There was a time when it was not cool for one company to monopolize an industry. If a business gets too big and controls too much of its market, it may get some unwanted attention from the feds. We have these pesky anti-trust laws, you know, intended to prevent one owner from garnering all or most of the players — and the market — under its control. The Standard Oil trust of the 19th century was the poster child for bullying business megalomania.
But one industry felt it was above the anti-trust laws. Newspapers argued that if one paper were failing in a two-paper town (does anyone know what town I might be thinking of?), readers would be deprived of that paper’s “editorial voice”. To preserve more than one “editorial voice,” newspapers lobbied and convinced Congress in 1970 to enact the Newspaper Preservation Act.
Well, we know how that worked in Detroit. Following a self-proclaimed “newspaper war,” Gannett bought the Detroit Evening News and joined with Knight-Ridder, owner of the Detroit Free Press, to apply for an exemption to the anti-monopoly laws on the grounds that the Free Press had losts the battle and was a “failing newspaper.” Supposedly, or so the papers, argued, the Free Press was in a “downward spiral” in danger of being closed by its owners.
An administrative law judge saw through that poppycock. An appeals court did not, but the dissenting vote (2-1 for the JOA) came from an appeals court judge named Ruth Bader Ginsburg, now on the Supreme Court. Anyway, the “downward spiral” line didn’t seem foolproof, so the companies hired big gun Washington lawyers to lobby, a Supreme Court justice bowed out because of too-close contact with the companies, there was a 4-4 vote of the Supremes and in 1989 we got this mess known as the Detroit Joint Operating Agreement.
For years, Gannett controlled the JOA, with three out of five votes on the board that operated the News and Free Press. Then suddenly on Aug. 3, 2005, we woke up to learn that Knight-Ridder had sold the Free Press to Gannett. K-R was hightailing it out of town. That left Gannett in control of the Free Press and, effectively, the News, since the new “owner” of the News, Dean Singleton, has what amounts to a 5 percent stake in “his” paper. Operating decisions (and, I recently learned, financing through 2009) are made by Gannett. Collective bargaining? Singleton is not at the table. Gannett runs “his” side of the show.
So what happened to preserving two independent editorial voices? Kind of got lost along the way, and the feds don’t seem interested in taking a look.
So much for anti-trust. Doesn’t apply in Detroit.
Then, a few years ago, Phil Power sold his big chain of suburban bi-weekly newspapers known as the Observer & Eccentric to — guess who? Gannett now owns the Free Press, controls 95 percent of the News, and also owns, lock stock and ink barrel, the O & E. Even that wasn’t enough. Gannett also bought Mirror Newspapers, a chain in five Metro Detroit towns. Gannett prints these suburban papers at its plant in Port Huron, but maintained in a Dec. 7 Free Press bit that “the publications will remain editorial independent and will be a separate operating unit.”
(Maybe somebody can enlighten me. According to the Free Press, “Gannett is the majority owner of the Detroit Media Partnership, which runs the business operations of the Detroit Free Press and Detroit News.” If Gannett is the majority owner of DMP, who is the minority owner?)
Several years ago, in collaboration with Gannett, Knight-Ridder/Detroit Free Press began publishing 13 weekly editions called the Community Free Press. Today, the Free Press publishes 11 of these CFPs in Detroit, western Wayne, the Grosse Pointes, Oakland and Macomb counties. The CFPs were intended to compete for news and — much more importantly — advertising. The competition? Why, the suburban papers. That would be, let’s see, the Downriver Herald, Oakland Press, Macomb Daily, Royal Oak Tribune, Spinal Column and — oh yes, the Mirror papers and the Observer & Eccentric.
But that was then, back when Phil Power still owned the O & E and Knight-Ridder still existed as the second-largest newspaper chain in the country after Gannett.
Back when there was some semblance of competition among the papers.
Back then, Gannett had its own versions of the CFPs and together with Knight-Ridder/Detroit Free Press they competed with the O & E for ad dollars.
