Leaving Readers Behind:
The Age of Corporate Newspapering   

This article is excerpted from the book "Leaving Readers Behind: The Age of Corporate Journalism," which is being published this month by the University of Arkansas Press.

"I BELIEVE IN THE PROFESSION of journalism. I believe that the public journal is a public trust; that all connected with it are, to the full measure of their responsibility, trustees for the public; that acceptance of lesser service than the public service is a betrayal of this trust."
--Walter Williams
The Journalist's Creed
1914

"W E STAND FOR EXCELLENT service to customers and communities, a fair, respectful and learning environment for all our employees and a strong return for our shareholders. This responsibility is shared by each of us in Knight Ridder, regardless of title or function."
--Knight Ridder
Statement of Strategic Intent
1991

N EWSPAPER OWNERS AND publishers like to say that ink courses through their veins, but it's really paranoia. They are world-class worriers, and with decades of practice is it any wonder? After all, they were convinced that Hollywood was going to kill them off, then radio, then television, then cable. Now the Internet has them fretting about New Media and personal data appliances the same way they once worried about Teamsters and direct mail. To be a newspaper publisher is to know perpetual angst. You can't enjoy it when advertising is up because you know it will go down, just as you can't enjoy it when the cost of newsprint is down because you know it will go up. A boom is nothing but a bust waiting to happen.
So you worry--all the way to the bank. The American newspaper industry today is a $60-billion-a-year, diversified colossus with profit margins triple the norm for U.S. industry as a whole. As writer William Prochnau put it not long ago, "A funeral for newspapering? It would draw more stretch limos than lined up for Elvis."
Despite what you might have heard, then, it's not a genuine question whether newspaper companies will survive in our ever-shifting, hypercompetitive communications landscape. They will, their genius for adaptation and self-preservation evolved to a level that Darwin would relish. They are that well-tested--and, it should not be forgotten, even better bankrolled.
Meantime, a far more compelling question goes unasked: As this evolution plays out, what might it ultimately cost us, the newspaper-reading public?
Judging from the evidence so far, the answer is: a lot.
The simple fact is that the American newspaper industry finds itself in the middle of the most momentous change in its 300-year history, a change that is diminishing the amount of real news available to the consumer. A generation of relentless corporatization is now culminating in a furious, unprecedented blitz of buying, selling and consolidating of newspapers, from the mightiest dailies to the humblest weeklies. Intended to heighten efficiency and maximize profits, this activity is at the same time reducing competition and creating new ownership models. Perhaps most alarming, it is revolutionizing, to the point of undermining, the traditional nature and role of the press. Today's thoroughly modern newspaper executive sees himself less the "public trustee" of Walter Williams' famous creed than the New Age guardian of shareholder value described in Knight Ridder's committee-written "Statement of Strategic Intent." Roll over, Ben Bradlee.
This is not to say that all the change in the industry has been bad, or that there aren't wonderful newspapers out there. There are, from the New York Times and Washington Post on one coast to the Los Angeles Times and San Jose Mercury News on the other. In between are dozens of good, some exceptionally so, papers. But many of these metropolitan regionals--still the key disseminators of information for tens of millions of Americans--are not as good as they should be, or in the case of such papers as the St. Louis Post-Dispatch and Des Moines Register, as good as they once were. Indeed, one can argue that considering there are nearly 1,500 daily papers in the United States, and considering that most of these are handsomely profitable, the percentage of excellence is abysmally low. Today's typical daily is mediocre, with a strong overlay of provincialism. And industry trends are only making matters worse.
That may help explain why newspapers largely failed to report the seismic activity shaking up their own backyard. Or at least they did until, in early 2000, a tremor out of Southern California was too big to be ignored. This was the takeover of mighty Times Mirror--publisher of the L.A. Times, Newsday, the Baltimore Sun and other respected papers--by Chicago's Tribune Co. With Wall Street having decreed to corporate America that you either Get Big or Get Out, the industry and its analysts generally applauded the $8 billion deal, which also included a handful of lucrative television stations. And they practically salivated over the synergistic possibilities; imagine what an enlightened conglomerate could do with these combined resources in print, broadcast, online and cable!
