The Gannett Media Conglomerate's Hidden History--Part 4

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

The Gannett Company has long been interested in the promotion of conservative politics around the United States. It was started in 1906 by a politically conservative, anti-liquor prohibitionist named Frank Gannett after Gannett purchased a daily newspaper in Elmira, New York for $3,000 in cash and $17,000 in borrowed money. Secretly financed by the International Paper and Power Company, a private power utility company in the first third of the 20th Century, Frank Gannett then purchased additional U.S. newspapers until he controlled a chain of newspapers that “were inflexibly conservative,” according to The Media Monopoly by Ben Bagdikian. Given the special influence that the International Paper & Power Company obtained by financing the growth of Frank Gannett’s media operation, it is not difficult to understand why “the Gannett papers were enthusiastic supporters of the power trust and scathing attackers of public ownership of generating plants,” according to The Media Monopoly book.

In the 1930s, the Gannett Company founder decided to form the anti-New Deal “Committee To Uphold Constitutional Government,” which successfully lobbied for the defeat of several proposed New Deal liberal reforms and attacked such New Deal liberal reforms as social security and increased taxation of the Ultra-Rich. According to the 1945 edition of Current Biography, Frank Gannett’s anti-New Deal lobbying in the 1930s “earned for him from New Deal Supporters the label of economic royalist.” Prior to his death in 1957, Frank Gannett was also a Cornell University trustee, as well as a lord of the press. Frank Gannett also used much of his Gannett newspaper chain wealth to finance an unsuccessful 1940 campaign for the U.S. presidency on an anti-liquor, Prohibitionist platform.

Consistent with the Gannett Company’s history of promoting political conservatism, it chose to feature then-U.S. President Ronald Reagan at the Sept. 15, 1982 Washington, D.C. launching of its USA Today national newspaper. And in 1985, Gannett chose to let USA Today be an official sponsor of President Reagan’s second-term inauguration festivities. According to The Making of McPaper, Reagan’s “inaugural planners were given $336,000 worth” of free advertising space in USA Today by the Gannett Company. The Jan. 22, 1985 issue of the Wall Street Journal also noted that one of the free USA Today ads printed to celebrate Reagan’s second term inauguration was a testimonial to Reagan from the former U.S. Senator and Republican Party Majority Leader Howard Baker—who had become a Gannett Company director in October, 1984.

In 1986, the Reagan Administration was able to grant a special favor to Gannett for Gannett Director Baker’s testimonial and for the media conglomerate’s providing of free ad space to inauguration planners. After Gannett purchased the Detroit News, Fortune magazine noted in its September 11, 1986 issue that:

“In Detroit a lot hinges on whether the News gets approval from Attorney General Edwin Meese III to enter a joint-operating agreement with its competitor and fellow money loser, the Free Press owned by Knight-Ridder. If it does, Detroit should turn out to be a big winner for Gannett.”

Needless to say, the Reagan Administration approved the joint-operating agreement between Gannett’s Detroit News and Knight-Ridder’s Detroit Free Press, despite local community opposition in Detroit to the joint-operating agreement.

(Downtown 5/8/91)

Next: Gannett’s UK Subsidiary & Post-1999 Media Monopolization Activity

The Gannett Media Conglomerate's Hidden History--Part 3

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

Around the same time Gannett decided to go into the television production business with PBS’ MacNeil and Lehrer, it also decided to use its windfall newspaper chain profits and Wall Street money to launch a national newspaper, USA Today, in the early 1980s.

Gannett began publishing USA Today in September 1982. The newspaper was primarily sold in 135,000 USA Today vending machines around the United States. Despite the opposition of some urban environmentalists, Gannett “stormed the city and bolted three thousand vending machines to the sidewalks of New York,” according to Neuharth’s Confessions Of An S.O.B. book.

Since the journalistic quality of its new national newspaper was not considered too great by most literate news junkies, Gannett was forced to spend huge sums of money promoting USA Today before it could be converted from an annual money-loser into a profitable media operation. It was also necessary to offer potential advertisers six-and-a-half months of free advertising in USA Today to induce them to advertise in the new national newspaper. And wherever it could, the multi-billion dollar conglomerate always sought to hire cheaper non-unionized workers to distribute USA Today to its vending machines and to newsstands.

According to The Making of McPaper: The Inside Story of `USA Today’ by Peter Prichard, USA Today’s managing editor in the 1980s, when Gannett started to distribute the newspaper in New York City in April 1983, USA Today spent $100,000 on its launch party—including $70,000 for food and liquor—and “saturated local television, radio, billboards and newspapers” with a USA Today ad campaign. Gannett also worked out a deal in 1985 with General Mills in which consumers who sent in proof-of-purchase seals for eight of 12 General Mills products could receive USA Today free for six months—at a cost of $12 million to Gannett. Only 93,000 of the 512,000 people who chose to sample USA Today for free, however, chose to take out paid subscriptions after six months of evaluating the Gannett national newspaper.

