Belo b-ball buy sparks

By: Lucia Moses

controversy in Dallas

When Dallas-based Belo, parent of The Dallas Morning News, bought a $24-million minority stake in the Dallas Mavericks basketball franchise and a planned sports arena, some reporters complained of an appearance of a conflict of interest.
The grumblings became public when a message posted by three reporters on the News’ internal electronic message board was leaked to the alterna-
tive Dallas Observer, which printed it. News executive editor Gilbert Bailon scolded the reporters for airing their grievances in such a format and maintained that the deal won’t affect coverage.
“Ownership does make covering the arena more tricky, but fair coverage is very possible,” Bailon writes on the same message board, noting that the guidelines for covering the arena remain the same as for any story.
Belo chairman Robert W. Decherd told the News that the deal is purely a business decision and a way to position the company to get access to sports programming. Other stations have contracts for the Mavericks’ broadcast rights, but it’s possible Belo could get programming for its TV stations in the future.
In dollar terms, the $24-million investment is small potatoes for Belo, which earned $233 million from operations in 1998 on revenues of $1.4 billion. In addition to the News, the company owns The Providence (R.I.) Journal and six other dailies, as well as 17 network-affiliated TV stations.
Executives at Hillwood Development Corp., which is chaired by Ross Perot Jr. and is the majority owner of the Mavericks, say the Belo deal is a typical example of corporate ownership of sports teams. “The whole sports business is revolving more and more around what’s going on in the media,” Hillwood CEO Rick Patterson says. “These are big professional organizations, and they do this all the time.”
Patterson says he expects Belo will help the team set a long-term strategy, nothing more. “You have a fiduciary responsibility not to have a conflict of interest.”
Others bristle at the suggestion that the paper’s integrity is compromised. “What Belo Corp. does really has no effect on what we as news reporters do,” says Dave Smith, executive sports editor. “We’re going to cover the Mavericks the same way we always have.”
Naysayers contend the deal is especially disturbing in light of what they allege is the News’ poor track record in covering certain high-profile issues. Belo gave money supporting two controversial campaigns, one for a tax to build the new sports arena, another for a bond issue for a local river development project. Both issues narrowly won voter approval. In 1998, some reporters protested what they believed was watered-down coverage of the river bond issue.
The Mavericks deal, critics say, affects not only sports coverage, but the arena and a major local development company, both frequent newsmakers.
Laura Miller, a Dallas City Council member and former News reporter, called Belo’s decision to invest in such high-profile entities “irresponsible and arrogant.” Miller says she left the News in part because she wasn’t allowed to do certain investigative stories and says the paper has grown more arrogant since its competition, the Dallas Times Herald, folded. Of the argument that the investment is just business, she says, “I just consider the newspaper to be a little different from the widget.”
The paper’s defenders point out critical stories that the News has published about the same pet projects, and deny that there has been interference. Reporter Richard Alm, who wrote the story announcing the Mavericks deal, says, “Nobody told me what to write, and nobody changed what I wrote after I wrote it.”
Harold Gaar, Belo’s vice president for financial and investor relations, says reporters face ethical considerations all the time when they write about the News’ advertisers. “An advertiser that spends $5 million to $10 million a year has a far greater impact than the potential return from the [Mavericks] investment,” he says.
Lois Finkleman, another Dallas City Council member, admits she was surprised to hear about the deal in light of the controversy surrounding the arena. But she says the News deserves a chance to show it won’t compromise its coverage.
On Aug. 12, the News came back with a follow-up story about the controversy surrounding Belo’s investment, evidence that the Dallas debate doesn’t look like it will be going away soon.
Being a media team player
Sports investments by media companies aren’t new. The Walt Disney Co., parent of the ABC TV network, owns the Angels baseball team and the Mighty Ducks hockey team, both in Anaheim, Calif.; the Tribune Co., which publishes the Chicago Tribune, has the Chicago Cubs; and Rupert Murdoch’s News Corp. owns the Los Angeles Dodgers.
Why? Media companies, which for years have profited from readers’ and viewers’ lust for sports, are no longer content just to deliver the news. Now they want to own the content, too.
Companies get the most mileage out of the arrangement when they operate TV stations because sporting events guarantee many hours of programming, a station’s biggest cost.
“If you have broadcast operations, you don’t have to bargain for the broadcast rights,” says Ben Bagdikian, dean emeritus of Graduate School of Journalism at the University of California at Berkeley and author of “The Media Monopoly.”
Ethical shadows hang over such deals in an industry that’s increasingly scrutinized and whose companies are diversifying by investing in related interests. Owners of sports teams, because of their high-profile nature, are especially open to scrutiny.
Bagdikian says newspapers can minimize the appearance of conflict if they have a strong tradition of evenhanded coverage, but can’t eliminate it. “I think it’s always a problem for a journalism organization to report on itself,” he says. “The less they do it, the better.”
(Editor & Publisher [Caption]
(copyright: Editor & Publisher August 14, 1999) [Caption]

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