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VOL. 130 | NO. 216 | Thursday, November 5, 2015


Sam Stockard

Consolidation of Tennessee’s Newspapers Bad for Taxpayers

By Sam Stockard

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The federal government isn’t likely to descend on Tennessee with trust-busting vengeance once three of the state’s four largest newspapers are owned by the same company.

Newspapers are too far down a virtual slippery slope of monopolism to retrieve from the hands of Gannett, which recently announced it plans to pay $280 million for Journal Media Group, the owner of The Commercial Appeal in Memphis and Knoxville News Sentinel.

They will join The Tennessean under Gannett ownership, along with the Jackson Sun, Clarksville Leaf-Chronicle and Daily News Journal in Murfreesboro, leaving the Chattanooga Times Free Press to its own devices.

And, frankly, the feds probably don’t care about newspapers in Tennessee. It’s not as if the New York Times and Washington Post are teaming up.

Some people, whether regulators or journalism experts, even see this business development with the nation’s largest newspaper company as a way to keep those papers in circulation, though many agree it isn’t a good sign for people who love to open the pages of a compelling paper each morning.

Mark Harmon, an associate professor in University of Tennessee’s School of Journalism and Electronic Media, points out this type of media consolidation is part of a 50-year trend driven by economics.

“The ranks of ownership are smaller while the portfolios of the owners are bigger,” says Harmon, who writes a news column for the News Sentinel. “I think those of us who would like to see a multitude of voices in every community react with caution when these kinds of things occur.”

Harmon concedes he isn’t sure what will happen to the Commercial Appeal or News Sentinel, whether newsrooms (information centers in Gannett speak) will be downsized.

He notes newspapers are “stressed” financially, making it difficult to attribute every move to ownership change when all factors are considered. Newspapers are employing all sorts of strategies to bolster revenue, from sponsored content to Internet pay walls, he says, “and that’s going to be a real experiment all across the country as newspapers try different ways of transitioning and surviving.”

Advance moves

McLean, Va.-based Gannett, which plans to close the deal in 2016, recently split its television stations and newspapers into separate companies. Likewise, E.W. Scripps Co., which owned the Commercial Appeal and News Sentinel, and Journal Communications merged its TV stations and put newspapers into the separate publicly traded Journal Media Group before this major merger popped up.

Journal Media chief executive Tim Stautberg says in a statement: “This transaction marks a critical next step in the transformation of our industry as we build local media brands that matter at a time when operational scale is a competitive advantage.”

Spoken in true Gannett language.

“Both Journal Media Group and Gannett are guided by a vision of strengthening lives and communities, and we’ll be better stewards in our local markets by sharing ideas, content and best practices among our new and larger family,” he adds.

Robert Dickey, who leads Gannett’s newspapers, says in a statement: “Our merger will combine the best of each of our organizations to create a journalism-led, investor-focused company which will provide substantial value to the shareholders of both companies.”

Take note of the words sharing, combine and investor, and one must ask why journalism has to be mentioned. Isn’t that what newspapers do?

In Gannett’s defense, competition among Tennessee newspapers began dying about a decade ago when they started “content sharing.” Editors in newsrooms across the state were required to send their daily story budget to every other newspaper in the state, and editors could respond, saying, “Please send me the double murder” or the “sheriff accused of political corruption.”

Based on what’s happening, this sort of grasping at straws was merely a harbinger.

Harsh criticism

MTSU journalism professor Ed Kimbrell calls the pending Gannett purchase “a tragedy.”

“What happens now with Gannett is the same story across (all the) newspapers it owns. It’s called the 20 percent rule. The truth is they have to generate 20 percent profit every year from every newspaper that is owned in order to make sure the stock grows in value,” Kimbrell says.

“That means (the quality of) both of those newspapers will now go down, that they’ll be forced to meet the 20 percent. And when that is true, suddenly reporters go, suddenly features replace (news), and suddenly there are very large photographs. The number of reporters will decline. And it is the Gannett story all over the country. Even USA Today is releasing reporters.”

Kimbrell, who says the Times Free Press will be Tennessee’s “last great hope” for the newspaper industry, predicts fewer reporters, especially on Capitol Hill, reducing coverage of what he calls a “dysfunctional” state government.

“And when you see them probably getting away with a lot of things that you never see because it’s buried in a budget, those kind of things mean the press in this state has lost the ability to really inform the democracy,” Kimbrell adds.

Fading hope

David Arant, chairman of the University of Memphis School of Journalism, is more diplomatic than Kimbrell, but he expects the three Gannett-owned newspapers to start sharing more coverage on state issues, reducing the amount of reporting done at the state government level.

