~ S P E C I A L ~ F E A T U R E ~
"Breaching the Wall"An excerpt from the new book
KNIGHTFALL:by Davis "Buzz"
Knight Ridder and How the Erosion of
Journalism Is Putting Democracy At Risk
"The Wall" is a mythical barrier between journalism's advertising and
news departments. In his book, KNIGHTFALL, Merritt shows how
corporate newspaper management repeatedly breaches the wall, sacrificing
the public interest for quarterly profits. This excerpt details The
Los Angeles Times' infamous Staples Center conflict of interest,
which ended with a surprising victory for "the wall."
Buzz Merritt was editor of Knight Ridder's Wichita Eagle for
23 years. He is considered the godfather of Public Journalism, including
work with the Pew Charitable Trusts, the J.S. Knight Foundation, and
others. KNIGHTFALL will be welcomed by teachers, students,
and media professionals -- and anyone concerned about the relationship
between profits, the public and the press.More information about the
book, KNIGHTFALL, and author Buzz Merritt follows the
Breaching The Wall An excerpt from
by Davis "Buzz" Merritt
The notion of strict separation between the business and journalism
functions of newspapers is relatively recent in terms of the whole of
American newspaper history, and judging by current practice, it may be
only a passing phase.
Certainly nineteenth-century publishers were unencumbered by such
ideas, as the newspapers of that time were widely reviled as corrupt
subjects of big money corporations. By the days of the Great Depression,
however, people like John S. Knight, Col. Robert McCormick in Chicago,
Henry R. Luce in New York, and Nelson Poynter in St. Petersburg were
defiantly declaring their independence from pressures of the
countinghouse. That they were wealthier than most other people perhaps
made such freedom easier to assert, but their matching philosophies found
fertile ground in newsrooms. At McCormick's Chicago Tribune
building, there were even separate sets of elevators for newsroom people
and businesspeople. The editor's business-side partner, the general
manager, spoke only to the editor among newsroom employees.
It is not clear why the idea began to gain credence when it did, but
part of the explanation may lie in the fact that in the nineteenth
century, advertising provided less than half the total revenue of
newspapers. By the 1920s, it was up to two-thirds and rising steadily
toward its present 80 percent.
At most newspapers, including Knight's, the doctrine of strict
separation lasted well into the 1970s. A newspaper or newspaper company
either respected the wall between the journalism functions and the
business functions or it did not. The wall was either impenetrable, high,
and thick, or it didn't exist at all. Its presence, or lack of presence,
was determined by the owners, but its viability was never a function of
the form of ownership: There were public newspaper companies
whose leaders respected it and ones who did not; there were private and
family owners who valued it and those who did not.
If a newspaper was thought of, by its owners, as just another way to
make money, the wall was an impediment; the enterprise's financial success
could be maximized only if the wall did not exist. Maximizing a
newspaper's income is not a difficult process if there are no concerns
about public service and intellectual honesty: Write only stories that
please advertisers and potential advertisers; allocate newsroom resources
to the subjects that surveys tell you people say they want to read; ride
the partisan winds in editorial policy; don't rock the boat. Few American
newspapers acted that way, which was fortunate for democracy.
Today, however, the wall is increasingly transparent, a relatively
recent development that is potentially dangerous to and surely unfortunate
for democracy. Instead of doing one or the other, the great majority of
American newspapers today try to walk a slack wire across the abyss --
tricky stuff akin to trying to be a little bit pregnant. It is not certain
how long and in what fashion that balancing act can be sustained, if
indeed it can be sustained. Nor is it clear exactly when the balancing act
started, but as the twenty-first century opened, most newspapers had at
least one foot on the wire, and many of them were several shaky steps
along the downslope. There's no safe haven on the other side of the abyss
to make the risk worth the danger of a tumble; once out on the wire, the
only safe resolution lies in deciding to back away, which, on a slack
wire, presents its own set of dangers.
The argument in favor of a high, impenetrable wall incorporates both
journalistic and business considerations. A newspaper's credibility is its
most vital asset. Its information and editorial opinions cannot be
trusted, in the case of news, and persuasive, in the case of opinion, if
readers suspect that the judgments behind the information and opinions are
influenced by other than journalistic standards. Conflicts of interest
between journalistic and business aims, as well as the appearance of
conflicts, must therefore be avoided.
