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 AJR  Letters

From AJR,   April/May 2005  issue

JOA Disputes   

John Morton (The Newspaper Business, February/March) was right that Pulitzer Co. would be sold but wrong in focusing on Gannett Co. as the likely buyer (it proved to be Lee Enterprises). Mr. Morton's discussion of Gannett's possible antitrust problem arising from the Pulitzer/Gannett joint operating agency in Tucson thus became moot. That discussion was so wrong, however, that it deserves correction for the record.

First, while it's true that "the U.S. Justice Department's antitrust division has never favored the creation of joint agencies," that's irrelevant. This would not have been the "creation" of a JOA, since you can't have a JOA with only one operator.

Second, it's true that Justice "has been especially sensitive about an agency devolving into a monopoly for one company." But Morton's suggestion that "Gannett conceivably could convince Justice that its own Tucson Citizen..is such a drag on the agency's profitability that the agency should be dissolved" is misleading: a., you don't need Justice's approval to dissolve an agency; the two operators can agree to do that at any time, subject to the terms of the particular agreement; b., what Justice most likely would have done if Gannett had bought Pulitzer would have been to require Gannett to put one of the Tucson papers on the market. This is Justice's standard effort to prevent a one-company monopoly in the wake of a JOA--and it's had some success recently in San Francisco and Honolulu.

It's almost too bad Gannett wasn't the buyer, so we could watch this scenario play out in Tucson.

Stephen R. Barnett
Elizabeth J. Boalt Professor of Law Emeritus
University of California, Berkeley
Berkeley, California

John Morton responds:
My comment that Justice has not favored joint agency creations was meant to illustrate the department's general antipathy toward JOAs and had no bearing on Tucson specifically. The point of Gannett's persuading Justice that its Tucson Citizen is a hopeless enterprise is precisely to avoid being required to seek a buyer. Whether the weak surviving soldoff dailies in San Francisco and Honolulu represent any kind of success I'll leave others to judge.