The other day, driving through North End Commons (a neighborhood a bit north of the Chronicles offices and to the west of our house), I noticed a florist, a friend of mine, out in front of another flower shop, chatting with the owner. The two businesses have coexisted now for over a year, though they stand barely a block apart. I suspect that, like me, most of their customers patronize one or the other exclusively, though I doubt that there are many people who would refuse to go to the other shop if their preferred one did not have what they wanted. Each store has its own look and feel, and, outside of the standard carnations and roses, each carries a distinctive stock. Their healthy competition has helped revive commerce in a neighborhood that, for many years, has been struggling.
This is the free market at its best: Two shopkeepers, each making a living doing something he enjoys, reinvesting much of his profit in a neighborhood that he cares about, and each able to chat amiably with his competitor—who, because of his shared love for the neighborhood, is also his collaborator. Granted, there are certain conditions that make this scene between two florists more likely than a similar one between, say, two discount computer resellers or even two grocers—higher margins, stock that has to be turned over very quickly, a distribution area that is limited by the nature of the product, etc. Still, the scene shows that markets do not always have to tend toward the monopoly model—maximizing profits and minimizing costs by eliminating competition—so beloved of the libertarians.
Rockford, however, does have its share of monopolies, and none is more obvious and more potentially damaging than the monopoly in the newspaper business. We are a Gannett town, and the local Gannett paper, the Rockford Register Star, is our only daily. There are weeklies—most notably Frank Schier’s Rock River Times and Rock Valley Publishing’s Rockford Journal—but for day to day news, the Register Star is it.
Most cities of Rockford’s size are one-newspaper towns, and that paper is usually owned by one of the major chains—Gannett, Knight-Ridder, Hearst, Tribune News-papers, Newhouse. While consolidation has always been a fact of life in the newspaper business, throughout most of Rockford’s history, the city usually had two, often three, and occasionally four papers vying for the public’s attention. That competition was healthy, and, more importantly, it was local. Each newspaper represented the viewpoint of a segment of the community. Whose voice, however, is represented by a $6.7-billion “international company with headquarters in McLean, Va., and operations in 43 states, the District of Columbia, Guam, the United Kingdom, Belgium, Germany, Italy and Hong Kong”?
The largest newspaper company (by circulation) in the United States, with 101 daily newspapers, Gannett has come under fire in the past for predatory advertising practices and disregard for antitrust laws. (The U.S. Justice Department began to investigate Gannett in early 1981, but the Reagan administration had little interest in pursuing antitrust actions against media giants, and the case was quickly shelved.) In The Chain Gang: One Newspaper Versus the Gannett Empire, journalist Richard McCord documents many of the battles that Gannett has waged against locally owned newspapers (including here in Rockford). McCord’s book, however, also makes it obvious that the problem is not Gannett per se but the evolution—or devolution—of newspaper publishing from a local concern to a centralized industry. Massive national (and, increasingly, multinational—Gannett, according to the company’s website, is “the second largest regional newspaper publisher in the United Kingdom”) corporations are almost structurally bound to view their “local” papers the way that Wal-Mart regards its “local” stores. “Success” and “failure” are measured in terms of monetary profit—advertising revenue even more than readers, who often are offered cut-rate subscriptions in order to boost the going rate of ads. In a limited market, advertising comes close to being a zero-sum game, which is why competition cannot be tolerated. Even if he has the best of intentions, the local publisher of a chain newspaper—who almost always was not born in the town he’s stationed in and, please God and Gannett, will not die there—has little choice but to consider the impact on advertising revenue when deciding the long-term direction the paper will take.
What happens, however, when one newspaper already has a near-monopoly on advertising in its market? Part of Gannett’s solution has been to lobby the Federal Communications Commission to relax restrictions on owning both a newspaper and a television station in the same market (since many businesses will advertise with both), and, under the Bush administration, they would likely have succeeded if Congress had not reined in the FCC. Another approach is to expand the newspaper’s coverage into neighboring markets, increasing the pool of potential advertisers.
Under its most recent publisher, Fritz Jacobi, that seems to be the route that the Register Star is taking. On both its editorial and news pages, the paper constantly beats the drum of “regionalism” in the “Rock River Valley.” It has consistently supported the expansive efforts of the newly renamed Rockford Regional Chamber of Commerce and the Rockford Area Council of 100, a business group of which Jacobi is also chairman of the board. To be fair, the Register Star’s local coverage has taken a decided turn for the better under Jacobi, and the local commitment of some reporters, such as political editor Chuck Sweeny, is unquestionable. There is only so much room for news in each issue, however, and local manufacturers have privately expressed concern that coverage of issues that affect them is poor to nonexistent. But then, manufacturers tend not to need to advertise in their hometowns. That may not be the reason for the lack of coverage, but who could blame them for thinking that it is?