By: Mark Fitzgerald
When Copley Press Inc. decided to sell nine of its newspapers in Illinois and Ohio, it took a leisurely, below-the-radar approach that contrasted sharply with the harried and closely watched auctions of Knight Ridder Inc. and Tribune Co. But at one paper, the Journal Star in Peoria, Ill., the newsroom was determined to make the low-key Copley sale a hot-button issue locally.
A campaign created by the Newspaper Guild local attempted to influence the decision-makers at Copley’s La Jolla, Calif., headquarters, and in the corporate offices of such potential buyers as Lee Enterprises, Gannett Co., and GateHouse Media. In the end, it was GateHouse which ended up winning the prize. GateHouse announced on March 13 that it had agreed to buy nine newspapers from Copley Press Inc. for $380 million, expanding its presence in the Midwest.
The purchase includes, besides the Journal Star, the State Journal-Register in Springfield, Ill., The Repository in Canton, Ohio, and four other dailies and two weekly newspapers in those areas. GateHouse, based in Fairport, N.Y., said it would continue Copley’s “outstanding stewardship,” and expects to close the deal by the end of April.
So did Peoria’s pushback pay off? Early reviews by local activists were positive. In any event, it is likely to be replicated across the country as newspaper companies big and small, publicly traded or family-owned, come under increased pressure to buy or be bought.
Less than a month before the GateHouse deal went down, E&P paid a visit to Peoria to observe the local effort to help attract a new owner that would respect quality journalism ? and let Peorians largely determine what will play in Peoria.
Making their play
Jennifer Towery, clutching the text of her speech and an oversized lawn sign reading “Save the Journal Star,” didn’t look nervous as she waited to speak to dozens of United Auto Workers retirees gathered for lunch at UAW Local 974 headquarters, along a stretch of rural road on the outskirts of Peoria, Ill. But on this late February morning, the snow melting on a day headed for 50 degrees, the president of the Peoria Newspaper Guild confessed to a visitor, “I’m so outside my comfort zone doing this.”
At the makeshift dais, Jane Evans settled down her fellow retirees who were impatiently eyeing the covered trays of fried chicken, and introduced Towery: “You all know that the Journal Star is going to be sold, and we’ve got a little lady here to tell you all about what’s going on, and what it’ll do to the union.” Evans, first vice chairman of the local’s retiree board, smiled at the petite Towery and added, “You know how we’re all with the union.”
And so went the start of another campaign day for Peoria’s Guild members. The union was betting that by rallying the community, it could influence Copley as it determined the next owner of the 66,779- circulation Journal Star.
It’s a strategy the national Guild first developed during last summer’s blockbuster sell-off of Knight Ridder. “What we learned during the Knight Ridder process that, if anything, surprised us, was that people really do care about these papers in their community,” said Linda Foley, the Guild’s national president. “They care that the paper continue to be locally owned and focused on the community. We found out that we have a lot of friends out there ? or at least, the newspaper has a lot of friends.”
During the Knight Ridder sale, the Guild campaign marshaled high-profile political and community figures demanding that the chain ? and, later, interim owner McClatchy Co. ? steer the sale of its papers to owners committed to maintaining a healthy newsroom. Pennsylvania Gov. Ed Rendell, for example, weighed in on the sale of The Philadelphia Inquirer, even contacting a McClatchy director to urge support for the Guild bid financed by Ron Burkle.
It’s hard to know in these closed-door sales just what difference rallying political and public support makes. But it seems clear that the union clamor helped spark the surprising local investor interest in buying the hometown paper that emerged in Philadelphia, and elsewhere. The Philadelphia outcome, of course, recalls the warning about answered prayers: The local investors were initially welcomed by the Guild, only to bitterly disappoint the union with a series of layoffs and austerity measures.
“There’s a school of thought that any local buyer is better than a chain,” Peoria Guild president Towery explained. “I don’t happen to share that view, because I’ve seen with horror what happened in Philadelphia. But I do believe those buyers had good intentions. They just bought too much paper.”
