Newspaper “clustering” and structural theory

26Sep11

Upon browsing the theories cited in Mierzejewska’s Managing Media Work chapter, the concept of structure-conduct performance [SCP] brought to mind how Gannett Corp. and other newspaper chains approached acquisitions during much of the ’90s and early “oughts” – before declining readership and revenues put the kibosh on such expansionism.

As described in the text [p. 15], under SCP factors such as the number, size, and location of business units “affects how firms behave” … and, in turn, “the industry’s ‘performance’ is related to the conduct of firms.” This certainly seems to fit the approach employed by Gannett [and other chains such as Cox Newspapers, A.H. Belo, Thomson Newspapers, MediaNews, and many others]. During the early days of newspaper consolidation, chains eagerly snapped up properties put on the market. Many were small-town dailies and weeklies, and the bigger the paper the better – so long as the price was right.

Yet as these chains became more experienced with acquisitions and the financials involved, it became more about location and “clustering” – or having multiple properties in the same region. This allowed duplication of operations such as printing or accounting, while newsrooms could coordinate or share coverage with sister papers. It enabled ad departments to cut more lucrative deals with clients who could choose which publications to place spots in, or blanket a market using all of a chain’s regional papers [as opposed to the increased cost of doing the same in competing papers].

Such approaches proved even more effective when competition in a “clustered area” was minimal either in number or circulation size. Gannett rarely ventured into markets where similar competing papers were located. In one of the few instances it departed from its clustering model, it heated up an ongoing newspaper war in the mid-1980s by purchasing the Arkansas Gazette – the larger crosstown rival of another statewide daily, the Arkansas Democrat. By 1991, the smaller Democrat’s Sunday circulation surpassed that of the Gazette, which was criticized for unpopular content changes and “outsider” journalists who lacked institutional knowledge of state issues. Eventually, Gannett sold the Gazette’s assets to the Democrat and the surviving paper became known as the Arkansas Democrat-Gazette [where I served as a business reporter from mid-2004 to mid-2009].

          While management frameworks such as SCP and structural contingency theory – the argument that “organizations will adopt structures that maximize efficiency and optimize financial performance” based on “contingencies that exist within the organization’s market environment” [p. 15-16] – tend to work well in the short term, they seem to prove more problematic for newspaper chains over the long term.

As cited by Mierzejewska, research suggests that market-based pressures for media chains “to maximize investor returns is reducing the resources [such as personnel, equipment, payroll, travel budgets, news hole] that publicly owned media corporations invest in newsrooms and content production” and, in turn, presumably reduces “the quality of the news and entertainment products those companies produce” [p. 16].

Such complaints have resounded throughout the media industry from journalists and audiences alike throughout the past 10 to 15 years – in some markets even longer. Although “the connection between reduced newsroom resources and reduced content quality has not yet been fully established” [p. 16], there are plenty of anecdotes and examples to warrant future investigation [indeed my largest ongoing research project to date addresses this very question]. Likewise, such dynamics also have implications in other frameworks we’ve read about such as organizational cultural theory [p. 18], new product development theory [p. 20], adoption effects on organizations and employees [p. 21], uses and gratifications [p. 21] and leadership theory [p. 21-22].

The links below offers a glimpse into industry events that – along with the torrent of free news content now available via internet – helped set the stage for the current U.S. newspaper crisis. Upon reflection, one cannot help but wonder whether newspaper chains – had they been more attentive to employees and news quality as opposed to profits – would face a predicament nearly as severe as they are these days:

The dynamics of “clustering” [lengthy and in two parts – recommend skimming].

http://www.ajr.org/article.asp?id=3210

History of the Arkansas Gazette and Arkansas Democrat [see bottom of articles on newspaper war]

http://www.encyclopediaofarkansas.net/encyclopedia/entry-detail.aspx?entryID=2344

http://www.encyclopediaofarkansas.net/encyclopedia/entry-detail.aspx?entryID=2343

My personal experience at The Indianapolis Star with chain-paper chaos and resource deprivation. The Star is a “clustered” property [along with other Gannett holdings in Indiana]. Note the article’s emphasis on role of management/leadership theory — or lack thereof – and it touches a bit on cultural theory as well [also lengthy and two parts – also skimmable].

http://www.ajr.org/article_printable.asp?id=3541

— Bill W. Hornaday

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