The Consequences of Corporate Ownership

Breach of Faith: A Crisis of Coverage in the Age of Corporate Newspapering
Gene Roberts and Thomas Kunkel
University of Arkansas Press. 288 Pages. $29.95.In the winter of 1979, as part of my professional development, I spent six months observing at the fast-growing Charlotte Observer. Charlotte was part of Knight Ridder Inc., at the time a fairly new publicly traded chain of newspapers. Like other newspapers in the chain from the Knight side, Charlotte retained the trappings of journalism and community service then synonymous with the Knights. Journalistic luminaries David Lawrence, Jr. and Jim Batten had been recent editors. Rich Oppel had just become its new editor.

With hindsight, I now see the warning signs that portended the transformation of a newspaper company known for journalism to a corporation known as a handmaiden of Wall Street and its institutional investors. For it was in Charlotte that I first heard newspapers being referred to as “assets” and communities called “properties.” For the first time I was exposed to talk of profit margins and stock price, talk that replaced what I had been used to hearing—talk of journalistic aspirations and public trust.

I was only exposed to this for six months. Gene Roberts lived in it at The Philadelphia Inquirer for many years before that once proud journalistic paragon was reduced to a revolving door for editors and continually lowered journalistic aspirations. Reading “Breach of Faith,” the new book that Roberts and Thomas Kunkel edited, reminded me of this turning point for newspapers some 23 years ago. Roberts and Kunkel, seasoned journalists themselves, have compiled an enlightening series of testimonials chronicling a trend that has imperiled our free press and, therefore, our democracy.

Changing How We Look at What Newspapers Are

In chapter five, “What Do Readers Really Want?,” Charles Leighton raises the issue of research and focus groups, and questions whether they have replaced journalistic integrity and community connection, and if they are corrupting our news reports. During my time in Charlotte, I spent a month with each of the department heads from news, circulation, advertising and marketing. The first question each one of them asked me was the same: “Tell me about your research and your focus groups.” To my embarrassment, I had to confess I wasn’t sure what a focus group was and that the research we did at The Seattle Times was infrequent and not very sophisticated.

Feeling rather inadequate, I sought out a newspaper researcher who was familiar with The Seattle Times. I asked if he felt the Times was missing the curve and the industry was leaving us behind in regard to research. I have never forgotten his response.

“Frank,” he said, “if I did a research study for you and it told you to completely change the content of The Seattle Times, what would you do with it?”

I hesitantly answered, “I guess I’d throw it in the trash can.”

He responded, “Right answer.” He explained the reason I could do that was that I had lived my entire life in the community my family’s newspaper serves. He reminded me of the deep connections that develop when a family has lived in a community for 100 years and four generations and when our publisher and editor tenures are measured in decades. He noted that the then-emerging class of newspaper managers in the expanding public chains needed their research and focus groups because they didn’t know their communities. They didn’t grow up in them, they hadn’t lived in them long, and they didn’t intend to stay in them.

We have since learned to use research and focus groups effectively at The Seattle Times as a supplement to our deep roots, and we have become a sophisticated marketing organization. But our use of them is embedded in the context that we are, first and foremost, a values-based journalism and news company. Our business is news and community service. Financial stability is to feed our journalism, not to maximize profits or personal wealth or to boost stock prices.

Concentrated Ownership

This story speaks volumes about what is wrong with our industry today and why concentration of newspaper ownership and Wall Street control is ultimately incapable of providing the community connection and journalism essential to an independent press and the survival of democracy.

Our democracy is in crisis from the loss of independent voices serving as its watchdog. Editors Roberts and Kunkel do the news industry and democracy a great service by publishing “Breach of Faith.” It is a terrific follow-up to their book last year, “Leaving Readers Behind.” In this recent book, Roberts and Kunkel expose the disinvestment and lack of community connection that ownership concentration has brought us.

Both books significantly add to the growing chorus of concern about the very serious threat to democracy resulting from the increasing concentration of newspaper ownership. They remind us that institutional owners of newspapers and other media will, if left unchecked, continue their relentless disinvesting in journalism and community service. These financial investors have no choice, nor do they care. They have a singular fiduciary responsibility. It is maximize profits and keep stock prices up. It drives a short-term business mentality that leads to disinvestment as a means of maintaining profits. Community service and quality journalism have no value to them.

Each chapter of “Breach of Faith” takes the reader through a specific area of disinvestment that has been brought on by ownership concentration. The chapters on less state house coverage and less training provide excellent examples.

A Forceful Response

Still, there are missing elements I would have liked to have seen in the book, elements I hope Roberts and Kunkel address next. The two of them should speak out more in their own voices. Now that the dialogue around ownership concentration and its disinvestment in journalism and community service has started, we have a host of books and articles that try to slice, dice and analyze the problem. To anyone paying even a little attention, the case has been made. Even casual newspaper readers have noticed the increasing blandness and narrowness of most of America’s corporate-owned newspapers. Local television and radio news now have little or no substance. “If it bleeds, it leads” is more true today than ever.

