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OVERDUE FINES: 25¢ per day per item EURNING LIBRARY MATERIALS: ' 2 ~ “3“,, 3;” Place in book return to remove -‘- "’ ' ' charge from circulation records till"\\\\ t P“ 4 ”N22 "71999 Accepted by the faculty of the School of Journalism, College of Communication Arts and Sciences, Michigan State University in partial fulfillment of the requirements of the Master of Arts degree. , fl/Qlj Chairman Date ARSTRACT Characteristics of Ownership of Michigan Weekly and Semi-Weekly Newspapers By Thomas R. Standley This study examines ownership of Michigan weekly and semi-weekly newspapers, and how the characteristics of ownership relate to group and single-ownership newspapers The study attempted to find differences between newspapers in group-ownership and single ownership. The study made use of a 19 question survey which was sent to 258 Michigan weekly and semi-weekly newspapers. Results from the 226 responding newspapers are analyzed in the study. Since little data could be found on group-ownership of Michigan weekly and semi-weekly newspapers, the study was descriptive in nature. The survey included questions on circulation, staff size, number of newspapers owned, whether the publisher was also the editor, location of the newspapers, length of ownership, previous ownership, average number of pages published, method of delivery, and competition. The study found significant differences between single-ownership and group-owned newspapers in nearly all of the areas the survey covered. Significant differences were also discovered between groups consisting of two newspapers, and groups of three or more newspapers. One of the major findings of the study was that group-owned newspapers on the average face strong competition from other weekly newspapers, while single-ownership newspapers on the average cited shoppers, a non-news medium, as their strongest source of competition. The study also indicated that group-ownership newspapers in Michigan seem to be expanding through the acquisition of existing newspapers rather than the founding of new newspapers. Generally, group-owned newspapers occupied stronger positions on the average than single-ownership newspapers in most areas of the study. GROUP OWNERSHIP CHARACTERISTICS OF MICHIGAN WEEKLY AND SEMI-WEEKLY NEWSPAPERS By Thomas R. Standley A THESIS Submitted to Nichigan State University in partial fulfillment of the requirements for the degree of MASTER OF ARTS School of Journalism 1977 TABLE OF CONTENTS Chapter I. Introduction.......................................1 II. Methodology........................................5 III. Survey Results....................................ll IV. Conclusions.......................................76 Bibliography..............................................93 Appendix...OOOOOOCIOCCOOOOCOOO...0.0.0.0....0000000000000096 ii 15. 16. 17. 18. 19. LIST OF TABLES Number of Newspapers 0wned..........................13 Circulation.........................................15 Location............................................19 Combined Advertising......................4...-.....22 Combined Pages/Sections.............................23 Years 0wned.........................................27- Previous 0wnership..................................30 Age of Newspaper....................................33 Central Plant Usage.................................37 Central Plant Ownership.............................h0 Newspaper Printing Process..........................h1 Form Taken to Central P1ant.........................hh Combined Editor-Owner Role..........................50 Staff Size..........................................53 Format of Newspapers................................57 Average Number of Pages.............................59 Delivery Methods... ................................62 Considering Delivery Change.........................68 CompetitionOOOCOOO000.00.000.00.00....‘000000000000072 iii CHAPTER ONE This study will be an examination of ownership of weekly newspapers in Michigan. The central effort will be to identify some of the characteristics of weekly and semi- weekly newspapers in group and single-ownership. Weekly and semi-weekly newspapers are neglected areas of research in journalism. Concentration of ownership in the daily newspaper field has been explored at some length by researchers such as Raymond B. Nixon of the University of Minnesota, but little research has been done on weekly and semi-weekly newspapers. After even a short examination of concentration of ownership among weeklies, it becomes apparent concentration of ownership in the daily newspaper field is not the same as in the weekly and semi-weekly newspaper field. There are similarities, but the differences are what are the most striking as will be discussed later in the study. This study will center on a survey of Michigan weekly and semi-weekly newspapers. An attempt will be made to examine certain characteristics of the newspapers which in many cases reveal strong differences between the newspapers in group and non-group ownership. An examination of the differences between very small groups consisting of two newspapers and larger groups of three newspapers or more will also be made. Because of the lack of research this study is descriptive in nature. It will seek to develop some basic information about ownership of Michigan weekly and semi-weekly newspapers. The question of who controls the press, including the weekly and semi-weekly press, is one of the most important questions that can be asked in a democracy. One of the primary objections to group-ownership over the years is the contention it could significantly reduce the number of viewpoints to which the public has access and seriously impair the quality of news when only a few people control what appears in print. Writing about the takeover of a community newspaper by a group, Rick Pullen, then a graduate student at Southern Illinois University, stated that: Apparently as a result of the conglomerate's quest for profits, subscribers are receiving an inferior product. Working conditions that led to the resignation of qualifed news people and hiring of inexperienced workers negatively affected the quality of the newspaper. An earlier deadline results in stories being held over for a second day. Lack of local news has violated, according to some subscribers, the purpose of a newspaper.(1) The intention of this study, however, is not to prove that group-ownership is either good or bad, but to describe the trend toward concentration of ownership of Michigan weekly and semi-weekly newspapers, and to examine 1. Rick Pullen. "When the Chain Came to Town," - roo Editor, (May/June 1972) p. 17. 3 differences in the characteristics between group and non-group newspapers. The types of characteristics to be explored include the location of the growth of weekly newspapers in suburban parts of the state, the decline of the weekly newspaper in rural areas, and the role of the centralized printing plant and its relationship to group and single-ownership. David R. Bowers has explored the role of the centralized printing plants, and the potential they represent as a mechanism for group-ownership.(2) Bowers discovered that some weekly newspapers with financial problems and up selling out to the owners of centralized printing plants where they have accumulated large bills. it should also be pointed out that Bowers views centralized printing plants as a source of hope for new newspapers. He maintains the rising cost of publishing out an offset newspaper may mean that most weekly newspapers will have to turn to centralized printing plants to survive. Most of the studies on weekly newspapers in the past have been limited to case studies, or a collection of information from a number of sources easily obtainable. John Cameron Sim, one of the few persons to take a look at the change in weekly newspapers in depth, brought together a 2. David R. Bowers, "The Impact of Centralized Printing on the Community Press." goucnalism anrtgrly h6(Spring 1969) pp. h5-h6. z. wealth of information from different sources and provided an excellent analysis.(3) Case studies have in the past centered on one newspaper or group of newspapers. Both types of studies will be cited in this study to illustrate the implications of the survey. The few existing statistical studies on numbers of newspapers in group-ownership deal exclusively with daily newspapers. Few reliable figures on group-ownership of weekly newspapers in the United States could be found. This lack of information was one of the primary reasons the decision to survey Michigan weekly and semi-weekly newspapers was made. A very important source of information on the creation and dissolution of weekly and semi-weekly newspapers is the Michigan Press Association's Hflsmigan,fl§wspapgg‘QLLegtng and Ratgbgok which includes extensive information on all member newspapers of the association. Only six to eight newspapers in Michigan are not members of the organization. By comparing past issues with the more current issues of the directory it is possible to get some idea of which newspapers have closed their doors, check the circulation of the newspapers, and determine their location. 3. John L. Sim. The Grass Roots Eggssi AmnggaLs QQEEQQLLX Ngwspapgrs (Iowa State University Press, 1969) CHAPTER TWO Central to the study is the 19 question survey of 226 Michigan weekly and semi-weekly newspapers. Ih§,fl1§hlg§n Newspaper Cirggtory and Ratebgok was the source for all of the names and addresses originally sent survey forms. The directory includes 258 weekly and semi-weekly newspapers, all members of the Michigan Press Association. Only six to eight weekly and semi-weekly newspapers in the state are not members of MPA.(1) Three non-member newspapers owned by publishers who also had newspapers with HPA membership were turned up. Of the 258 newspapers sent surveys, 22h cf the association newspapers responded, including one reporting that it had ceased publication. Counting responses from only the 258 newspapers originally sent survey forms, the study had a 86.8 percent rate of return. The first mailing of the survey was completed in August of 1976. After a two week waiting period all of the non-responding newspapers were sent a follow-up letter along with another survey form and stamped self-addressed return envelope. The questionnaire was kept as short and simple as 1. Michigan Press Association. Michigan Newsgagg: Dicggggry and Ratebook, (East Lansing: Michigan Press Association, 1976) pp. 7-33. 6 possible to maximize the rate of return. The annual survey done by the National Newspaper Association on weekly newspaper costs points out the dangers of attempting to ask for too much detail on a self-administered survey form. IL; 1926 ngkiy Newspaper Cost Study attempted to gather extensive information on cost and income from weekly newspapers in the United States and Canada. It ended with a total of only 316 returns, and of that total 22 responses were from Canadian newspapers.(2) Gerald C. Stone wrote in Journalism Quarterly: The NNA study receives approximately eight percent response from some 5,000 weekly newspapers. Since the return rates for the two national surveys are so low--and in view of recent research findings that respondents differ greatly from non-respondents--both associations and the individual publishers who depend on their reports must be skeptical of the validity of these surveys. Superior newspapers may be over represented in the studies because the method of securing data--which is the same method used by most other broadly based surveys of community newspapers--is the mail questionnaire. The response rate from these surveys predictably decreases with the length of the questionnaire sent, the sensitivity of the information sought, and the size of the publications whose owners and editors receive the forms.(3) An attempt was made to evaluate the logic and construction of the survey form along with its feasibility with a pilot study in the spring of 1976. Some small 2. National Newspaper Association, 1976 Wgekiy Ngwgpaper Cost Stgdy, (Washington 0.0., 1976) p. 3. 3. Gerald C. Stone, "Validation of Economic Surveys in the Weekly Newspaper Field," Journalism Ouacteciy, 53(Summer 1976) pp. 312-313. 7 changes were made in the format of the survey, although it retained its basic content and structure. The rate of return of the pilot study was comparable to the final survey. After a follow-up letter all of the data from the survey forms received was transferred to optical scanning sheets. A University of Toledo optical scanner transferred the data to standard 80-column computer cards. Directives using programs from the Statistical Eagkaga f9; tag Sagial Salangaa were keypunched on standard computer cards, and the data was processed on the CDC 6500 computer at Michigan State University.(h) Using an optical scanner involved the balancing of the constraints of time and money against a number of disadvantages posed by using the scanner. Earl R. Babbie summarized the inherent dangers of using this method. This use of the optical scanner provides greater accuracy and speed of keypunching. There are several disadvantages, however, which should be mentioned: first, coders find it very difficult to transfer data to the special sheets. Using the conventional code sheet, the coder simply finds the appropriate code number in the next blank Space on the sheet. The configuration of op-sense sheets, however, hampers this. Often it is more difficult to locate the appropriate space to blacken. Past experience suggests that h. Norman H. Nie et al. Stati§tiga| Baggaga fog tha l Salaagaa, 2nd edition (New York: McGraw-Hiil, 5min. 1975)pp. 19h-201, 218-2h5. 8 these difficulties result in a greater expenditure of time and greater inaccuracy, which often offsets the gains.