by David Asher
The author is NAA manager of business analysis.

Crunching through statistics about U.S. newspaper ownership in 2000, one singular factoid most effectively demonstrates the consolidation that has taken place: Ten companies own newspapers that distribute more than 51 percent of the nation’s weekday circulation. Quite a leap from 1999, when the top 10 held just under 46 percent (Presstime, December 1999, p. 29).

Yet the year-to-year data contrast sharply throughout. As of Nov. 22, the top 25 newspaper companies, ranked by circulation, distributed 40.2 million copies. More than three-quarters of the 4.6 million rise in the circulation of their newspapers came from properties acquired in 2000 by Chicago’s Tribune Co. and Gannett Co. of Arlington, Va.

Study the property count. It rose by 54 to 662, with 47 newspapers acquired in 2000 by Gannett or Community Newspaper Holdings Co. of Birmingham.

Bucking an industrywide malaise, many of the newspapers owned by these 25 companies grew circulation. Among five groups reporting no acquisition or sale of properties, four showed circulation gains: Dow Jones & Co. of New York City, Knight Ridder of San Jose, The McClatchy Co. of Sacramento, and The Washington Post Co. And two companies that sold properties during the year—The New York Times Co. and Media-News Group Inc. of Denver—still showed year-to-year circulation gains.

Four companies on last year’s list dropped out this time around, each for different reasons:

• No. 4, The Times Mirror Co., Los Angeles

• No. 13, Thomson Newspapers Inc. of Stamford, Conn.

• No. 17, Central Newspapers Inc. of Indianapolis and Phoenix

• No. 24, The Chronicle Publishing Co. of San Francisco.

High market value prompted the sales of Times Mirror and Central to Tribune Co. and Gannett, respectively. Likewise, favorable market conditions spurred the sale of the Chronicle Publishing Co., highlighted by the sale of the San Francisco Chronicle to The Hearst Corp. of New York City. Thomson sold all newspapers, save the flagship Globe and Mail in Toronto, to concentrate on information services.

Gannett still firmly holds its position as the country’s largest-circulation daily newspaper company. It acquired 26 dailies in 2000, bringing its count to 99. It purchased Central early in the year, gaining presences in Phoenix and Indianapolis.

Tribune’s shift from 11th to third came as a result of the Times Mirror purchase in March. Tribune now enjoys a premier position with major metros—the Chicago Tribune, the Los Angeles Times and Newsday in suburban Melville, N.Y. —in the three largest U.S. markets.

OPERATING EFFICIENCIES

Structural change throughout the industry reflects corporate executives’ drive for efficiency and competitive advantage through:

• Ownership of metro dailies and suburban weeklies in the same markets

• Geographic clusters of newspapers that share resources such as presses

• A California partnership including 20 dailies owned by three companies.

Hollinger International numbers among those forging metro-suburban liaisons. Hollinger appeared to be cutting its U.S. newspaper force when it sold the last 11 dailies in its Community Newspapers division during August. This followed the sale in early 1999 of 28 dailies to CNHI, leaving Hollinger with three Chicago-area properties in its U.S. portfolio. Hollinger then turned around and purchased four dailies and 14 suburban weeklies from The Copley Press of La Jolla, Calif., giving Hollinger more than 100 properties in and around Chicago.

Although not in the top 25, The Boston Herald raised its visibility with its purchase of four dailies, 88 weeklies and assorted shoppers in its market from the Fidelity subsidiary Community Newspaper Co. Industry analyst John Morton of Bethesda, Md., notes that these acquisitions “provide deep community coverage that the metro paper can’t provide. The suburban strategy has become increasingly important. It’s where the retail spending takes place and where readers are.”

Pulitzer Inc., listed as the 26th largest company in 1999, moved to 21st place in 2000, picking up The Pantagraph in Bloomington, Ill., from Chronicle Publishing. Of greater significance, Pulitzer acquired 38 suburban weeklies from Journal Register Co. of Trenton, N.J. The newspapers competed against Pulitzer’s flagship, The St. Louis Post-Dispatch, and will complement the metro with neighborhood coverage and advertising.

MediaNews Group Inc. did not go on an acquisition tear. Instead, it bought and sold to refine geographic clusters. It shed properties in Iowa, Pennsylvania and New Jersey as it boosted its New Mexico cluster by one daily and its Massachusetts cluster by six paid weeklies.

MediaNews added the Marin Independent Journal in Novato, Calif., to the consortium it operates and owns in partnership with Gannett and Donrey Media Group of Las Vegas. The California consortium now operates eight dailies in the Bay Area, six in the Los Angeles market and five elsewhere. In addition, MediaNews wholly owns two other newspapers in the Los Angeles market.

Large corporate mergers have allowed three relatively smaller organizations to enter the list in 2000. Ogden Newspapers, a privately held and family owned Wheeling, W.Va., company, joins the list for the first time with a portfolio of 36 medium-size newspapers across the country. While most reside in the Northeast and Midwest, Ogden has dailies in Florida and Hawaii, where it recently purchased the Maui News.

Howard Publications of Longview, Wash., made the list for the first time despite little activity in 2000: It sold only a 15,000-circulation daily. A privately held and family-owned company, its portfolio features 17 dailies from California to New York, with the largest in Escondido, Calif., and Munster, Ind.

Landmark Communications Inc.’s holdings include seven dailies with the flagship, The Virginian-Pilot, in Norfolk Va. It operates across media including broadcast, cable television, new media and outdoor advertising. It also owns Trader Publishing’s 175 classified publications in partnership with Cox Enterprises Inc. of Atlanta. Landmark’s seven newspapers include two other metros—The Roanoke (Va.) Times, and the News & Record in Greensboro, N.C.

Nationwide, consolidation continues apace, partially encouraged by the absence of two outside forces. In the past, the U.S. Justice Department stepped in to prevent sales of suburban newspapers to major metros, yet recent purchases have gone unhindered. Second, the Federal Communications Commission is expected to rule sometime in the near future on Tribune Co.’s ownership of newspapers and television stations in Chicago, Los Angeles, and New York. Any relaxation in cross-ownership rules could bring a spate of broadcast acquisitions.

A more important factor in consolidation trends: family ownership. Depending on your definitions, 18 of the top 25 companies are either held outright or controlled by families, and Morton sees several evaluating sales this year or making decisions on whether to sell in the future. Morton notes, “A lot of the families are seeing that they can get maximum value for their properties, and who knows what that value will be 10 years from now?”

Copyright 2000, Newspaper Association of America. All rights reserved.

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