The Phony War 

Rumor has it, Jay Shelledy recently threw one hell of a hissy fit.

Every morning for the past month, the editor of The Salt Lake Tribune has had to walk past a brightly colored sign announcing his competitor’s switch to morning publication. As the story goes, Shelledy finally snapped. As he cussed like a newspaper editor, he ripped down the sign, stomped on it—putting a nice footprint on the cute little sun and the Deseret News logo—and then carried it into the offices of the Newspaper Agency Corporation and demanded that the goddamned sign be removed from the goddamned lobby of the Tribune Building. And as the rumor would have it, Shelledy was told to piss off by the money men of the NAC, the revenue-sharing body of the Trib and the News. Shelledy put the sign back in the lobby. That’s the rumor at least.

Maybe you’ve heard of another one, one just as humorous as the Shelledy episode. The story goes a little something like this: For years, the Deseret News, the scrappy little afternoon paper that couldn’t, has wanted to go head-to-head with the nasty Tribune in the mornings. Now, with Dean Singleton—the business-savvy publisher of the Tribune—giving the OK, the D-News finally has its chance to prove once and for all it can compete straight up, at the same time and on the same ground with the Trib.

The really great part of this rumor is the speculation around town and in respected industry mags like Editor & Publisher that the move to morning publication will result in a newspaper war between Salt Lake’s two dailies. There is a war coming, all right, but the rumored one between the Deseret News and the Tribune is a phony. Phony because the two papers share the same rather fat wallet, which can shell out cash-money for new $13 million buildings in downtown Salt Lake City, undercut smaller newspapers’ advertising rates and send hundreds of thousands of free newspapers to places like Lindon and Alpine. The real war is between the two dailies and the suburban papers, and the first shots will be fired in Utah County.

Here’s another funny story. Back in the late ’60s, giant newspaper chains like Hearst and Scripps-Howard lobbied Congress and the Nixon administration for an exemption to antitrust laws because competition sure was a bitch. They wanted an exemption that would allow papers in the same metro area to merge their advertising, printing and distribution operations. Sure, it allowed for monopolies, but at least two distinct newspaper voices remained in the community.

In 1970, with the blessing of Nixon’s Department of Justice, Congress passed the Newspaper Preservation Act. It’s a laughably ironic name, since critics contend that the only newspapers the NPA has preserved are the big boys and the scrappy underdogs attractive enough to merge with the big boys. Together, these conjoined papers have tried to put the boot down—Shelledy-style—on smaller, suburban publications, hoping to gain circulation and ad revenue at their expense. The Trib and the D-News, in bed together since 1952—back when few people cared about these things—are proving to be no exception.

“It’s really great for the papers who participate,” says Jim Fisher, a University of Utah communications professor, “but it’s death to the smaller papers around.”

Smaller papers like Provo’s Daily Herald? Only time—and a massive newspaper war featuring millions of dollars, thousands of free and discounted newspapers blanketing Happy Valley, and a battle royale on the porches of Springville, Lehi and Pleasant Grove—will tell.

‘The 500-pound gorilla’

Switching to morning publication is a no-brainer for the Deseret News. Afternoon newspapers have gone the way of kids falling asleep to transistor-radio broadcasts of Brooklyn Dodgers games and folks sipping lemonade from their porch swings. John Hughes, editor of the D-News, says that if his paper didn’t switch publication cycles, it “would disappear. It’s a newspaper that doesn’t have a future if it stays in the afternoon.”

Singleton concurs, and even before the ink had dried on his contract to buy the Tribune in 2000, he agreed to let the D-News go morning. It was ultimately Singleton’s decision, since as chairman of the NAC—of which the Tribune controls 58 percent—he had the final say. He never gave it a second thought.

“It’s a good business proposition to have both papers in the morning field. That way, you don’t have to subsidize the evening circulation. You can share trucks, you can share distribution routes—you can put the Deseret News on the same trucks taking Tribunes all over the state,” he says. “I think we’ll sell more newspapers.”

The plan is to sell a lot more newspapers in Utah County, which the Deseret News has always seen as its Sudetenland. With a population of 400,000 mostly well-educated, almost exclusively Mormon residents—only about 50,000 of them subscribers to any daily newspaper—Utah County is an untapped Land of Bountiful, one that the Deseret News and the NAC would love to annex.

“We do think it’s our kind of territory,” Hughes says. “It’s conservative, with a large LDS population with big families. We do a lot of family coverage, and we already have the Church News. Those factors make Utah County fairly attractive to us.”