(5) An effort was made to minimize the weaknesses of this method by using two workers to process op-scan sheets. One person read the response while the other coded the op-scan sheet. The difficulties in obtaining access to a keypunch made using the op-scan sheets a necessity. The survey was designed to find out if differences existed between group-owned and non-group newspapers in a number of basic areas. Included on the survey were items such as circulation. The size of a newspaper's circulation has important implications in terms of the newspaper's financial strength as will be discussed in Chapter Three and Chapter Four. Questions were asked on whether the newspaper was located in a urban/suburban area or a rural area, and if the editor of the newspaper was the owner or someone hired by the owner or owners. Location was considered important as an indication of whether or not group-ownership was occurring primarily in metropolitan or rural areas or if location had no relationship to type of ownership. Since many weekly and semi-weekly newspapers have combined the role of editor and publisher, large numbers of editors hired by the owners would be a significant change from the past. The question central to the entire study is group size. In the study a group is defined as any two or more 5. Earl R. Babbie. Survey Raseacgh Methods (Belmont, California: Wadsworth Pooks, 1973) pp. 199-200. newspapers under the same ownership. Groups are broken down further to include those groups consisting of only two newspapers and groups made up of three or more newspapers. As will become apparent when the survey results are described in detail in the next chapter, there are significant differences between groups consisting of two newspapers and larger groups as well as single-ownership newspapers. One of the problems that developed with determining the number of newspapers in groups was that in very large groups, the person filling out the survey form did not know how many newspapers the firm owned. In other cases the group was so decentralized that for all practical purposes it was really two or more newspaper groups. An example is Towne Courier Publications, Inc. in East Lansing and Observer/Eccentric Newspapers in the Detroit suburbs. Both are owned by the same firm, but each failed to mention the existence of the other on the survey form. A series of four questions were closely interrelated. First, newspapers were asked whether the newspaper was printed in a central plant, secondly in what stage of completion it was shipped to the central plant, what type of printing press was used, and if the central plant was owned by the newspaper's firm. Questions were asked on whether the newspaper was previously owned by a group or individual, the age of the newspaper, and how many years the newspaper had been owned 10 by the same PUb‘iSher or publishing firm. Respondents were asked the average number of pages the newspaper published each week, whether the newspaper used a tabloid or broadsheet format, and what printing process was used to produce the newspaper. Newspapers were asked about what type of delivery methods they used and whether or not the newspaper was considering finding a new method of delivery because of rising postage rates. Finally, it was asked from what medium the newspaper faced the strongest competition. The following chapter outlines the results of the survey. CHAPTER THPFE More than half of the newspapers responding to the survey reported they were owned by groups. In all, 11h of the 226 neWSpapers that returned survey forms said they were part of a newspaper group. Many of the groups were not large. Groups consisting of only two newspapers accounted for an of the 11h group~owned newspapers in the survey. Clearly, the typical weekly or semi-weekly newspaper group in Michigan is not a conglomerate. The results of the survey which follow indicated there was no single easy classification that group-owned newspapers could he slipped into by the researcher. Groups consisting of just two newspapers will be considered separately from groups of three newspapers or more. Many of the characteristics of the two newspaper groups were different from both larger groups and single-ownership newspapers. The differences will become apparent when the results of the survey are listed. it should be pointed out that not included in the study are shoppers or other cross-media ownership situations. A number of the respondents made marginal notes indicating their advertising was sold in combination with shoppers they owned. Traditionally, shoppers owned by 11 12 newspapers cover an area roughly similar to that of the newspaper or newspapers. Circulation of newspapers in group-ownership tended to be higher than newspapers in single-ownership. Generally, the larger the circulation of the newspaper, the more likely it was group-owned. Newspapers of less than 3,000 circulation accounted for 26.7 percent or 60 of 225 of the total responding to the question. Sixty newspapers or 58.8 percent of the 102 newspapers responding said they were in single-ownership. At the top end of the circulation scale only 25 of the 79 newspapers in groups of larger than three newspapers had less than 3,000 circulation, or about 31.6 percent. Compared to all of the 225 responding newspapers those 25 newspapers accounted for just 11.1 percent of the survey total. Groups consisting of two newspapers totaled an of the responding newspapers, or 19.6 percent of all the newspapers in the survey. Of that number 21 or h7.7 percent were in the 3,000 or under circulation class. The circulation of newspapers in groups consisting of two newspapers was significantly different from either single-ownership newspapers or groups of three or more newspapers. The average circulation fell between the large group newspapers and single-ownership newspapers. Exactly the opposite tended to be true for the larger circulation newspapers in the study. For example, 13 TABLE 1 NUMBER OF NEWSPAPERS OWNED Number of ’ Relative Cumulative newspapers Frequency Frequency Frequency owned Percentage Percentage 1........... 102 45.1 45.1 2........... 44 19.5 64.6 3........... 18 8.0 72.6 4........... 7 3.1 75.7 5........... 12 5.3 81.0 6........... 3 1.3 82.3 7........... 1 0.4 82.7 8........... 3 1.3 84.1 9........... 3 1.3 85.4 11.......... 1 0.4 85.8 12.......... 13 5.8 91.6 36.......... 18 8.0 99.6 Total....... 1 0.4 100.0 1L. newspapers in single-ownership with more than 3,000 circulation totaled 42 of those 102 responding newspapers. Twenty-five of those newspapers were in the 3,001-5,000 circulation class. Groups consisting of two newspapers had 23 of their number in the 3,000 or more circulation range, or 52.2 percent of the newspapers in that type of ownership. As in the single-ownership situation, a large number of those newspapers, ii in all, were in the 3,001-5,000 circulation range. Groups consisting of three or more newspapers had 54 of their total number of 79 or 68 percent in the 3,000 or more circulation range. Twenty-one of the newspapers had circulations of 3,001-5,000. The conclusion here is that group-ownership newspapers are occupying a stronger position in terms of circulation than are single-ownership newspapers. This fact has important implications in terms of advertising rates and other financial considerations since traditionally newspapers with larger circulations can charge higher advertising rates. Looking at just where groups are located in terms of whether the newspapers are in a rural area or metropolitan setting, it becomes clear there are differences between group and non-group newspapers. Groups consisting of two newspapers fell statistically between the larger groups and newspapers in single ownership situations. Of all of the 15 TABLE 2 CIRCULATION Relative Cumulative Circulation Frequency Frequency Frequency Percentage Percentage 0 to 1,000 17 7.5 7.5 1,001 to 3,000 89 39.4 46.9 3,001 to 5,000 57 25.2 72.1 5,001 to 7,000 21 9.3 81.4 7,001 to 10,000 12 5.3 86.7 10,001 to 15,000 13 5.8 92.5 15,001 to 20,000 10 4.4 96.9 '20,000 or more 7 3.1 100.0 Total 226 100.0 16 newspapers responding to the question on whether they were located in an urban or suburban as compared to a rural area, 130 or 57.5 percent said they were in a rural area while 94 or 41.6 percent said they were in a metropolitan area. One garbled response was thrown out. Single ownership newspapers reported that only 27.5 percent of their number were in urban or suburban areas, or 28 of 102. In groups consisting of two newspapers 15 or 34.9 percent said they were in urban or suburban areas, while 28 or 63.6 percent were considered to be in rural areas. In groups of three newspapers or more, 50 of the newspapers reported they were in urban or suburban areas out of a total of 79 newspapers or 63.3 percent. There has been a belief in the past that most of the growth of weekly and semi-weekly newspapers has been in the suburbs. Charles E. Hayes, editor of the §ybygban,l;lh, group of weekly newspapers inserted into copies of the Chicago Itibgne distributed into the suburbs of Chicago, argued in gLa§§L9935, figligg that the greatest growth potential for community newspapers existed in the suburbs: The suburbs now control a fast-growing share of the nation's buying power. Suburban families currently earn 20 percent more than city families and hold 60 percent of all personal income flowing to metropolitan areas. The growing economic power of suburbs reflects the continued exodus of people to the suburbs. During the l9605, core city population rose by half a percent a year compared to population increases of 2.4 percent a year in the suburbs. This trend has intensified since 1970 with city populations declining by half a percent a year in the city and suburban populations rising by two percent a year.(1) 17 One implication Is that while group-ownership is an important factor in Michigan urban and surburban areas, it is also an important factor in rural ownership of Michigan weekly newspapers. The survey results indicate that group-ownership is a force in rural areas of Michigan. While most group-owned newspapers are located in metropolitan areas of the state, it is also important to remember that 36.7 percent of the larger group newspapers, and 65.1 percent of the groups consisting of two newspapers were located in rural areas. That would mean the generally held idea of rural newspapers being on the road to extinction may be incorrect, at least in Michigan. While rural weekly and semi-weekly newspapers in Michigan are not heading toward extinction, they are and have changed during the past few years. A number of rural newspapers have recently disappeared, an occurrence that John Cameron Sim viewed as a benefit: indeed, for the weekly press as a whole, suburban or "hometown," the disappearance of these marginal operations, poorly printed, without editorials, erratic in news coverage filling space with publicity hlurbs, has to be an advantage, much as one may sympathize with the little community which loses its "own" paper. if one serves as a judge in state newspaper contests as the author has, he will surely be impressed (and distressed) at the ease and speed with which literally scores of newspapers can be immediately tossed out of consideration for any common category--news, editorials, features, pictures, advertising. Too many of these poorly run papers have persisted well beyond their time, and they now do little more than contribute to the 1. Charles E. Hayes, "Newspaper Growth Action is in the Suburbs," fiLflifiLQQli Editgc 17(Spring 1976) p. 3. 18 stereotype image (fostered even by some recent documentary programs) held by much of the American public of the weekly newspaper as a laughable old relic filled with trivia.(2) Sim believes a sharp decline in the number of weekly newspapers in the first part of the century was generally attributable to inflated figures.(3) The decline in weekly newspapers has been consistent though, especially in rural areas. In his study of the demise of weekly newspapers in 488 towns of less than 1,000 population between 1950 and 1959, Wilbur Peterson found a net loss of 12 newspapers in Michigan. He found a total of 187 rural weeklies located in communities of less than 1,000 in the state. According to Peterson's figures 18 newspapers disappeared and six new newspapers came on the scene. A quick comparison of the 1964 and 1976 editions of the Mighigag Newspaper Directopy and Patgbogk revealed the trend toward fewer weekly and semi-weekly newspapers has continued until the present. In all, 59 weekly newspapers were not listed to appear in the 1976 edition that were listed in the 1964 edition. Some five to ten weekly newspapers are not members of the Michigan Press Association, but the directory was used because it is 2. John L. Sim. lbs was 3.921.: 33.5.5.1 mm C mmunity Newspapgcs (Iowa State University Press, 1969) p. 62. 3. Ibid., pp. 37-39. 4. Wilbur Peterson, "Losses in Country Weekly Newspapers Heavy in 19505," Jgugnallgm Q“a[;g[]y, 38(Winter 1961) p. 18. 5. Michigan Press Association, Mighigan Newspaper flnggggLy and Ratebggk, East Lansing, Michigan, 1964) pp. 7-36. 19 TABLE 3 LOCAT ION Relative Cumulative Location 'Frequency Frequency Frequency Percentage Percentage Urban/Suburban 94 41. 6 41. 6 Rural 130 57-5 99-6 No response 2 0.4 100.0 Total 226 100.0 20 generally more current than other sources.(5)(6) Rural newspapers that disappeared from the list during the 1964-1976 period had an average circulation of l,l67, while the average circulation of newspapers that left the list as a whole was 2,533. Frank Rucker and Herbert Lee Williams listed seven advantages of group-ownership in their book flgwspapg; Q;ganlzajlgn_ and, Maflaggmggt. The advantages Rucker and Williams listed included: 1. Supplies may be purchased through a central office with discounts for quantity. 2. Advertising space may be sold nationally, with a single organization representing all of the newspapers in the group. 3. Accounting methods can be standardized, permitting easy comparison of properties and quick corrections of administrative errors. 4. Encouragement and stamina are given to publishers within the group through exchange of ideas and experiences. 5. First rights to valuable features are obtained more easily. 6. Ownership of newspaper stock can be made available to promising journalists who otherwise might not be able to obtain it. 7. Certain details of bookkeeping and other office 6. Michigan Press Association, Mighigan figwspang Ellggtggx and Ratgbgog, East Lansing, Michigan, 1976) pp. 8-33. 21 procedures for all newspapers may be centered in a common office.(7) The problem with a list like the one above is that it is a little misleading. Most group-ownership situations do not use all of the seven advantages listed. Management styles vary from newspaper to newspaper, just as they vary among any group of busineses. An example is from the observations of the author while attempting to get survey forms returned from different newspapers. Panax Corporation, which has a number of newspapers in the Detroit area, had a highly decentralized office structure, with offices all over the Detroit metropolitan area. One of the advantages that Rucker and Williams do not mention, is the use of common pages and sections. Common pages and sections were found to be used almost exclusively by group newspapers in the study. Normally, common pages and sections are used by groups located around a single geographic area such as Detroit. The use of combination pages and sections allows the easy and economical sale of advertising under a combination rate and cuts costs to the groups which would otherwise be paying more to produce separate pages in each of its newspapers. Common pages and sections for newspapers in the study accounted for only two percent of single-ownership 7. Frank Rucker and Herbert Lee Williams, flgwspang chanization and Managgmgnt, 3rd ed. (Ames, iowa: Iowa State University Press, 1969) p. 21. 