Academic journal article Federal Communications Law Journal

Market Definition, Merger Review, and Media Monopolization: Congressional Approval of the Corporate Voice through the Newspaper Preservation Act

Academic journal article Federal Communications Law Journal

Market Definition, Merger Review, and Media Monopolization: Congressional Approval of the Corporate Voice through the Newspaper Preservation Act

Article excerpt

  I. INTRODUCTION
 II. HISTORICAL AND LEGAL BACKGROUND
     A. The Citizen Publishing Case
     B. The Newspaper Preservation Act
     C. The Federal Antitrust Laws
     D. The Courts, the NPA, and the Justice Department
III. CURRENT CRITICISMS OF THE NEWSPAPER PRESERVATION
     ACT
 IV. THE NPA, MEDIA COMPETITION, AND MERGER REVIEW
     A. Market Definition
     B. Adverse Effects of Mergers
     C. Market Entry
     D. Efficiencies
     E. Failing Firms
  V. CONCLUSION

I. INTRODUCTION

Wilkes-Barre is not your average American town of 43,123 residents. (1) The northern Pennsylvania burg, located 113 miles from Philadelphia, boasts two competing daily newspapers. The Wilkes-Barre Times Leader, once a Knight Ridder newspaper, was sold by McClatchy to an independent investment group for $65 million in late July 2006. (2) The Citizens' Voice, Wilkes-Barre's second daily newspaper, was founded in 1978 by workers on strike from the Times Leader. Now owned by Times-Shamrock Communications, the newspaper has become a worthy competitor, boasting more than 32,000 daily readers. (3) Unlike competing dailies in twelve other cities, the Times Leader and Citizens' Voice are not run under a federally approved joint-operating agreement ("JOA"). Instead the two newspapers are produced and printed by separate staffs in separate facilities.

With the growth of new media, including the rise of the 24-hour cable news channel and the increasing reliance on the Internet for news, such a phenomenon is rare at best. (4) As Americans turned to radio, television, and the Internet for their news, the newspaper industry began to wane. (5) At one point, the nation boasted more than 94 competing dailies. (6) However, as advertising dollars decreased and readers began to turn away, newspapers began to look at cost-saving measures to keep from closing their doors. (7) In an effort to keep struggling newspapers afloat, Congress, at the urging of newspaper publishers, passed the Newspaper Preservation Act ("NPA"). (8) The NPA exempted newspapers from federal antitrust laws, (9) essentially allowing competing dailies to merge their business entities while maintaining separate editorial staffs. (10) Unlike traditional companies seeking to unite their business ventures, newspapers can petition the Attorney General under the NPA to request authorization for a JOA. (11)

This Article examines the effect of the NPA on competition in the daily newspaper market by analyzing legislative history, subsequent court interpretations, and Justice Department implementation of the NPA. Part II of the Article discusses the legislative history of the NPA and the subsequent case law that has interpreted it. In addition, this Part addresses the effects of the NPA on the Justice Department's merger review process. Part III summarizes current criticisms of the NPA and its impact on media competition. Part IV posits that the NPA is harmful to competition among the media because it removes certain aspects of anti-competitive action from strict merger review. Part V concludes with a call for more regulation of media mergers and a redefinition of market as it pertains to media merger analysis.

II. HISTORICAL AND LEGAL BACKGROUND

A historical examination of JOAs must begin with a discussion of newspaper industry practices that began shortly after the Great Depression. (12) During the 1930s, several local newspapers had already united their operations and penned agreements to merge their businesses. (13) In doing so, they employed the traditional anti-competitive practices scrutinized today under federal antitrust laws. (14) These included price-fixing, profit-sharing, and other cost-cutting measures. (15) Two newspapers in Tucson, Arizona--the Star and the Citizen--were among those who entered into these unification agreements. (16) This agreement formed the basis of the United States v. Citizen Publishing Co. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.