That’s a huge understatement—one almost as big as the plans the D-News and the NAC have for the county. Sometime after the newly christened Deseret Morning News begins limited morning publication on March 31, Utah County will be swimming in newspapers. Joe Zerbey, president of the NAC, says that non-subscribers in Utah County will receive 35,000 free samples of the Deseret News every Thursday, along with 35,000 copies of the Tribune on Saturdays, for about six months. That’s enough newsprint to soak up Utah Lake, and enough newspapers to reach every single aluminum-sided home from Point of the Mountain to Payson. In conjunction with this journalistic chumming scheme, the D-News will start pumping out its expanded morning Utah County edition on May 5.

“It’s the most aggressive circulation initiative this company has had in 15 years,” Zerbey says, adding that sampling will likely occur later in northern Utah counties.

The free copies will come wrapped in an eight-page advertising supplement specific to Utah County, helping the NAC fulfill its true objective of tapping into a potentially highly profitable advertising market.

“We’ve dedicated a manager and six sales people to that part of the state,” Zerbey says, adding that the NAC also recently leased a new distribution center in Orem and will use the Deseret News’ Utah County bureau to house additional staff. “We have an aggressive sales strategy, and we’ll be giving Utah County subscribers a very zoned product. It will be local, local, local. Local classifieds, local obituaries, local ads.”

As Zerbey talks about increased circulation and untapped advertising potential, you almost expect him to unroll an old leather map and, as he points at the blood-red invasion arrows, tell you that the Fifth Cavalry of delivery trucks will hit Indian Hills while the airborne carriers will drop in on East Bay—and that the bastards don’t stand a chance.

“The NAC may have been a sleeping giant,” he huffs. “We’re awake now and we’re going to be the 500-pound gorilla in Utah.”

That makes the Daily Herald the big banana then. While its circulation is small—only about 32,000 daily—the Herald, its circulation list and its advertisers are prized commodities in this cross-county newspaper war. Without bursting out laughing, Singleton says the Tribune and the Deseret News are “underdogs” in the Provo market. The Daily Herald and Ogden’s Standard-Examiner—next on the NAC’s Most Wanted list—“are both owned by strong newspaper groups,” Singleton adds. “Certainly, both are highly profitable. We’re the underdogs in those markets. We’re just fighting to get some of that market.”

Hughes calls the Herald a “franchise,” and says diplomatically that the Pulitzer Newspapers Inc. property will offer stiff resistance. “They have been around for a long time. We will not be able to do all the things that they do. We will have to have good local coverage, good sports coverage, local ad content and local obituaries.”

One of the local obituaries could belong to the Herald. While it’s dangerous to automatically assume the Herald won’t be able to survive the NAC onslaught, it also isn’t a stretch to think the paper, around since 1873, is headed for rocky times. The content is already suffering, with the D-News picking off the Herald’s top two writers, Dick Harmon and Tad Walch, in the past three months. It could be only a matter of time before the Herald’s advertising takes a hit. Because advertising rates are tied into circulation figures, any significant loss in the Herald’s readership could be catastrophic.

The Deseret News plans to siphon away Utah County LDS subscribers who have long wanted to read a morning church-owned publication. With a product that will be heavily zoned—the copies of the Deseret News circulated there will have Utah County-specific stories on the fronts of the local news and sports sections—and favorable demographics, Hughes is confident his paper will gain circulation in Happy Valley. And some of the success will come at the expense of the Herald and the Tribune. Hughes says that studies conducted by the Deseret News show a “substantial number” of subscribers of other newspapers will switch to his paper once it goes morning, although he isn’t able to produce actual figures.

Jim Wall, publisher of the Deseret News, says that those figures are “‘maybe’ numbers,” meaning that it’s anybody guess what will happen until the papers in Utah County start competing head to head. “We don’t want to depend on that market,” he says.

Wall adds that the D-News’ primary marketing strategy isn’t to take away circulation from other papers but to gain among non-subscribers. He says the surveys show a long-term increase of 10,500 subscriptions from current non-subscribers. Wall says a third of those will come from Utah County. Battlefield Provo

For a guy who is outgunned and facing two allied forces, Kirk Parkinson is remarkably calm. The vice president of Pulitzer Newspapers of Utah, who, up until last week, was the publisher of the Herald, even manages the occasional chuckle and says that, gee whiz, if he were in the same position of the Deseret News, he’d go morning, too. And heck, if he were at the Deseret News, he’d be going down to Provo, too, and trying to get as much circulation he could.

But Parkinson is no dummy—he sees the ink-pressed writing on the wall. He knows that the headlines, in 52-point font, and the speeches in Salt Lake City newspaper board meetings are calling for war.

“They have made comments in speeches, to civic clubs and in numerous conversations, that this will be the primary target for them,” Parkinson says.

