinforces the argument that the speech interest attaches
>to  the property interest, and might be enforced under a property law
>regime,  but it suggests questions. Does the attachment need
>reinforcement. Is there  a need to protect against purchased silence as
>much or more than stolen  speech. Does the law provide a framework
>(antitrust?), and does the First  Amendment accommodate a framework, for
>protecting speech from being  silenced by acquisition as well as
>dispossession.
>
>John Noble
>
>At 4:06 PM -0500 10/28/01, Eugene Volokh wrote:  >        (1)  The conduct
>that Frank describes is much more self-limiting than  >throwing out a free
>newspaper's press run.  >  >        (2)  Beyond this, it is much less
>effective of a tool for denying  >people  >access to the story, since the
>publishers can simply take the income from  >the issue and reprint and
>redistribute it -- and can keep doing it so long  >as people keep
>buying.  >  >        So it seems to me that the analogy isn't that
>powerful.  >  >Frank Cross writes:  >  >> While my gut instincts tell me
>that the taking of an entire run of free  >> papers is theft, I'm finding
>it hard to defend.  Consider the following,  >> concededly not terribly
>realistic, hypo:  >>  >> Imagine a small magazine that thrives on
>newsstand sales, without  >> subscribers (or relatively few).  The
>magazine is about to publish a  >> shocking expose of a congressperson,
>company, etc.  A well-heeled  >> organization purchases all of the
>newsstand copies.  Dubious action, with  >> similar free press issues, but
>certainly not theft.  >>  >> In a sense, even free papers are
>"purchased."  The acquirer must make the  >> effort to visit the
>distribution site, pick up a paper, and carry it off.  >> I think the
>conduct at issue here is similar to the purchaser of  >> all copies  >> of
>the expose.

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