volokh at mail.law.ucla.edu
Mon Oct 29 18:46:32 PST 2001
I don't think that this supposed "censorship" by acquisition is going to
work that well, even if it's really subtle: Whether or not the takeover is
seen as creating an editorial policy shift from the get-go, investors --
either private or in a stock offering -- will soon enough see that some
viewpoint, which has some potential market, is no longer being sufficiently
catered to. If they calculate that there's money to be made with a new
magazine that's more like The Nation or The American Spectator, rather than
within the Washington Post-to-Wall Street Journal range, then they'll invest
in it. And if someone takes over this new left-wing/right-wing magazine
relatively quietly but then moves it to the center, investors will again see
that there's money to be made with a new magazine that serves this niche.
(Alternatively, if the original magazine wasn't the product of
money-conscious investors, but just of an ideologically committed publisher,
then the publisher can just take the money he's made by selling out and
start a new magazine, unless he, despite his ideology, has signed a
Of course, it's possible that there isn't any money to be made with such a
magazine, because there aren't enough people who are willing to pay money
for a magazine with those views. Then there'll be less likely to be such a
magazine. But the absence of the magazine will come from the fact that
there's not enough of a likely paying audience for this viewpoint, and NOT
from the fact that past magazines serving this juicy, profitable audience
were all bought up by "censors."
> -----Original Message-----
> From: Discussion list for con law professors
> [mailto:CONLAWPROF at listserv.ucla.edu]On Behalf Of John Noble
> Sent: Monday, October 29, 2001 2:11 PM
> To: CONLAWPROF at listserv.ucla.edu
> Subject: Re: purchased silence
> The suggestion that censorship by private capital would put a premium on
> censorable viewpoints assumes that censorship by acquisition is explicit.
> Jerry Falwell is not going to lead a buy-out of Hustler for the explicit
> purpose of shutting it down because no one is going to invest in shutting
> down the cash flow. Looking at the issue in the context of
> suppressing porn
> does not take you very far because porn is a commodity for which
> there will
> always be a market and plenty of producers. Other kinds of speech are not
> so fungible.
> The distinction here is that the news-stand newspaper grab is a public
> protest (and ineffective to boot), while the capture of speech by
> is discrete (and pretty effective). It also is not particularly
> hypothetical -- editorial policies are finally controlled by editors
> answerable to owners, and if the editors offend the owners they will be
> yesterday's editors. It is no accident that publicly owned media outlets
> represent a range of opinion bounded by the Washington Post and the Wall
> Street Journal. Consider for example a Post-Newsweek acquisition of a
> privately held publisher with a portfolio of 50 periodicals that
> includes a
> sustainable, modestly profitable, but radical periodical like the old
> Ramparts. Post-Newsweek is going "redefine" the publication if they don't
> drop it like a hot potato. The viewpoints expressed in that publication
> might find a new home, but in an increasingly concentrated media industry
> that becomes increasingly difficult.
> I agree that antitrust law does not typically take into account the
> preservation of competition between opposing viewpoints, and as I
> there would be significant 1A problems if it tried to. The tension between
> regulatory efforts to preserve diverse sources of information and opinion
> vs. free speech are illustrated by the cases in which FCC rules like the
> must-carry or leased-access requirements are challenged by the cable
> industry on 1A grounds. My real point was that purchased silence
> might be a
> greater and more intractable problem than stolen speech.
> John Noble
> At 7:25 PM -0800 10/28/01, Volokh, Eugene 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
> >>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
> >>> 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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