Likewise, the credibility of a newspaper's advertising lies in the
proposition that the space purchased delivers full value for the
advertiser's dollar, with no other considerations necessary. If a
newspaper provides more to the advertiser than the purchased advertising
space itself, the message is clear: Absent additional considerations, the
advertising is overpriced and its value is in question. So the wall
protects the integrity of both the journalistic content and the
advertising content while allowing the people on both sides of the wall to
pursue their separate but mutually supportive goals.
The change in newspaper attitudes about the wall is not so blatant as
to make a simplistic quid pro quo connection between news and advertising
content a routine practice, at least at most newspapers. The change is
much more subtle than that, and it is much more insidious because it
involves structural changes in the organization of responsibilities of key
newsroom people, and it involves their personal compensation.
Editors and other newsroom employees now regularly sit on marketing
committees with advertising and circulation managers. They share financial
goals through their overlapping MBOs (management by objectives) and other
compensation mechanisms. This puts immense direct and very personal
pressure on the newsroom people to align their journalistic standards of
judgment with the very different business judgments of their non-news
peers. Failure on the part of the newspeople to conform their thinking to
the rest of the management group can have direct, negative financial
consequences for everyone in the room. Entire regular sections of the
newspaper as well as special sections are conceived, designed, and
executed in that philosophically muddled environment, with ethical and
practical results ranging from benign to devastating.
The problem with such structures as interdepartmental marketing
committees is that the newspeople are invariably outnumbered by
business-side people, and they are also rhetorically outgunned because the
business people are dealing in dollars and cents and the newspeople are
dealing in a philosophical concept that, too often, business people either
do not understand or do not support.
In an ideal -- though admittedly fiscally inefficient -- world, editors
would decide what subjects to write about without regard for whether there
was an advertising tie-in opportunity. For example, an editor could decide
that the intense public interest in wellness, exercise, and nutrition
justified starting a weekly section devoted to that subject. Letting the
advertising department know in advance about the launch of such a section
would be a logical thing to do, but the coordination would end there, and
the section would be driven by news-information considerations. If the
advertising department wanted to sell ads for the section, that would be a
plus for everyone, including readers, but if the advertising were not
forthcoming, the section would still be produced because there were clear
informational imperatives involved. That's in an ideal world. In the real
world of 2005, most newspapers would not proceed with the section absent
advertising support because it could not be cost-justified, even though
there was an identifiable reader appetite.
Tying coverage of such matters as health and nutrition to advertising
interest may seem a minor compromise of editorial judgment, because while
such matters are important, they are peripheral to the most basic Thomas
Jefferson/First Amendment kinds of journalism. But insisting upon an
advertising tie-in is a step onto the slack wire, and once a newspaper is
in that business, it is over the abyss.
Automobile dealers are among the business world's most aggressive
competitors, in part because of the broad array of similar products to
sell, and in part because they run in narrow, low-single-digit operating
margins, certainly far less than the 25 percent to 35 percent common to
even the worst-performing newspapers. The recession of the early 1990s and
newspapers' subsequent efforts to impose advertising rate increases
heightened the tensions that already existed between the two. The auto
dealers' ability to use other, even if less effective, modes of
advertising gave them the opportunity to flex their considerable economic
muscle as the third-largest newspaper advertising buyer (behind department
stores and real estate), and they did so.
Newspapers, in their efforts to help readers with their lives, were
full of copy about automobiles: safety ratings, reviews of new models,
analysis of car-selling techniques, and, of course, tips on how to haggle
as well as the car dealers. Many newspapers developed freestanding auto
sections, some of them products of the newsroom, some of them done by
advertising departments. The newsroom sections tended to be more
aggressive in coverage than the advertising-produced sections, of course,
and the former also sometimes gave local car dealers indigestion and a
reason for taking on the newspapers. The early-nineties period saw dozens
of boycotts and threatened boycotts of newspapers by auto dealer
associations, and dozens of instances of harried publishers apologizing
publicly for what the dealers said were newsroom transgressions.
Three factors eased the tensions: First, the economy began to improve.
Second, in 1994, the Federal Trade Commission (FTC), investigated a
one-month, $1 million boycott of the San Jose Mercury News and
declared it an illegal conspiracy to restrain competition among dealers
and a chilling of the publication of important consumer information. The
Mercury News' alleged offense had been a story showing consumers
how to analyze factory invoices so they could better bargain with dealers.
