Tennessean publisher Leslie Giallombardo is smart and amiable, with a quick smile and an assuring laugh. She hardly casts an intimidating presence. But when she strolled into the Murfreesboro offices of Tom Larimer, the publisher of the The Daily News Journal, he had to have known that his number had been called.
With Giallombardo was Ron Fryar, a regional vice president of the Morris Multimedia chain, which operated The Daily News Journal (DNJ). Last year, Giallombardo and Larimer had been locked in a contentious legal dispute over the newspaper’s use of the phrase “A.M.” She claimed the Murfreesboro paper was creating a conflict with The Tennessean’s plans to introduce “Rutherford A.M.,” a two-day-a-week local section. Larimer fought back, hired a blue chip lawyer from Bass Berry & Sims and forced Giallombardo to abandon her lawsuit. But on Monday, when Giallombardo met with Larimer, she wasn’t trying to mend any fences. Flanked by Fryar, she informed him that Gannett had just acquired his paper and replaced him with one of its own publishers, Judy Terzotis. Larimer, who had been the publisher for nearly four years, cleaned out his office.
“Anytime there’s a change such as this, you’ll find that there is a change in key personnel, and this was one of those situations,” Giallombardo explains.
Larimer is more succinct. “What’s done is done. Now it’s just time to move on.”
Not that anybody has a choice in the matter. On Monday, in a deal that no one saw coming, Gannett solidified its Midstate print monopoly by swapping papers with Morris Multimedia, a private media chain in Georgia. Gannett gets not only The Daily News Journal of Murfreesboro (15,000 circulation) but the Review Appeal in Franklin (6,000 circulation). In exchange, Morris acquires Gannett’s only sizable Georgia paper, The Times in Gainesville with a circulation of more than 20,000. Gannett also got a pair of Rutherford County weeklies, the Rutherford Courier and the Murfreesboro Sun. Gannett now owns the dominant daily in two of Tennessee’s fastest growing counties, Williamson and Rutherford.
Giallombardo, one of Nashville’s most visible businesswomen, says that Gannett corporate hatched the deal and that she wasn’t privy to the negotiations. Still, she says that Gannett did ask her about the plans. “If they wanted to buy the Scene and I told them it wasn’t a good fit, it wouldn’t be pursued,” she says, trying to clarify her role in Monday’s acquisition.
While the swap of several small newspapers is hardly Comcast buying Disney, it marks the crowning achievement in Gannett’s stranglehold of the Middle Tennessee area. In addition to owning The Tennessean, the area’s dominant daily, Gannett now operates the major newspaper in just about every ring county. The chain’s Midstate papers include the The News Examiner in Gallatin, Hendersonville Star-News, Dickson Herald, Robertson County Times, Ashland City Times and Fairview Observer. Gannett also operates the Leaf-Chronicle in Clarksville. The Lebanon Democrat in neighboring Wilson County is still owned by a small, family-run chain, but clearly there is a bell in a Virginia boardroom tolling for them.
“I don’t feel like we’re in any imminent danger of being assimilated,” says Lebanon Democrat publisher Joe Adams, whistling by the graveyard.
When restaurant and retail chains endure lagging same-store sales and can’t figure out what to do about it, they rely on a simple formula: They expand. That might be what’s happening here. The Tennessean’s circulation has been dipping for nearly five years, and while the paper’s top brass are planning to remake the daily to lure back readers, adding to its Midstate media hegemony is probably a safer bet to increase revenues. The chain will probably save money streamlining editorial costswhy should Gannett have The Tennessean’s David Climer and the DNJ’s Greg Pogue fly to cover the same Titans game? But, really, the major savings probably will come from vanquishing the competition. If you want to run a print ad in Middle Tennessee, Gannett is just about your only daily option. Without having to worry about the pesky DNJ’s of the world, Gannett has less of an incentive to keep ad rates down. This is not advanced economics.
