Industry Leaders Square Off

By: Mark Fitzgerald

Correction posted at 2:20 p.m. EST, Sept. 19: The original version of this story incorrectly stated one of the figures on Knight Ridder’s newsroom spending.

When Frank A. Blethen, CEO and publisher of The Seattle Times, led the charge against the federal estate tax, he won almost unanimous support among newspapers. But now Blethen is campaigning to keep — and even tighten — the federal restriction on the same-market ownership of newspaper and broadcast properties. So this time around he’s preaching to a much smaller choir.

At a symposium last week on the state of family newspapers, Blethen’s pro-regulation position was opposed by newspaper colleagues such as Tribune Publishing Co. President Jack Fuller and retired Gannett Co. Inc. Chairman and CEO Allen H. Neuharth — and embraced by left-leaning journalism academic Robert W. McChesney, author of Rich Media, Poor Democracy, and Jay Schmitz, a regional representative of The Newspaper Guild, which, ironically, struck both Seattle papers a couple of years ago. McChesney and the Guild, meanwhile, continue to oppose repeal of what Blethen calls the “death tax.”

That wasn’t the only example at the symposium of positions or pairings that might once have seemed unlikely among newspaper publishers. Walter E. Hussman Jr., publisher of the Arkansas Democrat-Gazette in Little Rock, was at the center of two cases.

First, Neuharth lavishly praised the publisher who bested him in their fierce Little Rock newspaper war, which Gannett managed to lose despite starting out with the newspaper that had more circulation, more advertising, and more journalists. “Walter did it a very basic way: he put more news in his newspaper — lots of news,” Neuharth said.

Then, in his own keynote speech, Hussman, who is a third-generation family owner, used figures from the Inland Press Association’s “Cost and Revenue Study” to make the case that Knight Ridder — a publicly held company that has come under criticism for its alleged tendency to cut news budgets to maintain operating margins — actually spends more of its revenue in the newsroom than most of its peers. Hussman said he chose Knight Ridder because “it seems to get the black hat in all the debate about profitability versus quality.”

Comparing Knight Ridder properties to similar-size papers, Hussman said the chain’s papers in all circulation classes spent about 1% more than the industry average on the newsroom, with the exception of those in the 50,000 to 100,000 range, which spent about half a percent less than the norm.

As the first keynote speaker, Blethen seemed to set the agenda at the symposium, co-sponsored by the University of Illinois journalism department and The News-Gazette in Champaign, owned by the Stevick family. The paper is celebrating its 150th anniversary.

Nothing less than the future of democracy is at stake, Blethen argued. “If the [cross-ownership] ban falls, the financial forces it would unleash will hit the media business like a tidal wave, bigger than any force, deliberate or unintended, before,” he said. “Some journalists believe that if cross-ownership prohibitions fall, we will lose our opportunity to save an independent, diverse press.” More than just keep the ban, he said, the federal government should enact “new legislation to limit the newspapers, media, and information-distribution channels any one corporation can control.”

Of the 1,468 daily newspapers in America, just 250 remain in the hands of independent family owners. But the over-reaching of chains that “disinvest” in news to pump up margins, and then lose circulation, could actually lead to a renaissance of family ownership, some at the symposium argued.

“I think Thomson [Corp.] is a case where the marketplace eventually drove them out of the newspaper industry,” said Jim Ottaway, chairman of Ottaway Newspapers Inc., the Dow Jones & Co. Inc. community-newspaper group. In 2000, Thomson sold all 130 of its daily and nondaily papers, except for its flagship, The Globe and Mail in Toronto.

But Thomas Kunkel, dean of the University of Maryland’s Philip Merrill College of Journalism, told the symposium not to expect any turnaround: “Just as the Wal-Marts and CVSs and Home Depots are putting out of business the neighborhood five-and-dimes and local pharmacies and hardware stores, so independent papers are going, just as surely.”

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