Peoria’s campaign in some ways was a continuation of the Knight Ridder efforts, and the union’s longtime concern about the changing ? to its mind, worsening ? nature of newspaper ownership. Minnesota Newspaper Guild Executive Darren Carroll, who led some of the union community efforts as the McClatchy Co. sold off a dozen Knight Ridder papers, conducted two days of informal workshops for Peoria members to get the campaign started.
Within days, the local had set up a Web site, www.savethejournalstar.com, with online petitions, a letter to Copley Chairman, President, and CEO David C. Copley, and an active Web forum. Within weeks, Peoria front yards displayed lawn signs with the message, “Save the Journal Star.”
In a show of solidarity, the downtown Apollo Theatre showed the 1952 Humphrey Bogart film Deadline U.S.A. one night. The plot: a crusading editor races to publish a final story about a local gangster ? on the night before the paper changes owners.
Rallying the troops
Like their Knight Ridder counterparts, the Peoria Guild assembled an impressive array of political, business, and even cultural leaders to support its effort. At a January press conference, those pleading the Guild’s case included Peoria’s mayor, a leading mall developer, the directors of the local symphony and ballet, state legislators, small-business owners, librarians, and labor leaders.
The Guild’s most prominent supporter was the area’s congressman, Ray LaHood. A moderate in the mainstream of the Illinois Republican Party, LaHood sounded almost like an activist straight out of the Center for Media and Democracy as he spoke by phone from his Peoria office a few weeks before the GateHouse deal went down.
“If we have someone come in, and sort of emasculate the paper by doing away with the people who have several years of experience dealing with the school system, with health care ? heck, with the political system, this will hurt the community,” LaHood said.
LaHood has locked horns with the Journal Star on numerous occasions, but said he welcomed the paper’s scrutiny ? especially, he added, because its reporters tend to be locals with deep knowledge of the area: “I decided, because of the work that I do in the community, that it was important to speak up and hopefully send a message to Mr. Copley ? and those who are buying the paper ? that the emphasis on our community issues must be sustained.”
Copley had little to say during the Guild campaign. Hal Fuson, the legal officer who is the chain’s chief spokesman, said the chain regarded the effort as aimed not so much at Copley as at prospective owners. “From our point of view,” he told E&P, “there’s not much we can do to react in a constructive way to what they’re doing.”
Guild journalists trained all their reporting skills on trying to ferret out possible buyers. In February, a top executive for GateHouse, which owns the nearby Pekin (Ill.) Daily Times, was spied walking through the building. Lee Enterprises tipped its hand when someone signed into the building as a representative of a commercial printing business it owns. Lee was a natural suspect because it publishes The Pantagraph, just 30 miles down I-74 in Bloomington.
Small town, with a skyline
Peoria being, well, Peoria, the Guild campaign to steer Copley to a friendly owner had uniquely homey touches. It was as close to a genuine grassroots effort as can be pulled off in 21st-century wired America.
The city is a far bigger and more urban locale than the “will-it-play-in Peoria” of the national imagination. Along the wide Illinois River, office buildings soar and squat factories sprawl. But Journal Star reporters will tell you that it’s still in many ways a small town, where the librarian, the store clerk, and the mail carrier would stop to ask what’s going to happen to the paper.
So Peoria Guild members weren’t just cultivating congressmen and mayors ? they were out on the hustings as if they too were politicians.
Photographer Fred Zwicky, for instance, spoke to one of the Pekin, Ill., chapters of P.E.O., a women’s philanthropic organization that awards scholarships. He fielded questions about the impending sale, and made a presentation on photojournalism at the Journal Star now that its state-of-the-art presses are up and running.
“Well, we just thought he was a charmer, and that his pictures were beautiful,” recalled P.E.O. Chapter LM President Enid Woolsey a few days later. The group, she added, worries about the fate of the newspaper: “We’re all for the Journal Star, and I for one wouldn’t like to see it deteriorate.”
The P.E.O. ladies were so appreciative of Zwicky’s talk that they gave him a paper bag to take home with him. “I figured it was some cookies,” he recalled. Instead, Woolsey had packed two Cornish hens, some brie cheese, and a package of Canadian bacon. “I don’t know if she raided the fridge, or what,” a bemused Zwicky commented. All in a day’s campaigning.
