Chapter 33 - Antitrust Episode

Chapter 33 - Antitrust Episode

IN SUMMARY, the hundred-year life-span of The Salt Lake Tribune can be divided roughly into seven periods, each of which posed its own peculiar problems and editorial responses which management deemed appropriate for their solution.

One problem common to all the periods was generating from circulation and advertising enough revenue to pay costs of publishing plus a margin of profit or of raising money from other sources to cover deficits. The Tribune passed through periods of profitable and of deficit operations but throughout both strove to publish a product which would merit and attract the public acceptance required to achieve profitability. There were, no doubt, periods when its owners deliberately and knowingly pursued editorial policies which they could anticipate would produce deficits. In those instances it can be fairly assumed that they either thought the deficits would in the long run turn into profits or they were imbued with a conviction that the newspaper had a public obligation of higher priority than short-run profits for themselves. For the mission The Tribune had undertaken — to serve as the other voice in a bitterly divided society — demanded that it take positions which would be deeply resented by a large part of the citizenry within its circulation territory. Had it sacrificed principle and its moral concern on the crucial issues of the times it surely would have expired long before changing attitudes and policies cleared the way to an accommodation.

For the schismatic Mormon elders who founded the newspaper, the problem peculiar to their period was how to effectively challenge economic and political policies of the church without becoming embroiled in an ecclesiastical confrontation. They found the problem to be insolvable because too many partisans on both sides of the controversy either could not or would not draw the distinction they sought to establish. Brigham Young, for one, regarded opposition to church economic or political policies as proof of ecclesiastical disloyalty. So he reacted to the economic-political challenge with an ecclesiastical weapon — excommunication. This, of course, branded The Tribune founders as anti-Mormons in the eyes of loyal, orthodox members; and their frequent protestations that they were not attacking theological beliefs served to make them suspect among the anti- Mormon gentiles. They thus reaped hostility or indifference from both worlds and shrank their base of potential support to a small third world. This condemned their publishing venture to economic failure from the outset.

Fred Lockley and his fellow "border ruffians" were confronted with essentially the same situation and, after a few attempts to separate religion from the other issues, resolved their problem by attacking the church on all fronts - economic, political, ecclesiastical and social. This approach served to solidify their support on the anti-Mormon side of the conflict.

During the Lannan-Goodwin period an effort was again made, with partial success, to pin-point the "irrepressible conflict" on economic and political differences. But the unrestrained use by The Tribune and its allies of their most effective weapon - polygamy — inevitably turned it once more into an ecclesiastical conflict as well. Nevertheless, some progress toward an accommodation was achieved and this was temporarily accelerated during the first few years of the Kearns-Keith ownership of the newspaper.

The American Party period (1905 to 1911) can be characterized as a reversion of the simplified approach of Lockley — attack on all fronts.

During the A. N. McKay period under Kearns-Keith ownership the objective of The Tribune became disengagement from the "irrepressible conflict" and reactivation of the heretofore stop-and-go gropings toward an accommodation. Marked progress toward this goal was achieved, although the old fight continued to erupt for a few more years on the political front. The Tribune and its allies were not yet quite ready to forget their feud with Senator Smoot and his political organization; and this hangover from the gradually subsiding conflict served to keep some religious animosities alive. It might have been possible to attack Apostle-Senator Smoot without reviving the ecclesiastical frictions had The Tribune been willing to stop goading Smoot as the political puppet of Joseph F. Smith. But so long as the president of the church was kept under fire as the power-behind-the-scenes in the political arena the odor of religious conflict was bound to continue to permeate the state and Salt Lake City journalism. This odor did continue in slowly diminishing strength until the Fitzpatrick period when The Tribune embarked upon an irreversible policy of seeking to relegate the "irrepressible conflict" in all of its aspects to history and to establish a lasting accommodation by erasure of ecclesiastical divisions in non-ecclesiastical matters. The capstone of the success of this policy in the journalistic area was the creation of Newspaper Agency Corporation.

An economic problem peculiar to the current Gallivan period has been to preserve this two-voice newspaper accommodation from disruption by the federal government.

As has been pointed out earlier, the agency solution to the newspaper problem in Salt Lake City was in part a reaction to a costly competitive struggle during the five years preceding its creation. Beyond that it was also a recognition of the inexorable economic forces within the newspaper publishing industry which had already forced agency or single ownership solutions in scores of cities across the land. The five-year competitive confrontation between Salt Lake's two newspaper publishers had only hastened a solution which was bound to come anyway in one form or another. For while Salt Lake City has some unique aspects, it was subject to the same economic factors which, since the turn of the century, had reduced newspaper publication to one plant in ninety-seven percent of the cities and towns of the United States.

As of February, 1968, 231 cities had two or more metropolitan daily newspapers. In 169 of these cities both newspapers were in single ownership; in twenty-two cities two newspapers were separately owned but operated under an agency agreement in one plant; in thirty-five cities two newspapers, separately owned, were being published in separate plants; and in five cities more than two newspapers were being published in two or more plants. In a large majority of the forty cities with more than one plant, one or more of the newspapers were being published at a loss or were subsidized in one form or another.

