Banks and other institutional investors are also large owners of media stock. In the early 1980s, such institutions held 44 percent of the stock of publicly owned newspapers and 35 percent of the stock of publicly owned broadcasting companies, These investors are also frequently among the largest stockholders of individual companies. For example, in 1980-81, the Capital Group, an investment company system, held 7.1 percent of the stock of ABC, 6.6 percent of Knight- Ridder, 6 percent of Time, Inc., and 2.8 percent of Westinghouse. These holdings, individually and collectively, do not convey control, but these large investors can make themselves heard, and their actions can affect the welfare of the companies and their managers.
If the managers fail to pursue actions that favor shareholder returns, institutional investors will be inclined to sell the stock (depressing its price), or to listen sympathetically to outsiders contemplating takeovers. These investors are a force helping press media companies toward strictly market (profitability) objectives. So is the diversification and geographic spread of the great media companies. Many of them have diversified out of particular media fields into others that seemed like growth areas.
Many older newspaper-based media companies, fearful of the power of television and its effects on advertising revenue, moved as rapidly as they could into broadcasting and cable TV. Time, Inc., also, made a major diversification move into cable TV, which now accounts for more than half its profits. Only a small minority of the twenty-four largest media giants remain in a single media sector.