22 TABLE 4 COMBINED ADVERTISING . Relative Cumulative Combined . . Frequency Frequency Frequency Advert1s1ng Percentage Percentage Yes 97 42.9 42.9 No 124 54.9 97.8 Does not apply 1 ‘ 0.4 98.2 No Response 4 1.7 100.0 Total 226 100.0 Note: All figures rounded to the nearest tenth. 23 TABLE 5 COMBINED PAGES/SECTIONS Combined Relative Cumulative . Frequency Frequency Frequency Pages/Sections Percentage Percentage Yes 68 30.1 30.1 No 152 67.3 97.4 Does not apply I 0.4 97.8 No response 5 2.2 100.0 Total 226 100.0 24 newspapers. Groups consisting of two newspapers, as expected made more use of common pages with 15 of 44 or 34.1 percent using the technique. Groups with three newspapers or more in the study responding to the question made extensive use of common pages and sections. Of the Si newspapers in larger groups, 26 or 51 percent said they were using the technique. Six reSponses were not used because of problems interpreting them. As mentioned before, the other advantages to the common page or section is the ability to sell advertising easily at a combination rate. Only one press run instead of one for each newspaper is needed to produce the page and the advertisement, saving money in make-up costs and printing, not to mention added editorial costs if the news in each section or on each page is different. Of the 226 newspapers responding to the question on whether advertising was sold using a combination rate, 97 or 42.9 percent said they used combination rates, while 124 newsnapers or 54.8 percent said they did not. Five responses or 2.2 percent were not clear and were excluded. A slightly higher percentage of single-ownership newspapers reported using combination rates than reported using combination pages and sections. Five newspapers or five percent of single ownership newspapers indicated they sold advertising using combination rates, 95 or 94.l percent said they did not, and one response was not clear and eliminated. Groups consisting of two newspapers used the 25 method more often. Of the 43 responses from the smaller group newspapers, 24 or 55.8 percent reported selling advertising using a combination rate, while the remaining 42.2 percent said they did not. Again, there were significant differences between single-ownership newspapers, groups consisting of two newspapers, and groups of three newspapers or more. Case studies on the growth of specific groups discuss at length some of the characteristics that helped made the group successful. in his study of the Neighbor Newspapers, inc. of suburban Atlanta, Georgia, Robert Kellis Kramer describes how the group combined its 24 newspapers into eight "units" which are basically the same newspaper with different front pages: Why bother to change the flag from edition to edition? Simply because of the nebulous factor called community identity. The pgcayllle Neighbgc may be exactly the same as the Chamblge i but it says Ooraville on the front, and that should mean more to Doraville residents than if it carried the name Chamblee or a name encompassing a broader area, such as DeKalb County.(8) The Neighbor newspapers also make use of combination advertising extensively. "We have ten different retail ad buys or an advertiser can buy the entire package," Otis Brumby, Jr., publisher of the Neighbor Newspapers said in a 1976 interview with gdltgg and PublisheL. "We have many accounts however, who (sic) we wouldn't want to advertise in all of our newspapers since some of the reach would be 8. Robert Kellis Kramer, "A Case Study of Neighbor Newspapers, Inc." (M.A. Thesis, University of Georgia, 1972) p. 99. 26 wasted. We constantly caution our salesmen not to oversell."(9) One editorial employee of a suburban Detroit weekly newspaper chain frankly admitted to doubts about the rationale of combination pages when little content changed from one newspaper to another. "Who is fooling who?" he asked. An important financial consideration in the use of combination pages and sections is that putting out seven newspapers which are the same with the exception of a few pages is cheaper than putting out a single newspaper as mentioned earlier. In head to head competition the difference in cost could emerge as an important factor, leaving the single-ownership newspaper at a disadvantage. LFNGTH 0F Ol-iilERSiilP A surprising figure in the study was the ownership turnover rate. 0f the 226 newspapers in the study answering the question on length of ownership, more than half, 53.6 percent to be exact, had changed hands during the past ten years. How many of these changes of ownership involved group-owned newspapers? while as a whole more than half of 9. John Consoli, "Georgia Publisher Rides Suburban Atlanta Have," Editg: and EublishEE, (August 21, 1976) p. 11. 27 TABLE 6 YEARS OWNED Years present Owner has had Newspaper Relative Cumulative Frequency Frequency Frequency Percentage Percentage 1 18 8.0 8.0 2 11 4.9 12.9 19 ' 8.4 21.3 20 - 8.8 30.1 16 7.1 37.2 OOOOOOOOOOOOOOOOO . 1"" 602 #502 3 b, 5 6......... ..... 4 1.8 39.0 7 8 3 1.3 46.5 9 00000000000000... 5 202 “'80? H O O O O O O O O O I O 1... 1.5 4.9 53.6 1.3 54.9 0.9 55-8 1.3 . 57.1 0.9 58.0 1300000000000ooooo 14................ 15 1.8 59.8 2.2 62.0 1.8 63.8 0.4 64.2 1.8 66.0 3'5 6905 16.000.00.00000000 18.000.00.000000000 (n e- t. c- kn c- no \» A) \» 28 TABLE 6--Continued es . . wn $33 MW 8:33:12. 82:32:27 Percentage Percentage 21.............. 1 0.4 69.0 23............... 2 0.9 70.8 25.............. 7 3.1 73.9 26.............. 1 0.4 74.3 27.............. 1 0.4 74.7 28.............. 3 1.3 76.0 29.............. 2 0.9 76.9 30.............. 3 1.3 78.2 j33.............. 1 0.9 78.6 34.............. 2 0.9 79.5 35.............. 1 0.4 79.9 36.............. 2 0.9 80.8 37.............. 1 0.4 81.2 40.............. 2 0.9 82.1 42............... 1 0.4 82.5 43.............. 1 0.4 82.9 45.............. 1 0.4 83.3 50 or more ..... 17 7.5 90.8 No Response 20 8.0 100.0 Total 226 100.0 Note: All percentages rounded off to the nearest tenth. 29 the newspapers had changed hands during the ten year period, only 35.3 percent of the single-ownership newspapers in the study experienced a change of ownership during the same period, or a total of 36 of the 102 single-ownership newspapers responding to the question. Newspaper groups consisting of two newspapers had a 54.5 percent turnover rate during the ten year period, while groups consisting of three or more newspapers experienced an even higher rate of turnover. Of the newspapers in large group situations, the survey revealed that 86.1 percent changed hands during the ten year period. Obviously, there has been a great deal of activity in Michigan weekly and semi-weekly newspaper ownership and group-owned newspapers have played a large role in that activity. The next question is how many of the newspapers were previously owned by groups, and how many of the newspapers were formerly in single-ownership situations. A total of 53 newspapers or 23.5 percent were previously owned by groups while 141 or 62.4 percent of the newspapers were previously held in single-ownership situations. In another 24 or 10.6 percent of the cases the newspapers were still owned by the founding publisher or firm. The remaining 3.5 percent represented no response or garbled responses which were not usable. A total of 11 or 10.8 percent of the newspapers now in single-ownership were previously owned by groups. Another 77 or 75.5 percent of the newspapers were previously in 30 TABLE 7 PREVIOUS OWNERSHIP . Relative Cumulative ggizighip Frequency Frequency Frequency Percentage Percentage Group-owned 53 23.5 23.5 Single-ownership 141 62.4 85.9 Does not apply 24 10.6 96.5 No response 8 3.5 100.0 Total ‘ 226 100.0 31 single-ownership situations, and 12 or ll.8 percent were still in the hands of the founding firm or publisher. In the situation of groups consisting of two newspapers, seven of the 44 newspapers were previously owned by groups, or 15.9 percent. Among groups of three newspapers or more, 35 or 44.3 percent of the 79 large group newspapers reporting indicated they were previously in a single-ownership situation, and two newspapers or 2.5 percent indicated they were still owned by the founding publisher or publishing firm. The figures indicate most of the newspapers sold have followed the expected trend--into group ownership. From the figures, it can be deduced that more newspapers are going into group-ownership than are leaving it. When looking at the length of ownership figures, another important figure should be considered. A majority of the newspapers in Michigan, 68.4 percent, or 154 of the 225 reported they were more than 50-years old. Taking it a step further and breaking the figures on newspapers less than 10-years old, one finds groups owned 12 newspapers or 7.9 percent of the total. Groups consisting of two newspapers numbered five or ll.4 percent of the newspapers lO-years old or less, while single-ownership newspapers numbered ll or 10.7 percent. At the other end of the spectrum 79 or 77.5 percent of the single-ownership newspapers were more than 50-years old, compared to 32 or 72.5 percent of the newspapers in groups of two, while 46 group-owned newspapers or 37.4 percent had 32 been in existence for more than 50 years. The implication is that recently founded newspapers are nearly as likely to be in group-ownership situations as are newspapers in single-ownership situations. From the figures it would appear the trend toward group-ownership is occuring among older newspapers, and not just more recently established newspapers. The figures on the ages of newspapers reveal another important finding. There has been no great rush to start new newspapers in Michigan. That would tend to run against some recent ideas that offset printing has made it easy to get into the newspaper publishing business. "Nowadays, almost anyone can start a newspaper. All it takes is a typewriter, some volunteers and $200 or $300 to pay the printer. The trick is to keep on finding the dollars and volunteers to stay in business," Emily Weston Frankovich told readers of lug Natign.(10) Dr. J. K. Hvistendahl put the price tag a little higher: It is possible today, however, to launch a respectable weekly paper for no more than $25,000 in capital, mostly for photocomposing equipment, electric typewriters, dark room equipment, and light tables. And if those items are leased, the expenditures may even be less. The grassroots editor who neglects the needs of his readers and advertisers, therefore can expect direct competition. And it's going to be easier to launch a new newspaper in the next quarter century than it was in the last quarter century.(11) 10. Emily Heston Frankovich, "Small Voices of Diversity," Ihg Nation (April 20, 1974) p. 495. 33 TABLE 8 AGE OF NEWSPAPER Age of Newspaper in Years Frequency Relative Frequency Percentage Cumulative Frequency Percentage 2............... 3............... 4............... 5............... 6............... 9............... 10.............. 12.............. 13.............. 14.............. 15.............. 20.............. 22.............. 25.............. 280.000.00.00... NHHNW-PHN NUUHH 10 0.9 0.4 1.8 1.3 0.9 0.4 0.4 0.9 0.4 0.4 1.3 1.3 0.9 4.4 0.9 0.4 0.4 0.9 1.3 3.1 4.4 5.3 5.7 6.1 7.0 7.4 7.8 9.1 10.4' 11.3 15.7 16.6 17.0 17.4 34 TABLE 8--Continued Age of Relative Cumulative Newspaper Frequency Frequency Frequency in Years Percentage Percentage 37............. 2 0.9 18.3 38.............. 4 1.8 20.1 41.............. 1 0.4 . 20.5 43............. 6 2.7 23.2 44............. 2 0.9 24.1 45.............. 1 0.4 24.5 46......m.... 1 0.4 24.9 More than 50 155 68.8 93.7 No response 14 6.2 100.0* Total 226 100.0 Notes All figures are rounded to the nearest tenth. 35 Given the idea that newspapers are easy and relatively inexpensive to start, one would expect to find more new newspapers than the study turned up. None of the respondents said their newspaper was started in the last year. Only two or 0.9 percent said their newspaper was started in the last two years. A single newspaper or 0.4 percent reported it was founded in the last three years. Four newspapers or 1.8 percent said they were four years old, and three newspapers or 1.3 percent said they were five years old. The figures reflect anything but a headlong rush of persons jumping into the weekly and semi-weekly newspaper business. 0f the 14 new newspapers in the survey that started during the past ten years, five were single-ownership newspapers, three were part of groups consisting of two newspapers, and only two were part of groups of three or more newspapers. Any growth of weekly and semi-weekly newspapers is then occurring more among group-owned newspapers than single-ownership newspapers. Coupled with the finding that established newspapers when sold are more likely to end up in group-ownership than single-ownership, it becomes clear the trend is toward the group, instead of the person interested in setting up a single-ownership newspaper. 11. J. K. Hvistendahl, "Press Outlook Bright for Community Newspapers," filfififiigglfi flitgc, 17(Summer 1976) p. 3. 36 PRINTING PROCESS AND CENTRAL PLANTS The growth of the use of the offset press and central plant may be one of the most important changes to the weekly and semi-weekly newspaper field in the past few decades. It was less than 20 years that the vast majority of grassroots newspapers in Michigan were still using the letterpress process and printing newspapers in their own shops. It is a simple fact of life for most small newspapers that the price of an offset press is out of the reach of their limited resources for the small amount of work done on such a press. The advantage would seem to go to the group which through its combined resources can purchase and make more economical use of the offset press. The answer for the single-ownership newspaper was to let a central plant do the work and avoid the large capital outlay for a new press, but obtain some of the benefits groups enjoy through combined use of equipment. Centralized printing may be the major source of economics realized by Neighbor Newspapers. Instead of eight presses, one for each unit, the Neighbors have only one press. Instead of eight sets of composing equipment the Neighbors have only one. They realize a savings in personnel as well as machinery and they do not have to make payments or pay rent on eight separate buildings.(12) In the case of seven weekly newspapers in Kentucky, a co-op central plant was built that eventually evolved into a 12. Robert Kellis Kramer, "A Case Study of Neighbor Newspapers, Inc." (H.A. Thesis, University of Georgia, 1972) p. 10“. 