by GaveKal Research

The recent DSK scandal has once again brought the spotlight on the cozy and uncomfortable relationship between France's political elite and a media which, in France, seems to abdicate all too rapidly and all too often its role as the fourth estate. But can French journalists really be blamed for being as passive as the Anglo-Saxon press currently makes them out to be? As Charlie Munger repeatedly says: 'show me the incentives and I'll show you the outcome'. Using this rule to look at French media, it is hard to not feel sorry for French journalists. Indeed, here is what we know:

1) A quick glance through any French newspaper, or any French TV channel, shows that between 50%-75% of ads are for services or products offered either by a state-owned company (EDF, SNCF, Gaz de France, La Poste...) or a company partially owned by the government (Air France, Renault...). Given this open and overt dependency of the media on government revenues, can we really expect French journalists to be able to stir the pot aggressively? After all, does the SNCF or EDF really need to run ads given that most people do not have the choice to opt for other electricity, or railway, providers? What are these ads (for essentially monopolistic groups) meant to achieve if not to purchase the support of the media? With that in mind, is it really a surprise that every single French political scandal of note has been uncovered by either independent minded judges or by Le Canard Enchaine (the sole newspaper that does not run ads)?

2) Somewhat surprisingly, the two biggest French weapons manufacturers (Lagardere and Dassault) also happen to control the two largest French media groups, running titles such as Le Figaro, Paris Match, France-Soir, Journal du Dimanche... Defense groups owning newspapers and magazines? The synergies there do not appear obvious! Would no-one bat an eyelid if The New York Times was owned by Lockheed and The Times by BAE Systems? Is such a situation not rife with potential conflicts of interest as the French defense groups not only make most of their income by selling weapons to the government, but also depend on the government to get the authorization/lobbying to sell weapons outside of France (whether in Saudi Arabia, Taiwan, Brazil or India).

The large remaining media groups not owned by defense groups (such as TF1) are sometimes partially owned by Bouygues (France's largest construction company which depends on government infrastructure contracts for a good share of its revenue) or Vivendi (which now operates mostly in the telecom space but use to operate in water distribution)....

Putting it all together, it seems that the somewhat perplexing ownership structure of France's media behemoths invites massive potential conflicts of interest when it comes to covering the actions of France's political elite. Moreover, the very heavy weight of government-linked advertising does not help media groups establish their independence. This is why, when it comes to breaking news, French people are increasingly turning elsewhere (the announcement of Dominique Strauss-Kahn's troubles came through social media websites hours before any French news organization had a chance to react). Old media in France is dying (the recent financial troubles of Le Monde make The New York Times look like a blue chip, the TFI share price is down by two-thirds in the past decade...); and the DSK scandal has been a clear illustration as to why.

Comentário: Os fundadores do GaveKal, uma firma independente e renomada de pesquisa internacional, são franceses e conhecem bem a realidade deste país. A reação da grande imprensa francesa ao escândalo de Strauss-Kahn, o ex-chefão socialista do FMI, é mesmo o verdadeiro escândalo. A elite francesa logo partiu para a teoria conspiratória de que tudo não passa de uma armação, talvez até da CIA, para incriminar o adversário político de Sarkozy. O GaveKal mostra como é perigosa a simbiose entre governo e imprensa. O cão não morde a mão que o alimenta. A mídia francesa depende de recursos do governo. Os jornalistas franceses acabam subservientes aos políticos importantes, especialmente os de esquerda, que defendem esta simbiose. E pensar que deste país saiu um Voltaire nos tempos do Iluminismo! Pobres franceses...