PRESS

Wars among the newspaper families

July 7 1986
PRESS

Wars among the newspaper families

July 7 1986

Wars among the newspaper families

PRESS

The sudden May 27 closing of the financially troubled Baltimore News American—the 213-yearold newspaper that reported on the U.S. Declaration of Independence in 1776—added that city to the growing list of one-newspaper communities in the United States. And the folding of that Hearst Corp. paper cleared the way for the purchase of its competition by the giant Times Mirror Co. of Los Angeles. The day after the News American printed its last banner headline—“So long, Baltimore”—the Times Mirror Co. paid a record $835 million for the family-owned A.S. Abell Publishing Co., whose holdings included The Sun and The Evening Sun in Baltimore, two television stations and two magazines. Norman Isaacs, former editor, retired journalism professor and a former chairman of the National News Council, a group that investigated complaints against the media which disbanded in 1982, declared: “It’s the thirdand fourth-generation syndrome. They want the cash. The drift toward chain ownership is impossible to stop.”

The Sun sale was the latest in a recent series of transactions in which long-established family-owned newspapers in Detroit, Des Moines, Iowa, and Louisville, Ky., passed into the hands of giant media corporations. According to Ben Bagdikian, dean of the graduate school of journalism at the University of California at Berkeley, 97 per cent of the 1,674 daily newspapers in the United States are monopolies.

And Bagdikian says he finds the current trend disturbing.

He added, “The chains are controlling a series of local monopolies that are the sole carriers in many areas of serious local and serious national news.”

In St. Louis earlier this year the heirs to the press fortune of Joseph Pulitzer fought a highly publicized battle over the family’s flag-

ship paper, the St. Louis Post-Dispatch. Some family members wanted to sell the paper and the other media holdings that are the legacy of Pulitzer, for whom journalism’s Pulitzer Prize was named and the man re-

garded as one of the founders of the sensationalist so-called yellow press. (The term came from The Yellow Kid, a popular comic strip featured by both Hearst and Pulitzer papers which existed in New York in the late 1890s.) When Pulitzer Publishing Co. chairman Joseph Pulitzer Jr., grandson of

the founder, his half-brother Michael and first cousin David Moore refused to sell or to tender their 54-per-cent 1 holding, the family went to court. The dissidents wanted to sell the family holdings to Detroit-based real estate investor Alfred Taubman for $870 million. Eventually, the three family leaders agreed to buy out the smaller shareholders.

Although the Post-Dispatch remains in family hands, disputes between members of the Scripps family in Detroit, the Binghams in Kentucky, the Abells in Maryland and the Cowleses in Iowa, owners of The Des Moines Register, have resulted in the heirs getting out of the newspaper business. And with the exception of the Abells, they all turned their holdings over to Allen Neuharth, the chairman of the Gannett Co. Inc. of Arlington, Va. Under Neuharth’s tight financial control, Gannett has become the largest U.S. group, controlling 91 daily papers with sales of 5.5 m million copies a day. The ,

company had a profit of $350 million last year. But Neuharth’s major adventure has been USA Today, a national daily featuring extensive sports, short news stories and attractive four-color graphics. Although USA Today claims to be the second-largest paper in the United States (after The Wall Street Journal) with sales of 1.4 million daily, it has lost money ever since its 1982 introduction —an estimated $470 million so far.

In Detroit, Gannett paid $997 million last year for The Detroit News and other holdings, including a lucrative television station in Washington, D.C. But the future of the News is unclear. Engaging in an extremely expensive circulation battle over the past three decades, the afternoon News and the morning De§ troit Free Press not only cut ; advertising rates and news| stand prices—the News costs 815 cents on weekdays—but E also spent large amounts of

Neuharth; Gannett purchase in Louisville: `impossible to stop'

money on editorial coverage of such stories as racial unrest in South Africa, where the Free Press has a reporter and a staff photographer. The result has been an almost even splitting of the newspaper market, with the News selling 650,445 copies on an average weekday and the Free Press 645,266.

To end that expensive fight, Gannett and Knight-Ridder Newspapers Inc., the Miami-based group that owns the Free Press, negotiated a joint operating agreement which would enable both papers to cut costs by reducing staff. If the U.S. justice department approves, the companies would merge the production and business departments of both papers and publish a joint edition on weekends. Opposing the merger is a coalition whose members include Detroit Mayor Coleman A. Young and retired United Auto Workers president Douglas Fraser. Coalition member Hillel Levin, executive editor of Metropolitan Detroit magazine, questioned the economic necessity of the merger. Said Levin: “Neither newspaper is a basket case.” But the newspaper proprietors, in their submission to the government, have described the Free Press as a “failing” newspaper—a requirement under the law. But Elie Abel, a communications professor at Stanford University, said, “It’s hard to see how a paper with 600,000-plus circulation is failing.” Meanwhile, in Kentucky, a dispute in the Bingham family led to the sale of the Louisville Courier-Journal and The Louisville Times in May. When Barry Bingham Jr. removed all four female family members from the board of directors in March, 1984, Bingham sisters Sarah and Eleanor decided to sell their shares despite the opposition of brother Barry, the publisher of both papers. Last January the family’s 80-year-old patriarch, Barry Bingham Sr., claiming that the sale of the family business was both unavoidable and tragic, offered the company for sale. But the Binghams displayed their sense of humor by allowing a family-owned radio station to run a lottery promotion to attract listeners which proclaimed: “Win a Family Fortune with Bingham Bucks.”

In May, Gannett paid $417 million for the Louisville sister papers, which have won eight Pulitzer prizes for journalistic excellence. Said Isaacs: “Neuharth would like to go down as having turned Gannett into the producer of some of the highest-quality papers in the country. If he can do that through Des Moines, Louisville and Detroit—perhaps by making other papers pay the bills—then he will have really achieved something.”

—IAN AUSTEN in Washington