But few addressed what the takeover said about the increasingly quaint notion of local ownership; the most important outlet for news in our second-largest and most sociologically complex metropolis would now be governed out of a skyscraper 2,000 miles away in a city that can be fairly characterized as the anti-L.A. Nor did they speculate much about how it might fuel the industry's increasingly monopolistic practices, nor how in recent years the government's antitrust watchdogs have been fairly blasé about this whole business of media consolidation. (In acquiring Times Mirror, Tribune also got television stations in virtually all its major newspaper markets. As such, it was gambling that the Federal Communications Commission will be more permissive than in the past about cross-ownership--a bet that at this writing certainly seems well-placed.)
Nor did they assert what the Times Mirror acquisition really represented: the absolute triumph of corporate newspapering. Simply put, it was the biggest, baddest deal in a world that has become a deal-maker's paradise.
This is a world where conglomerates now rule unchallenged. Where independent papers, once as ubiquitous on the American landscape as water towers, are nearly extinct. Where small hometown dailies in particular are being bought and sold like hog futures. Where chains, once content to grow one property at a time, now devour other chains whole. Where they are effectively ceding whole regions of the country to one another, further minimizing competition. Where money is pouring into the business from interests with little knowledge and even less concern about the special obligations newspapers have in our society. The amount of activity is simply dizzying.
Just look at giant Gannett. After a multibillion-dollar burst of acquisitions in the first half of 2000, Gannett, which already was the nation's largest newspaper company in terms of circulation and sales, grew itself from 74 daily newspapers to 99. Most conspicuous was its swallowing of the Pulliam family's Central Newspapers Inc., which if nothing else practically guarantees that consumers of Phoenix's Arizona Republic and the Indianapolis Star may never get the kind of papers they have long deserved. Regardless, Gannett can now brag that it produces one out of every seven newspapers sold in America. Along with Knight Ridder and the newly fattened Tribune, these three chains now claim a quarter of all the daily newspaper circulation in the nation.
Consider the phenomenon that is Community Newspaper Holdings Inc. Bankrolled by that First Amendment bastion the Alabama state employees' pension fund, CNHI didn't even exist until 1997, but it already owns 112 daily newspapers reaching from Alamagordo, New Mexico, to Tonawanda, New York. The year 1998 saw the emergence of another instant chain, Liberty Group, created by a leveraged-buyout king whose other holdings have included bus companies, pharmacy chains and home-improvement centers. Liberty has acquired 68 dailies. It's too soon to know what will happen with these two newborn companies, but so far they have paid more attention to rigorous bottom-line management than to distinguished journalism.
The nonstop trading of small-town dailies may seem creative and exciting to newspaper brokers and financial analysts, but think how unsettling it is for those who actually subscribe to these papers, or work for them. Consider the Northwestern (circulation 23,500) in Oshkosh, Wisconsin. Here is a paper that prided itself on being in hometown hands since the Johnson administration--the Andrew Johnson administration. But in 1998 it was sold not once but twice, within the space of two months. Two years later it was sold again. Four owners in less than three years.
But more than the transactions themselves, it is the thinking underlying them that is having such a profound impact. Most of these sales are being driven by a relatively new concept known as clustering, in which a company purchases properties in close proximity to one another or to its existing papers. This allows the company to consolidate a number of functions, chiefly on the business side but sometimes editorial as well, for maximum efficiency. So it is that in populous New Jersey, the Newhouse and Gannett chains between them now own 13 of the state's 19 dailies, or 73 percent of all the circulation of New Jersey-based papers. (It may be our most monopolized state--a new license-plate slogan, perhaps?--although it would be given a run by not-so populous Oklahoma, where CNHI alone owns 24 of the state's 43 dailies.)
To date there are at least 125 major newspaper clusters around the country, involving more than a fourth of our daily papers. These clusters are as small as two papers but typically involve five or six, and not uncommonly as many as eight. There are countless others if you throw in weeklies, which lend themselves more naturally to the cluster concept. Proponents point out, correctly, that in some (unusual) cases a clustering arrangement has kept alive an otherwise failing newspaper. But even then the clustered management removes major decisions from that town, which is to say, it puts the paper one step further away from its readers.
By definition clustering reduces competition, with fewer companies operating in the same area, and taken to its logical conclusion it can dramatically reduce the number of editorial voices as well. This was seen recently in suburban Westchester County, just outside New York City. Over the years Gannett had collected 10 small local dailies there and operated them as a cluster, though it maintained their individual nameplates and identities. But in 1998 the company yielded to temptation and melded them into one vanilla-flavored metro, the Journal News. Now, the Journal News without doubt is a better paper than any of its small predecessors. Yet would anyone argue that this consolidation wasn't a severe blow to those communities' respective identities? Does anyone beyond its corporate minders really believe that the confederated Journal News "cares" about, say, Tarrytown more than the old Tarrytown Daily News did?