37 TABLE 9 CENTRAL PLANT USAGE gential Relative Cumulative P ant.n Frequency Frequency Frequency Urln l g Percentage Percentage sage - Yes 199 88.1 88.1 No 27 11.9 100.0 Total 226 100.0 38 newspaper group in less than 10 years.(13) A number of respondents to the survey made marginal notes on the survey form indicating the central plant they used was only partially owned by their publisher or publishing firm. Their responses were included with the newspapers reporting their newspapers owned the entire central plant. Of the 226 responses to the questions on whether the newspaper is printed in a central plant, 199 or 88.1 percent of all newspapers reporting said they did use such a facility printing two or more newspapers. Only 27 or 11.9 percent of the respondents said they did not use a central plant. Asked whether their newspaper owned the central plant, 99 of the 226 newspapers responding, or uh.8 percent, indicated the plant was at least partially owned by their publisher or publishing firm. Clearly, many newspapers in Michigan do not own a press, or at least the press on which their newspaper is printed. Of the newspapers in single-ownership, 78 or 76.5 percent said they used a central plant. Only 2h or 23.5 percent of the single-ownership newspapers reported doing their own printing for just their newspaper. Groups consisting of two newspapers reported that hl or 93.2 13. Nancy Shook Huck, "Newspapers, Inc.: The Impact of Corporate Ownership on its Community Newspapers," (M.S. Thesis, Murray State University, 1972) p. 9. 39 percent of their number used a central plant, while three or 6.8 percent did not. Every newspaper in a group of three newspapers or more used a centralized printing plant. Of the 82 newspapers responding to a question on whether or not the publisher or publishing firm owned the central plant where their newspaper was published, only 25 or 30.5 percent of the newspapers in single-ownership answered affirmatively, while 57 or 69.5 percent said they took their newspaper to an outside firm to be printed. Groups consisting of two newspapers showed a higher percentage of ownership of the central plants where their newspapers are printed. Seventeen of the bl newspapers using a central plant or u1.5 percent said they owned at least part of the plant. The remaining 2h newspapers or 58.5 percent said they took their newspapers to another firm's central plant to be printed. For groups of three newspapers or more, 56 of the 72 newspapers or 71.h percent indicated they used plants of which they owned at least a portion. The remaining 16 newspapers or 28.6 percent indicated they took their newspaper to an outside firm to be printed. The trend in the statistics indicates the larger the group, the more likely it will own the press on which its newspapers are printed. The trend in the survey results also clearly indicates the larger the newspaper, the more likely it will own the centralized printing plant where it is printed. A number of no TABLE 10 CENTRAL PLANT OWNERSHIP geptfifii Relative Cumulative Piagt g Frequency Frequency Frequency Ownership Percentage Percentage Yes 99 #3.8 #3.8 NO 103 as. 6 89» Does not apply 23 10.2 100.0, Total 226 100.0 Note: All figures rounded to the nearest tenth. 91 TABLE 11 NEWSPAPER PRINTING PROCESS Type of Relative Cumulative Printing Process Frequency Frequency Frequency Used Percentage Percentage Letterpress 23 10.2 10.2 Photo composition 198 87.6 97.8 Other u 1.8 99.6 No response 1 0.9 100.0 Total 226 100.0 42 newspapers with their own offset printing facilities will also take in other job printing, including other newspapers. That would mean an added source of income for the firm with the printing press, which in most cases means a group. According to a survey by the National Newspaper Association, central plant operations as Opposed to newspapers which rely on other firms for their printing, can on the average be expected to have a higher average net income. Newspapers doing in-house presswork in the NNA study averaged $310,757, while newspapers doing just their own printing in-house averaged $h90,20h. These figures should be used with the consideration of the limitations of the NNA survey mentioned earlier in this study. The NHA considered newspapers using in-house facilities as the firms that have their presswork and/or negatives and plates produced in their own plant, while central plant operations were considered to be those operations which produced their own and other publications.(1h) "In some instances there was no clear cut dividing line as, for example, the company which sent its own newspapers to a central plant, but accepted other publications which it printed on its job presses," the reported stated.(15) 1h. National Newspaper Association, ;9___ flggkly New spapg: _Q§L‘§LQQ1,(NaShington, D. C., 1976) p. h, 6, . 15. Ibid., p. h. 43 it should be mentioned that in the NNA report the average income was higher for central plants operation than in-house operation, regardless of the circulation range considered. Using another sampling technique, Gerald C. Stone validated the findings of the NNA in his dissertation "Management of Resources in Community-Sized Newspapers." Stone's extensive questionnaire took into consideration earlier studies including the NNA's, which have been done annually for the past 25 years. Looking at the survey of Michigan weekly newspapers and putting it along side of the NNA study, it becomes apparent that groups may be enjoying a strong financial advantage through the ownership of the majority of centralized printing plants. , The link though is far from perfect and more information is needed to make it more than an assumption. Another question the survey explored was the form in which the newspapers were taken to the central plant. The more sophisticated the equipment the newspaper has in its office, the higher the level of investment in the newspaper, and the less dependent the newspaper is on the central plant for services. The amount of investment in typesetting equipment, and other graphic equipment may indicate the relative strength of the newspaper. Newspapers were asked if they went to the central plant with the copy not yet typeset and pasted up, with the 99 TABLE 12 FORM TAKEN TO CENTRAL PLANT Form Taken to Relative Cumulative Central Printing Frequency Frequency Frequency Plant Percentage Percentage Not Yet Typeset 23 10.2 10.2 Camera Ready 99 93.8 59.0 Negative Shot 27 11.9 65.9 Plates Prepared 10 9.9 70.3 Does Not Apply. I 65 28.8 99.1 No Response 2 0.9 100.0 Total 226 100.0 45 negative already shot, camera ready, or with the plate already burned. Alternative responses were included for newspapers which did not use a central plant or had a press in-house (does not apply). A newspaper that took its copy to a central plant not yet typeset would not have as much money tied up in typesetting equipment, newspapers going to the central plant camera ready would have some investment in typesetting equipment, newspapers taking a negative to the central plant would have an investment in both camera equipment and typesetting equipment, while newspapers taking their plates to the central plant would have all of the equipment to publish a newspaper except the press itself. The press is the largest equipment investment a newspaper can make in most cases. Of the 226 newspapers responding to the question, 23 or 10.2 percent indicated the newspaper was taken to the central plant not yet typeset. A total of 99 newspapers or 93.8 percent reported they took the newspaper to a central printing plant camera ready, another 27 or 11.9 percent indicated the newspaper went to the plant with the negative shot, 10 or 9.9 percent indicated the plate was burned before the newspaper was taken to the central plant. The question did not apply to 65 or 28.8 percent of the newspapers, and two responses were not clear and could not be classified. Of the 225 newspapers included in the comparison of 96 group size to what form the newspaper was taken to the central plant in, only three single-ownership newspapers or 2.9 percent of the 102 newspapers analyzed in single-ownership were taken to the central plant not yet typeset, 95 or 99.l percent were taken to the central plant camera ready, 15 or 19.7 percent were taken to the central plant with the negative already shot, and seven newspapers or 6.9 percent were taken to the central plant with the plate already burned. The question did not apply to 31 or 30.9 percent of the single-ownership respondents, and one single-ownership response was garbled and could not be classified. Comparing the single-ownership newspapers to the study as a whole on whether or not the newspaper was taken to a central plant, some differences are evident. Only 2.9 percent of the responding single-ownership newspapers as compared to 10.2 percent of the newspapers in the study as a whole were taken to the central printing plant not yet typeset. The percentage of newspapers in single-ownership going to the central plant camera ready, 99.1 percent, was nearly identical to the study as a whole, 93.8 percent. A slightly higher percentage of single-ownership newspapers, 19.7 percent, were taken to the central plant with the negative already shot as compared to 11.9 percent of the newspapers in the study overall, and a comparable percentage of single-ownership newspapers, 6.9 percent to 9.9 percent of the newspapers in the study as a whole, went to the 97 central plant with the plates already burned. in groups consisting of two newspapers, three or 6.8 percent of the newspapers are taken to the central plant not yet typeset, a figure lower than the 10.2 percent in the study as a whole. A total of 22 newspapers or 50 percent are taken to the central plant camera ready, a figure comparable to all newspapers in the study as a whole. Small group newspapers taken to the plant with the negative already shot numbered seven or 15.9 percent, higher than the 11.9 percent for the entire study. The number of small group newspapers going to the central plant with the plates already burned was only two or 9.5 percent, almost exactly the same as the 9.9 percent for the study as a whole. For groups of three newspapers or more, 17 or 15.2 percent of the newspapers were taken to the central printing plant not yet typeset, above the 10.2 percent for the study as a whole. Thirty-two newspapers or 90.5 percent of the newspapers were taken to a centralized printing plant camera ready, slightly lower than the 93.8 percent of the newspapers in the study as a whole. A total of four newspapers or five percent of the newspapers in the large group situation were taken to the central printing plant with the plate already prepared, below the 15.9 percent for the study as a whole. Only one or 1.2 percent reported taking an already prepared plate to the central plant, below the 9.9 percent for the study as a whole. One response for groups of three newspapers or more was unintelligible and 98 could not be classified. While many of the newspapers in the study did not choose to own a press, many have, according to the study, chosen to invest in typesetting equipment, with a strong preference toward having the newspaper camera ready before taking to the central printing plant. While groups tended to own the central plants they used, the newspapers in groups using a central plant, but not owning one, did not differ significantly in the form they went to the printing plant. That would tend to support the findings of a 1973 study by Odalie Karen Kromp on the use of computerized typesetting equipment by weekly newspapers. She found the usage of computerized typesetting equipment did not tend to be in any particular type of office or location.(16) iS THE EDITOR THE OWNER? Traditionally,‘ the typical weekly newspaper in the United States has combined the roles of editor and publisher in a rural setting, many times with the wife also working on the newspaper. The survey indicated that situation does not exist on the average weekly and semi-weekly newspaper in Michigan today. As expected, the traditional role of the publisher-editor has continued among single-ownership 16. Odalie Karen Kromp, "The Computerization of Georgia's Weekly Newspapers and Evaluations of Specific Equipment," (M.A. Thesis , University of Georgia, 1973) p. 57. 99 newspapers, although it is not the norm for group-owned newspapers. Part of the reason is that owners of large newspaper groups quite obviously cannot be editing all of their newspapers at the same time. Of the 226 newspapers responding to the question on whether the editor was owner of the newspaper, 116 or 5l.3 percent of the newspapers said the owner of the newspaper was also the editor of the newspaper. In 107 or 97.3 percent of the cases, the respondent said the editor was someone hired by the publisher or publishing firm. Of the 101 responding single-ownership newspapers, 21 or 20.8 percent of the newspapers indicated the editor of the newspaper was someone other than the publisher. An overwhelming majority of the newspapers, 79 or 78.2 percent, indicated the owner of the newspaper was also the editor. One response identified as from a single-ownership newspaper was unintelligible and discarded. . The figures were much different for groups consisting of two newspapers, although a majority of the newspapers were still edited by the owners, and 19 or 93.2 percent were edited by a person hired by the owner of the newspaper. The figure would indicate that some publishers in small group situations are editing more than one newspaper. in groups of three newspapers or more, the figure for someone other than the publisher editing the newspaper jumps again. Of the 98 newspapers in the crosstabulation, 35 or 71.9 percent had editors who were not the owners. Twelve or 50 TABLE 13 CCKBINED EDITOR-OWNER ROLE Is the Editor Relative Cumulative the Owner Frequency Frequency Frequency of the Newspaper Percentage Percentage Yes 116 51.3 51-3 No 107 07.3 98.6 No Response 3 1.3 100.0* Total 226 100.0 *Note: All figures rounded to the nearest tenth. 