JESSELL AT LARGE

The Sad Unwinding Of Papers & Broadcasting

With a couple of important exceptions, the major publisher-broadcasters have spun off legacy newspapers holdings into separate companies or simply sold them. The moves have been driven by investors and trustees tired of seeing earning and margins dragged down by publishing, and management's inability to achieve any kind of cross-media synergy. One of the bigger blows came in 1975 when the FCC banned new same-market newspaper-broadcast combinations to prevent the publishers from becoming too powerful. Things have changed a little since then, but the prohibition remains.

As a look around broadcasting these days, I barely recognize it anymore.

For years, I could easily describe it, even in Latin. (Omnia broadcasta in tres partes est.)

The network O&Os were the top dogs with the stations in all the biggest markets and with the most revenue.

Right behind were the large publisher-broadcasters like Tribune, Hearst and Scripps. They were blue blood, if not also blue chip, companies that had leveraged their success in newspapering with even more success in radio and TV. These were truly distinguished operations with deep roots in our cultural and political history.

Then came the rest — family-owned pioneers like the Hubbard, small market publisher-broadcasters, short-term speculators, assorted long-term investors like Raycom and Meredith and consolidators like Sinclair and Nexstar.

But times have changed.

BRAND CONNECTIONS

The Big Four are no longer the biggest four. According to the BIA/Kelsey/TVNewsCheck station group ranking (by revenue), Sinclair and Gannett muscled their way into the Top Four through mergers and acquisitions.

The big change, however, is within the second grouping. With a couple of important exceptions, the major publisher-broadcasters have spun off legacy newspapers holdings into separate companies or simply sold them.

The moves have been driven by investors and trustees tired of seeing earning and margins dragged down by publishing, which has been in an accelerating decline since at least the Great Recession, and management’s inability to achieve any kind of cross-media synergy.

Belo was the first of the big old-line companies to decide TV and print no longer fit. In 2008, its financial mitosis produced Belo Corp. (broadcasting) and A.H. Belo (newspapers).  Gannett gobbled up the broadcasting half last year, ending Belo’s long run in broadcasting.

Media General sold off its newspapers, mostly to Berkshire Hathaway in 2012, to become a broadcasting pure-play.

Last fall, the Post-Newsweek Stations (now Graham Media Group) lost its newspaper connection when parent Washington Post Co. (now Graham Holdings) sold the Post to Jeff Bezos, the founder of Amazon.

The trend has accelerated over the past couple of months.

On July 10, Tribune announced it would split into two along media lines, with Tribune Publishing getting the newspapers and Tribune Media getting the broadcasting.

Just three weeks later, the E.W. Scripps Co. announced that it was merging with Journal Communications, another multimedia company, and that the two companies were separating their broadcasting and newspaper holdings into separate companies. E.W. Scripps would survive as the broadcasting company; Journal Media Group as the newspaper company.

And then just one week after that, Gannett said it, too, would undergo a publishing-broadcasting split. The broadcasting company would retain the Gannett name.

So what we have is a lot of corporate names that instantly evoke publishing traditions and prowess, but that have no connections to newspapers — Tribune Media, E.W Scripps, Gannett and Media General.

Two of major publisher-broadcasters still persist — Hearst Corp. and Cox Media. They are now the only two in the BIA/Kelsey/TVNewsCheck Top 20.

But at Hearst, the newspaper division, which includes the San Francisco Chronicle and the Houston Chronicle, seems to have nothing to do with the broadcasting division. The company has no overlapping TV and newspaper markets so there is not even a chance at combining resources.

Of the major companies, only Cox Enterprises still seems determined to keep its newspapers and TV stations together and wring out of them whatever synergy it can. This is due, in large part, by its having newspapers and stations in several markets, including its home base of Atlanta.

Cox has gone all-in in Dayton, Ohio, combining print, broadcast and digital under the same roof and training reporters to be competent in all media. You can read all about it at our sister site, NetNewsCheck.com.

A similar, but less comprehensive, experiment is going on in Cox’s hometown of Atlanta, where the company owns the Journal-Constitution, WSB-TV as well as WSB-AM-FM.

I asked Cox Media Group President Bill Hoffman about it when I interviewed him a year ago. “To listeners, readers, viewers in Atlanta,” he said, “they feel like it’s three distinctive brands, but behind the scenes the kind of collaboration that’s going on in content, marketing, sales, back-room efficiencies is very robust. It’s leading to better financial performance. The brands are stronger by whatever use-metrics you can put against them.”

Such enthusiasm stands in marked contrast to the frustration of most media executives who have tried to get newspaper people and broadcasters to cooperate.

The era of the publisher-broadcaster is not over. In addition to Hearst and Cox, it rolls on in smaller markets where the newspapers have not suffered nearly as much as their large-market counterparts.