Trading on good will
By the time Knight Ridder was forced to put itself up for sale, relations with its unionized newsrooms had soured from the relentless and accelerating demands for job cuts and economic shrewdness. Guild feelings at several papers were rubbed raw again when their hopes for a gentler ownership under McClatchy were dashed as several dailies were put on the block ? and McClatchy seemed not to take seriously the bid the Guild put together with Burkle.
What’s striking about the Peoria campaign was the warmth union journalists expressed about the Journal Star and its management. If the Guild local feels proprietary about the paper, it’s because the journalists and circulation people it represents used to be the proprietors, or, at least part-owners. At the time of its 1996 sale to Copley, the Journal Star was employee-owned under an ESOP (employee stock ownership plan) in which journalists and other workers owned a combined stake of not quite 50%.”From the beginning, they had a good relationship because [union members and employees] were the sellers ? they chose Copley to come in and buy the paper from them,” said Foley. “I think that probably had a lot to do with getting the relationship off on a good foot.”
Copley in many quarters of the Guild is not regarded as union-friendly. For example, at the San Diego Union-Tribune ? which after the GateHouse sale closes in April will be Copley’s only newspaper ? the company managed over the years to decertify all the unions in editorial and production departments.
But the family was respected in Peoria for providing the resources it needs to be the dominant newspaper in central Illinois, and, because it is private, not being obligated to seek ever-higher margins to satisfy Wall Street. “We’re the envy of other [Guild papers] in the international,” said local president Towery, who is editor of the Journal Star’s “Neighbors” local sections. The local unit, for instance, has had a closed shop ? an increasing rarity in union contracts ? for more than 50 years.
To the UAW retirees, Towery recounted recent negotiations in which three-year contracts have been wrapped up in just three days of bargaining. In the audience, Phyllis Rendleman, whose husband got laid off after 33 years with Caterpillar, shook her head with disbelief.
When Rendleman talked with a visitor about the Journal Star, she illustrated the reservoir of good will the newspaper has amassed. She’s forgiven the paper for what she thinks were slights during coverage of labor disputes at “Cat,” as all the retirees refer to the big tractor and work vehicle maker: “We got to calling it the Urinal Star, and I didn’t read it for years.” Despite that, Rendleman said she was likely to pick up one of the lawn signs that Towery left on a back table of the union hall, amid the many brochures aimed at the elderly.
Rep. LaHood said his colleagues on Capitol Hill warned him about what could happen if the paper were snapped up by the “wrong” buyers. Those politicians complain that “all some of these big chains care about is the bottom line, rather than the interest of the local people.”
After the sale was announced in mid-March, a spokesman for the congressman said he was unable to comment simply because “he doesn’t know a whole lot about GateHouse.”
The inevitability of change permeated even this campaign against change for the worse. The first shoe dropped in February when 11 Guild members accepted the 14 buyouts offered in the newsroom. Meeting in a back room of Leonardo’s Pizza for the February monthly members meeting, a Guild officer noted that the tables were usually full, “but we’re down 11 members, and they were active members.”
But the definitive change would come down with the news that GateHouse ? which has quickly become a rare newspaper company that Wall Street embraces for its strategy of growing cash flow and dividends through acquisitions ? was to become the Journal Star’s new owner.
The Guild strategy had worked, Jennifer Towery told E&P the morning after: “I think in reality this is the best possible outcome.” A private equity firm would have simply imposed a “slash-and-burn” policy, and were the paper to have gone to Lee Enterprises, the union figured more downsizing would be in the cards.
“GateHouse is more of a mystery, because they don’t seem to have any plan but grow, grow, grow,” Towery said. But that’s good, too, she added. Maybe GateHouse will use the Journal Star, and especially its new presses, to improve the other papers it is picking up in Illinois. And the local has heard from three other papers around the country with Guild units that GateHouse honored contracts ? and negotiated fairly.
One thing that the campaign clearly achieved was making the sale a hot local issue. The GateHouse deal led the TV news that night, and Peoria will continue to be watching, the union says.
“I tell people, continue to read the Journal Star, and you will know from the product you’re reading how we are being treated,” Towery said. “You will know if the talented people are being driven out, or if coverage is cut back. All you’ve got to do is keep reading.”