Go to the mobile version of this Web site.

Login | Contact Us | Site Map | Paid archives | Electronic edition | Subscription Questions | Extras

Newspaper joint operating agreements are fading

By David Milstead, Rocky Mountain News (Contact), Jeff Smith, Rocky Mountain News (Contact)

Published January 22, 2009 at 12:05 a.m.

Text size  
Newspaper boxes hold papers for sale in Seattle recently. Hearst Corp. has put the Seattle Post-Intelligencer up for sale.

Photo by Marcus R. Donner / Associated Press

Newspaper boxes hold papers for sale in Seattle recently. Hearst Corp. has put the Seattle Post-Intelligencer up for sale.



SPECIAL SECTION » The Rocky Mountain News is for sale. On December 4, 2008, E.W. Scripps, the owner of Colorado’s oldest newspaper, said if a buyer does not step forward it will pursue other options – including closure.

Click to read stories about the sale, and see what other news outlets have been saying about the paper since the announcement.

Related Links

Related Stories

More More Business

More stories »

The newspaper industry may not be dead, but joint operating agreements, designed to preserve two-newspaper towns, are failing.

"I think they're fading pretty fast," Rick Edmonds, media business analyst at the Poynter Institute.

What's happened in the past two weeks is proof of that.

On Dec. 4, E.W. Scripps put the Rocky Mountain News up for sale, with shutting down the paper a likely possibility. Scripps is in a 50-50 joint operating agreement with MediaNews Group, which publishes The Denver Post.

Since then, The Hearst Corp., a JOA partner with the Seattle Times, put the Seattle Post-Intelligencer up for sale.

And Gannett Co. announced it would close the Tucson Citizen unless it could find a buyer by March 21. Gannett is a 50-50 partner in Tucson with Lee Enterprises, which publishes the Arizona Daily Star.

In another JOA, in Detroit, the Detroit News and the Detroit Free Press announced plans to stop home delivery except for the Thursday, Friday and Sunday editions.

Edmonds wrote about the topic last week for Poynter, the nonprofit journalism think tank, in an online column titled "Newspaper JOAs Reach End of the Line." His comments appeared before the announcement in Tucson.

The structure of joint operating agreements - in which two newspapers share the cost of business, advertising and circulation operations - was authorized by Congress in 1970 with the Newspaper Preservation Act.

At one time, 28 JOAs were scattered across the country. Now only nine remain, according to Edmonds, and that includes Denver, Detroit, Seattle and Tucson.

"JOAs work until they no longer work," said Mark Fitzgerald, editor-at-large of the newspaper trade publication Editor & Publisher.

"In the past, it was a slow deterioration of the weaker paper," he added. "They were willing to keep the smaller paper open because cash flow was increasing reliably. The drain wasn't the same as today. What you have now is cash flow shrinking, revenue not reliably growing and debt service on top of that."

Stephen Lacy, journalism professor at Michigan State University, said there's some evidence that local communities were better off when there were two newspapers providing coverage. But JOAs, he said, were never destined to survive in the long run.

That's in part, he said, because they generally don't eliminate the basic problem of one newspaper gaining the upper hand in circulation and, hence, advertising revenue.

While not applicable to Denver, Lacy likes to cite the example of the Washington Star, which closed in the early 1980s.

The Star had 40 percent of the circulation, he said, compared with the Washington Post's 60 percent. But the Star could get only 25 percent of the advertising lineage "because the Post was a much better buy on a cost-per- thousand basis," Lacy said.

In recent years, of course, the Internet has thrown an even- more-dramatic wrench into the equation.

Classified advertising has migrated to Internet sites like craigslist.org while traditional retail advertisers such as real-estate brokers, department stores and car dealers can advertise via their own Web sites.

In Tucson, the Star, the morning paper, has a circulation of 117,000, but the afternoon Citizen sells only about 20,000 copies. The morning-afternoon dichotomy comes into play in the decision of the Citizen to find a buyer or close.

Edmonds said he supposes JOAs were a "modestly good thing" if one sees them as helping address the death of the afternoon paper in the U.S.

But it also "sort of postponed the inevitable in ways that might have ended up weakening whichever paper does survive," Edmonds said.

Edmonds cited the arguments made by The Seattle Times that the Post-Intelligencer was a money drain.

The Seattle Times sought to end that JOA in 2003, saying it no longer worked financially. Hearst, owner of the Seattle Post-Intelligencer, sued, eventually agreeing to pay The Seattle Times $25 million to keep the agreement going until 2016.

After Hearst recently put the Post-Intelligencer up for sale, Seattle Times publisher Frank Blethen stated the JOA structure had contributed to the big losses of both papers.

Denver Post publisher Dean Singleton made a similar argument in Denver after Scripps put the Rocky up for sale.

In a memo to Post staffers, Singleton called the Rocky a "drain" on the Post. He maintained that the broadsheet Post contributed two-thirds of the advertising revenue of the Denver Newspaper Agency, the joint-operating entity - and the tabloid Rocky only a third.

"I can tell you flat-out that is not true," Scripps CEO Rich Boehne responded at the time. "The paper and the (advertising) space are sold together. It is designed to be a 50-50 partnership."

EXTRA! EXTRA!

* Dec. 4: E.W. Scripps puts the Rocky Mountain News and its 50 percent share of a joint operating agreement in the Denver Newspaper Agency up for sale.

* Dec. 9: Tribune Co., which publishes the Chicago Tribune and Los Angeles Times, files for bankruptcy reorganization.