No matter. The Tarrytown Daily News was sacrificed on the altar of efficiency, and other luckless nameplates are sure to follow.
But when it comes to media efficiency, the absolute latest new thing is not consolidation or clustering but synergy, which is the leveraging of different kinds of media holdings to enhance one another. Tribune Co., as was evident in its Times Mirror takeover, has established itself as a pioneer in this field, using its newspapers as content factories for online sites, local television stations and cable news outlets, all under common ownership. "I am not the editor of a newspaper," declared Howard Tyner, then editor of the Chicago Tribune and subsequently promoted to oversee all the company's papers. "I am the manager of a content company. That's what I do.... We gather content."
Such an observation is de rigueur for modern newspaper editors; to say otherwise is to speak heresy. Never mind that the Chicago Tribune's circulation has eroded steadily from its peak of 1 million decades ago to 658,000 today, or that the daily once fond of calling itself "The World's Greatest Newspaper" is no longer even considered in the top 10 in America. (There are days, some Chicagoans argue, when it isn't even the best paper in town.) It doesn't matter if the obligation of feeding an omnivorous hydra-headed news machine may have helped take the edge off the paper, because this synergy idea is catching real fire. Down in Tampa, Media General has gone so far as to put its newspaper, the Tribune, in the same building with its local television station and online operation, the better to exchange stories and, ostensibly, resources. (It's still unclear what the newspapers get out of the bargain other than garish weather maps sponsored by the local TV meteorologist.) Tampa's has become the most sophisticated model for this kind of thing, and as such is drawing enormous interest from other newspaper companies.
Under the Tampa model, and presumably in most major city rooms of the future, news decisions for all these outlets are made in a coordinated way, sometimes in the same meeting. In effect the same group of minds decides what "news" is, in every conceivable way that people can get their local news. This isn't sinister; it's just not competition.
But you'd better get used to it, because the real momentum is just beginning. Indeed, should the consolidation of the newspaper industry continue at its current fevered pace, it won't be long before the nation effectively is reduced to half a dozen major print conglomerates. The flamboyant William Dean Singleton, CEO of MediaNews Group, one of the chains that has championed this new order, flatly predicts, "You will see a lot fewer newspaper companies in five years." No one has contradicted him.

T HIS IS NOT ANOTHER pointless lamentation on the Citicorping and Wal-Marting of America. All change has implications. Some are intended, some not; some are beneficial, some not. If it is regrettable that the corner five-and-dime and your neighborhood S&L have been driven out of business by the giants, it's also likely that at the end of the day you have more hardware selection and banking services at your disposal than ever before.
News, however, is a different commodity. It is unique to any given place; what happens in Portland, Maine, is of little consequence in Portland, Oregon. But unlike other realms of business, in the newspaper industry, consolidation--in tandem with the chains' desperation to maintain unrealistic profit levels (most of these big companies now being publicly traded)--is actually reducing the amount of real news being gathered and disseminated, most conspicuously at the local and state levels, where consumers need it most. This is because consolidation has resulted in far fewer news outlets, and the economic pressures have resulted in fewer reporters with fewer inches in the paper to say anything.
Concentration has other ramifications, less easy to document but no less real. For starters, it too readily facilitates a kind of corporate group mind-set. Sometimes this is a good thing; in recent years, for instance, it has resulted in a doubling of sports coverage and a fourfold increase in space devoted to business. More often than not, however, notions turn into convictions with no supporting rationale. Years back the idea took hold in the industry that readers found coverage of government "boring," and that foreign news was hopelessly "irrelevant," even though empirical evidence shows both suggestions to be canards. Coverage of government at every level has since been in retreat--about which more in a moment--and foreign news is quietly disappearing from mainstream newspapers. Indeed, most of the nation's dailies--perhaps 95 percent--practice journalistic isolationism. They devote twice the space to comics as they do to international news. They take the weather almost as seriously as momentous events from abroad.
This new media environment also fosters a kind of creepy coziness, where activity that once would have been dismissed as preposterous is now commonplace. Times Mirror can lend Dean Singleton $50 million to help MediaNews purchase the Los Angeles Daily News--hometown rival to TM's own L.A. Times--so that a stronger competitor won't. The publisher of Hearst's San Francisco Examiner promises to stem his paper's criticism of Mayor Willie Brown if Hizzoner doesn't oppose Hearst's takeover of the rival Chronicle. The entire business side of the L.A. Times can climb into bed with a major advertiser, the Staples Center, and no one in a leadership position appreciates its blatant impropriety. At a time when rank-and-file journalists are being held to higher standards of conduct than ever, what kind of screwy, hypocritical message does such activity convey?
