Regulatory license threat made news divisions unprofitable loss leaders that shielded network profits.
Evidence
Network executives were afraid that a failure to work in the “public interest, convenience and necessity,” as set forth in the Radio Act of 1927, might cause the Federal Communications Commission to suspend or even revoke their licenses. The three major networks pointed to their news divisions (which operated at a loss or barely broke even) as evidence that they were fulfilling the FCC’s mandate. News was, in a manner of speaking, the loss leader that permitted NBC, CBS and ABC to justify the enormous profits made by their entertainment divisions. — Lee McIntyre, Post-Truth, 128
Categorization
Category: Causal Relationships