Chapter 31 - Birth of NAC

Chapter 31 - Birth of NAC

SOON AFTER THE fiscal blood-letting between The Tribune and Deseret News was ended by the establishment of a joint operating agency, John W. Gallivan, then assistant to Fitzpatrick and secretary of The Tribune Publishing Company, was asked, "Why did it happen — why was Newspaper Agency Corporation formed?" His response was, "Why didn't it happen sooner?" This pointedly reflected the reaction of The Tribune management and owners, and presumably that of the Deseret News management and owners, toward the new cooperative arrangement.

On The Tribune side, only Fitzpatrick knew such details as who first thought of this particular solution? Who first proposed it? Did one side have to "sell" it to the other? Fitzpatrick never answered such questions in writing or verbally to anyone in The Tribune organization now alive. The first inkling to reach anyone that such a plan was under consideration by the publisher came to Gallivan in the form of a question. Fitzpatrick, in a rather routine manner, asked his chief assistant what he thought of an agency solution to the deepening problem of newspaper survival. Gallivan responded that it would be ideal but added what appeared to him to be the obvious: "But, of course, it would be impossible." Fitzpatrick remarked that he thought something might be worked out and dropped the subject for the time being.

It can be presumed from Fitzpatrick's question and from subsequent developments that some exploratory discussions had taken place between Fitzpatrick and representatives of the Deseret News. Fitzpatrick had enjoyed a personal friendship with George Albert Smith, president of the Mormon Church, which had not been disrupted by the competition between the newspapers. In fact, when President Smith died in April, 1951, Fitzpatrick, with his strong aversion to public platforms, surprised close associates by complying with a wish of the family that he appear as one of the speakers at the funeral.

It should be recalled at this point that in 1907 when the feud between The Tribune and Deseret News was in one of its bitterest phases, The Tribune had exempted David O. McKay (Smith's successor as president of the Mormon Church) and Anthony W. Ivins from its attacks on the church leadership. A close friendship existed between A. N. McKay, The Tribune's general manager from 1911 to 1924, and David O. McKay. (These two McKays were not related.) Fitzpatrick continued this warm relationship.

An incident in the early 1940's, seemingly inconsequential at the time but of real importance to the close personal relations of Fitzpatrick and McKay, was the acceptance by Fitzpatrick of an appointment to the executive committee of the Utah Centennial Commission which was created to plan for the state's centennial observance in 1947. Fitzpatrick was not reluctant to participate in and lend the support of The Tribune to public enterprises. Since he preferred to make his contributions of work or money anonymously, he was really making an exception in this instance by accepting a title. The chairman of the commission was David O. McKay. During the planning and performance of the centennial observance, the friendship between McKay and Fitzpatrick deepened into a mutual trust which would later help make agreement between the two newspapers possible. There were, then, no insuperable personal reasons why a new accommodation could not be reached in the journalistic field. Agreement between the two papers seemed unlikely or impossible to some only because of memories of past animosities.

Regardless of when the first exploratory conversations might have taken place, or who initiated them, discussions between Fitzpatrick and representatives of the Deseret News relating to the deepening financial crisis in the city's newspaper publishing business did occur during the spring and summer of 1952. It can reasonably be assumed that various solutions were considered in the process of reaching an agreement on the Newspaper Agency Corporation plan.

There were compelling reasons why both parties were anxious to quickly agree on some plan. The Tribune-Telegram, as a joint operation was not actually losing money at the time, but by 1952 profits had declined to less than one-fourth of the 1947 level. The Telegram had already failed financially as an independent business enterprise back in 1930 and had been taken again under the wing of The Tribune. Economic forces had so depleted Telegram advertising and circulation by 1952 that it was surviving only because of the fiscal umbrella provided by The Tribune.

