Despite big brother and exemption to U.S. antitrust law, weak JOA partners are increasingly closing, sometimes quite profitably
Another one will bite the dust this year. On Dec. 31, 1998, the 50-year-old joint operating agreement in Evansville, Ind., fades into history.
The decision to unhinge the two newspapers -- the morning Courier and evening Press -- was announced five years ago. But the severing of the JOA comes on the heels of the fall of the Nashville Banner, the afternoon paper in the JOA in Tennessee's fourth largest city, and after last year's implosion of the agency agreement in El Paso, Texas.
Bill D. Jackson, president and editor of the Press, says any pronouncements about the future would be premature. But circulation figures bode poorly. Between March and September 1997, average daffy circulation fell by 3.1% to 21,401. The dominant Courier, run by E.W. Scripps, increased circulation almost 2% -- to 61,780 -- during the same period.
The Courier therefore is operating as if the Press' days are numbered.
"I would doubt if they could make it on their own" said Vince Vawter, editor and president of the Courier. "We are certainly doing our planning on the assumption that they won't."
Once again, it appears that the Newspaper Preservation Act -- the industry's exemption from antitrust legislation, which was signed into law in 1970 with the intent to provide faltering papers a chance at life support -- may fail to protect another two-newspaper town. Through the 1990s, JOAs have failed to protect dueling papers in Shreveport, La., Knoxville, Tenn., Tulsa, Okla., and Pittsburgh, Pa.
"The law was a failure from the start," said Robert Picard, a professor of journalism at California State University at Fullerton who has written widely on newspaper JOAs. "There's got to be some incentive to increase competition. In JOAs, you don't compete on price, quality or anything"
Picard admits that JOAs keep secondary newspapers afloat temporarily, but he argues that they artificially inflate prices -- with advertising rates rising to monopolistic heights -- and don't provide any lasting benefits.
Jack A. Blum, who negotiated over the Newspaper Preservation Act as a staffer on Capitol Hill 30 years ago and is now a partner in Lobel, Novins, & Lamont, a Washington, D.C., law firm, says that he's not surprised that JOAs are splitting and newspapers are closing.
"They've never saved a newspaper yet," he said. "All they did was guarantee monopoly prices for two publishers."
What's more, Blum added, as soon as one paper has financial trouble, the JOA unravels.
He points to St. Louis as a glaring example of the failure of JOAs. Though the Globe Democrat shut down in the early 1980s, Pulitzer Publishing, which owns the Post-Dispatch, will continue to pay out big bucks -- $19.45 million last year alone, or about half the paper's total profits -- to its JOA partner until 2034. In Florida, Cox Enterprises, which closed the Miami News in 1988 -- JOA notwithstanding -- will continue to receive a payout from Knight Ridder, which owns the Miami Herald, until 2021.
The Newspaper Preservation Act was wrongly named, Blum said. "It was really the publisher's relief act."
Though he admits paying half his St. Louis profits to JOA partner Advance Publications for years to come, Nick Penniman, publisher of the PostDispatch and a Pulitzer Publishing senior vice president, says the arrangement is preferable to the way things were when both newspapers were during it out for readers. …