He has no desire to be a mere bullseye, however. Parkinson says that the Pulitzer group is prepared to meet the challenge head-on, with a damn-the-torpedoes strategy that includes improving the Herald’s editorial content and increasing delivery efficiency—and praying like hell that newspaper readers, as traditional and stubborn as any group, stand by their familiar hometown rag.

“The tendencies of people is to get used to a particular product, a particular format and a particular approach and stick with it,” he says. “I’m not saying we’re going to roll over and say ‘here you go, and if you don’t like it, oh well.’”

Parkinson believes that the ultimate deciding factor in this newspaper war will be the Utah County readers. Most readers choose a newspaper based on the editorial content—if the sports page sucks, forget it. Same with local news. And then there is the issue of local advertisements. Ask anybody in northern Davis County why they subscribe to the Ogden Standard-Examiner and here’s betting half of them say “Because you can’t get the damn movie listings for Layton in the Tribune.” Simple things like that lead Parkinson to believe that it’s impossible to beat the locals at their own game.

“In most cases, the metro paper has a hard time out-localing the local,” he says. “They’re not here. It’s pretty hard to do with just a bureau.”

While Parkinson might be correct, the Herald isn’t dealing with just any old metro paper looking to nab fickle subscribers who live in the suburbs. It’s up against not one but two newspapers, both of them helping the other through the NAC, and one of them just happens to be owned by the church to which more than 90 percent of the county’s population belongs. It would likely take a miracle of Joseph Smith proportions for the Herald to hang on to the circulation it’s got now. Parkinson is apparently a believer.

“A year from now, if you look at audited circulation numbers from 2004 and compared them with 2003, they [the Deseret News] will see a decline in our market and we’ll be steady or have a slight increase,” he says. When asked what makes him believe that, the funny water in Provo or the pollution from the nearby Geneva Steel Mill, Parkinson laughs and says, “That’s my prediction. Call it a hunch.”

Serving As a Monopoly Since 1952

Jim Fisher, the communications professor at the U, also has a hunch—that if the Herald wanted to sue the NAC, it would have a pretty good case. The premise of the case, he says, would lie on the argument that the original intent of joint-operating agreements is as obsolete as afternoon newspapers.

The JOA between the Tribune and the Deseret News was formed in 1952, when the two papers decided to put an end to their own newspaper war. The agreement was allowed before the existence of the Newspaper Preservation Act because, Fisher says, nobody ever really bothered to sue. It was a marriage of convenience that helped both papers survive.

“You had two people drowning and then a life boat comes along,” as Wall describes it. “I don’t know who got on first, but we both got on.”

Producing a daily paper is insanely expensive, what with the cost of presses, distribution, salaries and marketing. From a financial perspective, it doesn’t make much sense to own a printing press, which is used sparingly to churn out the morning newspaper, while another press across town collects dust until it’s used to print the evening paper. When you factor in that carriers take their respective papers to the same neighborhoods, that the trucks head to the same far-flung towns and that ad reps could be selling space in two newspapers as easily as one, it all adds up to merging operations.

Unfortunately, merging is a big no-no according to the Sherman Antitrust Act. Mergers tend to produce monopolies, even in the newspaper biz, and this country has a long history of looking down on and busting up monopolies. Except for newspaper ones.

Thanks to the Newspaper Preservation Act, two newspapers can join forces if one is failing. The reasoning is that it’s better to have a monopoly on the business side if two independent editorial voices remain, which is precisely why the 1952 JOA between the Tribune and the D-News was grandfathered in when the NPA was passed in 1970. Without a JOA in 1952 or even 1970, the Deseret News would have theoretically gone under.

But times have changed, and we’re not just talking about folks not reading the Deseret News from their porch swing. We’re talking about financial viability, success even.

It doesn’t take much to tell that the Deseret News isn’t hurting—just step inside John Hughes’ office on the eighth floor of the $13 million Deseret News Building, which, by the way, was paid for from the newspaper’s profits. With plush carpet, a conference table the size of Temple Square and a desk that looks like it was hand-crafted by the Amish themselves, Hughes’ office is a symbol of the Deseret News’ wealth. You can’t smell the ink up here, or hear the thumping of the presses. There are no newsprint-stained handprints on bad wallpaper. It’s the Celestial Kingdom of offices.

“Both papers have done quite well,” Hughes says. “We’ve made money in the JOA. We now have reserves.”

And enough money to throw at Utah County in a quest for additional circulation and, in the end, additional ad revenue, more reserves, more fancy conference tables and more nice buildings stuffed full of new Macs and $400 chairs for even the copy editors. If that means some people get laid off at the Herald, that’s America, son.

Pointing to the gains the NAC papers have made during their monopoly and to the fact that the papers have enough money to throw around Utah County, Fisher says that the Herald “could sue in court and say that ‘if they’re that damn healthy, we don’t feel like they should still be in a JOA.’ I think they’d have a strong case, particularly if Ogden joined them.”