Now, Gannett runs the whole show, including the O & E, and the outlook is quite different. Why, some wizard in the corporate headquarters back in McLean, Virginia has apparently figured out that Gannett is competing with itself for ad money.
That would never do.
In a monopoly, that doesn’t make sense.
I understand that a top executive recently warned Community Free Press workers that the community editions competing with the O & E soon were going to be killed. The decision is directly related to Gannett’s ownership of the O & E, so I understand the workers were told. The CFPs may survive in areas where the O & E doesn’t publish, such as the Pointes, Downriver and Macomb. But in Oakland and western Wayne, you can kiss them goodbye.
Maybe. I’m hearing the Gannett execs at the Detroit Media Partnership have back-pedalled. They probably got nervous after reading my expose about the CFP closure in joelonthreoad.com. Right? Now they’re saying they won’t kill the CFPs. Well, who knows? Only they do, maybe. Fact is, by virtue of its combined ownership, Gannett calls the shots. It can kill the weekly Freepies, it can keep them robustly alive with lots of support or it can let them slowly starve. Who knows.
Here’s what I do know: The CFPs have evolved into a lively alternative to the dull O & E. Readers like them. I know this, because I wrote for the CFPs for three and a half years before I retired last year. I heard from lots of readers who looked forward to opening their CFP on Sunday morning.
The CFPs are part of that “independent voice” the Newspaper Preservation Act was meant to preserve. Kill them, and one more piece of that independence will die.
But is it enough to simply not kill them? As long as Gannett owns the whole kit and kaboodle, it has the power to do what it likes with any part of its empire. That is the power of a monopoly.
I sensed elation from staffers who first thought the Freepies would be killed, then learned it wasn’t so, maybe. Reminds me of the guy who was hitting himself on the head with a hammer. Asked why, he said ’cause it felt so good when he stopped. Nice thing about Gannett is they swing the hammer for you.
Once upon a time, the Free Press staff worked in its own 1920s Albert Kahn-designed building on W. Lafayette. To save money, Gannett moved the entire editorial operation into the News building. To preserve some sense of identity among the proud Freepsters, Gannett gave the Free Press its own entrance on Fort St. on the opposite side of the News’ Albert Kahn-designed blockhouse facing W. Lafayette. In one fell swoop, a major piece of Free Press identity was history. My 20-year Free Press watch has on its face the image of that old Free Press building, an image new staffers would likely not be able to place. Then last year, Gannett closed the Fort St. entrance. Cost too much to pay a guard, they said. Now I’m hearing that Gannett has closed nine restrooms in the main building. Cost too much to pay the janitors to clean them. (They’ll learn that you can go that direction only so far — until you start paying janitors to clean the hallways and broom closets.) Scuttlebutt has it that Gannett will move the O & E’s Oakland newsroom into the main building on W. Lafayette, once again to save money. And then, late last year, Gannett persuaded a bunch of us senior staffers to take buyouts. That will save them money, too. Won’t it?
Get the picture? It’s all about cutting costs. Did I hear somebody say “quality product”?
Don’t you know? It’s a monopoly.
By the way: Kudos to Jim Schaefer and Mike Elrick for writing their blockbuster stories about Detroit Mayor Kwame Kilpatrick’s lying courtroom testimony in the cop-firing lawsuit.
But didn’t it seem like the Free Press was, perhaps, a bit over-eager to see the mayor prosecuted for perjury or any other violation the paper can conjure? Man, they just fell all over themselves looking for an investigation.
The beauty of a newspaper monopoly, for its owners, is this: You can whack away at people with no fear of tit-for-tat. Nobody — at least nobody with a real newspaper — is writing about that nettlesome issue of whether the current ownership arrangement of the Detroit News, Detroit Free Press, Mirror papers and the Observer & Eccentric chain might, gosh, just might violate the Newspaper Preservation Act.
Kwame’s small potatoes compared to what’s happening to newspapers in Detroit.
Now THAT’S an investigation I’d like to see.
