GR EXTRA!

Lunzer's testimony on Capitol Hill

Bernie Lunzer, President

22 Apr 2009

The Newspaper Guild-CWA

Chairman Johnson, I want to thank you, Congressman Coble and other members of the committee for this chance to testify. I’m Bernie Lunzer, President of The Newspaper Guild of the Communications Workers of America, representing media workers throughout the U.S., primarily journalists, and primarily at newspapers.  I have worked in the industry for thirty years, ten of those at the St. Paul Pioneer Press in the newsroom,  in advertising and in circulation.

I welcome this opportunity to talk about the current crisis within American journalism.  This crisis affects all members of this committee, all your colleagues and all Americans. American journalism is, and will continue to change radically in the next five years.   The policies you promote will decide whether we have a strong and fair press, or a limited, opinion press - regardless of the medium.

The underlying premise of this hearing is that Hearst Corporation and MediaNews wants Congress to relax anti-trust law. The Newspaper Guild is not convinced that such a remedy will be good for journalism in California or the United States. History has demonstrated that relaxing anti-trust law may actually do more harm than good.

MediaNews purchased over 20 publications in Northern California, some unionized, some not, to create a new entity called the BANG-East Bay. Once completed the company withdrew recognition of The Newspaper Guild-CWA. We lost a legal challenge, but later won representation of the full group through a hard-fought organizing campaign. Despite this, two years later our members still don’t have a contract.   If this exemption is granted in Northern California, others will demand the same ability to create monopoly markets, resulting in other workers throughout the country becoming targets for similar actions.

There is now one combined copy desk for all publications within BANG-East Bay. MediaNews has laid off roughly one-third of the journalists. The result is a homogenized mix of publications, with readers complaining that their "local" newspapers have little local content and are increasingly irrelevant to their communities.

Unhindered by antitrust law, a newspaper monopoly across Northern California will lead to job loss and to diminished products. This is contrary to the notion advanced by Hearst, which argues that its proposal would save something vital to the community. The Hearst-owned Chronicle now has fewer than half its original workers, and coverage in large sections of the community has already been diminished. History shows us that such a monopoly  will not benefit the local market and will further marginalize underserved, minority communities within this market.

Currently, publishers have recourse to an anti-trust exemption through the Newspaper Preservation Act, which maintains separate newsrooms but combines business operations. The sole purpose of the exemption was to help preserve the diversity of journalistic voices. But these joint operating agreements, or JOAs as they became known, often resulted in inflated advertising prices, so they have not proved to be a panacea for newspapers' problems. Furthermore out of over two dozen JOAs only ten exist today.

President Obama campaigned in favor of more anti-trust enforcement, stating in Gresham, Oregon, May 18, 2008, "There are going to be areas, in the media for example, where we're seeing more and more consolidation, that I think (it) is legitimate to ask...is the consumer being served?" The fundamental question of what is gained through such consolidation remains very relevant .

The largest concern we have about such a monopoly in Northern California is that an answer to the very real problems that exist in our industry will remain unanswered and that real innovation will be stifled. The two large corporations behind this initiative will only have forestalled their inevitable reckoning. The result will be underserved communities.

If there is to be serious consideration of the problems facing newspapers, Congress needs to look at alternative ownership ideas, like employee stock ownership, non-profit approaches and the new L3C concept. The L3C approach would allow publications to serve a stated social purpose in exchange for the ability to accept non-profit foundation money. Smaller, more committed news operations will be more successful in providing real coverage to communities. Bigger is not better. The current financial crisis is evidence of this.

An anti-trust exemption for such large corporations would create real barriers to entry for others, who may choose to compete in this same market. Without oversight, congressional and local, this exemption may not work, while these companies become a single voice for over half of our most populous state. Similar consolidations elsewhere would create incredible power for a select few.

A commitment must be made to local coverage and local job creation. These same entities that are promoting this current proposal have been the loudest in supporting the outsourcing of jobs - causing one to truly question any commitment they claim to have to their communities.
 
Agreements among competitors to shut down or reduce capacity or output are normally illegal per se under the Sherman Act; any effort to assist the newspapers in this regard will have far-reaching consequences.

Newspaper workers have made sacrifices to invest in the future of their publications. We have given up pay increases, vacations and other benefits in an effort to preserve quality local media coverage and a diversity of voices.

We have accepted these concessions with an understanding that we are investing in a long-term recovery plan. There must be a focus on new ways to generate revenue, and on creating new business models that recognize the deep changes we’re experiencing, but offer the community and marketplace viable news organizations and quality news coverage.  We look forward to working with your committee to address the long term problems of the newspaper industry in an equitable and progressive manner.  Thank you for your time and I look forward to your questions.