Newspaper
agreements are
failing nationwide

They 'are being dismantled
into one-newspaper monopolies,'
says an expert on the JOA law

Justice Department has little interest

By Helen Altonn
Star-Bulletin

The Honolulu Star-Bulletin is the latest victim of a Newspaper Preservation Act that has had results opposite of those intended, a University of California-Berkeley law professor said.

If the law's goal was to preserve two editorial voices in cities with joint operating agreements, it "hasn't done its job for the long term because JOAs are being dismantled into one-newspaper monopolies," Stephen Barnett said yesterday in a telephone interview.

Barnett is an authority on the 1970 law that can exempt newspapers from antitrust laws and authorize joint operating agreements.

The 117-year-old Star-Bulletin has operated under a JOA with the Honolulu Advertiser since 1962. The agreement allows combined production and business operations while maintaining separate newsrooms.

The JOA was to end in the year 2012, but the Star-Bulletin's owner, Liberty Newspapers, announced Thursday that it's shutting down the afternoon paper Oct. 30. Declining circulation and profits were cited.

Only 13 cities still have joint operating agreements out of 28 in the late 1970s, according to this month's American Journalism Review. "And the vital signs of papers in many of those towns are weakening by the month," it says.

Newspapers with JOAs have died in St. Louis; Miami; El Paso, Texas; Nashville, Tenn.; Tulsa, Okla.; Shreveport, La.; Knoxville, Tenn.; Pittsburgh; Columbus, Ohio; Evansville, Ind.; and Chattanooga, Tenn.

The total number of daily newspapers in the nation last year was 1,489 -- a drop from 1,642 in 1988, according to Editor and Publisher magazine.

Afternoon papers fell from 1,141 in 1988 to 781 last year. Morning papers increased from 521 to 721.

Barnett said the Newspaper Preservation Act may have delayed the death of some newspapers.

"But, on the other hand, it has contributed to the resulting monopolies by crippling the weaker paper in each city, like the Star-Bulletin," he said. "It certainly hasn't preserved two newspapers indefinitely, as it was expected to do."

Barnett said Liberty Newspapers should be required to show the Star-Bulletin's profit picture to the Justice Department.

Also, the Justice Department should require Liberty Newspapers to put the Star-Bulletin up for sale, he said, pointing out the department required that of the Hearst Corp. in San Francisco. Hearst bought the San Francisco Chronicle and put its weaker afternoon paper, the San Francisco Examiner, on the market.

"No one expects anyone to step forward (to buy it)," said Ben Bagdikian, retired dean of UC-Berkeley's graduate school of journalism, noting the trend of dying big-city afternoon dailies.

But newspapers enjoying years of exemption from the antitrust law to preserve a second voice in a city "owe something to the public ... and should never be permitted to profit by closing down," he said.

"There are some cases, pretty outrageous, where a dying paper was paid $30 million to go out of business in a joint agreement," Bagdikian added.

Terms of the agreement between Liberty Newspapers and Gannett Co., which owns the Honolulu Advertiser, haven't been disclosed.

Bagdikian cites traffic problems, drive time and television among the reasons for dying afternoon dailies. They can't print late-breaking news because of early press runs required to deliver papers outside the city, he said.

Daryl Moen, University of Missouri journalism professor, said afternoon newspaper deadlines kept moving up in most cities, primarily to beat traffic to get ahead of rush hours. "To do that, they became a stale morning paper."

Newspapers also expect to make more money than ever before, Bagdikian said, because they're part of huge multimedia companies and Wall Street is pressuring the news business.

Metropolitan dailies used to think a 15 percent annual profit margin was very good, and smaller papers made more, he said.

"Now, they make 20 percent a year and, because they're publicly traded, Wall Street wants them to make more," Bagdikian said. "That's not how you build up a good newspaper."

He said people making the big decisions for dailies in multimedia companies are increasingly remote from the newspapers they operate. "It becomes a dollar-and-cents decision -- how much more money you can make."

Roy Peter Clark, senior scholar at the Poynter Institute, a school for journalists, said the profit expectations for media companies "are way out of whack. I think there's a lot of shortsightedness and a bit of greed."

Clark said he thinks a newspaper's death "may be even harder on the community than the death of an important leader, than the death of a beloved person."

He said he views a newspaper as "a living, breathing organic thing, almost in religious terms ... and it's not just a provider of information. It defines people's identity and people's sense of membership in the community."

When an afternoon paper dies, he said, "newspapers lose some readers forever. ... The saving grace is that perhaps emerging technologies will give people some choices."

Clark noted that he was told he could set up a Web site for $30 a month. "This is a lot cheaper than buying a printing press, but that doesn't in any way make up for the loss of a newspaper," he said.

Whenever a city loses a newspaper, Bagdikian said, "some of the vitality of the city government goes out. One of the watchdogs has left."

Newspapers are the only media that can provide systematic coverage of their cities every day, he said.

"TV stations can't do it. Internet doesn't do it," Bagdikian said.

Barnett noted that while people talk about the Internet providing news, the main local news would come from a newspaper's Web site. "So it's not so much competition for the daily as another outlet for the daily."

He said a newspaper's closure impoverishes a city left with only "one monopoly daily" because of the loss of alternative news, opinions and reviews.

Moen said the decline in afternoon papers "is both curious and somewhat inexorable."

Most people who take morning newspapers actually read them after lunch, he said, "so it's not like they're reading a morning newspaper for the fresh news, because they're not."

But economic and lifestyle changes have driven people to morning newspapers, he said.

---

Justice has little
interest in JOAs

By Pete Pichaske
Phillips News Service

WASHINGTON -- The Justice Department still approves joint operating agreement applications -- but it hasn't received any since 1989. And the department has taken little interest in the breakup of a JOA in more than a decade.

Justice Department officials have declined to comment on the Honolulu case.

JOAs are when two newspapers maintain independent ownership and newsrooms, but share production, advertising and circulation departments to reduce costs.

A Justice Department official said dissolving JOAs are studied on "a case-by-case basis" to see if intervention is warranted.

In practice, the department has not actively intervened since it prevented the closing of the St. Louis Globe in 1983. A buyer was found for the Globe, but the paper folded anyway two years later.

"They won't get involved unless they think there's an antitrust problem," said Donald Baker, an antitrust lawyer and former head of the department's antitrust division, which oversees JOAs.

A JOA "is no assurance that a paper will go on anymore," he said. "I think we're going to see more and more of these close-downs."

Rem Rieder, editor of the American Journalism Review, said regulators seem to believe that even if a city is left with only one newspaper, the community still has an abundance of news sources thanks to broadcast media and, increasingly, the Internet.

"There are other outlets, it's true," he said. "But there are a lot of things only a newspaper does.

"It's a shame to lose newspapers, and it shouldn't happen," he said. "But they're up against inexorable forces. It's going to happen."

Ironically for Honolulu residents, Rieder's magazine, which focuses on the news media, this month published a lengthy article lamenting the declining number of JOAs.

The headline is telling: "The Death of the JOA: City by city, paper by paper, an experiment aimed at saving newspapers is withering away."

"It's been a noble experiment," said Rieder, "and it's kept papers alive. But as the second paper gets weaker and weaker, and overall profits get smaller, the smaller papers just can't make it."