Despite the huge sums of excess profits that Gannett spent to push USA Today on people in the United States, as late as 1986 it was still a big money-loser for Gannett. Between 1980 and 1986 (including pre-publishing years), Gannett’s total pretax operating losses from its USA Today national newspaper operation exceeded $458 million, which was “by far the greatest deficit any newspaper had ever run up,” according to The Making of McPaper book.

Yet despite the initial unprofitability of its new national newspaper, Gannett found it politically useful to continue to circulate millions of copies of USA Today during the politically conservative Reagan Era of the 1980s. And by 2008, USA Today’s current daily circulation was around 2.3 million, making it the largest-selling daily newspaper in the United States.

(Downtown 5/8/91)

Next: The Gannett Media Conglomerate’s Hidden History—Part 4

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

The Gannett Media Conglomerate's Hidden History--Part 1

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

The Gannett Company mass media conglomerate was the world’s largest newspaper publishing chain in the early 1990s. At that time, Gannett controlled the USA Today national newspaper, 81 other daily newspapers in the United States and U.S. territories, and 35 other non-daily newspapers. The daily circulation of Gannett-owned newspapers around the United States exceeded 6,000,000 in the early 1990s. Gannett also operated 16 commercial radio stations and 10 commercial television broadcasting stations at that time. Currently, Gannett operates 85 daily newspapers with a circulation of over 7.2 million and 23 commercial television broadcasting stations.

Among the mass media properties controlled by the Gannett Company in suburban New York, New Jersey, Connecticut and elsewhere, in addition to its USA Today national newspaper, in 1991 were:

New York: Yonkers Herald Statesman; White Plain Reporter; New Rochelle Standard-Star; Port Chester Daily Item; Mount Vernon Daily Argus; Mamaroneck Daily-Times; Peekskill Star; Ossining Citizen-Register; Tarrytown Daily News; West Nyack Rockland Journal News; Poughkeepsie Journal; Binghamton Press & Sun-Bulletin; Elmira Star Gazette; Ithaca Journal; Niagara Falls Niagara Gazette; Saratoga Springs Saratogian; Rochester Democrat and Chronicle Times-Union; and Utica Observer-Dispatch.

New Jersey: Camden Courier-Post; Bridgewater Courier –News; Mullville Daily; and Vineland Times-Journal.

Connecticut: Norwich Bulletin.

Washington, D.C.: WUSA-TV.

Arizona: Phoenix’s KPNX-TV; Tucson Citizen.

Arkansas: Little Rock Arkansas-Gazette.

California: Los Angeles’ KHS-Radio; San Diego’s KSDO-Radio; Marin County Marin Independent Journal; Palm Springs Desert Sun.

Colorado: Denver’s KUSA-TV.

Florida: Jacksonville’s WTLV-TV; Tampa’s WDAE and WUSA-Radio; Pensacola News-Journal; Fort Myers News-Press.

Georgia: Atlanta’s WXIA-TV.

Hawaii: Honolulu Star-Bulletin.

Idaho: Boise Idaho Statesman.

Illinois: Chicago’s WGCI-Radio; Rockford Register-Star; Danville Commercial News.

Iowa: Des Moines Register; Iowa City Press-Citizen.

Kentucky: Louisville Courier-Journal.

Massachusetts: Boston’s WLVI-TV.

Michigan: Detroit News; Lansing State-Journal; Battle Creek Enquirer; Port Huron Times-Herald.

Minnesota: Minneapolis-St. Paul’s KARE-TV.

Mississippi: Jackson Clarion-Ledger and Daily News.

Missouri: St. Louis’s KUSA and KSD-Radio; Kansas City’s KCMO-Radio; and Springfield News-Leader.

Nevada: Reno Gazette-Journal.

New Mexico: Santa Fe New Mexican.

Ohio: Cincinnati Enquirer.

Oklahoma: Oklahoma City’s KOCO-TV.

South Dakota: Sioux Falls Argus-Leader.

Tennessee: Nashville Tennessean.

Texas: Austin’s KVUE-TV; Houston’s KKBQ Radio; and El Paso Times.

Vermont: Burlington Free Press.

Wisconsin: Green Bay Press-Gazette.

Virgin Islands: Virgin Island Daily News. and

Guam: Pacific Daily News.

Then in 1995, Gannett purchased the Multimedia, Inc. media corporation and temporarily added 10 additional daily newspapers to its chain of newspapers, 5 additional television stations, and two additional radio stations. But by 1998, the Gannett media conglomerate had decided to reduce its involvement in radio broadcasting and had sold off the 16 radio stations it had owned in 1991 and the two additional radio stations it had acquired from Multimedia, Inc. in 1995.

