vs.

America’s Last, Best Newspaper War?

Also consider:

• Research indicates that readers form attachments to newspapers over time. Sure there may be mass defections from the Examiner when the Fang family takes over. But many Ex reporters and columnists whom readers relied upon will be available in the new Chronicle if Hearst keeps its promise to take the Examiner’s journalists with them. That will provide a powerful incentive to switch to the Chronicle.

• History has shown few cases where a newspaper from a city 50 miles distant has successfully competed with a larger hometown daily. In fact, competition between papers in the same town is so near extinction the feds passed an endangered species law; it’s called the Newspaper Preservation Act. It allows newspapers to bypass laws designed to prevent monopolies and form Joint Operating Agreements. In a JOA newspapers share profits.

• The trend among major newspaper corporations has been to avoid competition. While often beneficial to the public, competition doesn’t maximize shareholder value. Competing papers tend to spend more than they otherwise would on reporting and cut prices for subscriptions and ads to win market share.

  Both Hearst and Knight-Ridder, which owns the Merc and the Contra Costa Times, prefer monopoly to competition.

  Hearst sought a Joint Operating Agreement (JOA) between the Examiner and the Chron back in the 60’s to avoid competition. In the 1980’s Hearst shut down its papers in Los Angeles and Baltimore rather than compete and sold the Boston Herald-American to Rupert Murdock rather than battle the Globe. In San Antonio it closed its own paper in 1993, and purchased its competitor, creating the model for San Francisco.

  For its part, Knight-Ridder, sought a JOA for its Detroit Free Press rather than compete with the Detroit News.

• Tossing a newspaper on your driveway is costly, particularly when distributors must drive long distances between subscribers. Over the past 30 years newspapers have been cutting--not adding--sparse, outlying circulation.

A newspaper “war” occurs when one paper matches another beat for beat, page for page. Such a war just concluded in Denver, according to Columbia Journalism Review, when the Rocky Mountain News sued for peace (a JOA) with the Denver Post after losing $123 million over 10 years. The Mercury’s platoon in San Francisco isn’t equipped for war. This will more resemble a skirmish.

The competition is likely to center on the young dot com’ers of Multimedia Gulch and the bio techies in San Mateo County rather than average San Franciscans in the Richmond or Sunset districts. Retail advertisers drool over young techies because they have money to burn, households to fill with stuff, and unformed brand loyalties. And don’t forget the classifieds--the most profitable pages for a newspaper. Ads for job-hopping techies have helped thrust newspaper revenues to new highs, despite growing Internet competition.  

I think the Merc is betting that these Dilbert-ites will be more attuned to Silicon Valley than to Sutter or Van Ness. The Mercury covers the technology engine that is Silicon Valley like fog on the Golden Gate. Extending its brand north on the Peninsula into the biotech labs and Multi-media Gulch makes business sense.

But this is niche competition, cream-skimming, not the kind of city-wide competition the old Examiner provided.

The last, best American newspaper war?

Don’t think so.

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