There’s no pleasure, this time, in being right.
Although the Scene has been predicting for months that the Nashville Banner would eventually fold, the end, which came Monday, seemed sudden and cruel. Even worse, it didn’t have to happen.
As was expected, the Gannett newspaper chain, corporate owner of The Tennessean, paid off Nashville Banner owners Irby Simpkins and Brownlee Currey Jr. and shut the Banner down, effective this Friday. Nearly 100 staffers were suddenly jobless. Several had just been hired. One moved his family here in January. The paper’s new business editor started a week ago.
Only last August, Banner publisher Simpkins publicly assured the downtown Rotary Club that his paper had a long, prosperous future and privately told friends that he was earning a comfortable profit from the paper’s share of its joint operating agreement (JOA) with The Tennessean.
Under the JOA, the two dailies operated as a single financial entity. After all expenses outside the newsrooms were paid, the two papers split what was left, their shares determined by a negotiated formula. The Banner’s share of this pooled revenue in 1996 and 1997 was 21 percent, and it would have been the same for 1998. That percentage would have dropped to 19 percent in 1999 and would have gradually declined to 16.5 percent by 2005.
Out of the Banner share of revenues, the two owners paid themselves well. During the late 1980s, Simpkins and Currey took more than $1 million each year out of the paper.
With profits like that, Simpkins and Currey probably could have kept the paper going, even with declining circulation, until the JOA’s scheduled expiration in 2015. Or they could have sold the paper to another buyer, who would have continued publishing Nashville’s oldest daily paper. They did neither. Instead, Simpkins and Currey bargained to make a few more dollars while throwing the staff out of work and leaving Nashville a one-newspaper town.
It’s a safe bet that Currey and Simpkins wound up with a good deal. But the Gannett company may wind up with even more. Here’s an educated guess as to why Gannett finally decided that this was the time to buy the Banner and tank it:
Gannett controls all advertising for both The Tennessean and the Banner and sets rates based on the combined circulation of both papers. Over the last several years, Gannett, which also controls promotions and marketing, has slowly increased The Tennessean’s circulation while doing little or nothing to promote the Banner.
Once the Banner’s circulation dropped low enough, Gannett figured it could buy the paper and shut it down without having to cut advertising rates. That seems to be what’s happening now.
On Monday, Gannett’s advertising director sent a letter to advertisers telling them that the Banner was about to close but predicting that most Banner subscribers would switch to The Tennessean. What’s more, he stated that an aggressive marketing campaign will further increase Tennessean circulation ”within two weeks.“ The letter said nothing about any reduction in ad rates.
No wonder Gannett likes this deal. Now the chain can cut production and distribution costs by shutting down the Banner, still maintain its revenues from advertising, and keep all the increased profits without having to share them with Simpkins and Currey.
In the letter to advertisers, The Tennessean also promises ”expanded news content“ and ”other product enhancements.“ But don’t expect those improvements to last.
”Based on Gannett’s history in other markets,“ media critic Richard McCord said Monday, ”you can expect news coverage to go down in quality and quantity“ once the competition has been eliminated. ”Large advertisers, such as grocery and department stores, have no place else to go.“
Despite laments about declining circulation and uncertain profits, the sale and closing of the Banner was about greed, not newspaper economics. Currey and Simpkins got richer; Gannett got its monopoly; and the Banner staff got pink slips.
More than likely, the Banner would have died anyway once the JOA expired. But it would have been a gradual, dignified way of dying, with time for the newspaper’s family and friends to grow accustomed to the loss. One never really expected that to happen, but it would have been nice to be wrong.