Why the Ellison Takeover of CNN Is Such Bad News for US Democracy

A CNN insider told Variety magazine on Tuesday that the mood inside CNN right now is “like a funeral.” Nepo-baby David Ellison, bankrolled by his father who’s one of the richest men in the world and a major Trump suck-up and donor (and is in the Epstein Files), is on the verge of taking over the company that owns the news network.

On Monday, California Attorney General Rob Bonta and a group of Democratic state attorneys general rolled over and agreed to stop trying to block the $111 billion takover of Warner Bros. Discovery, now to be almost 50% funded by right-wing dictatorships in the Middle East who’ve given billions in gifts, loans, and investments to President Donald Trump and his family.

California Gov. and presidential hopeful Gavin Newsom hailed the agreement, saying it would both protect California jobs and preserve CNN’s “editorial independence.”

First the strongman’s friends acquire the newsrooms, then the coverage softens, then the elections start experiencing “anomalies,” and by the time most people notice, there’s nobody left on the air to expose the oligarchs and fascists.

If you believe that, I’ve got a bridge for you in Brooklyn.

As The Lever reported Tuesday, the fine print tells the entire story.

Going forward, CNN and CBS will be overseen by an “editorial independence board” composed of people hand-picked by the Ellisons and their agents. When Rupert Murdoch took over The Wall Street Journal from the Bancroft family back in 2007, he ran the same scam, as CBS News then reported:

As part of the deal package that cemented Rupert Murdoch's longstanding effort to acquire Wall Street Journal publisher Dow Jones & Co., the two sides agreed to create an editorial board that would act as a buffer between the media mogul and the newspaper…

That worked out real well, right?

There are also squishy promises for movies and jobs that are not backed up with any meaningful enforcement mechanism, and all of Ellison’s commitments can be set aside via a force majeure clause that lets Paramount off the hook in the event of “strikes, labor disruptions, [or] economic recessions.” So, all Trump has to do is extend the Iran War another few months to crash our economy, and the oligarchs are free to do what they want!

And if that doesn’t happen, there’s still the sunset clause that ends all their commitments in five years. Lee Hepner of the American Economic Liberties Project called it “a countdown to a cliff.”

These are the same billionaires who handed Trump a check for $16 million to “settle” a frivolous lawsuit against "60 Minutes," then cancelled Stephen Colbert’s show days after he referenced that as a “big fat bribe,” then reportedly offered the Trump White House up to $20 million in free “public service announcements” and installed a Trump-humping “ombudsman” at CBS News to police “bias” at the network.

And the Federal Communications Commission (FCC), run by Trump’s favorite brown-noser Brendan Carr, has blessed Saudi Arabia, the UAE, and Qatar taking a 49.5% equity state in the new entity that will control 2 of the 3 most important news networks in America.

Don’t expect any future analysis of Saudi involvement in 9/11, critical exploration of what Trump gave up in exchange for a $400 million 747 jet, or the billions that have gone to Jared Kushner and the Trump boys, Uday and Qusay.

Because of momentous decisions made by Presidents Ronald Reagan and Bill Clinton, freedom of the press in America is now as much an economic issue as a political one. As I laid out in The Hidden History of Monopolies (with a foreword by Ralph Nader), when Reagan came into office 90% of the American media landscape was scattered among over 50 companies; now a mere five conglomerates dominate that 90% of the media Americans consume.

Reagan stopped enforcing the Sherman Anti-Trust Act (and others) in 1983, leading to the “M&A Mania” of mergers and acquisitions that characterized the late 1980s and 1990s. As a result, there’s not a single major industry in America that’s not dominated by a handful of companies that generally behave like cartels, and the average American family pays an annual “monopoly tax”—in additional costs for pretty much everything—of around $5,000, according to economist Thomas Philippon.

Cell phone service that costs $15 a month in France or $12 a month in Australia bills out at an average of $61.85 per month in the United States. High-speed broadband that’s a bit over $31 a month in France or $36 in Germany (for higher speeds and better reliability than almost anywhere in the United States) averages nearly $70 per month in the US.

Similar metrics are found with pharmaceuticals, airfares, and medical costs, among dozens of other product and service categories.

But it’s most deadly to democracy when it comes to the media.

Since Bill Clinton signed the Telecommunications Act of 1996—which eliminated most of the rules about how many outlets one family or company could own—oligarchic monopoly of the media has spread its cancerous tentacles into politics, as well, destroying the ability of government to make policy that allows free people to make their own decisions about their own lives.

As Teddy Roosevelt, the great trust buster, said:

There can be no effective control of corporations while their political activity remains. To put an end to it will be neither a short nor an easy task...

And as Adam Smith wrote, in Wealth of Nations,

...the monopoly which our manufacturers have obtained... like an overgrown standing army, they have become formidable to the government, and upon many occasions intimidate the legislature.

And this is no small project by billionaires who explicitly distrust democracy and want complete control over America and her people. I’ve seen how this works up-close and personal when a Republican billionaire came after a media business I helped start.

In 2003, Louise and I had sold our last business and were retired in Vermont; that Thanksgiving, we drove to Michigan to visit my family for the holidays and all the way there I kept tuning across the radio dial looking for an intelligent conversation to occupy my mind while driving. In city after city, all I could find was Sean Hannity.

The outcome of that trip was my writing the initial business plan for Air America Radio and starting the radio show I’m still hosting 23 years later as a “proof of concept.” We were leasing stations from Clear Channel and reached over 90% of America; many credited Barack Obama’s 2008 victory to our being on the air.