Meanwhile, budgetary strictures and multimedia demands leave newsrooms more sorely pressed than ever. Our favorite example--and maybe a poster child for the beleaguered journalistic fraternity--is the police reporter for the paper in tiny Cumberland, Maryland, where the staff was stretched so thin that he had to have the local police fax him the day's crime reports--the ones they wanted him to see, of course, as opposed to the ones he might really need to see. This sort of thing isn't as uncommon as one might suppose.
In other words, what's happening in the newspaper world is more than inside baseball, of interest only to journalists and Wall Street analysts. It has a cost to average Americans that grows increasingly clear. And that cost, in the form of diluted and less serious, less substantive news, could be high for a nation whose democracy literally depends on an informed citizenry.

I N AN EFFORT TO ASSESS what is happening, an enterprise calling itself the Project on the State of the American Newspaper spent more than two years producing the most comprehensive examination of the industry in history. Underwritten by the Pew Charitable Trusts, the work was an initiative of the Project for Excellence in Journalism, a Washington-based organization led by media critic Tom Rosenstiel, committed to bringing about accountability and reform in the news business.
The Project's goal was simple: Hire some of the nation's top journalists to apply the same scrutiny to the newspaper industry that newspapers have historically applied to other business sectors. These correspondents, virtually all of them newspaper junkies who came of age at major metros themselves, spent on average six months reporting and writing. They traversed the nation from New York to San Francisco, from Oklahoma City to besieged little Oshkosh. Their reports, 18 in all and most running to 15,000 words or more, were published serially in this magazine. Given the megadeal that was presently to follow, it was fitting that the series debuted in the spring of 1998 with Ken Auletta's profile of Tribune Co. and concluded in early 2000 with William Prochnau's examination of the Los Angeles Times, where a highly touted effort to build a "newspaper without walls"--that is, without the traditional barrier between business and editorial--had just collapsed in the rubble of the Staples Center fiasco.
The point of the series was to get past the city rooms and into the business suites, to analyze the people and the forces that, for better and worse, are remaking the newspaper landscape. Where possible, the reporters were to quantify these changes. Beyond that, they were to discuss their implications, for industry and customer alike.
Some of their specific findings were terribly sad. A good example was the story of the Asbury Park Press, New Jersey's second-largest newspaper. Over the years the Press had carved out a reputation as one of the most enterprising independent papers in the nation. It did this by deploying an editorial staff of 240, quite robust for a paper with a circulation of 159,000, and by approaching its patch of the Jersey Shore with the amalgam of concern and affection that generally is possible only under local ownership.
Then in 1997, the Press was sold to Gannett. As is typical in such cases, the company promised no diminution of editorial quality. Just as typically it moved to effect precisely that. Within a year the Gannett-appointed publisher, Robert Collins, had slashed the newsroom staff from 240 to 185, significantly reduced the space available for serious news (though plenty was available for a new weekly pets section), and presided over the exodus of many of the Press' most talented people to its competitors. Hewing to well-documented Gannett principles, the paper shortened stories, de-emphasized government news and ordered reporters to "localize" pieces to the point of absurdity.
The year after his emasculation of the paper, Collins was named Gannett's manager of the year and praised by his corporate bosses for remaking the Press "into a decisive, results-oriented enterprise."
What happened in Asbury Park was a blunt but not especially exceptional example of what is occurring around the country. Prosperous Gannett applies the knife in this way because that is its corporate culture. But other companies doing such cutting say they have no choice, and often that is true. Why? Simple economics. One reason the newspaper market has been so heated is that properties are fetching record prices. The high prices put tremendous pressure on new owners to pare costs in order to make their debt payments. And as anyone in the business can tell you, there really are only two major cost centers in newspapering: people and paper.
Which helps explain the eviscerations at the papers of the Journal Register Co., whose primary owner is the Warburg Pincus investment bank. The company has squeezed properties like its Times Herald in Norristown, Pennsylvania, so hard that today the paper runs about half as many pages as it did before the Journal Register acquired it. A paper that once prided itself on comprehensive coverage of local government now lets many important meetings go uncovered, and accounts of others often appear days after the fact. "I have nothing good to say about it," Mayor Ted LeBlanc says of the Times Herald. He has stopped subscribing.