The financial plight of the Deseret News, as a business enterprise, was summed up in testimony presented by its legal counsel, George L. Nelson, to the Subcommittee on Antitrust and Monopoly of the Senate Judiciary Committee during hearings on the Failing Newspaper Act (a forerunner of the subsequently enacted Newspaper Preservation Act) from July 27 through August 15, 1967. Substance of that testimony was contained in this paragraph:

Because it was losing circulation and advertising revenue the Deseret News in 1947 commenced aggressive action to build its circulation in order to achieve and maintain essential advertising revenues, and simultaneously took active steps which greatly improved its quality as a newspaper. This effort, which continued for five years, entailed high cost, and resulted in substantial annual financial losses to the company. Indeed, in 1952, it was apparent that such losses could not be continued. The agency operation was then suggested as a possible solution, and by mutual agreement with the owners of The Salt Lake Tribune, the Newspaper Agency Corporation came into being on August 12, 1952.

Briefly then, the pre-agency financial situation in Salt Lake City was this: one losing newspaper, one being kept alive by the economic strength of a third, and The Tribune showing such a steep profit decline that it would have been plunged into losses in a very few years if the existing situation continued unabated.

One of the first, if not the first person, other than the publishing company officers and their legal counsel to be advised of the agreement was Gus P. Backman, who was chosen as the fifth or "swing" member of the board of directors of the proposed agency. Backman, who in 1930 had resigned as manager of the Z.C.M.I. to become secretary of the Salt Lake Chamber of Commerce, was a friend and a confidant of both Fitzpatrick and President McKay. The three had been meeting every Tuesday morning since the creation of the 1947 Centennial Commission to discuss community problems so it was a simple matter to add problems arising from the agency agreement to the agenda of the breakfast meetings. These meetings were continued until Fitzpatrick's death.

Backman recalls that he was recuperating from an illness in a hospital when the church president and The Tribune publisher walked unannounced into his room. They outlined the plan to him, asked if he would serve and he willingly accepted the assignment. He does not recollect that he was informed at that time as to negotiations leading to the agreement but it was his impression that both President McKay and Fitzpatrick were pleased with the arrangement and that neither had found it difficult to convince the other of the wisdom of such a solution.

On every count, it appeared to the managements of both newspapers that the agency plan—providing for joint business, production and distribution operations with separate ownerships and independent editorial voices—was the best solution for Salt Lake. Single ownership of both newspapers had been established in many cities and the number of such mergers was constantly growing. But the notion that Salt Lake was different still had some validity. It is conceivable at least that a Lord Thompson of Fleet Street, London, or a Newhouse of the U.S.A. could acquire a newspaper monopoly in a market and still maintain two editorial voices by leaving editorial policy strictly to local management. But it is hardly conceivable that a church—Mormon, Catholic or Protestant—could own two newspapers and permit them to take opposing positions on issues like prohibition, prohibition repeal, sale of liquor by the drink, or horse racing and parimutuel betting without discrediting both positions and both newspapers.

Aside from the conviction of managements of both newspapers that a solution which would continue two editorial voices in the area would be best for the area, there was a legal reason for adopting the agency concept. Soon after the plan was proposed Athol Rawlins, counsel for The Tribune, and Paul H. Ray, counsel for the Deseret News and a close personal friend of Fitzpatrick, made a study of the proposal in relation to antitrust laws. Their conclusion, as reported to Fitzpatrick, was that it would not violate antitrust laws and that it would, in fact, preserve rather than weaken competition.

Having agreed that the agency plan was the most suitable for Salt Lake, representatives of The Tribune and News began laying the groundwork for its establishment. The agency plan was not new. It was then operating in a score or more cities and in all instances had proved satisfactory to the participants. The depression had given it birth, and it had matured in a postdepression era of booming prosperity for the nation but, in many instances, pseudo-prosperity for newspapers. Costs had been rising even faster than circulation and advertising revenues. Newsprint became so costly that many papers were encountering diminishing profits and actual losses while publishing huge editions crammed with advertising. Publishers in markets larger than Salt Lake had already found it necessary to reduce costs by establishment of joint operations either under a single ownership or under an agency plan.