51 2h.5 percent of the newspapers responding had editors who were the owners. It could be expected that since traditionally the editor-publisher format was found in rural communities, a larger share of the rural newspapers would still have editors who are also publishers. In all, 29 or 25.2 percent of the urban or suburban newspapers indicated the editor was also the owner of the newspaper, while 86 or 7h.8 percent of the rural newspapers had editor-publishers. Two responses were discarded because they were unintelligible. Looking at the other side of the figures, 65 or 60.7 percent of the responding newspapers that hired an editor were in urban or suburban areas, while h2 or 39.3 percent of the newspapers with an editor not the owner were in rural areas. The figures tend to suport the idea that rural newspapers are more likely to continue with the traditional owner-editor concept than are suburban or urban newspapers. Since large groups tend to be found in urban or suburban areas, group-ownership may be related to the high percentage of owner-editors in metropolitan areas. Another factor to be explored when considering the owner-publisher or non-owner editor question is the circulation of the newspaper. Since groups tend to be more likely to have higher average circulations than single-ownership newspapers, it would be expected that newspapers with larger circulations would be more likely to have editors hired by the owner or owners of the newspaper, .— 52 while the newspapers with lower circulations would be more likely to have editor-publishers. It was found that of the 116 newspapers with the publisher serving as editor, 73 of the newspapers or 62.9 percent had circulations of 3,000 or less, while #3 or 37.1 percent of the newspapers had circulations of 3,001 or more. Among the newspapers with hired editors, 30 or 28.1 percent had circulations of less than 3,000, while 77 or 71.9 percent of the newspapers had circulations of 3,00l or more. Survey results tended then to be as expected, with groups, higher circulation newspapers and weeklies in metropolitan areas all tending to have as editors, persons hired by the owners of the newspapers, while the opposite held true for non-group, rural, lower circulation newspapers. As with most of the survey questions, groups consisting of two newspapers fell somewhere in between the larger group and single-ownership situation. STAFF SIZE In terms of what type of service a newspaper provides its readers, staff size is vital. The more persons on a staff, the more likly a story will be covered. Of course staff size is meaningless if the entire staff is untrained or simply incompetent, but it does give an indication of the newspaper's resources and commitment to service. 53 TABLE 14 STAFF SIZE Relative I Cumulative Staff Size Frequency Frequency Frequency Percentage Percentage 1... ......... 26 11.5 11.5 2 ............ 91 18.1 29.6 3.... ..... ... 38 16.8 96.9 9 ..... . ...... 39 17.3 63.7 5............ 20 8.8 72.5 6.... ........ 12 5.3 77.8 7..... ..... .. 17 7.5 85.3 8 ............ 6 2.7 88.0 9 ............ 3 1.3 89.3 10.. . . ..... 2 0.9 90.2 11.. . . 1 0.4 90.6 12 . .. 7 3-1 93-7 13 ....... . 2 0.9 99.6 14.... ....... 1 0.1+ 95.0 17 ... . . 2 0.9 95-9 21.... ....... 1 0.9 96.3 26 .... ...... 2 0.9 97.2 39... ........ 1 0.4 97.6 No Response 5 2.2 100.0* Total 226 100.0 *Note: Percentages rounded off to the nearest tenth. 59 The question on staff size in the study had its problems. It is extremely difficult to define what a newsperson on a weekly newspaper is since it is common on smaller newspapers for one person to serve in several capacities. The objective of the question in the study was intended to gauge the number of voices on the newspaper, rather than to determine the number of full-time and part-time newsroom employees. There was no single staff size that seemed to dominate the responses. The single largest grouping was two staff members, a number that #1 or 18.1 percent of the responding newspapers gave on their survey form. The next response in frequency was four staff members with 39 or 17.3 percent of newspapers, 38 of the newspapers or 16.8 percent said they had three staff members. Another 26 newspapers or 11.5 percent of the respondents indicated only one person made up the news staff of the paper. None of the remaining staff sizes indicated exceeded 8.8 percent. Of the 102 single-ownership newspapers reSponding to the question, the largest single number of responses came from newspapers indicating they had two staff members. Twenty-four newspapers or 23.5 percent of the single-ownership newspapers indicated they had two staff members. Newspapers in single-ownership with three staff members numbered 20 or 19.6 percent, and 15 newspapers said they had four staff members or 1h.7 percent. The average number of staff members for the single-ownership newspapers 55 was 9.2. For groups consisting of two newspapers, the largest single group of responses came from 11 of the nu newspapers or 25 percent reporting they had four people on their news staffs, while nine or 20.5 percent reported they had two staff members, seven or 15.9 percent said they had one staff member, six or 13.6 percent said they had three staff members, and four or 9.1 percent said they had five persons on their news staff. The average number of staff members on each newspaper was 8.6. Groups of more than three newspapers averaged 5.1 staff members. 0f the 79 newspapers responding to the question, 13 or 16.5 percent indicated they had four staff members, 12 or 15.9 percent reported they had three staff members, 11 or 13.9 percent said they had one member, eight or 10.1 percent indicated they had two staff members, eight or 10.1 percent reported they had seven staff members, seven or 8.9 percent reSponded they had five staff members and seven or 8.9 percent indicated they had 12 staff members. The biggest problem with the figures on staff size was that a few newspapers included stringers or correspondents, and some had many correspondents or stringers. While the figures seem to indicate groups on the average have larger staffs, the results must be treated as less than conclusive. It should also be mentioned that several large groups may use the same person for more than one newspaper. 56 PAGES Another important area of comparison was the number of pages a group versus non-group newspaper is publishing. Since all of the previous characteristics have leaned toward a picture of the Michigan group-owned newspaper as in a stronger position than the non-group newspaper it would be expected that groups would on the average have more pages. The number of pages of course could not be simply averaged. Many newspapers in Michigan are broadsheet, but a number use a tabloid format. Of the 226 responding newspapers on the question of whether they used a broadsheet or tabloid format, 82 or 36.8 percent reported they were tabloid and 1u2 or 62.8 percent used a broadsheet format. Since the typical page of a tabloid newspaper is about half the size of a broadsheet newspaper, the number of tabloid pages in a newspaper was divided by two. The result was that the number of pages between all the newspapers in the study could be compared, although a number of the responses on the average number of pages from tabloids translated to an odd number. For the study as a whole, 50 percent of the newspapers reported they averaged 11 pages or less. The largest single number of pages, 3h, or 15 percent of the 226 newspapers answering the question reported they averaged 10 pages. Looking at the graph it becomes apparent that the average number of pages varies widely, by far the vast majority of newspapers average less than 25 pages a week. Semi-weekly 57 TABLE 15 FORMAT OF NEWSPAPERS F0 m ,6 er Relative Cumulative N a 3 Frequency Frequency Frequency 8 spapers Percentage Percentage Tabloid 82 36.3 36.3 Broadsheet 192 62.8 99.1 No Response 2 0.9 100.0 Total 226 100.0 58 newspapers in the study gave the sum of the pages they averaged for both newspapers each week, and many of those are reflected in the classification of newspapers with more than 25 pages each week. One of the facts of life for most newspapers is that the number of inches of advertising is closely related to the number of pages the newspaper publishes each week. Take the Horenci Observer as an example. To publish eight pages each week the newspaper must sell 800 inches of advertising at an average of $1.25 an inch, 1,000 inches to reach 10 pages, 1,200 inches to reach 12 pages, and 1,000 inches to reach lh pages. While the needed revenue to reach a certain number of pages from newspaper to newspaper may vary depending on expenses, advertising expenses, and other matters, the number of inches reflects the newspaper's income, and the income is reflected in the number of pages the newspaper averages each week. The larger the newspaper the more the revenue. The number of pages should then be a powerful indicator of just how strong a newspaper is. Of the 102 single-ownership newspapers included in a crosstabulation between ownership type and the number of pages published on the average, it was found that 69.7 percent of the newspapers average 11 pages or less, while as a whole just 50 percent of the newSpapers averaged that number of pages. The largest share of the single-ownership newspapers, 59 TABLE 16 AVERAGE NUMBER OF PAGES Average Relative Cumulative Number Frequency Frequency Frequency of rages Percentage Percentage 1.. . .......... 0.4 0.4 2.. ...... . 0.4 0.8 3 ............... 0.9 1.7 4 ......... . . 17 7.5 9.2 5 ..... . ......... 5 2.2 11.4 6 ............... 11 4.9 16.3 7.. . .......... ‘1 0.4 16.7 8.. ............. 30 13.3 30.0 9... . . 6 2.7 32.7 10.. ....... . 34 15.0 47.7 11 ...... ... ..... 2 0.8 48.5 12.. . ...... 11 4.9 53.4 13 ........ . 23 10.2 63.6 14 .............. 13 5.8 69.4 16 ........ . ..... 12 5.3 74.7 18 .............. 4 1.8 76.5 20 ........ . 9 4.0 80.5 22 ............. a 1.8 82.3 24... . ........ 7 3.1 85.4 26 ..... .. ....... 30 13.3 98.7 No Response 3 1.3 100.0 Total 226 100.0 60 27 in all, or 26.5 percent, indicated they averaged 10 pages each week. Only three newspapers or 2.9 percent of the single ownership newspapers reported they averaged more than 25 pages each week. Generally, there were a broad range of responses from single-ownership newspapers as the graph indicates. Of the groups consisting of two newspapers only 47.7 percent reported they averaged 11 pages or less, slightly less than the overall average of 50 percent of the newspapers with 11 pages or less. The largest single grouping of the newspapers was the 11 or 25 percent reporting they averaged 13 pages. None of the newspapers in this type of ownership indicated they published more than 25 pages on the average. Groups of three or more newspapers had a much higher average number of pages than either single-ownership newspapers or groups consisting of just two newspapers. Only 30 percent of the large group newspapers reported averaging 11 pages or less, far below the levels of the types of ownership of the overall average of newspapers averaging 11 pages or less. The 50 percent mark was not reached for large group newspapers until the number of pages reached 16. In all, 52.5 percent of the large group newspapers reported they average 16 pages or less. A total of 23 newspapers in large group situations or 28.8 percent reported they averaged 25 pages or more. Again the survey reveals that group-owned newspapers 61 occupy a stronger position. Group newspapers average more pages than either the smaller groups consisting of just two newspapers or single-ownership newspapers. Groups consisting of two newspapers also again differed from either the larger groups or single-ownership newspapers. MFTHOD OF DELIVERY As postage rates have climbed in recent years, some publishers have been deciding to find alternative methods of delivery. The survey indicated that a large number of the respondents are already using other methods to get their newspapers to readers, although an overwhelming majority also still use the U.S. Postal Service. Of the 226 newspapers responding to the question on what delivery method was used, 8h.1 percent indicated they used a second class mailing permit. But the study indicated that newspapers are using a number of methods of delivery. A large number of newspapers in the study reported they were making use of controlled circulation mail or third class mail. This type of delivery provides for 100 percent coverage of the circulation territory but brings in no subscription revenues. The cost of these post office methods of delivery are substantially higher than second class mail. Respondents from 1h newspapers or 6.2 percent of the total in the study indicated they used a third class 62 TABLE 17 DELIVERY METHODS 323:3? £33332. £22322? Percentage Percentage Second Class 190 15.9 ---- Controlled Ciro. 17 7.5 ---- Third Class 14 6.2 ---- Carrier 72 31.9 ---- Newsstand 150 66.h ---- Other Methods 20 8.8 ---- Total 63 mailing permit, and 17 or 7.5 percent repported they used a controlled circulation mailing permit. One of the more interesting findings of the study was the number of newspapers reporting they used news carriers or motor carriers. Typically, the use of news carriers or motor carriers means a saving in delivery costs. Using the Morenci Observer again as an example, when the newspaper changed from delivering all of its h,200 newspapers by third class mail to news carriers and motor carriers it immediately cut its costs of delivery per unit from 7.5 cents a newspaper to five cents per newspaper for newspapers delivered in the market area. Newspapers mailed outside of the market area, about #00, remained under the third class permit. Over a one year period the change would mean a savings of $h,9h0, as circulation costs dropped from $15,380 under the system of mailing all of the newspapers under the third class permit to $11,hh0 a year under the use of a combination of third class and carriers. Kramer attributed a portion of the success of the Neighbor Newspapers in suburban Atlanta to the use of carriers. Faced with rising postage costs the group switched to a voluntary pay system using carriers to give advertisers saturation coverage.