Other examples abound. Out in California, Knight Ridder hacked away at newsroom positions and salaries after it acquired the feisty little Monterey County Herald, while MediaNews did the same in its highly contentious acquisition of the Long Beach Press-Telegram. Thomson Co. was notorious for its knifework at all its papers before it abandoned them recently for the even more profitable and infinitely less messy world of online information.
In Atlanta, meanwhile, Cox's cost-cutting showed up not only in the consolidation of the Journal and Constitution editorial staffs, but in how they were used. This became clear in 1998 when the Project on the State of the American Newspaper conducted the first-ever comprehensive survey of newspaper coverage of state capitals. The Project documented a strong nationwide retreat from such coverage throughout the decade of the '90s--sometimes to the point of near abandonment--at precisely the time when state government was gaining new power and exerting more impact than ever on the average American. The survey of full-time reporters at all 50 state capitals found a total of only 513. To put that in perspective, more than 3,000 media credentials are issued each year for the Super Bowl. And more than 50,000 lobbyists are registered with state governments. That's about 100 lobbyists for every overworked, underpaid press watchdog. The survey revealed that, over a decade, newspaper commitment to statehouse coverage fell in 27 states, among them New York, Michigan, Connecticut and Illinois. In fast-growing Georgia, statehouse coverage had almost disappeared off the radar.
This was particularly distressing because the Journal and Constitution had a proud legacy of blanketing the statehouse like kudzu. A generation ago when the Legislature was in session, 10 or 12 reporters, columnists and editorial writers could be found trolling the Capitol's marble corridors. By the spring of 1998 the combined papers were down to three full-time state government reporters. Things reached such a pass that reporters with little background or expertise had to be parachuted in to cover stories on an emergency basis--with predictable results. As Rick Dent, then press secretary to Gov. Zell Miller, explained, "They'll get assigned a welfare piece. I'll have to spoon-feed the information to them.... But I'm an advocate. I'm not going to give you the whole side of the story.... They say, ŒWho else should I talk to?' Well, hell, I'm not going to tell them to talk to the people who are on the other side."
The statehouse survey garnered considerable national attention, and follow-ups the next two years revealed a modest if discernible increase in full-time statehouse reporters: up to 543, or nearly a 6 percent increase. But the Journal and Constitution still had only three reporters on the beat.
A similarly disturbing situation was found to exist in Washington, D. C. A 1999 survey of 19 key departments and agencies showed a wholesale retreat in coverage of the federal government. Regular reporting on the Supreme Court and the State Department, for instance, dropped off considerably throughout the '90s. At the Social Security Administration, whose activities affect literally every American, only the New York Times was maintaining a full-time reporter. And incredibly, at the Interior Department, which controls 500 million acres of public land and oversees everything from the national park system to the Bureau of Indian Affairs, there were no full-time reporters around.
What was happening here? Why had government reporters gone from being newsroom stars to pariahs?
Mostly it was because their editors, under financial pressure from their publishers and under industry pressure to do more expansive lifestyle coverage, allowed themselves to believe that readers found "incremental" government news inherently boring. Of course, that kind of coverage does result when witless reporters are allowed to approach it that way, but in truth readers have never stopped, nor will they stop, appreciating intelligent reporting of public affairs.
The foreign story suffered the same fate as the government story, which is to say it wound up deep inside the paper, or out of it altogether. The Indianapolis Star, a fairly typical mainstream paper, published 23 percent less foreign news in November 1997 than in the same month 20 years earlier. In a comparative survey of 10 metro newspapers, the Project found that the percentage of newshole devoted to international events dropped from 5 percent in the mid-'60s to just 3 percent in the late '90s--by which time the United States had become the world's lone superpower, and events overseas were having a more direct impact on the average American than ever before.
Another issue the series brought to light was the incredible vulnerability of our hometown papers. Half the newspapers in America have a circulation of less than 13,000, and they are a precious national heritage. But these small dailies are being especially whipsawed by the new ownership models. After documenting every newspaper sale from 1994 through July 2000--713 transactions in all--the Project found that two-thirds of the time it was one of these community papers that was changing hands. In that six-and-a-half-year window, 47 percent of all hometown papers turned over--some of them, like Oshkosh, three or four times. And since with each swap a paper typically is more highly leveraged, budgets got tighter, and content of necessity became expendable.
