Gannett and Corporate Plunder
The Indianapolis Star laid off 62 employees yesterday. Some of them are my personal friends. There is no joy among those who still have jobs at the Star. Readers who don't follow the business of journalism really should. Without having a functioning press, we cannot begin to attempt to have an informed electorate. Corruption would become the standard method of doing business. The established business model of journalism has failed. It relied too heavily on revenue from print advertising.
The business model of journalism has taken debilitating hits over the past few years. Advertisers have pulled out of print for other forms of advertising that did not exist decades ago. The answer has been to lay off reporters, close bureaus and consolidate within the chains.
What has suffered is the ability of the "fourth estate" to hold government accountable. It remains to be seen if the investigative reporting organizations that have emerged, such as ProPublica, will fill the void left by cost cutting by the country's remaining newspapers.
Gannett, the corporation that owns The Indianapolis Star, has a reputation of promoting women and minorities to position of authority. Treating people equally was long overdue in the industry. However, it is not a warm and fuzzy company looking out for the best interests of the communities their properties serve. If you think otherwise, read The Chain Gang: One Newspaper versus the Gannett Empire by Richard McCord. McCord exposes Gannett's cutthroat business practices intended to drive all competition out of their markets. The Chain Gang is the result of excellent investigative reporting by McCord. It reads like a good detective novel. McCord had a lot at stake--Gannett was trying to eliminate his newspaper in Santa Fe.
As ownership of family newspapers has transfered to corporations, as in the case of The Indianapolis Star, the focus of business practices change. A corporation's first loyalty is to its stockholders, not to the community in which its business resides. The much needed scholarships for students studying journalism in the state of Indiana were immediately cut by Gannett after acquisition of The Indianapolis Star. The Indiana University School of Journalism asked for the scholarships to be reinstated. The request was denied. One of the scholarships for my program at IUPUI was specifically for a minority student. So much for Gannett's reputation of advancing minorities.
When I was growing up, my view of the world was what I saw and read in Life and Look magazines. Life, established by Henry Luce in 1936, also established the importance of the picture story. Both Life and Look were picture magazines. Life as a weekly folded in 1972 and Look in 1971. Both were victims of a change in advertising practices that are similar to newspaper problems today. The subscription prices to both magazines were low. The difference in production costs and profits came from advertising. Both were large format magazines offering excellent display space and color reproduction on good quality paper. Advertisers in a very short period of time decided to pull ads from print and increase expenditures in television.
For any number of reasons, advertising revenues have steeply dropped from newspapers. The result has been closings, furloughs, pay cuts and lay offs. This has caused a spiraling down of quality and the ability of newspapers to operate as the fourth estate. When businesses in other industries fail, democracy is not at stake. But a functioning, free press with resources to do investigative reporting is necessary to the democratic ideals of the United States. The more reporters, photojournalists, and copy editors we have in the process, the better we have a chance to understand what is happening in our communities.
So why did Gannett lay off two percent of its workforce? To reduce costs and remain profitable. Rick Edmonds thinks that the Gannett layoffs are part of a permanently shrinking newspaper industry. His analysis is sound and I agree with him.
Craig Dubow, chairman and CEO of Gannett, made $4,698,692 in 2009. Other executives also were well paid. I don't deny that executives at major corporations should be well paid. They make important decisions like withdrawing scholarships from Indiana colleges and deciding we need fewer reporters and photojournalists to cover our communities.
To quote Bobby King writing for the Indianapolis Newspaper Guild in response to the layoffs, "Finally, I’d like to say that despite Tuesday’s unpleasantness, despite the corporate greed that made it possible, and despite the sense of loss we all feel, our readers still depend on us to put out a newspaper. They still need us to tell the stories of their city, to root out the corrupt officials, to comfort the afflicted and afflict the comfortable. We do it to pay the bills, as did our friends. But mostly we do it because we feel it’s important, and because we will never concede defeat to those rat bastards at corporate headquarters."
Well said Mr. King.
Amen.
Couldn’t have said it any better, Dean Brown….Thanks for standing behind our cause!