Illinois' newspapers: Who owns the free press?

The independent, locally owned and managed daily newspaper has almost disappeared from the Illinois landscape. At the beginning of 1988 only 14 of the state's 69 general circulation dailies continued to be unaffiliated with newspaper or, more commonly, with a group and other communications enterprises. If the two downtown Chicago papers are excluded as atypical (and one of them, the Sun-Times, has the largest circulation of any independently owned newspaper in the nation), group-affiliated publications account for more than 80 percent of daily circulation.

The Chicago Tribune and 13 other Illinois newspapers belong to groups based in the state. The Smalls of Kankakee and the Shaws of Dixon are examples of two old Illinois newspaper families that chose to branch out with their own modest-sized regional groups rather than be swallowed up by a national or international conglomerate. No fewer than 41 Illinois dailies, however, are operated by corporations with headquarters outside the state — 11 of them by Canadian companies.

The oldest continuously published newspaper in Illinois, the Jacksonville Journal Courier, is owned by Thomson Newspapers Inc. of Toronto. Eight other dailies were acquired last year by the Toronto financier Conrad Black, who owns a controlling interest the London Daily Telegraph and many others around the world.

Black's new Illinois properties are clustered in the southeastern corner. The Harrisburg Daily Register, a long established voice in that region, was not sold to Black's enterprise, Hollinger Inc., but its editor, Roy C. Small, accused the Canadian of "strongarm tactics" in their effort to wrest control from him and the other major shareholder — 102-year-old Daisy M. Seright, who was confined to a nursing home (and died in February of this year). "My wife, children, dogs, guns and newspaper are not for sale," Small said he told the interested buyers. Black's representatives did acquire a 27 percent interest from minority owners and then went to court to obtain a seat on the Register board. Small says Hollinger is intent upon monopolizing advertising and news throughout the region. The Holinger people say they'll wait as long as necessary before adding Harrisburg to their chain. Black, who now owns 33 U.S. dailies, many of them in economically depressed areas, has observed that "the newspaper business is extremely profitable, and it is fun."

Outside of Chicago, the most influential newspaper groups in Illinois include: Copley Press Inc., strategically located with papers around the Chicago metropolitan rim and in the state capital; Gannett Co., which is the biggest chain nationally and has Illinois papers in Rockford and Danville; and Lee Enterprises, owners of three Illinois papers, among them Carbondale's

April 1988 | Illinois Issues | 23

The Southern Illinoisan, on Hollinger's western flank. W. Stephen Burgess, publisher of The Southern Illinoisan, has expressed concern over "foreign entities" having "too much influence" in U.S. news media. "It's not the same as investing in oil or in textiles," he pointed out.

Overall, however, it should be noted that the concentration of ownership is not as great in the newspaper business as it is in many other industries, nor is it as great in Illinois as in some other states. Some of the most prominent companies have minimal representation in Illinois. Hearst, for example, has only Edwardsville; Capital Cities Communications, only Belleville; Pulitzer, only the Southtown Economist and the Daily Calumet; Scripps League, only DeKalb. Others aren't in Illinois at all: Knight-Ridder, Times Mirror, New York Times, Newhouse, Donrey, Dow Jones.

The paper in Carbondale is one of several that formerly belonged to a group based in Decatur — Lindsay-Schaub — and which were either folded or sold to one of two larger groups, Lee or Hearst, in 1979. This is expected to be the next important phase in newspaper concentration everywhere: the absorption of small groups by bigger, increasingly dominant, and often multinational "communication/information" conglomerates.

The history of Illinois newspapers is easy to follow. The first newspapers were partisan organs. Typically, a printer and a politically ambitious lawyer formed a partnership. For a time, there were likely to be as many newspapers in town as there were party factions. After mergers, the surviving editor frequently found himself acting, more or less behind the scenes, as the political boss in the county. Many of them had enough clout to obtain the most valuable radio and television licenses.