Nor has the selling frenzy been confined to daily papers. It has also spread to the nation's 8,000 weekly newspapers. Weeklies once were too small and parochial for the major chains to bother with, but the big boys have gotten over that attitude in a hurry. When Pulitzer recently bought the 38 Suburban Journal weeklies and niche publications that ring its flagship St. Louis Post-Dispatch, it was only the latest big company to turn a nuisance into a synergistic opportunity. In city after city--Washington, Baltimore, Cleveland and Dallas, to name just a few--metro papers have been purchasing the community weeklies that surround them. Today the major owners of daily newspapers, such chains as CNHI, Gannett, Journal Register and Liberty, are also among the largest holders of weeklies. Times Mirror even purchased the weekly in Hartford, Connecticut, that was begun years ago precisely to give readers there an alternative to the daily paper, Times Mirror's Hartford Courant. The point is, the corporatization of the weeklies further erodes the number and diversity of editorial voices.
Other changes in the industry are much less noticeable to the public but are no less harmful. For instance, the chains increasingly are pressuring top editors--primarily through their wallets--to focus more and more on corporate goals, and less and less on the news. At too many papers these days, the editor is just another replaceable face in a management constellation. The business side is in clear control, and its influence is being felt in unwelcome ways in the news pages. Decisions about editorial emphasis, the size of reporting staffs, special sections, newshole--more and more these are being made either by committee or by corporate fiat. The diminution of editorial authority has resulted in great frustration, and many editors simply have left. "I think in that process a lot of editors were really beaten down," said John Carroll, former editor of the Baltimore Sun and the person Tribune brought in to run the L.A. Times. "They were demoralized. And some of them just never got back up off the canvas."
It wasn't ever thus. Once it was the norm in chains that a paper's chief business executive was called general manager or business manager, or more rarely, president, and usually this person had no authority over the newsroom. When the formidable John S. Knight was building the newspaper empire that was the forerunner of Knight Ridder, his editors and general managers reported separately to corporate headquarters. This arrangement began to fade in the late '70s, but it didn't disappear totally until the late '80s. Under the new system, a local publisher served as the top official of each paper, and he or she was the ultimate authority over both the news and business sides. Even then, to minimize the risk of the business side running roughshod over the newsrooms, Knight selected many of his publishers from the editor ranks. But within a decade, with the founder dead and buried, the business-side executives were filling the top roles. In Gannett and other companies a similar process played out, albeit more swiftly and more sweepingly.
Knight, legendary curmudgeon and Pulitzer Prize-winning columnist, not only tolerated but actively supported argument and debate among editors and businessmen; he believed he would more likely get the truth if all felt free to have their say. But times change. A few years ago, when the editor of Knight Ridder's paper in Columbia, South Carolina, differed with his publisher about the direction of local coverage, he was told point-blank that dissent was not in his job description. And Gannett circulated a memo to its editors that put it succinctly: "The publisher is responsible for the entire newspaper, including the quality of the news report."
So much for the walls between news and business.

O F COURSE, THERE IS NOTHING inherently evil about corporate newspaper owners, any more than there is anything inherently angelic about local ones. Most any print journalist old enough to remember typewriters--and it wasn't that long ago when an IBM Selectric was the epitome of high tech--has worked for at least one independent owner with the scruples of a loan shark. (Ask readers in Oklahoma City about the "blessings" of independent ownership, as their Oklahoman enters its ninth decade of benighted leadership under the Gaylord family.) Besides, newspaper chains are hardly a new phenomenon. Hearst, Pulitzer, Scripps--to a one the glorious, notorious print titans of the early 20th century made their fortunes and consolidated their immense influence by stringing metropolitan papers together, and Adolph Ochs couldn't invent the New York Times as we know it until he had first turned around the lowly Chattanooga Times.
Nevertheless, for the first half of the 20th century these chains, while inordinately powerful, were more the exception than the rule. Independent newspapers dominated the nation. A community of any size might have two or even three. Were many of these operated by boosters, shills and scalawags? Absolutely. But others were courageous and civic-minded. And even in the worst cases competition could be counted on as the great leveler, feeding the community's vitality and ensuring that at least a modicum of honest information reached the populace.
By the '60s, however, that was changing--slowly at first, then with the vigor of a Goss Metroliner whirring to life. The story of the modern newspaper industry is one of relentless chain-building, consolidation and corporate centralization.