(Downtown 5/8/91)

Next: The Gannett Media Conglomerate’s Hidden History—Part 2

PBS's Historic Gannett Connection--Part 2

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

In addition to receiving funds from the Gannett Company media conglomerate in the 1980s to establish the private, commercial MacNeil-Lehrer Productions joint-venture, MacNeil and Lehrer’s commercial venture also received public funds from PBS as payment for producing and hosting programs like the 1986 My Heart, Your Heart one-hour special on heart disease and a 12-part series on life in China, The Heart of the Dragon, as well as for the MacNeil/Lehrer NewsHour show. And in its Oct. 6, 1989 issue, the New York Times reported that the Entertainment Division of the commercial NBC network had “commissioned five hour-long health specials from MacNeil/Lehrer Productions which” were “to feature Dr. C. Everett Koop, former Surgeon General of the United States.”

According to the 1990-1991 NYNEX Business to Business Yellow Pages, the commercial offices of “MacNeil Lehrer Gannett Productions” were located at 1775 Broadway, on the corner of 57th St. in Suite 612—just around the corner from the publicly-funded, “nonprofit” Channel 13 studio offices of PBS’s MacNeil/Lehrer NewsHour show. The 1990-1991 Business to Business Yellow Pages also then listed 560-3169 as the MacNeil-Lehrer-Gannett Productions telephone number.

In the spring of 1991, Downtown telephoned this phone number, which was listed in the 1990-1991 directory under a bold-faced “MacNeil-Lehrer-Gannett Productions” listing, and was greeted by an answering machine. Downtown then telephoned the MacNeil/Lehrer NewsHour office at WNET-Channel 13 and asked what was then the nature of the Gannett Company’s relationship to MacNeil-Lehrer-Gannett Productions and/or the MacNeil/Lehrer NewsHour.

According to the MacNeil/Lehrer NewsHour and MacNeil-Lehrer Productions’ then-spokesperson, Christoopher Ramsey, MacNeil-Lehrer’s partnership with the Gannett Company had been terminated in 1987. Downtown then asked Ramsey why MacNeil-Lehrer-Gannett Productions was still listed in the 1990-1991 telephone Business-to-Business Yellow Pages if MacNeil-Lehrer Productions’ relationship to Gannett had ended in 1987?

“That’s a mistake made by the phone company. I’ll have to notify them,” Ramsey then answered.

But a customer service representative at Donnelly Directory, which published the 1990-1991 Business-to-Business Yellow Pages told Downtown that “within a year” after a business notifies the phone company that its phone number listing is to be changed, the listing is changed in the Business-to-Business Yellow Pages; and, if the listing is in bold face in the Business-to-Business directory, this fact is noted on the current monthly billing statement that the business customer receives each month.

By the mid-1990s, however, the NewsHour’s historic partnership with the Gannett Company media conglomerate had finally ended, after a controlling interest in MacNeil-Lehrer Productions was sold to AT & T, one of the NewsHour’s then-major donors. A 67 percent controlling-interest of MacNeil-Lehrer Productions was, subsequently, purchased by Liberty Media, another media conglomerate. Until 2006, the Liberty Media conglomerate that owns MacNeil-Lehrer Productions, was also the owner of a large chunk of stock of Rupert Murdoch’s News Corporation/Fox News global media conglomerate.

Today, the Liberty Media conglomerate (which also now owns the Atlanta Braves baseball team and television stations in Wisconsin) still controls 67 percent of the production company that produces PBS’s evening television news show. But one of the NewsHour’s correspondents (who was the wife of Wall Street Journal Washington Bureau Chief Albert Hunt in the early 1990s), Judy Woodruff, sits on the Freedom Forum foundation that used to operate under the name of the Gannett Foundation. (During the 1990s, Woodruff apparently also sat next to Bush Administration Secretary of State Condi Rice on the board of the Carnegie Corporation of New York foundation).

(Downtown 5/8/91)

And the current president of the PBS evening news show’s New York City outlet, WNET/Educational Broadcasting Corporation/Channel 13 President & CEO Neal Shapiro, also sits on the Gannett Company board of directors as a member of the Gannett media conglomerate board’s “Nominating” and “Public Responsibility” committees.

Next: The Gannett Media Conglomerate’s Hidden History--Part 1

PBS's Historic Gannett Connection--Part 1

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

“Public television’s programming has become subject to external interests, especially the interests of the corporations, foundations and government agencies that fund much of the national schedule…”

The Report of the Carnegie Commission on the Future of Public Broadcasting in 1979

“…On public television, Jim Lehrer and I have been trying an innovative approach to televised news. The partnership with Gannett will let us build on that experience.”