There is, however, the Federal Trade Commission to worry about, which, in theory, monitors anti-competitive business practices. Most lawyers say that Monday’s swap is small potatoes to federal regulators, but nobody is making any guarantees. “The anti-trust laws aren’t about balancing viewpoints,” says Ames Davis, an attorney at Waller Lansden. “They’re about economics, and I don’t think this is big enough for FTC to get involved.”
The two papers Gannett has acquired are relatively small, and the FTC hasn’t acted yet in other larger deals. Besides, there are other advertising venues besides print, defusing any claims of a monopoly.
“They are not the only media voice in town,” says Tom Lee, a former television reporter who now works as an attorney. “You still have television, which, for better or for worse, is still where most people get their media.”
Still, the FTC and John Ashcroft’s Justice Department, which also has jurisdiction here, are hardly predictable. Last year, the nation’s two alt-weekly chains, Village Voice Media (the Scene’s parent company) and New Times Media, agreed to a humiliating settlement with the Justice Department in the wake of an offending deal to fold competing papers. In October 2002, New Times agreed to close its 6-year-old weekly in Los Angeles that went up against the Village Voice’s L.A. Weekly. Meanwhile, Village Voice agreed to close its weekly in Cleveland, which competed with New Times’ Cleveland Scene.
“When two firms, regardless of what they sell, say 'You stay West and I’ll stay East,’ that is cartel behavior and illegal,’ ” Robert Pitofsky, the former head of the FTC, told The New York Times about the deal.
That’s not entirely unlike what’s happening here. Before Monday, there was at least some competition between Gannett and Morris in Middle Tennessee. Now Gannett dominates the Midstate, and in return, Morris adds to its nearly two dozen rural Georgia newspapers.
Leslie Giallombardo says that Gannett’s lawyers vetted any possible anti-trust complications stemming from Monday’s swap. “All of these things are handled by Gannett corporate. I’m sure they know what they’re doing and that they have crossed their Ts and dotted the Is.”
While he won’t say as much, there’s at least one person who’s hoping that Gannett’s lawyers were asleep at the wheel. Longtime Tennessean reporter Jim East took the daily’s early retirement package two years ago and, shortly after, became the news editor at the Review Appeal. Now he’s out of a job. As part of his buyout, East isn’t allowed to work for any Gannett publications, which effectively banishes him from most area newsrooms.
“It was stunning,” he says. “No one had any idea this was about to happen. For me personally, it was sad. I’m not sure what I’m going to do. I’ll be 61 in June, and I’m not sure how many jobs there are for hack reporters like me.”
For now at least, Gannett has no plans to stop its zoned supplements in Williamson and Rutherford counties. And Giallombardo says plainly that Gannett won’t be hanging any “going out of business” shingles outside the publications it just acquired. “They won’t be shut down, no,” she says.
But East doubts that Gannett wants to have its zoned supplements, like Rutherford and Williamson A.M., compete with papers it now owns. “They told us there were no current plans to do anything drastic, like close any papers. But business being what it is, it would seem probable,” he says.
Tom Lee, the attorney, agrees. “I can’t imagine Gannett expending the resources to operate two newsrooms in both counties.”
There may be a silver lining in Gannett’s growing cloud. Professor Richard Campbell, the former director of the MTSU School of Journalism, says that the media giant might very well improve Murfreesboro’s Daily News Journal, which he says hasn’t evolved like the city it covers. “Gannett has a reputation for taking small newspapers like this and making them better,” he says. “And I think their track record on diversity is good,” he says. “This is a paper that doesn’t have a diverse staff.”
But Anne Demo, an assistant communications professor at Vanderbilt University, says that media consolidation isn’t a good deal for small town USA. “When you have less and less management in a locality, the community loses autonomy.”
East points out that Monday’s deal may not be the bane of local journalism, but he says it’s not a good thing either. “We had people in Fairview and Leiper’s Fork writing columns about what was happening at their churches,” he says. “It was small-time journalism and people may scoff at it, but it was really, really popular. I’m not sure that they will keep it like that.”
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