Monday, April 14, 2008

The Gannett Media Conglomerate's Hidden History--Part 2

(The following (slightly updated) article originally appeared in the May 8, 1991 issue of the Lower East Side alternative newsweekly, Downtown).

Much of Gannett’s mass media empire was purchased via $1.5 billion in Wall Street money in the 1970s and 1980s—after many of the antiwar underground newspapers of the late 1960s, like the Lower East Side’s East Village Other (EVO) and RAT, had folded due to a combination of economic and political pressures. In 1967, only 28 U.S. newspapers had been controlled by Gannett. In the 1970s, 46 additional daily newspapers were bought by Gannett. As its former chairman of the board, Al Neuharth, noted in his Confessions Of An S.O.B. book: “In a single decade—1970 to 1980—Gannett went from number seven to number one, the nation’s biggest newspaper company.”

In the 1980s, another 23 more daily newspapers were added to Gannett’s stable. Many of the newspapers Gannett gobbled up in the 1970s and 1980s had previously been family-owned media operations. Between 1970 and 1989, all of Gannett’s radio and television stations were also acquired.

Among the largest mass media purchases made by Gannett during its $1.5 billion buying spree were the following:

1. In 1979, Gannett spent $362 million to acquire the seven television stations, three radio stations and Cincinnati and Oakland newspapers of Combined Communications—as well as Combined Communications’ 38,000 outdoor billboards, and 2. In 1985 and 1986, Gannett spent $1.2 billion to gobble up the Des Moines Register & Tribune, the Louisville Courier-Journal, the Detroit News and the Detroit News’ Washington, D.C. television station.

Gannett’s 1970s and 1980s drive to control more newspapers in single-newspaper U.S. cities and towns proved to be enormously profitable—as did its preference for utilizing non-unionized employees to operate newly-purchased local newspaper monopolies. According to the book The Media Monopoly by Ben Bagdikian, “The profit margin on some Gannett papers was astonishing—70 to 50 percent a year.” And these net earnings, according to former Gannett Chairman Neuharth’s Confessions Of An S.O.B. book, “made Gannett a darling of Wall Street.” According to Neuharth (who despite “retiring” as Gannett’s head in 1989—still received $200,000 a year in 1991 from its USA Today national newspaper for being a “consultant” and a columnist), between 1967 and 1987 Gannett’s annual gross income jumped from $186 million to $3.1 billion and its annual net income jumped from $14 million to $319 million. Yet despite Gannett’s profitability, 80 percent of Gannett’s newspaper employees were still non-unionized in 1991.

(Downtown 5/8/91)

Next: The Gannett Media Conglomerate’s Hidden History—Part 3