Parkinson says the Herald isn’t pursuing legal action and doesn’t foresee doing so in the future. But, he says, “we can’t rule it out because you never know.” Parkinson does acknowledge, however, that competing on his home turf against two government-protected carpetbaggers doesn’t seem all that equitable.

“The Newspaper Preservation Act is what it is,” he says, “but it does put them in a stronger competitive position.”

That wasn’t the original intent of the act, however, says Donna Leff, a professor at Northwestern University’s Medill School of Journalism. “The intent of the Newspaper Preservation Act was not to allow a dominant paper to muscle out a smaller paper.”

She says that when the act was passed in 1970, “regional and suburban newspapers were beyond the encroachment of major papers, but times have changed.” Leff adds that “the focus of a joint-operating agreement is for competition in one city between two newspapers.”

Outside of ganging up on the smaller competition, JOAs have been a miserable failure. Only 13 survive, down from close to 30 in the heydays of the 1970s. The number could soon be 12, since Seattle Times publisher Frank Blethen—who has consulted the Deseret News on the switch to morning publication—is trying to end the agreement he has with the Seattle Post-Intelligencer. The JOA between the D-News and the Trib expires in 2020, with an option to renew for another 10 years—and Wall says the Department of Justice wouldn’t even have to approve it unless the terms of the original agreement change.

Leff says JOAs have actually reduced competition because too many operations are joined, and that the theory that separate editorial voices exist is more myth than reality.

The U’s Fisher agrees, and points to the local agreement. “They publish the same exact stuff from the exact same perspective,” he says. “No one’s really digging for news. The community gets under-served by it all, because instead of getting two independent voices, or even one strong independent voice, we get a mediocre conglomeration of voices.”

Stephen Lacy, director of Michigan State University’s School of Journalism and an expert on JOAs, says the agreements have their purpose, and that they are lesser of an evil than a one-newspaper town.

“It allows for more ideas in the marketplace, more reporters, a bigger news hole,” he says. “When two dailies are competing, they end up spending more money in the newsrooms.”

Lacy adds that there’s no evidence showing that the Deseret News will drive out the Herald. In fact, he says that his research, conducted in the mid-1980s, shows that JOAs actually didn’t put suburban papers out of business.

A lot has changed in 20 years, however, and in Salt Lake City, a fair amount of profit has been amassed relatively easily. Without having to compete against each other financially, the two NAC papers have been generally profitable for over 50 years. In the words of Parkinson, it’s a pretty good deal.

But Lacy says it’s a deal that benefits communities, and says that Utah County readers stand to gain from the impending war. “It will improve journalism in Provo,” he says, and will put the papers to the test. “If there’s a newspaper that can come in and drive out the community paper, then there’s something wrong with that community paper.”

That’s American competitiveness at it’s finest, something that Zerbey—the president of the NAC—says is what this is all about. But at the same time, isn’t there something inherently un-American about letting two large players join forces to battle a smaller force on its home turf? Isn’t that why the Sherman Antitrust Act exists in the first place, to protect the little guys and to allow for a diverse array of choices? Not according to the Newspaper Preservation Act.

“The purpose is not to kill other papers. It’s to preserve voices in a limited market,” Fisher says. “When the papers get so strong that they can expand and thrive at the expense of the papers not involved, it’s time to remove the protection and let them sink or swim on their own. I believe a few judges would see that as a good case—‘stop competing head-to-head in that county or throw out your JOA.’”

Scott Trundle, publisher of the Standard-Examiner, says that the NAC’s foray outside of its primary market of Salt Lake County definitely raises the issue of whether the need for government protection still applies. “The intent of the joint-operating agreement isn’t being fulfilled,” he says. “Certainly, the inference is that they’re taking advantage of it by going outside the market where they were given protection.”

Ready, Fight!

Of course, all of this could be moot if Parkinson’s predictions come true. Perhaps the Herald will be able to survive the onslaught of free newspapers and cheap ads and will stick around for another 120 years. Perhaps it will continue to find replacements for the staff that the Deseret News shanghais with higher paychecks and better benefits. Maybe it will even grow, as the competition with NAC forces the Herald to better serve its hometown subscribers. Maybe there are enough newspaper readers in Utah County to go around for everybody. And who knows, even though the Deseret News already has a third of the Herald’s circulation in Utah County, maybe the Salt Lake daily will have a tough time selling its product, which is seen by many Mormons and non-Mormons to be sanitized party doctrine.

Who knows? All that there’s left to do is unroll the leather maps, deliver the Churchillian speeches to the staff, and get ready to duke it out on the front page for the hearts of the readers and a spot on the Astroturf-covered porches of Orem, American Fork and Provo.