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Newspapers brave the corporate storm

By Megan Zehren
UW-Eau Claire Journalism Seminar Student
Wednesday, May 15, 2002

Jeff Ash of the Green Bay Press-Gazette recalls when he could look forward to going to a workplace where a sense of community and family were of the utmost importance.

With a limited amount of turnover, Ash felt secure in his job and comfortable in his workplace. 

Gannett took over the Press-Gazette in 1980. Shortly after, Ash went to work for the Wisconsin State Journal. Upon his return to the Press-Gazette in 1990, he noticed some significant changes.

Among the agreeable differences were the increase in resources, an increased level of sophistication and the privilege of having a reporter who specialized in the Capitol’s activities, he said. 

The more unpleasant differences included the loss of exceptional medical benefits, profit- sharing and an overall warm family environment, Ash said.

Ash had also worked at the Leader-Telegram in Eau Claire, another independent newspaper, for about a year during college. He speaks in a nostalgic tone about life at the Press-Gazette when it was a family-owned newspaper. 

“When the Press-Gazette was family-owned, everyone looked out for each other,” he said. 

Many journalists on chain papers would prefer to work for an independent paper, according to a survey conducted by a University of Wisconsin-Eau Claire journalism class.  Among those on chain papers who once worked for an independent paper, over 26 percent like independents better.  Among those now working on independent papers almost 44 percent said they would rather stay on an independent paper.  

 Journalists in Gannett’s 10-newspaper cluster, including the Press-Gazette, can see how this may be true but are quick to point out the advantages of working within a cluster.

 “Stimulated by new opportunities for cutting costs and building revenues, and encouraged by tax laws and changing trends in retail advertising, such established companies as Knight Ridder, Cox, Media General, Gannett, Donrey and MediaNews are swapping properties like baseball cards, unloading papers that don’t fit their geographic strategies and acquiring ones that do,” states Jack Bass in his excerpt “Newspaper Monopoly” in a State of the American Newspaper series called Leaving Readers Behind. 

The generic term for this practice of syndication is “clustering.”

Just as in the game Monopoly acquiring adjacent properties allows for more leverage in business: Purchasing Boardwalk and Park Place permits you to build hotels and houses on the estate, making it more profitable when a poor soul lands on your property. 

Similarly, when companies learn of vulnerable newspapers in the same area, clusters are made through acquisition. This makes it possible to cut costs by centralizing production and sharing information. 

Bass said that nationally the problem lies within the goal of these companies. The objective is not fully journalistic, he said. 

“While the economic advantages of clustering become more obvious every day, the implications for readers and for journalism are less clear,” he said. 

The quality is increasing more at independent papers than it is at chain papers, according to the UW-Eau Claire student survey. About 72 percent of the respondents at independent newspapers said that the quality of their paper is better, compared to 51 percent of those working at chain papers who said the quality of their papers were increasing. 

This means that the struggle to stay independent could be forcing family-owned newspapers to focus more on the quality of their product. 

Even so, journalists within the Winnebago cluster speak proudly of the legitimized ethics and increase in recognition for exceptional journalism in their region.

Gannett Co., Inc. has a long history of clustering newspapers situated around ones it already owns. In 1906 a New York man by the name of Frank Gannett spawned what would one day become one of the most powerful influences in newspaper ownership history.

It didn’t take long for Gannett to figure out that combining newspapers could prove to be profitable. Hyphenated names such as the Star-Gazette and the Times-Union ensued as a result of merging two newspapers together. 

East-central Wisconsin newspapers have had their share of the clustering of independent newspapers and the powerful Gannett Company. 

Ultimately, 10 newspapers have become sister newspapers under their father company, Gannett. Newspapers included in this cluster surround the large Lake Winnebago and are scattered around the area.  These papers are the Green Bay Press-Gazette, The Appleton Post-Crescent, the Oshkosh Northwestern, The Fond du Lac Reporter, The Sheboygan Press, the Manitowoc Herald-Times, the Marshfield News-Herald, the Stevens Point Journal, the Wausau Daily Herald and The Wisconsin Rapids Daily Tribune. 

This cluster, also called a strategic marketing group by Gannett, is split into two regions: the Winnebago group and the Central Wisconsin group. The Winnebago group comprises of the newspapers that are tightly packed around Lake Winnebago and the cities they are based in have come close to overlapping. 

At the top of the lake is Green Bay, where the Press-Gazette resides. When the Winnebago Strategic Marketing Group was formed, Gannett had already owned the Press-Gazette for over a decade. As an existing paper under Gannett, they were prompted to look to Green Bay’s close proximity to other cities and the plan was underway to cluster these newspapers together. Even though the Press-Gazette had been corporately owned for some time, Jeff Ash, the assistant sports editor, remembers what it was like to be independently owned. 