(17) In all, 72 respondents or 31.9 percent of all, of the newspapers in the study indicated they were using new 17. Robert Kellis Kramer, "A Case Study of Neighbor Newspapers, Inc." (N.A. Thesis, University of Georgia, 1972) p. 8h. 614 carriers and/or motor carriers. As expected a fairly high number of newspapers also said they used newsstand sales, 150 or 66.h percent of the respondents. A total of 20 newspapers said they used other methods of delivery. Breaking down the figures into group and non-group ownership, the study indicates group-owned newspapers are much more likely to make use of delivery methods other than second class mail. Eighty-seven of the 102 responding single-ownership newspapers or 85.3 percent indicated they used second class mail. The figure was slightly higher than the study as a whole. Newspapers in groups consisting of just two newspapers dropped slightly below the overall percentage for the study, with 35 of an or 79.5 percent reporting they used second class mail as a method to deliver their newspapers. The percentage of groups of more than three newspapers nearly identical to the overall study reported they were using a second class mailing permit. Sixty-seven of the 79 responding newspapers or 8h.3 percent as compared to the overall percentage of 8h.1 percent reported they used a second class permit. Single ownership newspapers also came close to the overall average in the use of third class mail. Seven of the 102 single-ownership newspapers in the study or 6.9 percent reported they used a third class mailing permit. Overall 6.2 percent of the newspapers said they used a third 65 class permit. Single ownership newspapers were higher than the study as a whole for respondents indicating they used controlled circulation mail. Six of the 102 newspapers in single-ownership or 5.9 percent said they used controlled circulation mail, lower than the overall rate of 7.5 percent. Groups consisting of two newspapers were slightly higher in number than the average for the study in controlled circulation situations. Six or 13.6 percent of the nu newspapers in groups consisting of two newspapers reported using controlled circulation mail. Four of the hk newspapers or 9.1 percent reported using third class mail. Both percentages are based on a relatively low number of newspapers in comparison to the entire survey size. Differences are more striking among ownership types when the use of carriers is examined. Single ownership newspapers used carriers far less than either newspapers in groups consisting of two newspapers or large groups on a percentage basis. Single ownership newspapers reported that only 13 or 12.7 percent of the 102 reporting said they used carriers. The percentage for groups consisting of two newspapers grew to 29.5 percent or 13 of the nu newspapers reporting. Of newspapers in groups of three or more newspapers, hS or 60 percent of the 79 newspapers said they used carriers to deliver their newspapers. All of the percentages for newspapers using newsstand 66 as one of their methods of delivery were high, although large group owned newspapers reported using newsstands at a higher rate than either single-ownership or groups consisting of two newspapers. Single ownership newspapers reported 63 of 102 or 61.8 percent of their number used newsstands. Groups consisting of two newspapers reported 28 of an or 63.6 percent used newsstands, and 58 of 79 large group newspapers or 73.h percent reported using newsstands as a method of delivery. Single ownership newspapers reporting using "other" methods totalled seven or 6.9 percent, groups consisting of two newspapers totalled six or 13.6 percent, and seven or 8.9 percent of the large group newspapers said they used "other" methods of delivery. There was no breakdown of other methods of delivery. The figures for methods of delivery show little difference between group and non-group ownership except for the figures on carrier-delivered newspapers, and to a lesser degree a larger percentage using newsstands. it is the difference between group and non-group newspapers that is interesting. The difference indicates that many more group newspapers are utilizing the money saving technique of carrier delivery, but that may not be the only reason for the use of carrier delivery. Carrier delivery is also an easy way, and an inexpensive way, for free newspapers to deliver. Since free newspapers cannot meet postal guidelines for second class delivery, they must use either 67 third class or controlled circulation permits if their newspapers are to travel through the mail. As in the case of the Morenci Observer the difference in cost between carrier-delivered newspapers and the U.S. Postal Service can be substantial. Sim wrote about free circulation: It is the distribution problem which compels many suburban and community (neighborhood) papers to free distribution or controlled (voluntary) circulation plans. In order to put advertising rates at a level which is essential in the absence of any substantial revenue from circulation, the publisher must offer the advertisers saturation, or at least large circulation. It becomes more efficient and therefore relatively cheaper to have carriers deliver to every household rather than to lists of customers on routes. The mails may serve just as an auxiliary system where it is impractical to use carriers.(18) Of the 258 neWSpapers in the Michigan Newspaper Directory and Ratebook, 17 or 6.6 percent list their figures as being supplied by the publisher of a free circulation newspaper. Some publishers with free or voluntary pay circulation policies such as Observer/Eccentric Newspapers use audited circulation and did not appear in the ratebook as free circulation newspapers. With postage rates increasing sharply over the past few years, it would be expected that many publishers would be ready to abandon mail service for some other method of delivery. That was not the case. When asked if they intended to change their method of delivery, the vast majority of newspapers, 1h7 of the responding newspapers or 18. Sim, The Grassrgots Prgss: Ameciga'g Pgmmunlty N,! , p. 157. 68 TABLE 18 CONSIDERING DELIVERY CHANGE Considering Relative Cumulative Delivery Frequency Frequency Frequency Change Percentage Percentage Yes 20 10.6 10.6 No 1N7 65.0 75.6 Does Not Apply 36 15.9 91-5 No Response 19 8.4 100.0* Total 226 100.0 *Note: All percentages rounded to the nearest tenth. 69 65 percent said they had no plans for changing their method of delivery. The reason may he that in the past few years of sharply rising postal rates, the newspapers most likely to change have already made their move. In the other responses 36 or 15.9 percent of the newspapers said the question did not apply to them, and 2h or 10.6 percent of the newspapers said they were considering changing their method of delivery. Another 19 or 8.h percent of the newspapers gave unintelligible responses which could not be classified. "The worst prospect for weeklies is that in-county postal rates may climb so steeply that they will be forced to start their own rural distribution system, but this is not likely to occur unless the postal service completely abandons what used to be called in happier days, 'rural free delivery,'" Hvistendahl wrote in glasjrggjs Edi:g[.(19) As the cost of delivery continues to rise, more newspapers may take a look at the practicality of using carriers. It is significant that use of carriers is higher among group-owned newspapers in the study than among single-ownership newspapers. 19. Hvistendahl, "Press Outlook Bright for Community Newspapers," p. h. 7O COHPETITIOH If the response from the survey is any indication, competition is a fact of life for Michigan weekly and semi-weekly newspapers in the survey. There can be more than one meaning to the term competition, but in this section, competition refers to the scramble for dollars not news. Since it has been widely assumed that there are few places left with more than one newspaper, it would also be expected that few reSpondents to the survey would indicate other weekly and semi-weekly newspapers as among their strongest source of competition. It did not work out that way. Of the newspapers saying they faced strong competition from other weekly newspapers, a large number of them were group-owned. Thirty-four of the 63 were in groups of three newspapers or more. Another seven newspapers or 11.1 percent were in groups consisting of two newspapers. Only 16 newspapers in single ownership said they faced strong competition from weekly newspapers. Still weekly newspapers were not the most frequently cited source of strong competition. By a large margin shoppers were called the strongest source of competition from the responding newspapers. Of the 226 responding newspapers, 112 or h9.6 percent reported shOppers were among their strongest sources of competition. Shoppers were cited more frequently by single-ownership newspapers than by group-owned newspapers. 71 Of 102 newspapers in single-ownership responding, 63 or 61.8 percent, said they faced strong competition from shoppers. Groups consisting of two newspapers reported a slightly lower total, 26 of an or 59.1 percent. Groups of three newspapers or more reported that shoppers were a source of strong competition much less frequently. Only 23 of 79 or 29.1 percent of the large group newspapers said they faced strong competition from shoppers. The differences between large groups and smaller groups and single-ownership newspapers facing strong competition is large although the reasons are not clear. One possible answer is that since most single-ownership newspapers in the study are_ in rural areas and most group-owned newspapers are in metrOpolitan areas, shoppers may tend to be in rural areas of the state. Another apparent source of strong competition for weekly and semi-weekly newspapers in the study are daily newspapers. Responding newspapers cited daily newspapers 6h times as a strong competitor in their areas, or 28.3 percent of the total. Single-ownership newspapers were well below the average percentage of the study as a whole in citing daily newspapers as a source of strong competition. Of the 102 single-ownership newpapers in the cross-tabulation, only 20 or 19.6 percent reported radio stations were strong competitors. Groups consisting of just two newspapers were well 72 TABLE 19 COMPETITION Relative Cumulative Source of . . Frequency Frequency Frequency Competition Percentage Percentage Shopper 112 #9.6 --- Radio Station 26 11.5 -__ Weekly Newspaper 63 27.9 --- Daily Newspaper 6h 28.3 --- Television 2 0.9 --- Other 1 0.9 --- Total --- ---- --- 73 above the study as a whole in reporting that radio stations posed strong competition. They cited radio stations 1h times for 31.8 percent of the an responding newspapers in the small group classification. Newspapers in groups of three or more reported even more frequently that radio stations were sources of strong competition with 30 of the 79 large group newspapers or no percent indicating that they faced strong competition from daily newspapers. The reason for the higher percentage of large group newspapers reporting they faced strong competition may be related to the earlier survey finding that most of the newspapers in the study are in group-ownership and that all metrOpolitan areas of Michigan without fail have a daily newspaper. 0n the other hand most daily newspapers probably do not offer a threat to the advertising base of weekly and semi-weekly newspapers in small towns across the state. Radio stations were reported as a strong source of competition by 26 or 11.5 percent of the newspapers in the survey. A percentage of single-ownership newspapers comparable to the study as a whole 12 or 11.8 percent of the 102 responding indicated that radio stations provided strong competition. Groups consisting of two newspapers were below the study as a whole in the percentage reporting that they faced strong competition from radio stations. The figure jumped to 13.9 percent or 11 of the 79 large group 7a newspapers, higher than the study as a whole. The figures show no strong differences between the different types of ownership and the percentage as a whole was rather low. Perhaps not at all surprising is that only two newspapers cited television as a strong source of competition. Only two newspapers, both of them in groups of larger than three newspapers reported facing strong competition from television stations. A single newspaper owned by a group consisting of two newspapers said it faced strong competition from an unspecified source. Looking at the question of competition from all of the sources taken together, single-ownership newspapers reported facing their strongest competition from shOppers, the most cited source of competition in the study as a whole. Large-group newspapers reported weekly newspapers and daily newspapers as their strongest sources of competition. Newspapers in the study also cited radio stations and television stations as sources of competition , although not in large numbers. The competition factor has not disappeared from weekly and semi-weekly newspaper publishing if the study is any indication. The problem for single-ownership newspapers may not be as much from encroachment of group-owned newspapers as it is from shoppers sapping off financial strength. Many of the group-owned newspapers which are centered for the 75 most part in metropolitan areas are squaring off with other weeklies and daily newspapers. Sim pointed out that growth of business beyond the suburbs into small towns does not necessarily mean a bonanza for community newspaper publishers. The extension "beyond the suburbs" suggested by Mr. Kohn brings many shopping centers into or adjacent to small towns. Does that not then guarantee a good advertising volume for the small town publisher? Not necessarily; in fact, rather seldom. These Operations are predicated on mass volume; they handle their advertising in the same way. They want saturation coverage of even in its own field.(20) Sim points out that shoppers then fill the void. The next section of the study will attempt to pull together the survey results and discuss their implications. Group-owned and single-ownership newspapers do differ, but just what the differences mean is what the final section is about. 