Newspaper Ownership - 2006 Annual Report

There was considerable anticipation in 2005 that the Federal Communications Commission would relax the so-called “cross-ownership” rule that bars companies from owning newspapers and television stations in the same market, but it did not. A ruling from the five-member agency was expected sometime in early 2006, after President Bush appointed t he lawyer Robert McDowell to fill the seat left vacant by Kathleen Abernathy, whose term had expired .

Lauren Rich Fine, a media analyst for Merrill Lynch, told the Chicago Sun-Times in January 2006 that the unpredictability surrounding the future of cross-ownership rules “has cast a shadow over merger and acquisition activity.” In March 2005, for example, the Tribune Company was ordered to sell WTXX in Connecticut because it was in the same market as the company’s Hartford Courant. After an appeal, however, the FCC gave Tribune a two-year waiver.12 (For a more detailed discussion of potential FCC actions in 2006, see the ownership chapter in the Local Television report.)

Private newspaper companies rarely figure in a big way in discussions of industry economics because they are not required to report financial results and do so only sporadically. A number of big companies occupy the private side, though. Among them:

*Advance Publications, 26 newspapers including the Oregonian, the Star Ledger, in Newark , and the Plain Dealer, in Cleveland . It ranks fourth in circulation among all companies.

*MediaNews, controlled by Dean Singleton. It has 46 papers, with the Denver Post the flagship, and ranks eighth in daily circulation.

*Hearst, 12 newspapers including the San Francisco Chronicle, the Houston Chronicle and the San Antonio Express News. It ranks seventh in daily circulation, a bit ahead of McClatchy.

*Cox, 17 newspapers including the Atlanta Journal-Constitution, the Austin American-Statesman and the Palm Beach Post. It ranks 11th in circulation, just behind E.W. Scripps.13

Those companies use their independence in different ways. Advance, especially, and Cox to an extent, invest in news quality. MediaNews is mostly about financial performance and acquisition. Historically, it has bid on properties no one else wants, and CEO Singleton has compared himself to a surgeon who saves some patients and loses others.14 Hearst has a mixed bag of holdings, including one hot market, San Antonio; one of the very few big-city papers, the San Francisco Chronicle, that are actually losing money, as well as the smaller paper (the Post-Intelligencer) in Seattle’s contentious Joint Operating Agreement whose other paper is the Times.

Advance faced one of the thorniest operating problems in 2006 — how to manage the New Orleans Times-Picayune as the city recovered slowly from the devastation of Hurricane Katrina. The company was unequivocal in saying it intended to keep operating the paper, but didn’t say what downsizing or other adjustments may be necessary.