And some of the small publisher-broadcasters are not so small. Cracking the BIA/Kelsey/TVNewsCheck Top 30 ranking this year are Quincy Newspapers (No. 22), Cordillera Communications (a subsidiary of the Evening Post Industries) (No. 23), Schurz Communications (No. 24) and the Dispatch Broadcast Group (a subsidiary of Dispatch Printing Co.) (No. 27).

Other notable publisher-broadcasters include Morris Multimedia, Forum Communications, News-Press & Gazette and Calkins Media.

From the beginnings of broadcasting, Washington policymakers feared that publishers would take over the business and tried to discourage their involvement in it. The fear culminated in 1975 when the FCC forbid new in-market newspaper-broadcast combinations. To this day, liberal Democrats defend that prohibition as if all our First Amendment freedoms depended on it, even as newspapers cut back, go broke and disappear.

I wish they could see the business as I do.

Harry A. Jessell is editor of TVNewsCheck. He can be contacted at 973-701-1067 or [email protected]. You can read earlier columns here.


Comments (4)

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Brian Bussey says:

August 29, 2014 at 4:40 pm

wall street has no interest in the reporting of facts or, in depth, long form, investigative journalism. Could it be that that wall street is tired of being investigated. Since when was it necessary for newspapers to be as profitable as oil companies?. If anyone actually looked the balance sheets of the newspaper groups they would see that the newspaper groups had higher margins than the oil companies, they just did not have as much revenue. America will suffer greatly from the erosion of the quality of investigative journalism that has saved countless thousands of American lives from corporations who put profits before its people. What really shocks me is that Newspapers refused to run their commercials on their own TV stations. That is the only reason subscriber counts are falling.

Sarah Norat-Phillips says:

August 29, 2014 at 5:22 pm

Harry–Ancient history, I guess but thanks for the column on the break-up of the Newspaper Broadcast companies. Having had the privilege of working proudly for Tribune Company for going-on twenty nine years and prior to that eight years at NAB, I lived the Ban. Rarely noted is that when the Ban was adopted in 1975, the Commission acknowledged that their research documented that cross owned stations broadcast more and superior news and public affairs programing than all other TV stations be they network O & Os or others. The very thin intellectual predicate was an expressed hope that more and different ownership might engender a more diverse and robust marketplace of ideas and viewpoints. It was a subset of the “scarcity” rationale. No need to rehash the assertion held by many that the Rule actually starts from the Nixon Administration’s animus against the Washington Post. Debunk that assertion if you wish, but it certainly spooked the Post into swapping its Washington station with the Detroit Evening News. Clearly, the Post felt threatened. At the same time,, Tribune held tight with WGN and WPIX launched by its Chicago Tribune and New York Daily News respectively. The eventual Supreme Court decision did not require major market break-ups but did acknowledge that future technology might be a basis for revisiting “scarcity” rationale. Clearly,They were uncomfortable. They were close to trampling on the First Amendment and they knew it.
Since then, Tribune aggressively grew our Company, and more than once went up against the Ban. Our purchase of the Renaissance stations in 1996 and later the Times Mirror acquisition in 2000. In both instances, the Commission and the Hill for that matter would threaten us with forced divestiture. I At the last moment, their internal legal analyses, I assume, concluded how shaky the “scarcity” rationale underpinning the Rule truly was. Tribune would be granted the necessary language. The transactions closed. Irrespective,the Cross Ownership Rule without any factual basis would remain. When the Federal 3rd Circuit in its highly critical opinion,stayed the Commission’s Omnibus Five Part Ruling more than a decade ago, it noted one exception. On major market Broadcast Newspaper Cross Ownership, it wrote that relief is “supported by record evidence” enhances “localism” and does no harm to “diversity”. Powerful words, indeed.. Several legislatively-mandated FCC Quadrennial Broadcast Ownership Rulemakings later and this Rule which has never had a factual predicate remains. With all these companies recognizing today’s media marketplace by splitting up, the one constant is the anachronistic Ban. From inception to the present, its tortured history, is a black mark on our regulatory process. It never had a factual basis and now it doesn’t make any difference, it still remains.

Ellen Samrock says:

August 29, 2014 at 9:30 pm

But isn’t that typical of Capitol Hill politicos? They’re either hopelessly mired in the past, still trying to regulate Western Union’s monopoly on the telegraph (never mind that they stopped telegraph service in 2006) or swept up in someone else’s magical thinking of the future (“According to Cisco, one day the world will use holographic locomotives to transport goods. We need to regulate it.”) They never get it right. In the meantime, businesses, like Tribune, Gannett and others, try to survive amid the regulatory fallout and convoluted craziness. Pres. Reagan had it right, ‘government is the problem.’ Always has been, always will be.

robert russo says:

September 1, 2014 at 3:39 pm

CORRECTION: Gannett’s TV company will NOT keep the Gannett name. That will go to the newspaper side. A name for the TV company has not yet been announced. Please fix.


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