As a family-owned newspaper it actually felt like family, he said. This can be seen by the benefits package the employees could take advantage of, including top-notch medical benefits and profit-sharing. 

Summer parties, Christmas parties and retirement banquets also helped to keep the family in good spirits, Ash said.

Now, Ash explained, under Gannett, the benefits are less attractive and as de-personalized as they can get. Although 401K, a plan for investment savings, is part of the benefits package, which is being revised all the time, profit-sharing disappeared and the benefits are managed by outside companies. 

Being a stockholder and an employee of a Gannett-owned newspaper creates a balance in the drawbacks of receiving less benefits, says Ash. The disappearance of summer parties could mean better equipment for the newsroom as the money that would be used for picnic supplies could be relocated to a new computer. 

Among the benefits of working in a chain paper is how much sponsorship Gannett puts into exceptional journalism. At the end of each year the “Best of Gannett” competition takes place, which awards certain papers for their efforts in writing.

The Press-Gazette won this award for their coverage of the Super Bowl when the Green Bay Packers won in 1997.

An additional benefit to being owned by Gannett is their corporate support for the newspaper Web sites. Each newspaper in the Winnebago cluster has its own Web site with coverage distinctive to their community.

Another aspect of being corporately owned involves the reason newspapers are being made every day: the readers. When a family owns a newspaper there seems to be a sense of hometown pride, reflected in the papers by including news that indicates the town’s history and growth, Ash said.

Obituaries and wedding announcements used to be very important to the community. Readers have noticed that those aspects of the newspaper are less important now, Ash said.

Divorces have disappeared altogether as a result of being labeled what Ash said his superiors call “nosy-news.” 

Only about 15 percent of respondents said that the amount of local news coverage has decreased since they began working at their newspaper, compared to about 39 percent saying that the amount of coverage locally is actually increasing, according to the survey by UW-Eau Claire students. 

When he was working for an independently owned newspaper, Ash noticed, the employee turnover rate was very low, but changed once Gannett came in to the picture. 

“There was a loss of a sense of community and family, and a lot of people left because of it,” he said. 

About 22 percent of those surveyed said that their newspaper had laid off journalists two or more times since their start at their newspaper, the UW-Eau Claire student survey said. 

Moving down the west bank of Lake Winnebago we come to Appleton, Wisconsin. Named for the bend in the Fox River, which runs through most of the Winnebago clustered cities, The Post-Crescent is distributed here and serves a four-county area. 

This paper joined the “corporatized” world in 1984 when Thomson News, Inc. purchased it from its original owners. Just after Thomson completed a $35 million printing facility in Appleton, it sold the paper and the facility to Gannett in 2000. Dan Flannery, managing editor of The Post-Crescent, has worked there for 16 years and has seen Thomson come and go as well as witnessed the arrival of its current owner, Gannett. 

Flannery has heard frequent criticism of Gannett, but he hasn't seen examples of those shortcomings, he said.

“Things changed from a technological as well as a process standpoint,” he said. As examples of changes, he cited increased fact checking and newsroom adherence to ethical guidelines. 

One other change is front-page advertisements, which were introduced by Thomson. 

“I’m not a big fan of front-page ads,” Flannery said. “But no one questions ads on page three, right? As a professional journalist I’m not happy with the decision, but the readers don’t seem to care as much.”

Dan Flannery Managing Editor, Appleton Post-Crescent (photo courtesy of The Appleton Post-Crescent)

When Bass visited Appleton he found a staff proud of the paper’s quality.

“We have a good working relationship with our editor and publisher,” John Lee of the Guild/Communications Workers of America local told Bass. 

“I think there’s a relationship between quality and the union. It adds stability, with staff continuity committed to this newspaper and this community,” Lee told Bass.

A short car ride due south will bring you to Oshkosh, Wis. This is the home of the Northwestern, apparently one of the most frequently bought-and-sold newspapers in the country. A 24,000 circulation daily newspaper, the Northwestern, between the years of 1998 and 2000, was acquired and sold three times. 

The first of these transactions happened in 1998 when the independent owners sold their newspaper to the Virginia-based Ogden Newspapers. This first sell was the result of a struggling battle to keep the larger corporations away from buying the Northwestern. The owners, Thomas Schwalm and Samuel Heany, sold the business they had inherited from their father-in-law Oscar Hardy, who had owned the newspaper from 1917-1948, in a final attempt to “not be run by remote control,” said Stew Rieckman, managing editor of the Northwestern. 