20. Sim. newness; WW N w , p. 60. CHAPTER FOUR Opinions on the effects of group-ownership are numerous and varied. Fvidence on the implications of group-ownership on the other hand is harder to find. There were no relevant empirical studies found in the literature that conclusively determined the type of ownership of a newspaper had any effect on its quality. Still, the survey indicated the type of ownership a newspaper had did have far reaching implications. Defining the elements that make a 'good' newspaper is an almost impossible task if the idea is to achieve overall concensus on quality of newspapers. An editor or reporter may judge the quality of the newspaper on any number of criteria to which there is varying professional agreement, readers may judge the newspaper for reasons ranging from what comic strips are carried to coverage of international news, the publisher and stockholders may judge the quality of the newspaper on its rate of return on investment, while advertisers might judge it on the number of customers it draws into their stores. If one accepts the premise it is all but impossible to please everyone with a definition of the ideal newspaper, the next lOgical step might be to simply determine as narrowly as possible the conditions that would endanger 76 77 freedom of the press. Using some of the available literature and the survey of Michigan weekly and semi-weekly newspapers it may be possible to begin determining where the dangers of group-ownership exist for weekly and semi-weekly newspapers in Michigan, if they do exist. The next task is to determine under what conditions group-ownership could potentially pose a problem for freedom of the press. It is assumed in this study that freedom of the press is the concept that is considered to be in danger from group-ownership, and that characteristics of ownership of group-owned newspapers that tend to threaten freedom of the press should be neutralized. The literature on group-ownership has many examples of criticisms of group ownership and suggested remedies. The problem with all of these studies is that they do not provide empirical evidence their criticism is valid, and some of the proposed solutions may be as bad or worse than the problems they are intended to correct. While most of the literature addresses itself to the concept of group or chain ownership as a whole in the newspaper industry, the bulk of it is based on the daily press, and not weekly and semi-weekly newspapers. Because of that many of those criticisms can be dismissed almost immediately. Earlier it was mentioned that Pucker and Williams listed a number of advantages to group-ownership. They also listed a number of disadvantages which included: -The manager of a group-owned newspaper might not feel 78 compelled to promote the local community to the same degree that he would if the newspaper were owned by himself or by a local corporation or partnership. ~Subscribers sometimes feel that the paper is managed by remote control, that they are not as close to the editor as they would like to be. -Permanence of managements is more in question than when the newspaper is entirely locally owned. While the survey cannot comment directly on the first disadvantage cited by Rucker and Williams, a simple logical evaluation would indicate the idea is not as negative as it sounds. The concept that a publisher or manager might not promote the community, might also mean the publisher does not feel compelled to submit to boosterism journalism which is blind to a community's problems. The criticism appears to lack the necessary depth to define precisely how group-ownership is undesirable, and is open to subjective evaluation. The closeness of the editor to the subscriber is again an extremely vague criticism, and open to interpretation. It is not well defined, and there was not evidence in the literature or survey to suggest that most groups have strong central management structures. The study can speak to the third disadvantage 1. Frank W. Rucker and Herbert Lee Williams, flgwfipapgg Organizatiog and Mangaemgn; 3rd ed. (Ames, Iowa: Iowa State University Press, 1969) p. 21. 79 described by Pucker and Williams, that permanence of managements is more in question when a newspaper is in group-ownership than when it is locally owned. The survey indicated a high rate of turnover for Michigan weekly and semi-weekly newspapers, with more than half of the newspapers in the study changing ownership in the past ten years. Robert L. Bishop, a University of Michigan journalism faculty member, may have laid the groundwork to explain the high rate of turnover for Michigan weekly and semi-weekly newspapers, while the number of newly established newspapers in the state remains low. Pishop pointed out that tax structures in the United States have a steep income tax and a low capital gains tax, making it more profitable for a group to buy and sell media properties than to collect their income. ie wrote about a Michigan newspaper group: The Panax Corporation of Michigan illustrates the advantages of this tactic. During the 12 months in 1970-71, the corporation sold a daily, a weekly, and radio station for capital gains, after taxes of $1.8 million. The proceeds enabled Panax to merge with the Macomb Daily, the largest independent paper in the state except for the Detroit News, and another group of seven weeklies. Capital gains for 1971 were almost four times the net income for operations.(2) The final criticism by Rucker and Williams is also vague and fails to define any specific danger of group-ownership beyond a vague feeling. BishOp is extremely critical of group-ownership, and 2. RObe't L- BiShOD. "The Rush to Chain Ownerhip," £91umhia.deutnali§m.Eexiewu. 11(November/December 1972) D. 15. 80 the thrust of his argument is aimed toward the methods used to form groups. Bishop cited what he saw as a tendency of group-owned newspapers to quash competition, the possibility of cross-media ownership with local or regional monopolies might mean problems of a region might not be reported there or other areas, and because ad rates go .down with competition, but in monopoly situations advertising rates can simply be raised whenever the owner wants to increase profits.(3) Comparing the results of the survey to Bishop's contention that group-ownership may be a force that tends to eliminate competition may not generally apply to Michigan weekly and semi-weekly newspapers, at least for the present, since a large number of group-owned newspapers reported competing against weekly newspapers. Gerald C. Stone also found that group-owned weeklies had strong competition in his nationwide study of community newspapers. "Competition is categorically greater for the chain publications, but this is a consequence of publication in the suburbs of metropolitan areas,’ Stone wrote in comparing the level of competition between group-ownership and single-ownership newspapers in his study.(h) Since the survey of Michigan weekly and semi-weekly 3. Bishop, "The Rush to Chain Ownership," p. lh-IS. u. Gerald Cory Stone, "Management of Resources in Community-Sized Newspapers," (Ph.D. Dissertation, Syracuse University, 1975) p. 90. 81 newspapers did not consider cross-media ownership, the survey results have no bearing on Bishop's assertion that cross-media ownership can create local or regional monopolies which can lead to possible supression of news. The survey results contradict Bishop's argument in that not only do group-owned newspapers face competition, they face a different kind of competition than faced by group-owned newspapers. Ironically, single-ownership newSpapers in the study reported facing the strongest competition from shoppers, a non-news medium. That means if a weekly and semi-weekly newspaper succumbs to strong competition from a shopper, readers in those communities could be deprived of their only local news medium, while most of the readers of group-owned newspapers would have fewer sources of news if one of their newspapers failed, but they would still have at least one newspaper. The presence of competition for most of the group-owned newspapers means that the condition Bishop considers a requisite for raising advertising rates at will, monopoly, is not generally present in the newspapers considered in the survey. The group-owned newspapers still should be in stronger position financially with their greater use of combined pages and advertising, and relatively higher percentage of ownership of centralized printing plants. Stone found that mean profit per subscriber in is study was $11.10 for group-owned newspapers compared to $8.70 per subscriber for single-ownership 82 newspapers. If Michigan weekly and semi-weekly newspapers conform to Stone's findings, than profits would even be greater for group-owned newspapers overall since group-owned newspapers in the survey tended to have more circulation than single-ownership newspapers. FishOp describes a number of remedies for group-ownership including elimination or severe Iimitation of capital gains advantages, a graduated income tax similar to the graduated personal income tax, enforcement of rules on retained earnings such as they were before 1959 when firms were required to pay out 70 percent of their incomes to owners (although Bishop did not say at what level he would set the requirement), not allowing depreciation of equipment until it is actually replaced or sold, and not allowing monopoly rent when firm's are sold by either publishers or broadcasters, that some sort of monopolies commission be set up, the one market to an outlet rule be enforced to prevent cross-ownership situations, that restrictive business practices should be prosecuted as in the example of a publisher purchasing syndicated material just to keep a competitor from getting it.(6) Many of the recommendations Bishops has for preventing concentration of ownership seem applicable to business as a whole and not just newspapers, with the exceptions of the creation of a monopolies commission and the revision of 6. Bishop, "The Rush to Chain Ownership," pp. 18-19. 83 postage rates. The monOpolies commission suggestion is similar to a recommendation by a Canadian study that conceded some group-ownership situations have been beneficial in some situations, it have implications that are. dangerous. "What matters is the fact that control of the media is passing into fewer and fewer hands, and that experts agree this trend is likely to continue and perhaps accelerate. if the trend is allowed to continue and perhaps unabated, sooner or later it must reach a point where it collides with the public interest. The Committee believes it to be in the national interest to ensure that that point is not reached," the Canadian report maintains.(7) Under.the Canadian proposal a Press Ownership Review Board would have powers to, "approve or disapprove mergers between or acquisition of, newspapers and periodicals."(8) The powers given to a government under such a proposal would be enormous in terms of who would be allowed to purchase a newspaper, and ominous since nobody has bothered to define at what point the line is crossed and group-ownership becomes dangerous. Even if the contentions of the Canadian media report and Bishop are correct, and control of newspapers, includuing weekly and semi-weekly newspapers are passing into fewer and fewer hands, their solutions to the problem seems nearly as bad as the problem 7. "Canada's Media Report: Mirror of the U.S.," Columbia .iQuLfliLLflfl nglgw, 10(May/June 1971) pp. 21-22. 8. "Canada's Media Report: Mirror of the U.S.," p. 2“. 8h itself. Letting a government agency have the power to decide who is fit to own a newspaper is not much better than letting group-ownership continue. Taking it a step further Bishop's suggestion may be unconstitutional, conflicting with First Amendment press rights. As mentioned earlier most of Bishop's other suggestions such as the elimination of capital gains advantages for groups, depreciation, graduated income taxes, rules on retained earnings, and not allowing monopoly rent when a newspaper is sold would seem to apply not to just the media, but to all businesses. Put in such a light, these proposed actions would Open broad questions on capital formation in the United States which are beyond the scope of this study. Application of the proposals to just the media would seem to be somewhat discriminatory and perhaps in conflict with the First Amendment. The proposal that cross-media ownership be eliminated in monopoly situations has become more than just a proposal since the Federal Communications Commission has begun to crackdown on some situations where the only newspaper in an area owns the only radio station.(9) The basic question involved in both the Bishop and Canadian argument revolves around access to the press, and the number of voices heard through it. If this is taken to be the goal or one of the goals of freedom of the press, I. William Hill, "FCC Breaks-up Media in 16 Cities," Macaw. (February 1. 1976) p. 9. 85 group-ownership in Michigan is not a threat if the survey results are correct. The real problem may lie in protecting the large number of single-ownership newspapers in the survey competing against shOppers. The suggestion by Bishop that the federal government, "should help solve dis tribution problems for magazines and local newspapers by restructuring postal rates" is applicable to the study's situation.(10) Under current conditions competing with mass circulation shoppers in rural areas with a free circulation newspaper poses a problem for weekly and semi-weekly newspapers. Unless they decide to develop some type of delivery system of their own, the rural weekly newspapers with a competing shopper would be forced to resort to controlled circulation or third class mail which would raise costs per copy of delivery nearly to the same level as shoppers, but since shoppers can use space devoted tonews in the newspaper for additional advertisng revenue to help offset costs they can still keep their advertisng rates lower. In sparsely populated areas organizing an in-house organization to deliver newspapers would be difficult, especially for smaller newspapers with limited staff and capital. All of this still does not develop a helpful definition of the problems posed by group ownership, since beyond the vague threat of fewer voices nothing has been 10. BishOp, "The Rush to Chain Ownership," p.19. 