It should be said that in the beginning, this development was not necessarily a bad thing. One can make a strong argument that as the large chains mushroomed, they very often improved the newspapers they bought, sometimes sharply. Certainly this was the case in Philadelphia, Miami, Macon, Lexington and other cities where Jack Knight took control of papers. Long Island's Newsday, already a fine paper when it was acquired by Times Mirror in 1970 from Harry Guggenheim, blossomed and matured under its Los Angeles owners. Applying steadily evolving technological improvements and other efficiencies to their new properties, such chains in a couple of decades were able to ratchet up their profit margins while simultaneously bolstering editorial content.
Along the way society was changing, and so was the industry. The automobile, the booming suburbs and television altered commuting and reading patterns, and the marginal big-city papers began to fall by the wayside. (Not all that worry we talked about earlier was heedless, you understand.) As afternoon dailies especially became expendable, more and more communities suddenly found themselves one-newspaper towns. And those that survived this great shakeout realized something that the oil-and-steel crowd had known for years: A monopoly can be a beautiful thing.
Philip Meyer, a longtime industry executive who now holds the Knight Chair in Journalism at the University of North Carolina, and other industry critics have made this point before, but it's worth revisiting. The economic model of a newspaper, all things being equal, should resemble that of a supermarket--high volume, low margin. You make money because you produce something inexpensively that the masses consume day after day after day. But suddenly newspapers were no longer in a conventional situation. If yours were the only supermarket in all of Dallas, you could surely charge whatever you wanted for milk and eggs. Likewise, because they became monopoly institutions, newspapers got to the point where they could boost profit margins to 20, 30 and in some usurious cases 40 percent. These are dizzyingly high margins for any type of commerce. They are also addictive, to owners and stock analysts alike. "That easy-money culture has led to some bad habits that still haunt the industry," Meyer observed. "If the money is going to come in no matter what kind of product you turn out, you are motivated to turn it out as cheaply as possible. If newspapers are under pressure, you can cheapen the product and raise prices at the same time. And, most important, innovation is not rewarded."
Certainly that became the industry's default position, especially in economic downturns. Newspapering has traditionally been considered a cyclical industry, doing better when times are better--and advertising, therefore, is stronger. And while the analysts didn't expect growth from newspaper companies when the economy was weak, they did expect their executives to tighten their belts.
Then a dynamic new kind of newspaper CEO arrived on the scene to demonstrate to Wall Street and the world that such cycles could be defied. And damned if he didn't do it.
Al Neuharth had grown up on the editorial side of the newspaper business, earning a reputation for being as tough as he was flamboyant. As the influential leader of Gannett, he was less interested in Pulitzers and editorial excellence than in financial performance. And he managed to string together an astounding 86 consecutive quarters in which every period had higher profits than in the same quarter of the preceding year. Neuharth's performance radicalized profit expectations. But he had constantly expanded his company, carefully buying noncompetitive papers usually in cities with booming growth. The rule for his publishers was simplicity itself: Make your quarterly profit goals and prosper; miss them and you'd better start looking around.
The message spread through the industry like a new gospel. Before long even newspaper companies in stagnant or non-monopoly markets were being pressed to duplicate Neuharth's profit performance. The results in some cases were draconian cuts in the newshole and news staffs. Editors, who found more and more of their compensation tied to the company's financial performance, became all too proficient with the scalpels. "The first time you have to take a hundred thousand out of payroll, it's a fascinating exercise," said former Milwaukee Journal Editor Sig Gissler. "The fifth time you have to do it, it's lost its allure.... You come in and start killing the nearest snake."
In Neuharth's wake, there was no longer any ambiguity about priorities for the publicly traded companies. News was no longer the paramount value, simply a vehicle to achieve the paramount value, which was financial return. Talking about Jack Knight's old company, a Merrill Lynch analyst in 1998 nicely summed up the new paradigm. "KRI's historic culture has been one of producing Pulitzer Prizes instead of profits," she wrote, "and while we think that culture is hard to change, it does seem to be happening."
So in newsroom after newsroom, the cutting continued. If a paper was large enough, it might operate in this fashion for quite a while before anyone but journalists would notice the difference in the product. But by the late '80s, and even more dramatically in the '90s, it became clear that there was a limit to how long you could pile annual earnings gains upon annual earnings gains without damaging newspaper quality. Naturally, newspaper executives didn't want to admit that any more than Detroit wanted to admit it was producing inferior automobiles in the 1970s. Still, the business had reached the point where it was threatening to eat its own seed corn in the pursuit of short-term financial performance. And the evidence was there in the paper--in thinner and blander news reports, in the disappearance of a columnist or a statehouse reporter, in the folding of a Sunday magazine, in stories that simply never got covered. In the '90s, daily papers in the main "had become less distinctive institutions, less connected to their communities, more homogenized, often led by people whose only instinct seemed to be to increase shareholder wealth," said David Laventhol, who served as publisher at both the L.A. Times and Newsday. "Journalistic and community achievements seemed secondary."