Representatives of The Tribune and News visited many of the agency cities to study the operations. Almost all the major agency agreements were carefully studied. Legal opinions as to possible antitrust problems were obtained from specialists in Chicago, San Francisco and Salt Lake City. Tax ramifications were anticipated and "cleared" with appropriate agencies. After some nine months of work there emerged a draft of a Newspaper Agency Corporation plan acceptable to both publishers and their legal counsel. In brief outline, the plan provided that the jointly owned agency would handle production, circulation and advertising for both newspapers. It would collect all revenues derived from advertising and circulation and pay all expenses (other than editorial) for both publishers and distribute what was left to The Tribune and the News according to an agreed formula. The NAC was to have as its president the publisher of The Tribune. He would be one of five members constituting the board of directors. The Tribune would also name the treasurer, and the Deseret News would select the vice-president and secretary. The fifth or "neutral" member of the board was the already selected Gus P. Backman. The Tribune would publish seven mornings weekly and the News six afternoons weekly. The agreement spelled out the guarantees of the editorial independence of each newspaper.

Fitzpatrick, perhaps better than anyone else involved in newspaper publishing in the Salt Lake market, had an awareness of the cost-reducing potentials of the agency plan. He had observed the results of joint publication of The Tribune and Telegram as compared with separate publication in two plants. He could now look forward to a period of easing financial pressures. For in addition to the economic benefits offered by the agency arrangement in operational costs, it had come along at an opportune time to remove a threat to family ownership of The Tribune. During the period of the fierce competitive battle between the rival newspapers, Thomas F. Kearns, owner of the largest single interest in The Tribune-Telegram, posed a new complication. He had never really liked the newspaper business and wanted to use his capital in some enterprise of his own. He reached a decision to sell and discussed the matter with prospective purchasers. Results of these discussions leaked out from time to time and served to give substance to the rumors that The Tribune had been sold. By sale of the Telegram to the Deseret News as part of the agency arrangement, and by borrowing on real estate, Fitzpatrick was able to raise sufficient cash to buy the Thomas F. Kearns interest for the Kearns Corporation, thereby nailing down, hopefully for another generation or more, the family ownership of the newspaper.

The creation of NAC marked for the longtime journalistic rivals a pinnacle of accommodation which had been in the making for more than eighty years. In form it probably went beyond any expectations of the combative Fred Lockley or the caustic and scholarly C. C. Goodwin. It was, in effect, a realization of the accommodation which Lockley and Goodwin said could take place if certain economic, political, social and ecclesiastical aims and practices were revised. In substance, if not in form, it achieved the goal Thomas Kearns had set when he employed A. N. McKay as The Tribune's general manager in late 1910. It was the accommodation John F. Fitzpatrick had affirmatively sought throughout his career with The Tribune, and it came in a form which even he probably could not have visualized until a year or two before it was achieved.

The NAC agreement was formally signed and publicly announced on August 30, 1952. Stockholders of the Kearns Corporation drew a sigh of relief. Newspaper publishers across the country telephoned and wired congratulations. Some added an expression of envy. Others, who had some knowledge of the past history and current state of journalism in Salt Lake City, admitted amazement. Like Gallivan, they viewed the plan as an ideal but impossible solution. The newspaper readers of the Intermountain area were astounded. To some the announced plan of joint publication by the rival newspapers was simply unbelievable. Some preferred to accept as factual, a rumor which was more unbelievable than the fact-that the Deseret News had purchased The Tribune. A few accepted the most unbelievable version of all—that The Tribune had purchased the Deseret News.

After the agency agreement had been operating for about eighteen months to the satisfaction of the parties a threatening cloud reappeared on the horizon. In March, 1954, counsel for the two newspapers and the agency corporation learned that the attorney general's office had initiated a detailed investigation of the operation of the newspapers and the joint agency. The investigation, under the direction of Lyle L. Jones of the San Francisco office, continued through 1954, all of 1955 and into 1956.

