JOA to Live on After 'Tucson Citizen' Folds

By: Even though the Tucson Citizen will close March 21, the joint operating agreement between its owner, Gannett Co. Inc., and Lee Enterprises, which owns the Arizona Daily Star, will continue through at least 2015.

Joint operating agreements became popular in the past 40 years as a way to give newspapers competing in the same market a way to survive ? by sharing business operations, such as advertising, publishing and distribution costs, while keeping newsrooms separate.

Those JOAs, however, became less profitable as newspaper readership and advertising revenues began to decline, and costs to report and publish the news went up.

When Gannett announced that it would close the Citizen if no buyer was found by this week, it did not include its share of the JOA among the assets for sale.

Under the arrangement, JOA partners create an entity ? in this case, Tucson Newspapers Inc. ? to run non-editorial functions. The partners share operating costs and revenues.

That means that Gannett intends to share the costs and profits under the JOA, but will not publish any newspaper in Tucson.

Holding onto a JOA share has been a common strategy among publishers of failing newspapers in such agreements, media analysts said. That tends to dissuade potential buyers from seriously trying to buy those publications, they said.

"When you sell a paper without the JOA attached to it, you're almost certainly dooming it," said Mark Fitzgerald, editor-at-large for the industry publication Editor and Publisher. "And if not, you're signaling clearly to the marketplace that you're not interested in having another buyer come in."

It also doesn't necessarily attract scrutiny from the Justice Department's antitrust division, which oversees JOAs.

The Citizen reported last month that Gannett and Lee filed an amendment to their JOA with the Justice Department, allowing the corporations to drop a requirement that both companies publish newspapers in Tucson through 2015.

At one time, there were 28 JOAs in the U.S., but only seven remain aside from Tucson: Detroit; Seattle; Charleston, W.Va.; Fort Wayne, Ind.; Las Vegas; York, Pa.; and Salt Lake City.