Some people may have noticed the black plastic newspaper boxes that appeared downtown a couple of weeks ago. In a transparent attempt by the Missoulian to impede the growth of the Independent, they changed the publication day of their weekly “Entertainer” section to Thursdays and started distributing it as a free, stand-alone newspaper.
Judging from their work in the last two issues, the quality of their new free weekly is apparently inconsequential to them. What seems to matter more is luring business away from the Independent, which isn’t just unethical and anti-competitive, it’s probably illegal.
Granted, they cobbled together a modest redesign to change the section’s look and added a few components to the editorial mix, including a wise-cracking column and a grid for upcoming night club gigs, but it was surprisingly drab to look at. Overall, their effort was unworthy of a reputable newspaper. In the inaugural Oct. 11 issue, they misspelled “calendar” four times in a two-page event listing, most notably in the bold headline across the top of the page. The error was fixed the following week, but considering the energy and money they put into selling this issue over the last month, including posting billboards on Brooks Street, it leaves the reader wondering, if they didn’t intend to sweat the details and publish a quality publication, then why bother at all?
The answer, I’m afraid, is as obvious as it is disturbing. The Missoulian has begun distributing the “Entertainer” as a free weekly because Lee Enterprises isn’t satisfied with a merely dominant position in the local advertising market. They want it all, and they can’t abide the success of the Independent. There’s a word for their frame of mind, a word that makes me uncomfortable, but it is the only one that fits: Greed.
The Independent has never been afraid of aggressive competition. We believe in the power of free markets and competition to improve our quality of life. But the only free market the Missoulian and Lee Enterprises desire is one free of rivals. This is not just speculation. It’s a deliberate business strategy cited in the “Mid-Year Media Review” delivered by Lee Enterprises management in June. Rather than operate papers in large metropolitan areas, they want to own papers in mid-size markets where they are unlikely to encounter strong competition.
But things haven’t been going their way in western Montana, despite recent acquisitions of the Ravalli Republic, the Lake County Leader, the Big Fork Eagle, the Whitefish Pilot, and the Hungry Horse News. Since I became publisher of the Independent four years ago, it has become one of the most popular alternative weekly newspapers in America. We reach 56 percent of Missoula adults—more readers, as a percentage of the population, than any other alternative weekly in the country. In fact, our circulation in the Missoula urban area actually exceeds that of the Missoulian by about 1,000 copies, according to independent, third-party audits.
As the Independent has grown over the last few years, we’ve doubled the size of our staff, increased our page count, and received national recognition for the quality of our reporting. In a study conducted by a Kalispell research firm last fall, readers of the Independent said they were more likely to trust us than the readers of the Missoulian were to trust the daily. Clearly, we’re gaining ground, and it’s starting to worry Lee Enterprises.
But even though we’re the largest newspaper in Montana not owned by an out-of-state corporation, we’re still small relative to the Missoulian, which eclipses our gross revenue by as much as 40 times. And we’re dwarfed by Lee Enterprises, which reported net income of $84 million last year. In fact, Lee Enterprises boasts one of the highest profit margins in the newspaper business, at about 30 percent.
The key to their extraordinary profitability lies in their conscious decision to avoid competitive markets. In Missoula, that’s allowed them to nearly double their nationally published advertising rates over the last 10 years, notwithstanding their stagnant circulation during a period of tremendous population growth.
And they can be merciless cost-cutters. Last year, Missoulian Publisher David Fuselier ordered the water coolers and coffee makers removed from the office and insisted that all staffers empty their own trash.
Overall, their approach to business should trouble free market conservatives and anti-corporate liberals alike. By deliberately limiting competition, acquiring it outright where it stubbornly exists, Lee Enterprises is trying to take the risk out of capitalism. In the process, they are effectively reducing the diversity of local news sources, which poses a genuine threat to the viability of our democratic institutions. They may not tell you what to think, but they can dictate what you think about. And in the process, they can reduce the quality of service they provide to advertisers and readers alike.
The law recognizes the threat that corporate monopolies pose to consumers and free markets. Businesses with a dominant market share are not supposed to adopt predatory tactics that inhibit competition. That means that they’re not supposed to manufacture substandard products like the “Entertainer” and then charge below-market prices for it, offering special premiums or discounts to lure business away from smaller competitors. They’re not supposed to concoct schemes just to get in their rivals’ way. They’re not supposed to succeed simply by virtue of their size and ability to absorb temporary losses. It’s illegal.
Still, it happens. In the 1970s and 1980s, Gannett, the largest newspaper conglomerate in America, provoked a volley of antitrust suits across the country. They acted with such impunity that one of their publishers in Salem, Ore. once stood on a desk and proclaimed that the competing free community paper would be out of business within months. He called it “Operation Demolition,” and nicknamed his sales representatives “Dobermans.” Gannett’s predatory practices succeeded in killing the Salem weekly, and many others like it. Those communities were left that much poorer for it.
History is full of similar examples to remind us that unfair trade practices aren’t just hypothetical thought crimes. Corporate giants can—and do—compete unfairly and with complete disregard for the consequences. Jobs are lost, consumer choices are limited, and prices go up. And when they influence the way a community receives its news and opinions, they have a pernicious effect on culture and democracy.
The Independent will not change how we do business just because the Missoulian has put a bull’s eye on our back. We will continue publishing the best newspaper around, making it useful, enlightening, and fun to read. If the “Entertainer” is the best they can do, then we have little reason to be concerned. We know readers will prefer the Independent.
Ultimately, the danger we face doesn’t come from the “Entertainer.” It lurks in the rapacious mindsets of the people behind it. If they’re intent upon undermining our success, they can truly hurt us and hurt the community too. But they’re going to find themselves in a fight so fierce and unrelenting, they’ll wish they’d picked on somebody their own size.