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New Economic Realities

Although the nineteenth century saw the rise of the great metropolitan daily newspapers and the first years of the twentieth century saw the model applied successfully too many Michigan cities, forces were already at work that would lead to the decline of many newspapers. As George Booth had seen, consolidation recognized that advertisers seeking a mass audience supported most generously the paper with the largest circulation.  His views were undoubtedly informed by his father-in-law, James Scripps, who in 1879 expressed the rationale for consolidation:

I believe there are too many newspapers, not alone for the good of their publishers, but for that of the community. With two rival grocery stores the public gets its tea and its sugar at cheaper rates. It is not so with its newspapers . . . the expense of printing two newspapers . . . is double what it costs of a single paper would be . . . With the diminished patronage both papers must be smaller, advertisers, of course, must receive correspondingly less benefit . . . the remedy for supernumerary papers is consolidation.[92]

In 1909 the number of daily newspapers printed in the United States peaked at 2,609. By the 1920s the ritual of reading the daily paper was firmly entrenched in American society. Despite the competition of radio that ritual remained largely unchanged into the 1950s. However, the concluding half of the twentieth century saw newspaper circulation experience a steady, long-term downward trend.[93]

The newspapers printed in Detroit exemplify this pattern. In 1899 the last daily newspaper founded in the city, the Detroit Times, began publication. With its appearance, Detroit boasted five dailies. In 1915 the News, which since 18xx had owned and published the Morning Tribune, closed that paper. Four years later the News purchased and closed the Journal. The three remaining papers shouldered on, with the weakest, the Times, receiving a major infusion of cash and talent when it was bought by the Hearst chain in 1922. The 1950s, however, were financially difficult years for all of Detroit’s papers. Competition for advertising revenue from radio and television, coupled with several lengthy and bitter strikes, were taking a toll. In November 1960 the News , which had saw its circulation lead over the Free Press slowly slip away, bought and closed the financially troubled Times. The move came about largely to preserve the News status as the paper with the largest circulation in the city, and the associated advertising revenue that came with that position.[94]

Magazine Rolls at Early Detroit NewsThe consolidation of Detroit’s papers into two dailies led to a period of journalistic excellence  spirited rivalry, and expanding costs.  The war between the News and the Free Press was proving an expensive one that the owners of both papers could neither end nor win. In 1985, after suffering more than $20 million in losses, the independent paper James Scripps had founded more than a century earlier was sold by his heirs to the Gannett Company. At the time of the sale, Gannett’s chairman, Al Neuharth, addressed the employees of his latest acquisition. Neuharth’s acquisition of the News had more than a little irony in that during the 1960s  he had worked “down the street” at the Free Press. Neuharth’s comments that day seemed to say that the long war between the two papers would go on, and he assured his new employees that in the end the News would triumph.

The thing that really pleases us is the way the position of the Detroit News has been solidified as number one in this very, very attractive Michigan market. And you know that the fact is, the News is number one in every respect, no matter how you measure it. You’re number one in news content. You’re number one in public service. You’re number one in circulation. You’re number one in advertising. Now, I can tell you of the importance of that, having worked down the street at number two for several years. So that number one position is something of which you should be extremely proud. And all of us ought to be willing to do whatever’s necessary not only to maintain it, but to see that it is enhanced.

Neuharth then added, noting that Gannett had paid $717 million to acquire the News, “More importantly, I think that also says that we will have some money left over with which to fund the future – fund the future – of this great newspaper.”[95]

As bottles of champagne were opened, the News staff believed they finally would have the resources to vanquish the paper “down the street,” but the moment was an illusion. The papers continue to lose money. The Free Press was in as bad a financial condition as its rival. In 1986 court papers revealed that the Free Press had been losing $10 million a year since 1980. Rumors had been whispered for many years that the News and the Free Press could not continue to lose money at this rate; either one would close or they would merge. Those rumors had long been answered with assurances that the locally owned News would never accede to a merger while the Knight –Ridder chain, which had bought the Free Press in 1940 from a local owner, would be equally stubborn in giving up a paper it had invested in both financially and emotionally to win the great Detroit newspaper war and overcome “the Snooze.”[96]

But in reality the war was coming to a quick end. The national press widely reported that one of the papers would soon close. Time Magazine ran a story about the Detroit newspapers under the headline, “Bitter Show-Down in Motown.” Gannett, with no vested local interest in the News, quickly approached Knight-Ridder chain, which owned the Free Press, with a plan. Knight-Ridder, having failed in two attempts to sell the financially troubled Free Press, was open to any reasonable suggestion.  The two national chains began discussing a joint operating agreement for their Detroit papers. Negotiations were difficult but in April 1986 the chairmen of the two newspaper chains announced a Joint Operating Agreement (JOA) that would merge business, printing, and distribution operations of the two newspapers, and, although neither openly admitted it, bringing the long war between the News and the Free Press to an end. Although legal challenges to the agreement would eventually reach the United States Supreme Court, in the end the JOA was implemented.[97]

Despite the JOA, Detroit’s major dailies continued to suffer significant financial challenges. Symbolic of the continuing problems facing major metropolitan newspapers nationwide an the need to find a successful business model for mass market newspapers, the Detroit dailies announced in December 2008 that the papers planned to curtail home delivery and rely more on the internet. The plan called for home delivery to be curtailed to two days a week for the Detroit News and three days a week for the Detroit Free Press. At the same time the number of stories and features made available on the web were to increase.  Whether this plan would work was not clear, but it clearly indicated the continuing efforts to save Michigan’s most well-known papers.[98]