In fact, reduction is happening already.

Commercial Appeal writer Richard Locker produces legislative stories for the News Sentinel, with longtime Knoxville reporter Tom Humphrey in semi-retirement and focusing mainly on his column, Humphrey on the Hill.

Arant also predicts more USA Today content in the Commercial Appeal and News Sentinel. This enables Gannett-owned newspapers to fill space with national and international stories on packaged pages going to numerous papers in about 100 markets.

Also, editorials and locally-produced columns could take a hit.

“It certainly limits the number of editorial voices that are available in Tennessee,” Arant explains. “It will give one person control of these three major outlets and that worries me.”

Monopolistic fears

Although the looming deal raises “anti-trust concerns” for Arant, he doesn’t see any action coming down because of the number of web news organizations, TV stations and the fact large newspapers don’t hold the “pervasive presence” and the “pervasive readership” they once did.

And even though he sees this continuing consolidation as an effort to find a “monetary model” to make newspapers work and to reward investors, he clearly isn’t excited about it and makes it plain he’d like to see the deal fall through at the last minute.

“It’s not a good thing,” Arant says. “I’ll say that very clearly. It’s not a good thing we’re seeing this kind of newspaper consolidation and having fewer reporters and fewer and fewer voices in our state. But I’m not sure what the alternative is.”

Arant says he hoped the newly formed Journal Media Group would make a more sustained effort at keeping the newspapers going. He notes, however, the national trend for newspaper companies is to fall by the wayside, pointing to the demise of Knight Ridder, which once was one of the nation’s strongest newspaper companies.

The public’s failure to support news reporting at the local level is “disturbing,” Arant notes. Most people are so obsessed with other digital and media products, they don’t have time to “consume” news and certainly don’t want to pay for it.

America’s newspaper decline is ahead of the rest of the world, he adds, pointing toward Germany and South Korea as examples of democratic countries where people still support and buy newspapers.

Arant calls this phenomenon “the underlying problem” and says Gannett’s purchase of Journal Media stems from declining revenue for traditional news organizations.

Arant is similar to many people in that he reads news stories online or on his cell phone – to a point.

“I don’t turn all the pages like I do in a printed newspaper,” Arant says. “So I think you lose some of that serendipitous learning, information that we stumble upon, and it gives us a better sense of our community and makes us a better citizen, when we understand the issues at a deeper level.”

Bracing for layoffs

Since the deal is months from being finalized, Gannett hasn’t announced any plans related to personnel in the Memphis and Knoxville newsrooms. Based on its history, though, the most experienced reporters and editors are likely to be offered buyouts. Also, all newsroom personnel might be required to reapply for their jobs.

After key people at The Tennessean were let go more than a year ago as part of a restructuring, The Nashville Scene published a Gannett salary and compensation table giving a glimpse into the corporate hierarchy’s rewards for running a leaner company.

For 2014, it showed president and CEO Gracia Martore received $1 million salary, a $2.75 million bonus, $3.9 million in stock awards, $4.5 million in pension value increase and deferred earnings, totaling $12.4 million.

Dickey received $675,000 in salary, a $750,000 bonus, $1.29 million in stock, $1.16 million in pension increases and deferred earnings, totaling $3.99 million.

Those bonuses came on top of previous corporate bonuses given when Gannett employees were forced to take furloughs during the national recession – a model for corporate America.

Final analysis

Gannett can’t be blamed for trying to find unique ways to connect with readers. Yet its decision to give the news free to Internet readers for years and then try to make them pay for it was a dismal failure. In fact, it probably expedited the demise of the newspaper world.

It seems, however, Gannett’s executives spend more effort trying to redefine journalism, coming up with bureaucratic initiatives with stilted names, rather than rewarding writers and editors for producing interesting stories.

The company’s philosophy of cutting costs by eliminating people and independence in an effort to improve stock value remains a mystery to people who spent their lives reporting on political greed and hypocrisy.

It runs counter to the idea of adding resources in Tennessee, especially rapidly-growing Middle Tennessee, where more reporters and photographers are needed.

The compensation Martore and Dickey received last year alone would be enough to outfit a decent reporting staff. But apparently, as long as the stock value goes up and executives get their bonuses, nothing else matters.

Eventually, there will be nothing left to cut, and nothing will remain but the shells of once-proud news organizations.

EDITOR’S NOTE: Sam Stockard is a former editor and writer at The Daily News Journal in Murfreesboro.

Sam Stockard can be reached at sstockard44@gmail.com

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