Stew Rieckman Managing Editor, Oshkosh Northwestern (photo courtesy of the Oshkosh Northwestern)

Then came the buzz that Thomson, Inc. was looking to put together a cluster. 

Oshkosh was important to Thomson at this time because it already owned four other dailies around Lake Winnebago. Schwalm, Heany and Ogden hadn’t planned on Ogden selling the newspaper so quickly, according to Schwalm in an interview with a Milwaukee reporter. 

“The story we heard was that Thomson kept throwing newspapers at Ogden until he couldn’t say no,” Schwalm said. 

The Northwestern took great pride in being an independent newspaper for so many years, but if they had to be sold, they were glad it was to Ogden and not to Thomson, Rieckman said. 

Ogden Newspapers acquired the Northwestern in April 1998. Two months later they turned around and sold it to Thomson. 

“It’s a feeling as if someone surrendered,” Rieckman said of the selling of the paper to Thomson. 

“Thomson was seen as the mortal enemy and was at the gate ready to suffocate the newspaper,” Rieckman said. 

Thomson introduced ideas to the Northwestern such as closely coordinated advertising and common products within the cluster it had formulated. Readers benefited from extended coverage of Wisconsin’s coveted football team, the Green Bay Packers, as well as a news bureau in Madison and group projects uncovering facts about education and employment in the cluster’s region, Rieckman said. 

On the downside, competitiveness dulled and reporters became less aggressive. During this time the quality of journalism suffered and with all of the worrying about the stability of their jobs, journalists lost sight of what they were really there for, he said.

“Everyone forgot that we still had to put out a newspaper,” Rieckman said.

At a time when newspapers were getting rid of papers not involved in a cluster employees at the Northwestern had no choice but to embrace their new way of life. 

With the turn of the century Thomson, Inc. wanted to extend its hold on electronic media and loosen its grip on hard-copy newspapers. As a result, Thomson put the chain it had obtained up for sale. Gannett was quick to respond. 

Rieckman knew something was up when he drove in to the parking lot at the Northwestern one morning and spotted an environmental company taking soil samples. 

“We didn’t know what, but we knew something was going to change,” he said. 

At first, Gannett wanted all 56 of the Thomson newspapers that were up for sale. After consideration, they decided to buy just over a dozen of the papers ranging from the Wisconsin papers to Indianapolis and some Ohio papers.

When Gannett came to power most employees at the Northwestern just shrugged their shoulders and tried to prepare themselves for what lay ahead, Rieckman said.

They had been through it before, but this time there was a double-whammy with the recession that had just begun.

Gannett put extensive expense controls into place and froze positions or eliminated them altogether, Rieckman said. There was almost a 100 percent turnover in carrier force. The bottom dropped out in advertising. People complained of bad customer service. Things didn’t look good, he said.

With everyone wondering, “What about me?” reporters lost sight of what was important and the paper’s future was unpredictable, he said. 

Reporters wanted to know what Gannett was all about and how to adopt Thomson’s ideas to their new owners, all while grappling with synergies and trying to settle into the cluster, Rieckman said.

Eventually, the Northwestern became the experts in surviving changes in ownership and was looked to for advice from neighboring newspapers when the Winnebago cluster was starting to form. 

At the southern tip of Lake Winnebago lies Fond du Lac (meaning “foot of the lake”). Here The Reporter carries its news to the citizens and is yet another addition to the Winnebago newspaper cluster. As part of the 2000 purchase by Gannett, Thomson also owned The Reporter before this time. 

Fran O’Leary, managing editor of The Reporter, has noticed that a lot of the management decisions have been good for the company and not good for the employees.

“More paperwork and more meetings cuts into productivity,” she said. “There’s too much emphasis on what’s good for the bottom line.”

About 78 percent of respondents said that the emphasis on profit margins has increased since they started working at their current newspaper, according to the UW-Eau Claire student survey. 

O’Leary worked at the Janesville Gazette before coming to The Reporter about 15 years ago. 

“At independently-owned newspapers they worry about what is best for the newspaper and the people,” she said.

The purchase of The Sheboygan Press and the Manitowoc Herald Times in 2000 completed the Winnebago cluster. 

In 1999, Bass says, the combined circulation of these five newspapers was about 143,000. Three smaller newspapers about 70 miles away, known as the Central Wisconsin group, added another 43,000, he said. 

One reader of the Stevens Point Journal, one of the papers in the Central Wisconsin group, is disappointed with the paper now that it is owned by Gannett. 

“It was our local paper. That’s what it was. It was our paper, and now it’s been taken over by outsiders, and now it’s not the same,” funeral director George Barnes said in a Milwaukee Journal Sentinel interview. 

Newspapers are businesses, Ash said. “Day to day we just put out a paper.”