It is sometimes forgotten that the Republican party of Illinois was founded by 14 newspaper editors called together in 1856 by the editor of what was then the Jacksonville Journal. It was not uncommon for editors to run for office or for politicians to start newspapers. Congressman Ira C. Copley founded dailies in Aurora and Elgin to promote his political career and to defend his family's gas, electricity and streetcar interests against the public ownership movement. In some Illinois cities, the job of postmaster was routinely awarded to the local editor as a patronage plum from the national administration. As recently as the 1940s, editors of some downstate newspapers were discovered on the state payroll.

Beginning about that time, declining competition made media properties in local markets vastly more valuable as monopolies than the cash flow figures would seem to justify. Groups were clamoring to buy small independent papers at inflated prices.

Federal tax policy hastened the trend by stimulating chain ownership. Estate taxes are based on market value rather than current earnings. So, especially if there were several prospective heirs, some of whom wanted to get their money out of the newspaper before inheritance taxes came due, the temptation to sell became overwhelming. The tax laws encouraged the trend in another way, too. Although families could not set aside untaxed funds in preparation for the intergenerational transfer-of-wealth taxes, newspaper companies were allowed to accumulate undistributed profits for the purchase of more and more papers.

What the absentee ownership trend means to the quality of journalism and the thoroughness of news coverage in Illinois communities is less clear. Today group-owned papers are run in a more businesslike fashion. They either return the expected earnings or new managers are sent in. The managers are less involved in partisan politics and, until recently at least, tended to be more detached from community interest groups.

Some of the old-time publishers were notoriously casual about their return-on-investment, deriving immeasurable psychic compensation instead from their leadership and power in the community. Through four generations of Cousley family owners, the Alton Telegraph, for example, covered the news aggressively without ever having a financial budget.

The editors and publishers of yesteryear took a paternalistic, protective attitude toward the community. John T. McConnell, publisher of the largest remaining downstate independent — the Peoria Journal Star, which is now owned by its employees —says that paper gives between $75,000 and $125,000 a year to local charities. "You won't find that in Rockford or Danville [the two Gannett papers]," he adds. "The money that we make stays here. We don't put it in a bag and send it off to New York or California."

Successful group managers are anything but casual about finances. They use market research to identify and then satisfy the editorial needs of the readers with a cool precision. The old-time editors, in contrast, were forceful leaders of public opinion, but in directions that often reflected their own position in the local power structure.

For the most part, profit margins for newspaper groups are impressive. Lee Enterprises reported an operating profit margin of 27.8 percent in 1986. A Copley editor told me that the Aurora Beacon-News "sends about a million dollars a year [in profits] to California."

Yet the pressure to keep earnings rising every quarter is especially urgent where, as in the cases of Lee and Gannett, ownership shares are publicly traded in the investment markets. Shareholders are understandably more interested in the appreciation of their investment than they are in journalistic excellence. Always, the management of a group newspaper owned by shareholders has to be concerned with the value of those shares.

April 1988 | Illinois Issues | 24

How that can affect the newsroom is illustrated by something that happened in Carbondale on "Black Monday." Southern Illinois publisher Burgess went home to lunch last October 19 and was distressed to hear the calamitous 508-point drop in the stock market being described on network television news as a "crash." Later that afternoon he made a rare appearance at the daily planning conference of his editors. "I don't do that often," he explained later, "but I didn't want this newspaper contributing to any panic by drawing implications to what happened in 1929. The situation needed an extra amount of sensitivity, so I forbade them to use the word 'crash' in the headline."

If the pressure to increase profits makes it necessary to reduce costs, McConnell in Peoria says there are only two ways it can be done: "by cutting newsprint and bodies, which usually means the 'news hole' and newsroom bodies." And there have been national studies indicating that news staff size and ratio of news to advertising are less, on average, at chain-owned newspapers.