* Dec. 16: Detroit News and the Detroit Free Press announce plans to stop home delivery except for the Thursday, Friday and Sunday editions. A condensed newspaper will be sold in newspaper boxes on other weekdays.

* Jan. 9: The Hearst Corp. puts the Seattle Post-Intelligencer up for sale. If a buyer isn't found in 60 days, Hearst said it will either publish an Internet-only edition or shut down operations.

* Jan. 16: Minneapolis Star-Tribune files for bankruptcy reorganization less than two years after being bought by a private equity group.

* Jan. 16: Gannett Co. tells Tucson Citizen staff that it will close the newspaper if a buyer isn't found by March 21.

Comments

  • January 22, 2009

    7:51 a.m.

    Suggest removal

    KCBRONCOFAN writes:

    I remember, many years ago, kneeling on the steps in front of my East Denver home at the break of dawn furiously folding 150 or so copies of The News for my paper route customers. Then, in the afternoon after school, doing the same thing for many of the same customers at The Post paper station. Worked fine Monday through Saturday but Sundays were a real chore.

    In those days the two papers were much different editorially. The hard news was pretty much the same but it seemed the Post was a little more thorough in the reporting. I think largely because they may have had a little more time to work the stories. Both were fine papers but we have been losing them, and all newspapers for that matter, to the shrill one sided "reporting" of TV and especially radio and the internet.

    Readers of newspapers generally don't do so just to re-enforce their belief systems. Po-tweet, Po-tweet.

  • January 22, 2009

    9:23 a.m.

    Suggest removal

    bobjohnson writes:

    I remember watching the local news several years ago and an anchor man was reading a story of a fire and saying how the building's facade had been destroyed. Only thing was, he pronounced "facade", as if it rhymed with "arcade".
    I couldn't watch him do the news after that.

  • January 22, 2009

    9:44 a.m.

    Suggest removal

    Iron writes:

    "JOAs work until they no longer work," said Mark Fitzgerald, editor-at-large of the newspaper trade publication Editor & Publisher.

    Now that's a classic statement. Right up there with, "That depends on what your definition of 'is' is", by Clinton.

  • January 22, 2009

    9:49 a.m.

    Suggest removal

    Rwwatson writes:

    Hmmmmm.... ""JOAs work until they no longer work," said Mark Fitzgerald, editor-at-large of the newspaper trade publication Editor & Publisher."

    Gee, I wonder why newspapers are going out of business when these people are in charge.

    And, Singleton runs the board of the DNA. So if one of the papers is a "drain", it is becuase of the leadership. The board has one paper on each day of the weekend, with the Sunday paper being the Post, which of course is the big advertising paper of the week (main source of revenue). Now Singleton wants the News gone, but still wants Scripps to pay for half of the Posts bills. He may get rid of the News and take over their subscribers (paid subscribers are GOLD for newspapers as that is how advertising rates are derived), but he will never get Scripps to honor their half of the JOA without a paper to support (unless he is willing to split profits and revenue). The DNA JOA is a 50/50 agreement. I look forward to seeing him get this done...

  • January 22, 2009

    10:23 a.m.

    Suggest removal

    Marshdale writes:

    I see other problems besides the advertizing revenue. Hard hitting investigative journalism has gone to the wayside. I can remember when papers had blockbuster stories weekly, but you don't see that any more. People used to clamour for a paper to read those stories. Papers are affraid to go after corrupt advertizers for fear of losing revenue. The Fourth Estate is dying and along with it the American way. We depend on accurate reporting to keep the poulous well informed. This began to die years ago. Now we are forced to get sound bite snippets from TV Jokers, I'm sorry "newsmen and women." Honestly, it is so gross I can't even take it any more.

  • January 22, 2009

    10:26 a.m.

    Suggest removal

    The_Punnisher writes:

    Funny how things work out when you place MAMMON at the top of your priorities.

    This is the result. Greed triumphs the REPORTING of NEWS.

    My, we have come a long way from Ben Franklin & Thomas Paine in this country.

  • January 22, 2009

    11:04 a.m.

    Suggest removal

    dencolo writes:

    Rwwatson:
    Singleton doesn't run the board of the DNA. The chairman is the CEO of Scripps and there are two board members from each paper.

  • January 22, 2009

    11:11 a.m.

    Suggest removal

    jeffdragon writes:

    I thought Harry Whipple was the chairman of the DNA, and he was hand-picked by Singleton?

  • January 22, 2009

    12:20 p.m.

    Suggest removal

    mmannino writes:

    While I agree that there is liberal bias in the news coverage of most newspapers, the bias has only a small impact on the problems facing the newspaper industry. The two major issues are the availability of many competing sources of news and the loss of ad revenue. These two problems are linked. The additional sources of news have drained ad revenue. In addition, search engines and ad sites (such as Craigslist) have further eroded the advertising base. These two problems are really just new competition. The newspaper industry must consolidate and find a new model. There is a need for local news coverage. With the emergence of new media, what role will the traditional newspaper industry take?

    The liberal bias has alienated some conservatives but the overall impact on the newspaper business is very small. Most people do not care nor recognize the bias. Newspapers have lost some conservative readers but not enough to make much of a difference.

    I am sad about the turmoil in the industry because many individuals are impacted. Tumultous change is difficult to accept and survive. However, the alternative of government subsidies is much worse in the long run. Government subsidies will prevent evolution in the new media and involve permanent subsidies (much like the Democrats plan for the domestic auto industry).