What we need are respected voices like Roberts and Kunkel speaking forcefully—from their own experiences and in response to what they see happening in our industry—about this devolution of journalism, why it matters, and what the solutions are. In short, it matters because democracy cannot function well and will not survive if it doesn’t have an independent press with a variety of voices and a genuine commitment to journalism and to the communities they exist to serve. Roberts and Kunkel are well positioned to lead this discussion and to begin giving visibility to solutions. Indeed, the solutions are obvious and easy. The more difficult questions are whether we can muster the will to insist on them and whether we’ve already lost so much of our independent voice that this story won’t be adequately told.

I regard four steps as necessary to solve this crisis.

1. Preserve the Federal Communication Commission’s (FCC) cross-ownership ban that it is considering lifting.
2. Preserve and enforce FCC ownership restrictions pertaining to TV and radio.
3. Pass new legislation to limit the number of newspapers and other media and information channels any one corporation or person can own.
4. Repeal the federal death tax that effectively forces independent family-owned newspapers and other businesses to sell to large corporations.

The Wall Street money-managers, who control most of our newspapers, care only about stock prices, profit margins, and increasing earnings. They hire and develop professional managers whose income and stock options are based on short-term financial performance. They do not reward publishers and editors for journalism, for community service, for racial and cultural inclusion. We have entered an era of newspaper CEO’s, managers and publishers who rarely have news backgrounds or sensitivities.

With chains controlling over 80 percent of America’s daily newspapers and 75 percent of newspaper circulation, we have pretty much lost our diversity of voices. Massive disinvestment in news by the public companies and most of the large chains has left too many newspapers with insufficient resources to tell democracy’s important stories on either the local or national level.

The worst omissions and the most egregious ethical failures in our business increasingly have to do with what isn’t covered, not what is. Whether it’s a lack of resources, a lack of will, or a lack of journalistic sensitivity, ownership concentration has led to a loss of the critical independent storytelling ability that is vital to a democracy.

Important News Coverage That Isn’t Happening

If “Breach of Faith” has a missing chapter, it has to do with the lack of coverage of critical topics, including ethical transgressions involving the self-interest of publishers and owners. I believe the concentration of newspaper ownership, the control now wielded by financial-institution investors and its impact and implications, is one of the most important stories of our time. One piece of this story is the heavy lobbying of the FCC and regulatory agencies by the large newspaper and media companies to get rules relaxed or eliminated to further their desires for more ownership concentration of television, radio and cable. Next up are their efforts to try to repeal the limited ban on cross-ownership of newspapers and television stations in the same community.

A tantalizing question is why the large corporate newspapers and chains aren’t aggressively covering this story. And why they aren’t discussing with readers the impact of these changes on democracy and the American public. Is it their lack of resources and will? Or is it because it’s not in their financial interests?

On September 10, I passed through Chicago’s O’Hare airport. I was returning to Seattle from speaking at a symposium on “The Independent Family Newspaper in America: Its Future and Relevance” at the University of Illinois. During my layover, I picked up a copy of the Chicago Tribune. The lead business story, with a large photo, was about an analyst extolling the virtues of buying newspaper-company stocks in spite of the deteriorating stock market. The story featured Gannett and Knight Ridder, but also made strong mention of the Tribune Co. as a good buy.

Was this an appropriate story for the Tribune Co.’s flagship newspaper? More to the point, why hasn’t the Chicago Tribune reported more prominently the Tribune company’s leading role in lobbying for repeal of the FCC cross-ownership restrictions? It is because the owners, their executives, and even some editors have a financial stake in the story being left untold? Is it some measure of the conflicts created by financial-market ownership, stock options, and corporate self-interest that a question like this even must be asked?

To its credit, in editorializing in support of removing the FCC restrictions—which it characterizes as “obsolete” and “out of touch with reality”—the Tribune acknowledges its corporate interest. But it bases its case purely on financial considerations and competitive opportunities. The public good, the health of democracy, and the well being of local communities are not considerations. This illustrates how dangerous the ownership concentration and the Wall Street control has become. It is ownership concentration that is advancing the cause of greater concentration by removing government limits that were put in place to protect the public interest.

Among other things, hasn’t deregulation and ownership concentration clearly been shown to be a risky proposition? Aren’t there lessons to be learned from the damage done by the relaxing of controls of savings and loans, the airline industry, banking and telecommunications? And, in those cases, mostly money was at stake. With the FCC rules, public good and democracy are at stake.

Isn’t that a story good newspapers should be reporting?

‘Only in Variety Is There Freedom.’

I delivered the opening keynote at the symposium in Illinois and borrowed a line from journalist Walter Lippmann for the title: “In variety there is freedom.” It was from a speech Lippmann gave over 50 years ago in which he said, “there is safety in numbers and in diversity and being spread out and having deep roots in many places. Only in variety is there freedom.” He also said the secret of a truly free press is “that it should consist of many newspapers decentralized in their ownership and management and dependent for their support—upon the communities where they are written, where they are edited and where they are read.”

Lippmann’s wonderful description of a free press is still valid today. It is vital to our democracy’s survival. Unfortunately, it is not a model that works for short-term financial investors.

Gene Roberts and Tom Kunkel have put together another fine volume that moves this very important dialogue forward. I look forward to hearing more of their personal voices, advocacy of solutions, and pushing all of us to find the will to act.

Frank A. Blethen is the publisher of The Seattle Times.