Newspaper JOAs Reach End of the Line
I don't subscribe to the view that the newspaper industry is dying. But early in 2009 we are seeing the last throes of Joint Operating Agreements, the rickety structure authorized by Congress in 1970 and meant to preserve two-newspaper towns.
In the last two months the three biggest remaining JOAs have hit the skids. The Detroit Free Press and Detroit News are going to eliminate home delivered print editions several days of the week. Both Denver's Rocky Mountain News and the Seattle Post-Intelligencer are poised to close unless a buyer can be found quickly (improbable in the current dismal market).
The current harsh economic climate exposes flaws that have been apparent all along in JOAs, which have dwindled from a peak of 28 to nine (including Denver, Detroit and Seattle). The law, incorporating several agreements authorized before 1970, waives anti-trust regulations and allows papers in a given city to pool business functions while maintaining separate editorial staffs -- hence preserving two distinctive editorial voices.
The idea was that the resulting savings could check a market dynamic in which circulation and advertising flowed to the stronger of the two papers and eventually drove the other out of business.
It didn't work, though. Most often the second paper grew so weak that it was losing money for its owners and dragging down the JOA "agency" as well. From a peak of 28 JOAs, the herd had been thinned to nine at the beginning of 2009. Earlier casualties include the Cincinnati Post and Albuquerque Tribune.
The three big-city JOAs are a slightly different case, with papers that are closer in circulation and vitality. The Detroit and Denver agreements are of relatively recent vintage and were expected to stop ad rate wars and pumped up discount circulation, both expensive and wasteful practices.
Still, all six of the papers have divided markets that naturally could support a single paper, not two. Newsprint got very expensive in 2008, and there has always been the duplicative cost of having two newsroom staffs essentially covering the same set of things. So, again, market forces have overwhelmed the intent of prolonging the life of weakened papers.
Even the biggest cities -- New York and Chicago -- do not support two profitable papers now. And metro papers like the Atlanta Journal-Constitution or Dallas Morning News have their cities to themselves, but have still been forced to scale back distant circulation and make big newsroom staff cuts in the face of falling ad revenues.
The remaining JOAs are in Charleston, W.Va.; Fort Wayne, Ind.; Tucson, Ariz.; Salt Lake City and York, Pa. Technically the JOA in Las Vegas is also a survivor, though for several years the Sun has been printed as an insert to the Review-Journal. Dean Singleton's MediaNews is a participant in the Charleston, Salt Lake City and York JOAs, as well as those in Detroit and Denver.
The industry lobbied hard for the Newspaper Preservation Act, back in 1970. It will go down, though, as a modest monument to unintended consequences and ineffectual government intervention. Is it an object lesson in not letting government near newspapers and their troubles (let alone the considerable First Amendment complications of any entanglement)?
I don't think government subsidies to reinforce the fading civic function of newspapers is a ridiculous idea on its face. Some perfectly respectable countries like Sweden and Norway have been underwriting circulation for years. President Nicolas Sarkozy has a fast-track (and controversial) commission going to explore a government role in vitalizing the ailing French press.
The American context is different, however, and the newspaper industry is not close to the front of the bailout line. The JOA experience shows how devilish it is to get the details right in a durable way. And that would be all the harder in the volatile print/digital climate sorting itself out now.