So, of course, billionaire Mitt Romney—with an eye to running for president in 2012—had his company Bain Capital buy up all of the Clear Channel radio stations and, one at a time, take us off the air until we didn’t have enough of a signal to make money selling advertising. The network died in 2010 (and Romney lost).

The people who own the media pipes, in other words, get to decide what flows through them.

Remember when Uber was offering rides for half the price of taxis, until they’d put so many of the taxi companies out of business? Or Walmart offering goods at little to no margin just to drive local competitors out of business? Monopolists and wannabe monopolists understand exactly how this works.

While Rupert Murdoch reportedly lost an average of $80 to $90 million a year for about five years before Fox News turned a profit, he never viewed that as a loss: It was an investment. Economists Stefano DellaVigna and Ethan Kaplan later did the math and found that Fox News succeeded in shifting 3-8% of its audience toward the Republican Party, which in Florida alone in the 2000 election was worth more than 10,000 votes for George W. Bush in a state he carried by fewer than 600.

Had there been no Fox “News,” in other words, there would have been no war in Iraq or Afghanistan, and thousands of Americans and millions of Iraqis and Afghans would still be alive. And there would have been no Bush tax cuts, so our national debt would be nowhere near so bad. And Al Gore would have done something about the environment.

This is critical stuff: No democracy can survive the assault of what Thomas Jefferson referred to as “an artificial aristocracy founded on wealth and birth, without either virtue or talents” when only one family or political perspective dominates the media.

Franklin D. Roosevelt—the Bernie Sanders of his day—saw all of this coming. On April 29, 1938, in his Message to Congress on the Concentration of Economic Power, he told the country what fascism actually is:

The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism—ownership of government by an individual, by a group, or by any other controlling private power.

FDR understood that when a monopolized industry gets big enough, its main rival then becomes the government itself because only the government has enough remaining power to break it up. Adam Smith made the same point in Wealth of Nations in 1776, writing that the East India Company and its allies had, “like an overgrown standing army,” become “formidable to the government” and could “intimidate the legislature.”

The simple reality is that in every country that’s slid from democracy into strongman rule over the past half-century, the first step was capture of the media by friends of the regime.

• Four days after Vladimir Putin was inaugurated in May, 2000, ICE-like masked agents raided the offices of Media-Most, the company that owned Russia’s largest independent national TV network (NTV). They threw its owner, Vladimir Gusinsky, in prison on fraud charges and confiscated his stake in Gazprom, then took over the network with the deal finalized in April of 2001. That same year Boris Berezovsky was forced to sell his share of the ORT network to Roman Abramovich, a fellow oligarch but one who’d pledged his total loyalty to Putin. Within a few years, every national channel in Russia was in the hands of the state or a Putin-friendly billionaire, and still are.
• Viktor Orbán’s people were slightly more sophisticated in 2018, having his oligarch buddies buy up media properties after he sued dissenters into bankruptcy by claiming libel. By the following year, the media monitor Mérték estimated that 77.8% of Hungary’s news media was directly or indirectly controlled by Orbán’s party, which is why when Péter Magyar successfully ran against Orbán he had to visit virtually every city and town in the country to get around the media blackout on his candidacy.
• In Egypt, Abdel Fattah el-Sisi was less elegant in his approach to the media. He had his version of the FBI—the General Intelligence Service—use a front company called Eagle Capital to buy up virtually every TV network, radio station, and newspaper in the country. Reporters Without Borders found that a dozen once-powerful media owners were pushed to sell to intelligence-linked companies, while the handful of businessmen who backed Sisi got to keep theirs. The spy agency’s media group now owns the ON, CBC, Al-Hayah, and DMC networks, and those Egyptian journalists who dared criticize the regime all went to prison.
• Rodrigo Duterte in the Philippines used regulatory power the same way Trump lickspittle Brendan Carr’s FCC does. The country’s largest newspaper, the Philippine Daily Inquirer, was forced to sell to a billionaire Duterte ally under threat of imprisonment for breaking “media rules.” Duterte’s right-wing buddies in Congress then refused to renew the broadcast franchise of ABS-CBN, the nation’s biggest network, which had made the mistake of exposing the extrajudicial killings of his so-called drug war. Eleven thousand people lost their jobs, and Nobel laureate Maria Ressa’s little opposition newspaper The Rappler was ordered shut.

Almost without exception, this is the process autocrats use to destroy democracies, as documented brilliantly by people like Timothy Snyder and Ruth Ben-Ghiat.

First the strongman’s friends acquire the newsrooms, then the coverage softens, then the elections start experiencing “anomalies,” and by the time most people notice, there’s nobody left on the air to expose the oligarchs and fascists.

As Thomas Jefferson wrote in 1786:

Our liberty depends on the freedom of the press, and that cannot be limited without being lost.

So, here we are. Bonta and Newsom have caved, and only the attorneys general of New York, Connecticut, Massachusetts, and Minnesota tried to hold out. You may want to call your own state attorney general and ask where they were on this case; you should be able to easily find their number with a quick internet search.

We should also contact our members of Congress (202-224-3121) and demand hearings on the FCC’s corrupt behavior, restoration of our anti-trust laws, and a return to the media ownership limits that Clinton blew up in 1996.

And please share this piece and hartmannreport.com with anyone who still thinks it can’t happen here. It has already happened everywhere else that’s seen their democracy disintegrate, and the first thing to go into oligarchic hands was always the news.