As noted earlier, the joint agency solution adopted was not the only one available. But the parties were in agreement that it was the best for Salt Lake City.

Up to that time neither the agency or single ownership solutions had been challenged in the courts. The irony of the subsequent developments was that the solution which the Salt Lake publishers had every reason to believe would be most palatable to the public and which would preserve news and editorial competition was the one picked out for attack. The victim was an agency agreement entered into by Tucson Arizona Star and the Tucson Daily Citizen in 1940, twelve years before the Salt Lake City agency was established. A common-sense question suggested by the action was why Tucson was singled out for Antitrust Department attack rather than neighboring Phoenix, a much larger newspaper market where a single ownership solution had evolved. The answer to the question, as the Tucson case disclosed, was legalistic.

Upshot of the Tucson case was a U. S. District Court decision that the agency agreement was in violation of antitrust laws and a seven to one U. S. Supreme Court decision upholding the trial court. Inasmuch as the case directly involved only the agency type arrangement, it cannot be said that the total merger solution to the competitive dilemma would not have been held in violation of antitrust laws had one of those been attacked. But the fact that single ownership solutions had gone unchallenged and that an agency agreement was selected for attack suggests that the single ownership solution could have been adopted in Salt Lake City in 1952 without raising an antitrust eyebrow, then or since.

This presumption is strengthened by certain aspects of the Tucson case. For example, the court decision held that a key legal doctrine which could be used to justify a total merger was not available in the defense of an agency agreement. Justice Potter Stewart, in a partially dissenting opinion, in response to a question as the availability of the "failing company" doctrine had the Tucson newspapers been totally merged, responded:

I think if the Star had acquired all of Citizen's assets and gave stock to the owners of Citizen, it [the failing company doctrine] probably would be available. I would say that the Government wouldn't have much chance in this particular case of attacking that acquisition.

The question of whether the public interest would be better served by two entities competitively collecting and disseminating news and expressing separate editorial viewpoints than by one entity exercising a monopoly of all business, news and editorial functions apparently was not recognized as part of the case.

However correct that might have been legally, there surely is a valid common-sense viewpoint that that question should have been the heart of the case.

It was this viewpoint which impelled The Tribune, along with other participants in and supporters of the agency concept, to start preparing soon after the Tucson case was initiated to carry their case to the legislative branch of government in the event of a decision adverse to the agency plan. One of the most persistent activists in this enterprise was Gallivan. For five years he devoted a substantial portion of his time and energies to preparing and helping to mobilize support for the 1970 legislation which became known as the Newspaper Preservation Act. He served as treasurer of the group of agency publishers who pressed the campaign for the legislation and was a member of a three-man committee which implemented the strategy largely formulated by Washington counsel Morris W. Levin. The other members were Byron V. Boone, publisher of the Tulsa World, and Amon Carter Evans, publisher of the Nashville Tennessean. An important contributor to the immense amount of legal work involved in drafting, revising and amending the numerous proposals which eventually emerged as the Newspaper Preservation Act was Donald W. Holbrook, member of the Salt Lake City firm which serves as general counsel for the Kearns-Tribune Corporation.

Although the legislation was approved by large majorities in both houses of Congress, it was stubbornly fought by its opponents at every stage of the legislative process. Governmental departments were divided. The Department of Justice, understandably, opposed the bill but the Department of Commerce, representing the administration, supported it. However, all the pros and cons submitted by proponents and opponents in committee hearings really boiled down to a few simple points of disagreement. Opponents maintained that the Tucson decision did not bar joint activities necessary for survival of two newspapers and was therefore unnecessary; and that the proposed legislation would give forty-four agency newspapers a special and permanent monopoly in twenty-two cities. The case of the proponents rested on the contentions that the Tucson decision did bar joint activities necessary for survival of two newspapers; that of the two alternatives, the agency plan should be given equality if not preference over single ownership; that the proposed legislation would do no more than place agency agreements on economic equal footing under antitrust laws with single ownerships.

As one Washington, D.C., newspaper reported with a seeming implication of shocked disapproval, Gallivan did openly lobby for the bill. He did so with the conviction that in this instance the interests of the community and The Tribune were not merely compatible but reciprocal. His position was summed up in this paragraph of testimony presented to the Antitrust and Monopoly Subcommittee of the Senate Judiciary Committee in August, 1967:

We wish to preserve this editorial competition [that is provided by an agency agreement] in Salt Lake City. On a basis of closest association with the Salt Lake newspaper market since 1937, I can say without qualification that the only alternative in my community was and is single ownership — an alternative that neither party to the present arrangement seeks or wants. The Tribune and the Deseret News have been traditional balancing factors in our particular society for nearly a century and it seems obvious that the public interest is best served when they continue to be.

Whatever the merits of the conflicting viewpoints concerning the Newspaper Preservation Act, its enactment into law surely strengthened for the foreseeable future the 1952 agency agreement which permitted the continuation of two newspapers and two editorial voices in Salt Lake City and enhanced the prospects of The Tribune's continuing into its second century the role it has played since its birth.