Abstract

"The “White Knights” of Showbiz: Junk Bonds & Leveraged Buyouts in 1980s Television"

Pete Johnson, The University of Texas, Austin (pete.johnson@utexas.edu)

Media industry historians often evoke terms like “deregulation” or “neoliberalization” and speculate on how the financialized state of contemporary media conglomerates derives from a series of policies initiated in the late-1970s and 1980s (deWaard 2020; Holt 2011). However, these histories often remain at the macroeconomic or policy level. Indeed, the mid-level manifestations of neoliberalism and financialization in the 1980s remain underexplored. This paper addresses these meso-level effects by looking at leveraged buyouts (LBOs) in the broadcasting and cable space from 1981 to 1987. In particular, it examines private equity firm Kohlberg Kravis Roberts’ (KKR) LBO of station group Storer Communication. Leveraging archival trade magazines, local newspapers, and equity analyst reports, I ask how three key stakeholders—the media industry, Wall Street, and local stations/audiences—responded to changing financial ownership. How did private equity and LBOs shape television industry practices, texts, and reception? How did media industries address finance (and vice versa)? Ultimately, I find that even though a small group of vocal activists and industry insiders remained skeptical, audiences and television professionals were generally ambivalent about Wall Street ownership—in fact, financial investors were preferable to erratic media moguls. While highly leveraged acquisitions of media firms (e.g., Twitter) and speculative junk bond financing (e.g., Netflix) remain prevalent today, this project draws critical attention to an earlier period of media financialization, when financial stakeholders invented and reinvented tools and tactics to monetize cultural products in a deregulated marketplace.

References

deWaard, Andrew. 2020. “Financialized Hollywood: Institutional Investment, Venture Capital, and Private Equity in the Film and Television Industry.” Journal of Cinema and Media Studies 59, no. 4 (Summer): 54–84.

Holt, Jennifer. 2009. Empires of Entertainment: Media Industries and the Politics of Deregulation, 1980-1996. New Brunswick, NJ: Rutgers University Press.