In October, 1955, representatives of the Deseret News and The Tribune met with the Justice Department investigators for the purpose of seeking an agreement which would permit continued operation of the agency. But a few days after this session the department served upon the newspaper publishers a complaint charging violation of the antitrust laws and seeking an injunction against further carrying out of the contract. Actual filing of the complaint, however, was withheld to permit further discussion and negotiations prompted by a form of consent decree presented by the Department of Justice for adoption and acceptance by defendants. The proposed consent decree and a revised draft were discussed at meetings in Salt Lake City and San Francisco and on December 5, 1955, representatives of all the defendants were summoned to Washington to meet with Assistant Attorney General Stanley N. Barnes and the Justice Department investigators. This conference led, in January of 1956, to a demand for additional material, all of which was supplied. No further requests for information were made and no complaint was filed. The agency continued to function in accordance with the contract and the parties assumed that the department had concluded that the arrangement was not in violation of antitrust laws.

Except for the burden of supplying massive bundles of documents, accounts and contracts required by the Justice Department and participating in conferences with the investigators, Fitzpatrick had an eight-year respite from pressing financial harassments during which he could concentrate on improving the quality of The Tribune and operation of the agency. He had suffered a mild heart attack and was under medical orders to diminish the heavy work-load he had carried from the time he became the indispensable secretary and assistant of Thomas Kearns in 1913.

The Tribune, under his guidance, had established an excellent reputation within the newspaper publishing industry within its service area, for comprehensive and objective news coverage; for typographical excellence; for recognition of its public responsibilities; and especially for its local news coverage. And for The Tribune, "local" meant an area of more than 208,000 square miles in four states in which some 200 correspondents were deployed to keep the home-office editorial force "on top of things."

A typical example of the readiness of The Tribune news organization to respond occurred on June 30, 1956, when two commercial airliners (UAL and TWA) collided over the Grand Canyon in northern Arizona, killing all 128 persons aboard. For its coverage of this commercial air tragedy, The Tribune was awarded the Pulitzer Prize for 1957 for "local reporting under the pressure of edition time." As the citation said:

This was a team job that surmounted great difficulties in distance, time and terrain. . . . The accident occurred in one of the most inaccessible places in the U.S. Although individual reporters and photographers performed in an outstanding fashion, the results of their work were made possible because of the complete coordination of editors, rewrite men, laboratory photographers and technicians.

The really unusual aspect of this coverage of a disaster was that it won a Pulitzer Prize. The extraordinary circumstances of an airliner collision in such a remote area and the number of persons killed naturally attracted world-wide attention. But The Tribune's coverage was what its readers could expect. Airplane crashes was a field in which The Tribune staff had acquired special proficiency through experience. With a scarcity of major newspapers in the Intermountain area, The Tribune's "beat" covered a huge territory encompassing large parts of five states. Because of this geographical fact, the news of so many air accidents had been distributed under a Salt Lake City dateline that the city was often referred to, much to the distress of the Chamber of Commerce, as "the graveyard of aviation." As chamber officials feared, the appellation no doubt served to give the Salt Lake area an undeservedly bad image among those readers who failed to recognize the immensity of the graveyard.

During this period Fitzpatrick delegated more and more responsibilities to his chief assistant and prospective successor, Gallivan. He spent more time playing golf, his favorite sport; and he genuinely tried to reduce the stresses of his tension-filled life. This was prompted in part by entreaties of his associates. For by this time no one around the newspaper could imagine what The Tribune would be like without "J. F." No one wanted to think or talk about it. But it is part of a newspaper's business to anticipate the death of prominent individuals, at least to the extent of preparing what is known in the newsroom as an advance obituary. Fitzpatrick himself would have been scathingly critical of an editor who, notified of a highly newsworthy death just before a deadline, had nothing in the files ready for publication after insertion of a short lead on time, place and circumstances of death.

