Bold steps for helping newspapers (seriously)
Another good reason to read lots of newspapers: You end up coming across all sorts of crazy ways to save the newspaper business. One of the most interesting that we’ve found so far comes from The Dallas Morning News, where Lazard executive John Chachas lays out some bold steps that the U.S. government could take to help save the press. (No, we’re not talking about financial support or “bailouts”.)
As he says in his introduction:
By the end of this year, some of America’s biggest dailies may well be run by their lenders. There is little evidence that banks would serve us well as the chroniclers of the nation’s news.
That’s because ad revenue is diving, costs are fixed, debt is threatening to shut down publishers and the papers have not yet found a way to make more money. So what can the government do? Wake up, Chachas suggests:
The Justice Department, the Federal Communications Commission and even the U.S. Senate have all, for decades, held that combining local dailies or owning papers along with other local media is anti-competitive. This is nonsense. Antiquated anti-trust laws have been extended to apply not just to the local concentration of economic power but also to how many “voices” there may be in a defined market. Yet somehow voices refer only to print. Regulators fail to consider the Internet or even cable TV as local competition.
The regulators’ insistence on a narrow product market definition is particularly inconsistent given their recent willingness to define the market more broadly in other contexts, such as in the merger of XM and Sirius. It is as if regulators went to sleep during the Eisenhower administration and woke up staring blankly at an iPhone.
Chachas says newspapers are the most trusted, credible source of local news and that their “imminent demise isn’t just some abstraction of destructive capitalism.” (We’ll drink to that.)
So here are his suggestions:
- Redefine “market” truthfully – all local media. “Combinations of geographically adjacent papers is one logical path to create efficiency,” he says.
- Grant the industry a short-term anti-trust exemption. Newspapers should be granted a finite (36-month) anti-trust law exemption to permit deployment of an industry-wide system to track and charge for re-use of their content.
- Eliminate local media cross-ownership restrictions that prohibit common ownership of newspapers and TV stations in the same market. (Robert Decherd, who runs A.H. Belo Corp, the company that owns the Dallas Morning News, is a big proponent of that, as luck would have it.)
- Allow in-market mergers. “If two papers in a market need a special exemption to set unified pricing, the market probably isn’t big enough for two papers.”
Those are some pretty hefty ideas, not your typical airy thoughts about “rethinking the paradigm.” In fact, maybe it’s time to add Chachas to the big newspaper thinker’s debate over at The New York Times website.