The writer is a former Detroit News business reporter living in Los Angeles.
By Eric Starkman
If the Detroit Chamber of Commerce gave a lifetime achievement award to the company that has most harmed this city, Gannett Co., owner of the Detroit Free Press, would be the most deserving recipient.
The ailing and rudderless media conglomerate has been a cancer in Detroit from the moment it washed ashore.
In 1986, Gannett acquired The Detroit News, once Michigan’s most prominent newspaper with statewide circulation, and forged a so-called joint operating agreement with the Detroit Free Press, then owned by another chain, Knight Ridder. The agreement, based on questionable arguments that were challenged by local business and civic leaders, allowed the Freep and the News to merge their business operations while maintaining separate newsrooms. JOAs are effectively a monopoly, but were allowed if they would preserve a failing newspaper, which the Freep supposedly was.
Journalism companies have never been run by the brightest bulbs in corporate America. Even with a monopoly, Gannett and Knight Ridder struggled to make their joint operation profitable. They alienated advertisers by jacking up rates three-fold and provoked a bitter strike in the most union-supporting town in the country. To goose profitability of their joint operations, Gannett killed The News’ morning edition, causing the newspaper to lose more than half its readers and giving the Freep circulation supremacy.
Under Gannett’s ownership, the News’ reputation withered so badly that the company, even with its sizeable stable of third-rate newspapers, no longer wanted it. In 2005, in a highly unusual and questionable transaction, Gannett sold the News and acquired the Freep. The newspaper has been in a downward spiral ever since.
Wait, it gets worse
The Freep’s death knell has been sounded. As part of a company-wide strategy to boost profitability in the wake of its failing digital strategy, Gannett last month ordered the Freep to eliminate eight positions through buyouts or forced firings.
Crain’s Detroit Business last week reported that two of the staffers taking buyouts are popular columnist Rochelle Riley and sportswriter Perry Farrell, who worked at the newspaper for 19 and 31 years, respectively. Riley and Farrell are African- Americans; Gannett last year ordered the firing of Stephen Henderson, another longtime Freep African-American senior editor because of “inappropriate behavior.” Locally managed WDET investigated the alleged behavior and determined it didn’t merit removing Henderson from his hosting gig on that station.
Media analysts and pundit apologists will tell you the Freep’s decline is an industry-wide problem resulting from a variety of factors including the internet, social media, millennials don’t read, etc. And there is some validity to these explanations. But the real reason newspapers are failing is they have lost touch with their communities. The Freep is designed and edited in Kentucky by people who likely don’t know where Gratiot is let alone know how to pronounce it.
Minneapolis still has a viable local newspaper because of its responsible business community. The paper is owned by a prominent local businessman and its publisher, Michael Klingensmith, is an accomplished executive and Minnesota native. The entire senior management of the Star Tribune is comprised of Minneapolis natives or people with longstanding ties to the city.
Under Klingensmith’s leadership, the Minneapolis Star Tribune’s circulation revenues increased every year while its circulation declines have been far below the industry average. Based on print circulation, the Star Tribune is the fifth-biggest Sunday newspaper in the country, while the Freep is 10th. (The Detroit metro area has nearly a million more residents than greater Minneapolis.)
The Toronto Star, where I once worked, has long been the dominant newspaper in Canada’s biggest city because local families who are committed to Toronto control the company that owns it. Toronto has four newspapers, all considerably better than the Free Press.
Only better owners can fix this
Things are likely going to get a lot worse at the Freep. Digital First Media, which owns the Detroit News and is known for pillaging newspapers of resources, has made an offer to buy Gannett. The already low quality of America’s daily newspaper industry will be destroyed if this acquisition goes through.
Regardless, Gannett has an uncertain future. Bob Dickey, the company’s CEO, plans to retire later this year and the head of its online marketing business also is bailing. Underscoring how little regard Wall Street has for Gannett, the company’s market capitalization – the total value of its outstanding shares – is just north of $1 billion. By comparison, Nextdoor, a technology company that runs a network of schlocky hyperlocal social media websites, was valued at $1.5 billion in its second round of funding.
So, it’s time for Detroit’s business and civic leaders to step up to the plate and demand that Gannett divest itself of the Freep and sell it to a consortium of local owners. Detroit and Michigan offered obscene tax incentives to induce Amazon to move here, so the city and state should offer some sweetheart package to local buyers of the Freep. New Jersey earmarked $5 million to boost local journalism after Gannett decimated the local newspapers in the Garden State.
“Democracy Dies in Darkness” is the motto of the Washington Post. Under Gannett’s ownership of the Freep, Detroit has suffered a major power failure. The city should rally and take back its newspaper before it’s too late.
To paraphrase the immortal words of Rep. Rashida Tlaib: Kick the Gannett motherfuckers out of Motown.
