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Gannett purchase concerns journalists


The Des Moines Register’s acquisition last week of a group of 13 weekly shopper newspapers serving Greater Des Moines sparked concern from some journalists, and raised speculation about possible further acquisitions in Iowa by parent company Gannett Co. Inc.

From a business perspective, buying the shoppers makes good sense and will allow the Register to offer advertisers a more targeted buy for their money, said a newspaper broker.

The Des Moines Register is one of 101 daily newspapers owned by Gannett, the nation’s largest newspaper group, with a combined daily circulation of 7.6 million.

The publicly traded media company reported fourth-quarter earnings of $358 million, up 3 percent from fourth quarter 2002. Total operating revenues increased 6 percent to $1.82 billion.       The Register purchased the Press-Citizen-Shopper group from Ogden Newspapers Inc. for an undisclosed sum. Based in Wheeling, W.V., Ogden publishes 39 daily newspapers, several magazines, including Mother Earth News and Farm Collector, and weeklies and shoppers in 11 states.

Des Moines Register President and Publisher Mary Stier said in a release that the Register “has a strong reputation of improving weekly publications after acquisition, such as the Altoona Herald-Index and Indianola Record-Herald. We believe we can do that with the Press Citizen operation, too.”

Any media company owning too many outlets in one community, however, is “worrisome,” said Gilbert Cranberg, a former Register editorial page editor and George H. Gallup professor emeritus at the University of Iowa School of Journalism and Mass Communication.

“It wouldn’t shock me if they made a run at Cityview,” he said, referring to the independent alternative published by Business Publications Corp., which also publishes the Business Record. “Their strategy seems to be to acquire a lot of stuff in this area.”

If the Federal Communications Commission loosens its rules on cross-ownership of media within the same community, “it would not surprise me in the least to have Gannett make a run at KCCI, which is clearly the No. 1 (television) station in the market,” Cranberg said. There is speculation that Gannett is interested in acquiring all or part of Hearst-Argyle Television Inc., one of the largest television broadcast companies, which owns KCCI, the CBS affiliate in Des Moines.

Gannett’s newspaper holdings, including USA Today, account for about 13 percent of total U.S. paid circulation, said Owen Van Essen, president of Dirks, Van Essen & Murray, one of the nation’s most active newspaper brokers.

“Nevertheless, the newspaper industry is still far less consolidated than the broadcast radio and television industries,” he said.

“Generally speaking, all daily newspaper companies are looking to generate a wider footprint in their area,” he said. From an advertising perspective, buying the shoppers will allow the Register to offer more targeted geographic regions to small businesses that don’t need to advertise throughout the metro.

Another journalist said he suspects that the Des Moines shoppers’ advertising rates will go up and that options for advertisers will decrease.

“I imagine the impact will first be felt with the advertisers, where they won’t have another newspaper group trying hard to compete with Gannett,” said Richard McCord, who wrote “The Chain Gang,” which detailed his experience in fending off a takeover bid by Gannett for his weekly newspaper in Santa Fe, N.M., in the mid-1980s.

McCord said Gannett’s more recent strategy has been to consolidate its presence in various states.

With the Des Moines purchase, “I wonder if they’ve staked out Iowa as a state where they’d like to become a large geographic presence, like they did in Wisconsin five or six years ago,” he said.

Bill Monroe, executive director of the Iowa Newspaper Association, said newspapers such as the Register are limited in how much they can raise advertising rates without risking businesses switching to radio or television ads.

Monroe said the Gannett newspapers he’s familiar with in Iowa have editorial content that compares “very favorably” with other newspapers in the state, noting that the Register was recently named the state’s best newspaper for 2004 in its size category.

“When you’re the biggest in the state, you tend to take a lot of shots,” he said. “But when you actually measure the performance of that newspaper against its peers, I think that’s how you judge.”   

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