Press Box

The Great Newspaper Crackup of 1918

And what to learn from it.

Gravediggers earned overtime during the second decade of the last century as they shoveled earth over such expired newspapers as the Boston Journal, the Cleveland Leader, the New York Press, and the Boston Traveler. They were kept busy in Philadelphia, Chicago, Baltimore, New Orleans, and Portland, Ore., too, where newspapers either went under or consolidated with stronger competitors.

In his much remarked-on obituary for the dead dailies in the January 1918 Atlantic Monthly,Oswald Garrison Villard described the passing of these papers in language that could have been lifted from the recent eulogies for the shuttered Seattle Post-Intelligencer and Rocky Mountain News. Villard, editor and publisher of The Nation, called the Boston Journal’s demise a “tragedy of journalism”—one that could potentially slay democracy, too, because multiple news sources were required to present “both sides of every issue” to the citizenry. He was appalled that in a number of big cities—including Cleveland, the nation’s sixth-largest—only one morning paper had survived. (We should be so lucky today.)

The leading cause of newspaper death then as now was “the enormously increased costs of maintaining great dailies” and limited advertising. According to Villard, “scarcely half” of New York’s newspapers were returning “an adequate profit.” One New York daily, which Villard does not name, was suffering the astronomical loss of $500,000 a year—about $7 million in today’s money.

Only $7 million a year? The executives of today’s New York Times Co. would dance a jig in their skivvies down Eighth Avenue if they were on the hook for just $7 million annually instead of the $85 million in red ink their Boston Globe is expected to spout this year. The Times Co. has vowed to fold the Globe or to sell it if its workers don’t make huge concessions.

Losses weren’t the direct cause of newspaper death in Villard’s era. It was owners’ growing reluctance to sustain losses that did them in—a reluctance counter to the original premise and allure of the ownership business. Why were owners previously so willing to lose money on their newspapers? The psychic profits reaped from owning a newspaper, even one that loses great sums, exceed that of almost any other investment. This explains why, as Villard puts it, “there are few other fields of enterprise in which so many unprofitable enterprises are maintained.” A newspaper owner gets a place at every table, access to all the top politicians’ ears, and the power to impose his worldview on his readers—or, at least, the illusion of such influence.

This illusion isn’t a cornerstone of the modern industry in the way it was in Villard’s time. Although vanity newspaper owners still walk the land—I’m thinking of Mortimer B. Zuckerman (the New York Daily News), Philip Anschutz (Examiners in San Francisco and Washington, recently folded in Baltimore), convicted felon Rev. Sun Myung Moon (the Washington Times), and Rupert Murdoch (the New York Post,not his Wall Street Journal)—the impulse to throw money away on newspapers for purely psychic rewards has waned in recent decades.

What’s gotten many newspapers in trouble today is not vanity purchases by outsiders but poorly timed investments by newspaper insiders. It used to be that no price was too high if it laid claim to the dominant daily in a market. But that wisdom has died three times in recent years, with the New York Times Co.’s purchase of the Boston Globe for $1.1 billion (in 1993), the McClatchy chain’s purchase of the Minneapolis Star Tribune for $1.2 billion (in 1998), and Rupert Murdoch’s more recent $5 billion deal for Dow Jones Inc. The first two deals were toasted by a top newspaper analyst as costly but worth it in 1998, proving that even the smartest people in the business couldn’t see the bubble straining to be popped.

The financial pressures on the Times Co., McClatchy, and other overbuyers are gruesome, but as Nat Ives argues in a recent piece (paid content), the owners who overburdened themselves with debt are more vulnerable than the medium itself. “[T]here’s no reason for newspapers themselves, whoever owns them, to stop the presses. Most operations are plenty profitable,” Ives writes. In other words, most struggling newspapers will survive at lower but handsome profit margins after these sick corporations get their financial acts together or (more probably) are forced to surrender their titles.

The enduring—and unintentional—lesson of the Villard piece is that a little newspaper death is a good thing. For example, the newspapers at greatest risk in recent decades have been the weakling titles kept on life support by joint-operating agreements. These agreements permitted rival newspapers to skirt antitrust laws and behave like partners instead of competitors, as Daniel Gross explained in a 2003 Slate piece. In the usual progress of a joint-operating agreement, two newspapers suck up the monopoly profits until the weaker one is finally allowed to die. In the last decade, the Post-Intelligencer, the Rocky Mountain News, the Albuquerque Tribune, the Cincinnati Post, and the Birmingham Post-Herald have all suffered this fate.

The tragedy of the joint-operating agreements is that instead of making the stronger paper stronger, the arrangement tends to weaken it. Freed for almost a decade from the long-running joint-operating relationship it had with the San Francisco Examiner, the once-stronger San Francisco Chronicle is in such terrible shape that it has threatened to snuff itself unless it wins concessions from its workers. Had the Chronicle and the Examiner been forced to compete on the business side in 1965 instead of to collaborate, a clear victor would have a fighting chance at surviving in today’s environment.


I’ve left out of my discussion Sam Zell’s “complex” $8.2 billion purchase of the Tribune Co. because it is neither a vanity play nor newspaper-insider miscalculation. What the hell is it? If I figure it out, I’ll hit you with Twitter. If you’ve got a better idea, send it via e-mail to (E-mail may be quoted by name in “The Fray,” Slate’s readers’ forum; in a future article; or elsewhere unless the writer stipulates otherwise. Permanent disclosure: Slate is owned by the Washington Post Co.)

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