86 offered as evidence that group ownership is dangerous. A reasonable method of determining whether group-ownership is detrimental to a free press might be to gather statistical information such as in this survey, and determine the impact of groupeownership on freedom of the press. Carefully defining the problems and then working toward solutions that meets the definition of the problem would seem more rational than simply opening the door to infringements on First Amendment rights by the imposition of government council with control over who owns media outlets. Beyond that, a new definition of group-ownership and other terms may be necessary. Most of the groups consisting of two newspapers in the study did not share the characteristics of larger groups or single-ownership newspapers. Further, some groups, especially those in metropolitan areas may need to retain their current form simply to survive against daily newspapers. Splitting up the groups could mean the end of the economic base of support provided by combination pages and mass circulation. in other words the boundary lines of a community may not define a viable marketing area. Some of the characteristics of ownership in the survey might help contribute to a definition of the problem of group-ownership and its impact on freedom of the press. The survey indicated that close to half of the newspapers that had recently changed ownership had gone from single-ownership to group-ownership, while few group-owned 87 newspapers became single ownership newspapers. Further it was indicated that a higher percentage of the newspapers had changed ownership in just the past few years, while few new newspapers had come on the scene. in addition, the literature indicates a continuing disappearance of rural newspapers. There was still a sharp difference between newspapers in group-ownership which tended to face competition from weekly neWSpapers and single-ownership newspapers which tended to face competition from shoppers. Putting all of this together seems to indicate that rural newspapers are on the decline or at least in a period of consolidation, while group-owned newspapers are expanding using single-ownership newspapers as a base for their growth. The immediate problem would seem to be how to prevent single-ownership newspapers from failing, and if further investigation confirms a rapid rate of absorption of single-ownership newspapers by group newspapers, methods of evaluating whether those newspapers can survive on their own and if group-ownership will tend to have negative impact will be needed. The difference in the figures on competition would tend to indicate that the loss of rural neWSpapers and the growth of group-ownership are in some ways separate trends. The group-owned newspaper's tendency to have a larger circulation, greater ownership to own central printing plants, use of common pages, combined advertising, and use of lower cost methods of delivery all 88 suggest that grOUp-owned newspapers are stronger financially, but their concentration in metropolitan aras also suggests that perhaps many of the advantages of group-ownership are reliant on being located in a densely populated area. All of these characteristics may not be easily adaptable to rural newspapers either in single-ownership or group-ownership. In that case a definition of an element crucial to ownership might be location. Newspapers in urban areas may simply be more suited to group-ownership,although a number of groups consisting of two newspapers exist in these areas. Further study is needed to determine if these small groups are the basis for further growth or simply one single-ownership publisher buying another publisher down the road out to build a stronger financial base for his operations. Since newspapers are businesses, and businesses have to make money to survive, further research should be done to determine to what degree single-ownership newspapers in rural areas are failing because of a shrinking advertising base, and to what degree shoppers are sapping off existing advertising and putting weeklies and semi-weeklies out of business. it may develop that an approach similar to BishOps on postal rates would help balance the competitive scales. The higher rate of ownership of central printing plants among group-owned newspapers may reflect a source of i f,“ 89 potential problems for single-ownership newspapers which are more likely to depend on the services of a central plant. Situations could develOp where a central printing plant owned by a newspaper group could be forced to drop single-ownership newspapers using the printing plant on a contract basis. An example might be a newsprint shortage where only enough newsprint is available to handle the group's newspapers. Another example might be a group's desire to take over the area covered by a newspaper printed in the central printing plant. The printing plant might simply close its doors to the independent newspaper forcing it to find another place or way to get its newspaper printed. A central plant might even refuse to handle a newspaper because of special interest group pressure. As mentioned in the first chapter, David R. Bowers views the centralized printing plant as a mechanism for the creation of groups when failing nwspapers fall behind in their bills because of poor management: By its nature of printing newspapers for others, the central printing plant is in a position to absorb these publications when they come up for sale--or cannot pay their bills, in some cases. One publisher who must remain anonymous, quite frankly says he hopes to add newspapers which cannot pay their bills because he feels their failure is caused by their inefficient operation. He feels he can make a number of them succeed through sound business methods.(11) if a newspaper cannot find a place to be printed or 11. David R. Bowers, "The Impact of Centralized Printing on the .Community Press," W WhMSpring 1969) pp. us-us. 9O afford a press than freedom of the press could be affected. The tradeoff for lower capital costs may well be a potential threat to the existence of the newspaper. A possible area of further study might examine the ownership patterns of centralized printing plants to determine the number of groups owning printing plants, and where the plants are located. An examination of prior ownership of Michigan weekly and semi-weekly newspapers printed at the central plants, and where they were printed before they changed hands would help shed light and gauge the impact of centralized plants on weekly and semi-weekly newspapers 0 SUHNARY The survey indicated that Michigan weekly and semi-weekly newspapers in group-ownership differ in many ways from single-ownership newspapers. While the differences in the characteristics have been examined at some length, the question of whether or not group-ownership poses a threat to freedom of the press or the continuance of single-ownership Michigan weekly and semi-weekly newspapers is far from answered. Single-ownership newspapers in the survey reported facing strong competition from shoppers, a non-news medium, group-owned newspapers said they faced strong competition from other weekly newspapers. That finding would tend to contradict the common belief that 91 group-ownership inhibits competition. The finding that group-ownership seems to be expanding through the acquisition of established single-ownership newspapers, while few new weekly and semi-weekly newspapers have been founded in the past few years was important. Of the recently established newspapers in the survey, most were group-owned. Ownership of central plants falling primarily among group-owned newspapers is important in the potential impact it could have among the single-ownership newspapers. While 76.5 percent of the single-ownership newspapers in the study used a centralized printing plant, only 30.5 percent of the newspapers printed in central printing plants owned a portion or all of the plant they used. That opens questions of how much control single-ownership newspapers as a whole have over their own fate. As expected most group-owned newspapers were located in urban or suburban areas, while most single-ownership newspapers were located in rural areas of Michigan. Location may be related to a number of findings in the study such as the heavy use of combination rates and pages/sections among group-owned newspapers as well as greater use of news carriers since denser populations make these techniques appropriate. The higher average number of pages for group-owned newspapers may indicate a stronger financial position for group-owned newspapers. The findings of other newspaper 92 studies tends to support that idea. Other expected findings included a larger higher average staff size for group-owned newspapers, and the larger number of respondents indicating they used an offset printing process. Respondents also reported having substantial amounts of typesetting equipment, with most newspapers in the study being at least able to have their newspapers camera ready before going to the central printing plant. There were also strong differences among the group-ownership newspapers in the study with groups consisting of two newspapers differing significantly from larger groups. The groups consisting of two newspapers were also different than single-ownership newspapers in the study. The smaller groups may combine both the characteristics of single-ownership and group-owned newspapers or they may represent a third type of ownership. More study is needed to determine just why these newspapers are different. This study has attempted to be a descriptive examination of the ownership characteristics of Michigan weekly and semi-weekly newspapers. Hopefully, it has filled in some of the void left by past lack of research in the area and opened the door for further study. 93 RIRLIOGPAPY Books Babble, Farl R. Sugyey Researgh Pgtbgds. Belmont, California: Wadsworth Books, 1973. Janowitz, Morris. The figmmgnifix_fige§§ in an Urban Setting. Chicago, University of Chicago Press, 1967. Liebling, A. J. Ihe Erggfi. New Yorszallantine Books, 1961. Hie, Norman H; Hull, C. P.; Jenkins, J. 6.; Steinbrenner, K.; Pent, D. H. _§££fl££.£QL the Sgslal §glgngg§. New York: McGraw-Hill Book Company, 1975. Rucker, Frank W., and Williams, Herbert Lee. ugwgpgggL Otganization and Management.3rd ed. Ames, iowa: Iowa State University Press, 1969. Sim, John Cameron. ]be filfififilgglfi Eggggi Amgciga's Community figuggangg. Ames iowa: lowa State University Press, 1969. Journals and Periodicals Bishop, Robert L. "The Rush to Chain Ownership." Columbia Jougnalism PQXIPW- 11(November/Decemher 1972) pp. 10-19. Pottoni, Ronald L. "Group Ownership of Newspapers." Etggdom of Infogmatign Repgct N9, 190. (November, 1967) Bowers, David R. "The Impact of Centralized Printing on the Community Press." Joutnalism Ouagterly h6(Sprlng 1969) DD. “3'96. CODSO‘i’ John. "CPOnga Publisher Rides Suburban Wave," Editgc and Publishgn (August 21, 1976) p. 11. 9h "Canada's Media Report: Pirror of the ”.3." Columbia Journalism Review. 10(“ay/June 1971) 00. 21-28. Frankovich, Fmily Watson. "Small Voices of Piversity." lbs Hagig . 28(April 20, 1979) DD. “95-h97. Hayes, Charles F. "Newspaper Growth Action is in the Suburbs." Cgaggroots Editor 17(Spring 1976) p. 3. Hill, l. William. "FCC Breaks-up Media in 16 Cities." Editor and Publisher (February 1, 1976) p. 3. Pvistendahl, J. K. "Press Outlook Bright for Community Newspapers." Gragstogts Editor 17(Aprll/June 1976) DD. 3'“, 15. Nixon, Raymond B., and Hahn, Tae-Youl. "Concentration of Press Ownership: A Comparison of 32 Countries," Journalism Quartegjygh9(8pring 1971) pp. 5-17. Hixon Raymond, P. "Half of Nation's Dailies Now in Croup Ownership." Fditot and Publisher (July 17, 1975) DD. 7, 32. Pullen, Rick. "When the Chain Came to Town." 1 r o Editog 13(May/June 1972) pp. 16-17. Schlaver, C. O. "Schaumburg's Population Explosion Anchors Copley's lllinois Expansion," Amecigan Eigig 90(Narch 1972) pp. 22-25. Stone Cerald C. "Validation of Economic Surveys in the Weekly Newspaper Field." Journaligm Ouarggpiy 53(Summer 1976) pp. 312-313. "Suburban Success Story: Growing 'Neigbbors' Take to the Suburbs of Atlanta," Amerigan Pcess 90(January 1972) DD. 22-25. 95 Theses and Dissertations Huck, Cathy Shook. ”Newspapers, Inc.: The impact of Corporate Ownership on its Community Newspapers." “.8. Thesis, Hurray State University, 1972. Kramer, Robert K. "A Case Study of Neighbor Newspapers, Inc." N.A. Thesis, University of Georgia, 1972. Kromp, Odalie Karen. "The Computerization of Georgia's Weekly Newspapers and Nanagement Evaluation of Specific Equipment." M.A. Thesis, University of Ceorgia, 1973. Stone, Cerald C. "Management of Resources in Community Sized Newspapers." Ph.D. Dissertation, Syracuse University, 1975. ‘ nther Sources NcAllister, William, ed. mmmmgt Ngmgpaggrg and chigdigals. Philadelphia: N. W. Ayer and Sons, inc., 1975. Michigan Press Association. Michigan Neugpapg; fligggtoty and Ratebook. East Lansing, Michigan: Michigan Press Association, 196k. Michigan Press Association. Migbigan newgpgpgg Directory and Ratebooh. East Lansing, Michigan: Michigan Press Association, 1976. National Newspaper Association. 1926 Ugekly Newspaper Cost Study. National Newspaper Association: Washington D.C. 1976. APPENDIX 96 Weekly Newspaper Survey Please answer the following brief multiple chOice and fill-in questions by either circling or filling in the pne appropriate response. After completing the questionaire, please mail . it back in the self:addressed stamped envelope enclosed. All information given on this form is confidential and will be used for statistical purposes only. We ask for identification only as a method of checking-off returned forms and in case fOIlOWvup questions are necessary. I Name of newspaper Name and title of person filling out form 1. What is the circulation of the newspaper?_’_ 2. How many people (including part—time) are on your news staff? 3. is your newspaper located in an urban or suburban area? A. Yes B. No 4. is the editor of the newspaper: A. The owner of the newspaper? B A person hired by the pubiisher(s)? 5. How many newspapers are controlled by management of the newspaper? 6. Is the newspaper printed in a centralized printing plant that prints more than one news- paper? A. Yes .8 No 7. If you answered yes above is the caper taken to the centralized printing plant: A. With the copy ngt_yet typeset and pasted up? 8. Camera ready? C. With the negative already shot? D. With the plate already burned? E. Does not apply? 8. Is the centralized plant owned by thegnewspaper's publishing firm or publisher? A. Yes 8. No .' 9. How many years has the newspaper been in existence? 10. How many years has the newspaper been owned by the same publisher or firm? h.— 11. Was the newspaper preViously owned by a: A. Person or firm owning more than one newspaper? B. Person or finn owning this newspaper only? C. (Does not apply, only one person or firm has owned the paper) 12. Is the newspaper's advertising sold in combination with other papers on a regular basis? A. Yes B. No. 13. Does the newspaper share pages or sections with another newspaper? A. Yes 8. No 14. Is the newspaper published using a: A. Letterpress process B. Photocomposition Process C. Other processes 15. Is the paper a: A. Tabloid B. Broadsheet 16. How many pages does the newspaper average? 17. Please circle the method(s) used.to deliver your paper. (Mark more than one if necessary on this question only) A. Second class mail 8 Controlled circulation mail C. Third class mail D. News carrier/Motor carrier E. News stand F. Other methods 18. Are you contemplating changing your method of delivery because of postage increases? A. Yes 8. No C. Does not apply 19. What media or medium (shopper, radio station, other weekly, daily) do you face the strongest competition from? 97 MICHIGAN STATE UNIVERSITY EAST LANSING - MICHIGAN i832} SCHOOL OF jOL‘RNAUSM - [INIUV “All. I am using the attached survey as part of my master of arts thesis in Journalism at Michigan State University and would very much appreciate it if you would take a few minutes to fill out the form and return it in the enclosed self—addressed stamped enve10pe. I am collecting information on ownership patterns of weekly newspapers and the characteristics of each of the papers. All information collected is confidential and will be used for statistical purposes only. I am asking you to put your name on the form as a check-off. procedure and in case further questions are necessary. Since I can afford to send out only a linited number of forms and this is basically a statistical study, every form returned is important. If you would like more information on the survey, please place an "X" at the too of the first page of the questionaire. I will respond as soon as possible. Thank-you for your time and help, Thomas P. Standley HICHIGRN STATE UNIV. LIBRQRIES 3129301 1030594