Lou Grant’s death (okay, Ed Asner’s) left me nostalgic for those Chuckles the Clown days when newsrooms buzzed with idiosyncratic idealism. Five giant corporations now control most of what we see and read. The smallest number of media companies are now reaching the largest number of people in U.S. history, and the strongest critical analysis I can find is not in mainstream media, but in the student newspaper at Vassar. Which gives you some idea of the pickle we are in.
Who controls the corporations who control our news? A helpful index was just compiled—not by mainstream media, but by Harvard researchers exploring media’s future. Skimming the list, I see two names again and again: BlackRock Fund Advisors and Vanguard Group.
BlackRock and Vanguard are two of the Big Three (every industry is clumping) passive fund asset management firms. The third, State Street, is owned by BlackRock. Whose largest shareholder is Vanguard.
Together, BlackRock and Vanguard own:
• Eighteen percent of Fox.
• Sixteen percent of CBS, and therefore also of Sixty Minutes.
• Thirteen percent of Comcast, which owns NBC, MSNBC, CNBC, and the Sky media group.
• Twelve percent of CNN.
• Twelve percent of Disney, which owns ABC and FiveThirtyEight.
• Between ten and fourteen percent of Gannett, which owns more than 250 Gannett daily newspapers plus USA Today.
• Ten percent of the Sinclair local television news, which controls seventy-two percent of U.S. households’ local TV.
• A large unspecified chunk of Graham Media Group, which owns Slate and Foreign Policy.
Maybe media is a better investment than I thought, once it . . . clumps. But passive funds (index mutual funds and exchange-traded funds, not the actively managed ones) are an awfully nerdy setting for a Netflix Originals media conspiracy. International banks would be sexier.
Unless, that is, you find power and wealth sexy. BlackRock, it turns out, is the world’s largest money manager, with $9.5 trillion currently under management. I whistle under my breath—$9.5 trillion is a lot of cash in play, and it makes BlackRock considerably larger than the world’s largest bank (the Industrial and Commercial Bank of China).
How did this happen? The best explanations do not show up on Fox or CNN or CBS or ABC or NBC or USA Today or Sixty Minutes, but in academic journals. Since 2008’s shakeup, more and more investors have focused on passive funds rather than picking and choosing particular stocks. This is an unprecedented shift, one that might even threaten capitalism.
“Some $11 trillion is now invested in index funds, up from $2 trillion a decade ago,” Annie Lowrey reports in The Atlantic. This has “moved the country toward a peculiar kind of financial oligarchy,” decreasing competition because “mega-asset managers control large stakes in multiple competitors in the same industry.” (Like media.)
An investigative reporter I worked with used to mutter “oligarchy” when suspicious. The word is now appropriate. Sen. Elizabeth Warren wants BlackRock put under federal oversight as one of the financial entities designated “too big to fail,” because they would take us all down with them.
“If a $9 trillion investment company failed, would that likely have a significant impact on our economy?” she asked Treasury Secretary Janet Yellen at a hearing this past March.
Yellen danced a bit, then said, “It’s not obvious to me that designation is the correct tool.”
“Wait just a minute,” Warren said. “Designation is what gives the Fed its increased oversight power, is that correct?”
Yellen conceded the point but said the Financial Stability Oversight Council had already looked into the matter.
During the Trump Administration, writes David Dayen, “the Treasury Department official leading efforts to relax that designation and keep asset managers outside its grip [was] Craig Phillips, a former BlackRock executive.”
By then, BlackRock was already working hand in glove with the U.S. government. BlackRock was the firm chosen by the Obama Administration to clean up after the 2008 financial meltdown, buying up toxic assets the Fed was not legally allowed to purchase. BlackRock executives were the ones who proposed the economic reset that went into effect in March 2020, when the central bank forsook its historic independence and agreed to join monetary policy with fiscal policy. BlackRock had proposed this in 2019, but COVID created the perfect opportunity: an emergency for which an “independent expert” could be appointed by the central bank to avoid fiscal crisis. BlackRock was appointed the independent expert. It also won a no-bid contract to manage a $454 billion slush fund, leveraging it for more than $4 trillion in Federal Reserve credit. So BlackRock is playing both sides, buying mainly its own funds on behalf of the central bank.
BlackRock’s CEO, Larry Fink, angled for the position of Treasury Secretary when it looked like Hillary Clinton might be president. He served briefly on an advisory committee for Donald Trump and was heavily promoted to be Treasury Secretary in the Biden Administration. Fink’s former chief of staff at BlackRock, Adewale “Wally” Adeyemo, is now deputy secretary of the U.S. Treasury. Former BlackRock executive Brian Deese is Biden’s top economic advisor; former BlackRock executive Michael Pyle serves as chief economic advisor to Vice President Kamala Harris.
The Vassar article says it flat out: “Interlocking directorates, revolving doors of personnel and financial stakes and holdings connect the corporate media to the state, the Pentagon, defense and arms manufacturers and the oil industry.” One of the world’s largest investors in weapons manufacturers, BlackRock is also heavily invested in tech platforms and, through its investors, has a stake in all the major corporations in the S&P 500.
Big investors do more than vote their shares, concludes a survey published in the Journal of Finance; they also talk directly to management (sixty-three percent of those polled) and to board members (forty-five percent). With $9.5 trillion in assets hanging in the balance, BlackRock feels a responsibility to “monitor and provide feedback to companies.” It promises transparency—but also notes the power of quiet, one-on-one conversations.
Does BlackRock’s opinion matter to a reporter in the field? I doubt it. But BlackRock might matter to a publisher or owner, who might then influence an editor or newsroom director. By the time certain facts are being headlined and others excised, it is hard to tell where the influence originated.
We are living in the realm of oligarchy, and it is naïve to think media can exist unaffected. Until now, I barely knew BlackRock existed—let alone that, with Vanguard, they have enough of an interest in most big media corporations to be considered “insiders” under U.S. law. Critics call BlackRock a “great vampire squid,” a “shadow bank,” and “almost a shadow government”—one that neatly avoids the spotlight.
But any entity this big contains contradictions. BlackRock has just received China’s permission to establish its first foreign-owned mutual fund. Meanwhile, activists are protesting BlackRock’s investment in two blacklisted Chinese companies, both barred from trade with the United States because of their involvement in surveillance and their participation in repressing the Uighurs. George Soros calls BlackRock’s push into China “a tragic mistake” that could risk national security.
Fink comes across as a reasonable man concerned—except for the issues in China and the reluctance to be regulated—with social and environmental responsibility. That is BlackRock’s rhetoric, at least. And we will not hear much beyond the rhetoric, because . . . who would tell us?