The Economics of Monomedia and Cross-Media Expansion: A Study of the Case Favouring Deregulation of TV and Newspaper Ownership in the U.K

Since the early 1990s, regulators across the globehave faced increasing pressure from media firms toliberalise domestic media and cross-media ownershiprestrictions. Based on empirical research carried outin the U.K., this paper examines the ``economic'' case putforward in favour of deregulation. Findings suggestthat, although factors other than size will affectperformance, there is generally a strong and positivecorrelation between the market share and the operatingprofitability of firms involved in either televisionor radio broadcasting or newspaperpublishing. But, with regard to cross-media ownershipof television and newspapers, there is nocompelling evidence that diagonal integration bringsabout inherent synergies, economies of scope or othereconomic benefits. Thus, whereas a variety ofeconomic efficiency gains may be available to justifya relaxation of restrictions over monomedia expansion,few such benefits can be found in support ofderegulating cross-ownership of television andnewspapers. Copyright Kluwer Academic Publishers 2000