An advance obituary on Fitzpatrick posed a touchy problem for The Tribune management and staff. No one wanted to broach the subject to him, and those who knew him well realized that it would not be easy to write anything even approaching adequacy which he would approve. Someone finally did convince him he should sit down with a reporter and at least provide some background information for use upon his death. The reporter assigned to the job arranged an appointment in the publisher's office but found him too busy to cooperate that day. Fitzpatrick, however, did take time to indicate what he desired. It was characteristically Fitzpatrick. One of the phrases he commonly used for emphasis was: "in no way." On this day he informed the reporter that anything published in The Tribune upon his death should "in no way" suggest or create an impression that The Tribune was going to be adversely affected by his demise. Above all, he did not want his obituary to be over-written or overplayed, for this would create the impression he wanted to avoid. He reiterated the point several times, using over and over the phrase "in no way." The reporter came away with the impression that, so far as the publisher was concerned, his death would not matter—only The Tribune mattered.

Several more appointments were made but each time Fitzpatrick found a reason to postpone the interview. Thus, when he returned to his home on the evening of Sept. 11, 1960, after watching the Utah Open Golf Tournament at Salt Lake Country Club and unexpectedly died from a heart attack, The Tribune was faced with a deadline a few hours away and no obituary. It is doubtful any other person in the city of comparable importance and prominence could have suddenly died and caught the newspaper so ill-prepared to record the event. The files contained only a few modest clippings relating to the conferring of honorary degrees upon him by the University of Utah and Brigham Young University, a papal appointment as a Knight of St. Gregory in 1948, and his activities in support of education, college athletics and the Salt Lake Country Club. Any additional information about his background had to be obtained quickly, and under the difficult circumstances posed by sudden death, from members of his family and close personal friends. So the account of his death was not over-written or over-played in The Tribune as he feared it would be; but had he been in his office next morning to read it, he would almost certainly have chastized the editor for offending on both counts.

A sentence from a statement sent to The Tribune by the late Harry Chandler, then president of the Los Angeles Times-Mirror Company, summed up an evaluation by his fellow publishers: ". . . He was one of the grandest men in our profession and one of the most conscientious publishers that it has ever been my privilege and good fortune to know."

Time magazine, which sometimes strives for impertinence, struck a pertinent note with this comment on his death: "On Fitzpatrick's death The Tribune, in open defiance of the old man's longstanding order, ran his picture on Page One, thereby providing many subscribers with their first glimpse of the ungregarious Irishman who had greatly altered and immeasurably improved Utah's journalistic landscape."

Bishop Robert J. Dwyer accurately characterized him for his associates on The Tribune in a eulogy delivered at a Pontifical High Mass in the Cathedral of the Madeleine:

If we seek the keynote of his life, the 'leit motiv,' there is only one term that is adequate and inevitable — stewardship. ... He was a man admirable for his grasp of reality, his application of the virtue of prudence. He may never have cared to put a name to it, but we recognize it as his inner strength, as the strong fibre of his personality. We may not always have agreed with his interpretation of reality, but we were always sure that he was seeking, at the top of his bent, to find it and act in accordance with its dictates. Sometimes he gave an impression of hardness, almost ruthlessness, for the search for reality, the encompassing of it, not infrequently requires this of us. Yet in his heart of hearts he was wonderfully tender, utterly self-effacing, wholly dedicated to his ideals. . . .

For members of The Tribune organization the inevitable which they had not liked to contemplate was now a present reality. Fitzpatrick was no longer there to "see around corners" and chart the newspaper's course accordingly. They could all be thankful that it hadn't happened ten years sooner. For that would have been an appallingly bad time to lose the seasoned and confidence-inspiring skipper. But in 1960 the newspaper was prosperous and growing. Newspaper Agency Corporation was firmly established and fulfilling the hopes which brought it into being. The Tribune was facing no extraordinary problems and the outlook was for clear and untroubled sailing ahead. Not even Fitzpatrick, however, could have negotiated shoals before they appeared. A rather menacing one was soon to confront the new publisher.