Abstract
I don’t know about you, but I got tired a long time ago hearing politicians, journalists and the general public, even journalism and media textbooks, persisting with the assumption and assertion that all media companies continue to get bigger and bigger through mergers and acquisitions.
Yes, GateHouse Media/New Media Investment Group keeps buying newspapers (it is over 150 dailies at my last count) and Berkshire Hathaway—once known among newsies only for owning the Buffalo News and for Warren Buffett giving colorful interviews—has become a major player with nearly 25 dailies. Alden Global Capital, a New York-based hedge fund, owns Digital News Group (formerly Ingersoll Publications and the Journal Register Co., including a half dozen large newspapers) and 50.1 percent of Media News Group (a more familiar name), which owns more than 50 daily newspapers.
But Raycom subsidiary Community Newspaper Holdings Inc. owns about 10 fewer newspapers than it did a dozen years ago (now down to just over 80), and Gannett Co.—with about 100 dailies—does not own many more than it did 20 years ago. Tronc, the print part of what used to be Tribune Company, owns fewer than three dozen dailies at this writing, despite having acquired Times-Mirror Corp. some years back. By the time you read this, Tronc will have sold the Los Angeles Times, San Diego Union-Tribune, and other California dailies, and therefore have shrunk. Many other media corporations, such as Hearst and Advance Publications, also have stayed about the same size for 10 or 20 or even 30 years. Cox Enterprises’ Cox Media Group has been downsizing like crazy, now only six daily newspapers assuming its sale of the Austin American-Statesman is closed by the time you read this. Morris Communications sold all of its remaining daily newspapers to GateHouse in 2017 and had sold all of its radio stations in 2015, now focusing primarily on magazines and tourist publications, billboards, and books.
Eli Noam’s 2016 book, Who Own’s the World’s Media (Oxford University Press), is particularly helpful in laying out the facts of the U.S. newspaper industry (see his Chapter 18: “Media Concentration in the United States,” on pp. 500-560, followed by the “United States—Data Summary” chapter on pp. 561-571).
On page 501, Noam writes, By 2000, 77% of all daily newspapers were owned by chains, though there were 119 of these, not a small number. The 10 largest chains owned in 2000 18% of newspaper titles and about 40% of the market by circulation. The circulation share of the 10 largest chains declined somewhat, from 39.4% of circulation in 1984 to 39.9% in 2000 to 35.4% in 2009.
On page 502, Noam writes, Only a few newspapers are distributed nationally, namely USA Today (Gannett), Wall Street Journal (News Corp.), and The New York Times, and none of these titles has a large market share overall . . . . The market shares of the biggest firms are modest nationally. Gannett, by far the biggest firm, held a market share of about 9.6% in 2013 . . . The second tier of six companies, having about 3-8% of market circulation, includes McClatchy (5.7% after it acquired 20 of the 32 Knight-Ridder papers in 2006). The Tribune Company (5.9%) was for a while number three after it had bought Times-Mirror in 2000, thus combining the Chicago and Los Angeles markets. However, the company went into financial distress and bankruptcy in 2012 and was broken up. Dow Jones & Co. (8.3% [market share] with secondee [sic] Wall Street Journal) was bought by Rupert Murdoch’s News Corp. in 2007 for $5 billion. Moving into the newspaper business was an unusual move for one of the top media firms [News Corp.]. Other large newspaper firms included The New York Times Co (3.5% [market share]), which bought the Boston Globe in 1993 for US$1.1 billion. That acquisition proved spectacularly unsuccessful, and the New York Times sold it in 2013 for a mere $70 million after losing money for years. Advance Publications (4.8% [market share] . . . ) and Media News (2.7% [market share], part-owned by Hearst, part-owned by a hedge fun after a 2010 Chapter 11 bankruptcy) are two other large newspaper groups.
That Noam published his book only two years ago and so much has changed tells a lot about the volatility of the U.S. newspaper industry. It’s not just an oligopoly of several Titanic-like ships that are big, stately and steady now even if they are going to all sink one day. Tribune Co. was broken up into separate print (Tronc) and broadcasting companies (Tribune Media) in 2014 and, at this writing, Tribune Media’s sale to Sinclair Broadcast Group is pending. News Corp. was split into a print-oriented News Corp. and a broadcast and film-based 21st Century Fox in 2013. Gannett Co. split into broadcaster Tegna and print-oriented Gannett Co. in 2015. And these are not the only media companies that split up or divested assets within recent memory. E.W. Scripps split into separate newspaper (Journal Media Group) and broadcasting (E.W. Scripps) companies in 2015 (and Gannett bought Journal Media in 2016). Capital Cities/ABC owned, well, a lot of everything when it was bought by Disney Corp. in 1995. But Disney sold all of Capital Cities/ABC’s newspapers (and all, or almost all, of its magazines). Newspaper chain Lee Enterprises once owned many TV stations but sold them in 2000. Newspaper chain Pulitzer Inc. sold all of its TV stations in 1999, before being bought by Lee Enterprises in 2005. Dallas-based Belo Corporation divided into separate TV and print companies in 2007. Freedom Communications sold all of its TV stations in 2012 before it was bought by Digital First in 2016. Cable and film-oriented Time Warner spun off print-oriented Time Inc. in 2014. And I’m probably forgetting other yet other examples of U.S. companies with print media breaking up rather than getting bigger.
In fact, I also think it safe to say that the newspaper industry’s biggest problems continue to be too much competition from other media (of all kinds), owners being primarily interested in profits rather than good journalism, and mismanagement (see Tronc, just for starters), rather than any newspaper chain, or all newspaper chains for that matter, being too large. (Number of titles alone does not necessarily translate into profits or political power or high journalistic quality or anything else anyway; just for starters, Gannett has the largest total circulation but only the third highest number of dailies.) With the exception of The Wall Street Journal, no newspaper is being credibly accused of slanting the news, or refusing to publish a newsworthy story, for political reasons—unless you count the times The New York Times delayed or killed stories at the request of the George W. Bush Administration.
In any case, the fact is that media companies divest assets as well as acquire them, media companies sometimes even breakup, and these phenomena have been both undercovered by news media and understudied by scholars. Some breezily say that all of these moves were driven overwhelmingly by more profitable broadcasting media freeing themselves from less profitable print media. But every case was different. More importantly, combined print/TV companies never achieved predicted synergies for many reasons, not the least of which were differing professional cultures and media conglomerates not being set up to make the synergies happen (they don’t on their own). (For a worldwide view of media companies spinning off and splitting up, see De-Convergence of Global Media Industries, by Dal Young Jin [Routledge, 2015], which has not received as much attention as it should have.)