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Cover Story: The Deal That Changed Everything

JOA either preserved -- or doomed -- competition

By Bob Driehaus · February 21st, 2007 · Cover Story
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Click here for The Post's full operations timeline. The Cincinnati Post had more weekday circulation in the mid-1970s than today's Cincinnati Enquirer, when it convinced the Justice Department it was a failing newspaper that needed to form a cartel with The Enquirer to survive.

That's what it got when The Post and Enquirer entered a joint operating agreement (JOA) in 1979 after several years of negotiations and legal battles with the papers' unions. Since then, The Enquirer has printed, circulated and drawn advertising for The Post under an agreement that will expire on New Year's Eve.

In the beginning, according to some who were there, the JOA was a gentlemen's agreement with vague language that required gentlemanly cooperation to work and a dedication to the Tri-state that went beyond making windfall profits. But since the agreement was signed and mega-chain Gannett bought The Enquirer, The Post's circulation and staffing levels have been in a 30-year nosedive, going from 195,000 subscribers in 1977 to less than 35,000 today.

Bitter recriminations have abounded among Post employees and union officials, who have complained that it was poor execution of the JOA more than business trends that was destroying a newspaper almost 130 years old.

"At the time the JOA was signed, it probably was the best decision to keep The Post in business. But toward the end, the spirit of the JOA wasn't upheld, which was to make sure both newspapers could continue to thrive," says Luke Saladin, president of TNG-CWA Local 34009, the union that represents The Post's reporters, photographers and copy editors.

'Tired of bleeding'

The newsbox in front of The Post at 125 E. Court Street regularly sits empty or with days-old newspapers, which is just the tip of the iceberg of neglect, Saladin says.

"You walk into a CVS downtown, you see The Louisville Courier-Journal, The Enquirer, and national newspapers, but no Posts. Turn on the television and you see them running commercials for The Enquirer but not for The Post. Our future was predetermined no matter what we did in terms of content."

E.W. Scripps, the Cincinnati-based media company that owns The Post, argues that it has lived a longer and more productive life within the confines of the JOA than it would have competing with The Enquirer, with separate printing presses, advertising sales staff and circulation departments.

"A primary purpose of the JOA was to maintain an additional voice in the community, and so from that perspective, I would say that the Cincinnati JOA was a big success," says Tim Stautberg, a Scripps spokesman. "The Cincinnati Post and Kentucky Post were able to provide this community with award-wining journalism for the past 30 years."

The Post was doomed by larger business trends, according to John Morton, a veteran newspaper analyst in Silver Spring, Md.

"I think it was inevitable," he says. "We've seen this happen in many other JOA markets where the second newspaper keeps losing circulation and eventually shuts down, particularly afternoon newspapers consigned to a declining future."

But Mark Fitzgerald, editor at large at Editor & Publisher, has a different take.

"JOAs are usually applied in very cynical situations where a paper is tired of bleeding itself trying to compete," he says. "Seattle and Denver are perfect examples of that. And Cincinnati was a perfect example, because when the JOA started the afternoon paper was still strong enough to compete. So if this JOA were truly about preserving an editorial voice someone would try to keep The Post alive."

The JOA was born at a time when rumors were rampant that The Post was in danger of closing. Hurt by the departure of key advertisers, it had begun losing money. The paper lost more than $13 million from 1969 to 1979, when the JOA was approved and about 500 Post employees lost jobs. Its printing plant was closed and circulation and advertising departments dismantled.

Whatever the reasons, The Post's circulation has dropped steadily since the JOA's inception. The agreement merged the business operations of the two newspapers but preserved their independent newsrooms to compete for the day's scoops, the most colorful sports columns and just the right side dish to serve on Thanksgiving.

Because The Enquirer was deemed the more viable newspaper, it was given approximately an 80 percent stake in the business side and, effectively, the final word on where to circulate both papers, how much to market them and how much to charge customers and advertisers.

"Negotiations were long, and they were very good," says William J. Keating, publisher of The Enquirer from the JOA's inception through 1984 and from 1992 to 1994. "The E.W. Scripps people were really good to deal with, not only in the negotiating stage but also in the operational stage. Everybody worked to try to make it a success."

When negotiations began, Carl H. Lindner had controlling interest in The Enquirer but soon sold it to Combined Communications of Phoenix. Before the agreement was enacted, Combined Communications was bought by Gannett, which still owns The Enquirer.

Keating says he and others at The Enquirer made a good-faith effort to fight the tide of lower circulation at The Post.

"The circulation dropped off for The Post, but I think that was true generally for afternoon papers around the country," he says. "The whole idea of the (JOA) was to preserve two editorial voices in the community, and I think it was done. And the financial arrangement has worked out quite well for both parties."

From the day the JOA was signed, the rumor mill began weaving tales of The Post's doom well before the JOA expired. A 1990 story in The Post explored whether circulation dropping below 100,000 meant that the paper would make too little money to stay open. In fact, the JOA specifies that three consecutive years of losses would be grounds for the agreement to be nullified.

But The Post took care of falling revenue by slashing costs and jobs. Three buyouts since 1995 cut the staff to a fraction of its former size. The Kentucky Post newsroom in Covington was sold to a law firm, and its staff was shipped to the Cincinnati headquarters on East Court Street. It all added up to huge profits. In 2006, Scripps recorded a $20.7 million profit off The Post. In 2005, it made $23.5 million.

Still trying elsewhere

The JOA was among many formed after the nation's newspaper giants lobbied Congress to pass the Newspaper Preservation Act, legalizing collusion between a city's daily papers with the intention of preserving independent editorial voices for the good of the community. The alternative, publishers argued, would be the death of competing papers, leaving cities with just one newspaper and one set of editors holding forth on the issues of the day.

Scripps entered a JOA in Denver in 2001, merging the business operations of its Rocky Mountain News with The Denver Post. Scripps reported at the time that it had lost $123 million competing before entering the new agreement.

Stautberg says the JOA has worked well for Denver and that Scripps learned from past JOAs. The JOA gives the two newspapers equal say in making business decisions, with the tie-breaker going to the head of the JOA's administration, currently Harry Whipple, president and CEO of the Denver Newspaper Agency. Whipple, who did not return phone calls, was previously editor of The Cincinnati Enquirer.

"One of the lessons that we've learned is, to the extent that you're able to negotiate a 50-50 arrangement with an equal say in decision-making, we would hope to do that," Stautberg says.

Changing tastes, the emergence of cable network news and the Internet all play a part in declines in newspaper readership. Just 11 JOAs remain, and many have expired or ended early, including ones in Pittsburgh, Evanston, Ind., Birmingham, Ala. and Memphis.

Post newsroom employees are part of The Newspaper Guild, the nation's largest newspaper union. Linda Foley, the U.S. president of the Guild, says we'll never know whether The Post would have been better off eschewing a JOA.

"Had those papers vigorously competed, what kind of journalism would have survived?" she says. "I don't think we know that, and I think it's probably wrong to assume that it led to a better outcome."



Bob Driehaus worked at The Post from 1996 to 2006.
 
 
 
 

 

 
 
 
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