A T THE DAWN OF A NEW millennium, this kind of bottom-line pressure shows no sign of abating. On the contrary, newspaper executives wake up most days to stagnant stock prices and Wall Street analysts who, if they mention newspaper companies at all, do so in the dour manner they reserve for "mature" industries--even those staid, unsexy ones that still manage to return 24 percent profits.
Off to one side, the print folks look out in awe at the growth of online, trying to figure out whether it represents their future or their demise. To the other they see a white-hot media environment where Microsoft partners with NBC; America Online swallows up Netscape, then Time Warner; CBS merges with entertainment giant Viacom; Yahoo! shops for partners, as does AT&T, as do the Baby Bells. It's confusing, migraine-inducing stuff, and newspaper executives are no more immune than the rest of us to a culture that says if you're not moving--somewhere, somehow--you're dead.
So they are moving--by merging, by clustering, by cutting, by reorganizing, by synergizing with a vengeance. They are in such a rush that they are sorting out their destinies even as they fulfill them.
Needless to say, that is not exactly the ideal procedure. Were these same executives able to suppress their quarter-to-quarter anxiety and step back for a broader perspective, they might actually see the contemporary newspaper landscape for what it is: a remarkable opportunity. In the great media shakeout, newspapers stand as the last vestige of local news, something that will never go out of demand. One by one the other media players--local TV, local radio--have left the field. The local franchise most newspapers own has never been more valuable.
It's true that no one is exactly sure what will come of the familiar pulp-and-ink product that lands at the door, though it likely will prove more enduring (romantics might even add endearing) than we are led to expect from the seers, some of whose more outlandish notions of the communications world to come have the ring of those "helicopter in every driveway" predictions of the old Futuramas. Still, it seems a safe bet that newspaper companies will continue to go along as they are now, delivering news and information in a variety of formats, some of which doubtless even the futurists have yet to conjure.
It seems equally clear that such news will be more personalized, faster and increasingly married to other technologies. In other words, the old media will adapt to complement the new, as has ever been the case. And who knows? The Internet, far from being the villain of the piece, may turn out to be the print media's salvation, allowing newspapers to capitalize on their franchises with maximum efficiency. Now that we're finally getting past the first initial hysterical reactions to dotcom fever, the early signs are somewhat encouraging. It turns out that even on the Internet, profit counts more than hype--and newspapers know a thing or two about making profits. There are surveys suggesting that newspapers are actually employing their Web sites more quickly, and more imaginatively, for breaking news than such vaunted Internet "portals" as Yahoo! and MSN. At the same time, not only hasn't the Web's widely anticipated siphoning of print classifieds occurred, but until the current downturn newspapers were still showing strong gains in lineage. And if overall readership is still shaky and slightly eroding, it remains relatively stable, especially in light of the millions of viewers who are abandoning the network news programs.
All in all, then, this may prove to be a golden time for newspapers--if they have the courage to advance rather than retreat, if they invest in content, and if they remain mindful of what made their commodity special in the first place. "Why does a community desire to have its own medium?" asked the publisher of a small weekly in Washington state. "I kind of like the idea of the First Amendment. It's not owned by the press. It's owned by the public."
Not long ago Washington Post columnist Richard Cohen addressed the subject of the turmoil in the news media and the question of what can happen when a newspaper forgets that it has a higher obligation than a satisfying return on investment. "News is not a product like a tire or a paper towel," he wrote. "It is what we journalists say it is. The reader has to believe.... A newspaper's 'brand' is trust--trust in its judgment, its independence, its values. That's what remains constant. The news changes every day."
Indeed, what Walter Williams asserted decades ago is still true. A newspaper is a kind of public trust--and to be trusted it has to be there every day, constantly monitoring, constantly watching, constantly providing information that is not only useful but truthful. That is an expensive and ongoing commitment. Radio, television, even digital interlopers like Microsoft and America Online have already demonstrated that they are unwilling to make that kind of commitment, in terms of putting enough trained, skilled information-gatherers on the ground. Should newspaper companies be tempted to follow their lead, as some already have, we will wind up with that most terrible of ironies--communities that are, in the middle of the so-called Information Explosion, less informed than ever.