Media conglomerates buying out family newspaper chains
By TOM LITTLEWOOD
THE SENIOR Lindsays and Schaubs were peculiar acting newspaper magnates. Long after consolidating their two Decatur papers in 1931 and then acquiring others in Urbana, East St. Louis, Carbondale and Edwardsville, the owners kept on doing strange things, like printing long, thoughtful, in-depth analyses of public affairs in the state. With most newspaper chains, editorial quality is important only insofar as it increases profits.
By now the sons and grandsons have taken over. The early leaders are either dead or retired, as in the case of retired 79-year-old Edward Lindsay, a cousin of the founder and the top editor in the 1940's and 50's. Their heirs were less comitted to editorial quality; they had other interests, and there were so many of them it was inconvenient to get together to make decisions. Succeeding generations saw the newspapers as less compelling business investments.
Concentration of news media ownership is proceeding at a galloping rate in Illinois. Not only are deeply rooted, locally owned publications being pur-chased by groups, but smaller homegrown groups are being swallowed by communications conglomerates often based far from Illinois. Last December alone, dailies in Macomb, Watseka, Olney and Clinton were sold to groups.
As part of that trend, an agreement was reached early this year for the sale of all but two of the Lindsay-Schaub newspapers to Lee Enterprises, a publicly held corporation with newspapers, television and radio stations, and a graphic arts products company concentrated mainly in the plains states. The Quad City Times in Davenport, Iowa, and the Kewanee Star-Courier in Illinois are Lee properties. Profits have been climbing at over 30 per cent a year, which is higher than the rate of increase for income.
Gannett Co., which owns far more papers in more states than any other chain, also had been dickering for L-S, but Lee offered a higher price. Neither wanted any part of the two money losers in the L-S group the Urbana Courier and the Metro East Journal in multi-troubled East St. Louis. These two, excluded from the Lee deal, were left floundering like a couple of ailing, beached whales awaiting death. Both are in competitive markets and therefore unattractive to acquisitive chains. Lee's priorities for its acquisitions will be revealed when a decision is made about the future of L-S's excellent 10-person public affairs news staff under editor Robert Hartley.
Budget-cutting
The new owners wasted no time making their first budget-cutting decision at L-S. When the same company owns both the morning and afternoon newspapers in a city, they can operate in one of two ways. The owners can preserve newsgathering competition with separate editorial staffs; or they can be combined, usually at less cost, in a single "all-day" publication with multiple editions produced by the same staff. Either two reporters will be sniffing around city hall, or the same reporter will write one story for the morning paper and rewrite the lead (or top) for the p.m.
By an odd coincidence, the two L-S papers in Decatur and the two Gannett-owned papers in Rockford (acquired in 1967) had the same problem: fewer readers bothering to subscribe to both editions. But they took steps that were exactly opposite. Tom Blount, the Decatur editor, prepared plans to hire 20 additional staffers and convert from an integrated cooperative arrangement to one in which the Herald and Review would compete for news. By developing separate identities, and a news product that was not as bland, it was hoped that readers would once again have reason to buy both papers.
Rockford example
Rockford, meanwhile, followed the example set some years before by the Copley chain which switched the Springfield newspapers from competing to noncompeting operations. Everything is new in the Rockford Morning Star. Twelve pages are made over on the average for an afternoon paper that goes to press at 1 o'clock. Jerry Bean, the general manager, points out that few readers had access to the work of the entire staff, so he asked, "Why not pool them and have them write for everyone? Now we have more reporters working for everybody." The decision was made, Bean insists, not as a cost-cutting measure but rather to improve the product. No editorial jobs were lost when the change was implemented at the start of the year. However, Bean did not rule out a cutback later. Total circulation actually increased slightly, because the production savings were put into promotional efforts.
Within days of the L-S purchase, Lee told Decatur to forget the split operation plans for hiring more reporters. One of the reasons given by the Lindsays and Schaubs for selling out was the impact of the inheritance tax laws on newspaper fortunes. U.S. Rep. Paul Simon (D., Carbondale) is a co-sponsor of federal legislation that would grant estate tax breaks to family-owned newspapers. In the next "media" column we will examine the outlook for legislative remedies as well as other facets of the media ownership concentration picture in Illinois.
April 1979/Illinois Issues/33
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