Have you ever stumbled upon a series of similar business news stories on a particular topic during an online search, only to find that despite appearing on various platforms, they all seem remarkably alike? This phenomenon may arise because the news outlets are under the same corporate umbrella—a trend increasingly observed nationwide as media companies navigate shrinking resources.
Flora Sun, an assistant professor of accounting at Binghamton University’s School of Management, delves into this issue in her latest study. She explores how business news outlets owned by the same parent company are more likely to produce homogenised content. This homogeneity could potentially undermine financial markets by limiting the diversity of news, thereby hampering investors’ ability to interpret crucial information from earnings reports effectively.
Sun explains, “The market could be adversely impacted by such uniform coverage, as the pace at which stock prices reflect new information may slow down. This happens because there isn’t a sufficient variety of viewpoints to balance each other out, eventually aiming for an efficient market price.” She emphasises the startling realisation that subscribing to multiple newspapers or online news sites might not provide varied information if a single media conglomerate owns those sources.
The research analysed news articles about earnings announcements across 34 major media outlets involving 4,462 publicly traded companies from 2007 to 2019. In total, 288,385 articles concerning 95,820 earnings announcements were reviewed. Using a range of statistical methods to scrutinise the data, Sun and her colleagues observed that media outlets within the same group tend to adopt similar narrative styles and language, even in their headlines and article content.
The study highlights a significant yet often overlooked issue: these media outlets’ apparent independence belies their consolidation, potentially diminishing their role as neutral information intermediaries. The researchers argue that today’s economic pressures may push media outlets to prioritise content sharing over maintaining distinct journalistic standards. This practice of sharing content is particularly prevalent among outlets of networks with high audience reach, further incentivising homogeneity.
“It’s crucial to note that this research does not accuse the media of inherent bias,” Sun clarifies. “Rather, it sheds light on a scenario prevalent in today’s media landscape, of which investors and the general public should be aware.” This study underscores the need for vigilance among news consumers and financial market participants, who may not realise the extent of media consolidation and its possible effects on the diversity and quality of information.
More information: Flora Sun et al, Common Media Holding Companies and the Uniqueness of Business Press Content, The Accounting Review. DOI: 10.2308/TAR-2023-0191
Journal information: The Accounting Review Provided by Binghamton University