In Illinois, it is possible to find examples of good and bad practices by group newspapers, but generalizations are risky. Gannett has outfitted the Commercial-News in Danville, an economically troubled community, with the most advanced computerized page layout technology. The Journal Courier in Jacksonville, on the other hand, makes considerably more money for Thompson than it ever did for the Fay family, the previous owners, but the plant limps along with a 1949 letterpress. Some groups strive for stability in their management leadership. Others rotate transient editors and managers in and out, nomads without community ties who want foremost to move on to a bigger place.

Is there any correlation between ownership and either community involvement or journalistic excellence? Burgess, who was transferred by Lee from Decatur to Carbondale in 1984, says no. "The fact that I report to a vice president in Davenport, Iowa, has no bearing on the quality of the product," he asserts.

For the citizen/reader the crucial questions come down to whether the newspaper reports community news fully and fairly and whether the news is sanitized to prop up the local establishment.

Because rotating managers are less likely to be part of the establishment, it might follow that they would be less involved in local and state politics, with fewer interests to protect. And, in fact, the most prominent vestiges of the old-style politically active newspaper executive can be found in two independents downstate — in Harrisburg and in Champaign-Urbana.

Holding out against the Canadians in southern Illinois, Roy Small is an anachronism. He raises money for Democratic candidates from people his reporters write about. His wife is an elected member of the school board. He readily concedes that "we (on the Register] have all been very political people," even though newspaper readers might suspect that the Smalls' political interests influence how the news is reported.

Another throwback to the era of the flamboyantly personal publisher lives on at the Champaign-Urbana News-Gazette. Marajen Stevick Chinigo, 75, inherited the paper from her parents and has no heirs of her own. Maintaining villas in Ravello, Italy, and Palm Springs, Calif, she recently turned over the management of the News-Gazette to her lawyer, former state legislator and Republican county chairperson, John C. Hirschfeld.

Hirschfeld continues his law practice while running the newspaper and contributing a lively column of his opinions — political and otherwise. Believing the newspaper, in this media age, to be a far more effective instrument for carrying out his political will than the paltry patronage and other resources of a party chieftain, he also continues to be active in local politics and to use the column as a personal newsletter advancing his interests.

A vigorous local opinions page of that kind is anathema to most group-owned papers because it constantly irritates some readers and advertisers, which can be bad for business. What the News-Gazette is doing would be commendable — if it covered the news fully and fairly, which, unfortunately, it does not.

Although a large state government institution is the biggest employer in its circulation area, the News-Gazette is the only Illinois newspaper of its size that does not have a Springfield bureau. Last year, when state tax policy affected the pocket-books of University of Illinois employees, the newspaper managed in its news columns (and on the opinions page) to ignore altogether whatever part local Sen. Stanley Weaver, a member of the Republican leadership in the Senate and a friend of Hirschfeld, might have played in the resolution of the tax issue.

If the news coverage in a home-owned paper has traditionally been more likely to be influenced by the political and other interests of its managers, there are more frequent signs that group representatives too are risking journalistic conflicts by becoming more directly involved in local booster teams and other civic activities. The distance separating group-affiliated newspaper executives and the people and organizations their reporters write about is not as wide as it used to be.

The principal reason for this change is regional economic woes and the competition for new industrial jobs. Burgess is chairman of the Southern Illinois Economic Coalition, an appointed member of the governor's Illinois Economic Board, the Build Illinois Task Force Committee, the Transportation Department's Strategic Advisory Committee, and he was included on one of the governor's trade mission junkets to the Orient — all activities that cannot have escaped the attention of any would-be investigative reporters in Lee's Statehouse bureau.

In these times of economic competition for jobs in the state, many of the old distinctions between locally managed and group-managed newspapers have been blurred. Increasingly, editors and reporters for a group-owned paper are under the same pressure to play up good news, to sit on a story at the request of the Chamber of Commerce and, above all, to be aware of what local organizations the boss is involved in.□

Tom Littlewood is a professor of journalism at the University of Illinois in Urbana-Champaign. His book, Coals of Fire, about the Alton Telegraph libel case, has recently been published by the Southern Illinois University Press.

April 1988 | Illinois Issues | 25