Former PBS NewsHour Anchor Robert MacNeil in September 1981

In September 1981, the Public Broadcasting Service’s evening news anchormen, Robert MacNeil and Jim Lehrer, formed a partnership with the Gannett Company to produce television news, specials, documentaries and cable programs.

Fifty percent of the partnership, MacNeil-Lehrer Productions, was to be owned by the Gannett Company, 25 percent by MacNeil and 25 percent by Lehrer. According to MacNeil, under his and Lehrer’s agreement with the Gannett Company, Gannett would “fund program ideas we three collectively agree should be produced.”

The Gannett Company’s chairman of the board and president in 1981, Al Neuharth, characterized Gannett’s decision to form a commercial partnership with the publicly-funded PBS news anchormen as “a marvelous opportunity to add a significant dimension to our development of electronic news and information capability,” according to the Sept. 12, 1981 issue of the New York Times. At the same time, MacNeil explained one of his reasons for then becoming a partner with one of the biggest commercial mass media conglomerates in the world: “Since we didn’t take a vow of poverty and chastity when we joined public television, it would be nice if we could also make some money.”

Yet in 1969, former PBS evening news anchor MacNeil had complained in a WRVR-FM radio discussion that “Television is in the hands of people who want to use it to sell things. It’s a market place.” And in his 1982 memoir, The Right Place At The Right Time, the Canadian-born and bred MacNeil would later claim that he and Lehrer “have turned down a number of attractive job offers in commercial television,” “the pleasure of working together on what we want to do outweighs the higher salaries we have been offered outside” and “freedom from frustration and tension is worth a lot of money.”

Although PBS’ Channel 13 often pleaded poverty in the early 1990s during its annual WBAI-imitation television marathons to help finance the MacNeil/Lehrer NewsHour, neither Gannett nor the MacNeil/Lehrer Newshour was then in special need of money. The Gannett Company’s gross annual income exceeded $3 billion and its net income per year approached $400 million in the early 1990s. And in its Aug. 4, 1988 issue, the New York Times noted that the MacNeil/Lehrer NewsHour also received a “financial commitment of $57 million through corporate support of AT&T, Pepsico and John D. and Catherine T. MacArthur Foundation” in the late 1980s.

(Downtown 5/8/91)

Next: PBS’s Historic Gannett Connection—Part 2

Shareholders Sue Columbia Trustee-Linked PMI For Securities Exchange Act Violations

Columbia University Trustee Ann Kaplan is also a Professor of Finance at Columbia’s School of Business and both a member of Smith College’s board of trustees and the chair of the Smith College board’s investment committee in Massachusetts. In addition, Columbia University Trustee Kaplan sits on the board of directors of the Financial Guaranty Insurance Company [FGIC] next to certain officers and directors of the PMI Group Inc. (PMI), which has owned 42 percent of the stock of FGIC in recent years.

After PMI announced on March 3, 2008 that its U.S. Mortgage Insurance Operations had reported a net loss of $236 million in the fourth quarter, the value of a share of PMI stock dropped to $6.43, although its value during the Nov. 2, 2006 and March 3, 2008 period had once been as high as $50.07. So on April 3, 2008, the law firm of Schriffin Barroway Topaz & Kessler, LLP announced that a class action lawsuit against PMI on behalf of its shareholders was filed in the U.S. District Court for the Northern District of California.

According to the April 3, 2008 statement of Schriffin, Barroway, Topaz & Kessler, the Complaint “charges PMI and certain of its officers and directors with violations of the Securities Exchange Act of 1934” and alleges that the defendants “failed to disclose material adverse facts about” PMI’s “financial well-being, business relationships and prospects.” The lawsuit’s complaint also accuses PMI CEO and Chairman L. Stephen Smith, PMI Executive Vice-President David Katkov and PMI Chief Financial Officer Executive Officer and Executive Vice-President Donald Lofe Jr. of engaging in profitable insider trading in which they made millions by selling their own PMI stock at the same time they “materially misled the investing public, thereby inflating the price of PMI securities, by publicly issued false and misleading statements” about PMI’s actual financial condition.

Coincidentally, sitting next to Columbia University Trustee Kaplan on the FGIC board of directors are the defendants in this civil lawsuit: PMI CEO and Chairman L. Stephen Smith and PMI Chief Executive Officer and Executive Vice-President Donald Lofe Jr.. In addition, PMI Senior Vice President Patrick Mathis, PMI Group President Bradley Shuster and PMI Executive Vice President Arthur Slepian also sit on the FGIC board next to Columbia University Trustee Kaplan.

Next: PBS’s Historic Gannett Connection—Part 1