Death Toll Mounts As Weak JOA Papers Die Anyway p.18

By: ROBERT NEUWIRTH Despite big brother and exemption to U.S. antitrust law,
weak JOA partners are increasingly closing, sometimes quite profitably
ANOTHER ONE WILL bite the dust this year. On Dec. 31, 1998, the 50-year-old joint operating agreement in Evansville, Ind., fades into history.
The decision to unhinge the two newspapers ? the morning Courier and evening Press ? was announced five years ago. But the severing of the JOA comes on the heels of the fall of the Nashville Banner, the afternoon paper in the JOA in Tennessee's fourth largest city, and after last year's implosion of the agency agreement in El Paso, Texas.
Bill D. Jackson, president and editor of the Press, says any pronouncements about the future would be premature. But circulation figures bode poorly. Between March and September 1997, average daily circulation fell by 3.1% to 21,401. The dominant Courier, run by E.W. Scripps, increased circulation almost 2% ? to 61,780 ? during the same period.
The Courier therefore is operating as if the Press' days are numbered.
"I would doubt if they could make it on their own," said Vince Vawter, editor and president of the Courier. "We are certainly doing our planning on the assumption that they won't."
Once again, it appears that the Newspaper Preservation Act ? the industry's exemption from antitrust legislation, which was signed into law in 1970 with the intent to provide faltering papers a chance at life support ? may fail to protect another two-newspaper town. Through the 1990s, JOAs have failed to protect dueling papers in Shreveport, La., Knoxville, Tenn., Tulsa, Okla., and Pittsburgh, Pa.
"The law was a failure from the start," said Robert Picard, a professor of journalism at California State University at Fullerton who has written widely on newspaper JOAs."There's got to be some incentive to increase competition. In JOAs, you don't compete on price, quality or anything."
Picard admits that JOAs keep secondary newspapers afloat temporarily, but he argues that they artificially inflate prices ? with advertising rates rising to monopolistic heights ? and don't provide any lasting benefits.
Jack A. Blum, who negotiated over the Newspaper Preservation Act as a staffer on Capitol Hill 30 years ago and is now a partner in Lobel, Novins, & Lamont, a Washington, D.C., law firm, says that he's not surprised that JOAs are splitting and newspapers are closing.
"They've never saved a newspaper yet," he said. "All they did was guarantee monopoly prices for two publishers."
What's more, Blum added, as soon as one paper has financial trouble, the JOA unravels.
He points to St. Louis as a glaring example of the failure of JOAs. Though the Globe Democrat shut down in the early 1980s, Pulitzer Publishing, which owns the Post-Dispatch, will continue to pay out big bucks ? $19.45 million last year alone, or about half the paper's total profits ? to its JOA partner until 2034. In Florida, Cox Enterprises, which closed the Miami News in 1988 ? JOA notwithstanding ? will continue to receive a payout from Knight Ridder, which owns the Miami Herald, until 2021.
The Newspaper Preservation Act was wrongly named, Blum said. "It was really the publisher's relief act."
Though he admits paying half his St. Louis profits to JOA partner Advance Publications for years to come, Nick Penniman, publisher of the Post-Dispatch and a Pulitzer Publishing senior vice president, says the arrangement is preferable to the way things were when both newspapers were duking it out for readers.
"Between 1975 and 1983 the agency lost money, and some years it lost a hell of a lot of money," he said. "You can't continue to sustain two voices and lose that much money."
The situation in St. Louis, he added, was exacerbated by a 1973 newspaper strike that drove food advertising to direct mail. The newspapers, he said, never recovered. What's more, he argued, the suburban papers had out-muscled the Globe-Democrat, making it, in essence, the third paper in the area.
Penniman also noted that Pulitzer's successful Tucson, Ariz., JOA shares business operations with Gannett Co. That deal, born in the 1950s and renegotiated in 1988 to increase reimbursement for news department expenses, is set to run another 15 years.
"One of the secrets to our success in Tucson is that the two papers are tremendously different . . . [and] serve pretty discrete markets."
Pulitzer's morning Arizona Daily Star, circulation 92,000 daily, is strong in the suburbs while Gannett's afternoon Tucson Citizen, circulation 45,000, concentrates on city news.
Phil Buckner, president of Buckner News Alliance, the minority partner in the York, Pa., JOA, says that to his mind the problems facing JOAs reflect a larger trend: the decline in afternoon readership.
"You don't want to go on indefinitely just paying money for the privilege of running a newspaper," he says.
The Evansville JOA may be a case in point. Scripps originally owned the evening paper, but dumped it in 1986 to purchase the morning franchise.
Vawter expects circulation and advertising rates to fall when the Evansville papers divorce, saying, "It's going to drop some but I don't think we're going to take that big a hit."
No matter what happens after the end of the year, Vawter insists the JOA has been a success.
"It's kept two independent voices here for longer than is economically viable in this day and time," he said. "It's been profitable for both parties."
But Picard, the professor specializing in newspaper economics, predicts more JOA paper closures in the near term: "Birmingham is going to go and Honolulu is just a matter of time," he said, referring to the JOA between the morning Post-Herald and the evening News in Alabama's largest city and between the Advertiser and Star-Bulletin in Hawaii's capital.

?(JOA Status Report
Two JOA papers died in 1997
Nashville Banner, El Paso (Texas) Herald-Post

Scheduled to dissolve Dec. 31, 1998
50-year partnership between Indiana's
Evansville Courier and Evansville Press

In next 10 years
In York, Pa., William Dean Singleton, owner of
p.m. York Dispatch (circulation 40,326) has option
to buy a.m. York Daily Record (circulation 43,000)
in 2004

In San Francisco, Calif., JOA expires in 2005 between a.m. San Francisco Chronicle (circulation 484,218) and p.m. Examiner (circulation 120,856)

In Cincinnati, Ohio, JOA expires in 2007
linking a.m. Cincinnati Enquirer (194,328) and
p.m. Cincinnati Post (72,616 )

Remaining JOAs and expiration dates
Salt Lake City, Utah, 2012
Chattanooga, Tenn., 2015
Tucson, Ariz., 2015
Birmingham, Ala., 2016
Fort Wayne, Ind., 2020
Albuquerque, N.M., 2022
Honolulu, Hawaii, 2022
Seattle, Wash., 2032
Charleston, W.Va., 2036
Las Vegas, Nev., 2049
Detroit, Mich., 2086

Sources: News services, ABC) [Caption]

?(E&P Web Site: [Caption]
?(copyright: Editor & Publisher April 18, 1998) [Caption]


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