The next year, the Santa Clara County dealers' association signed a
consent agreement not to promote such boycotts. Other auto dealer groups
heard the FTC's message and formal, organized boycotts trailed off. The
third factor: When dealers boycotted newspaper advertising, car sales
dipped, often sharply.
The tension with auto dealers and other major advertisers in times of
economic stress led some newspapers to try various routes around the
problem. One, The News & Observer in Raleigh, North Carolina,
transferred its automotive writer from the newsroom over the wall to the
classified advertising department in 1991. But Dan Neil was no ordinary
auto writer. From the newsroom, he had written provocative, tough-minded,
often irreverent stories and new-car reviews, the best of which often were
passed around gleefully (and enviously) in other newsrooms. He did not
change his style when his boss became the classified advertising manager
rather than the editor, and he plied his trade without anyone editing his
copy. Finally, however, local auto dealers tired of his aggressive style,
and Neil was ordered to run his copy by the classified advertising manager
before it was published. He refused and was fired. After several years of
freelancing for various publications, he was hired by the Los Angeles
Times as its auto critic, working out of the newsroom again. And it
was a newsroom, as we shall next see, that had been through the Mother of
All Wall Breachings.
WHERE'S MY BAZOOKA?
In 1995, the directors of Times-Mirror Corp. were worried about their
floundering flagship, the Los Angeles Times. From 1960 to 1980,
under famed and outspoken publisher Otis Chandler, the newspaper earned
prominence for both its business and journalistic performances. After his
retirement, however, the enterprise began to drift, and by 1995 the
directors, mostly Chandler family members, were desperate for new
leadership: The operating margin was at 6.5 percent, down from the
mid-twenties; the stock price had skidded from $42 to $18; and circulation
was down almost 20 percent. They turned to Mark H. Willes, a General Mills
executive whose only newspaper experience was reading them. As CEO and
then chairman of the corporation, he also named himself publisher of the
Times. In 1998, he hired as president of the Times
Kathryn Downing, an attorney whose publishing experience involved only
legal periodicals, not newspapers.
Willes quickly decided that the wall between news and business
functions was an anachronistic barrier to financial revival and declared
publicly that he would destroy it "with a bazooka, if necessary." Such
words from a cereal magnate only a year into the newspaper business
horrified and alarmed many journalists at the Times and
elsewhere, including its editor, Shelby Coffey, who resigned. Predictably,
the response did not deter Willes from acting on his conviction by
decreeing regular coordination between news and business at many levels.
He announced a plan to appoint general managers for each of the
newspaper's sections who would coordinate with the section editors; each
section would be required to develop a pro forma with readership and
The restructuring set up the Times to get more than a little
bit pregnant and a long way out on the slack wire.
The next step onto the wire was the newspaper corporation agreeing to
be a founding partner in development of the Staples Center, a 20,000-seat
arena touted as a catalyst to the revitalization of downtown Los Angeles.
The agreement had the newspaper paying Staples about $1.6 million over
five years in a combination of cash, free advertising, and about $300,000
from later, unspecified joint projects. Similar deals are not uncommon in
other cities, despite the fact that a newspaper partnering with a business
that its news department covers inevitably raises conflict-of-interest
questions about fairness.
Some executives argue that a newspaper company has an obligation to be
an active participant in community life, and that its journalism
responsibilities do not and cannot make it less than a fully participating
corporate citizen. However, such deals make life much harder for the
newspaper's journalists. They must contend not only with the
conflict-of-interest questions but also with assumptions on the part of
the partner/news source that its involvement with the business side of the
newspaper changes the equation in dealing with the news side. Editors and
reporters would much prefer a totally clean-hands situation.
The Los Angeles Times involvement with Staples did not stop
with the founding membership. As the arena's opening day approached in
1999, people on both the news and business sides were thinking about how
to mark the occasion. Editor Michael Parks felt that the opening was an
important news event because of the arena's role in the renaissance of the
center city. Business-side people saw it as a financial opportunity.
Together they developed a plan to devote a 168-page special issue of the
Times' Sunday magazine to the subject, with the news staff
providing the stories and the business managers the financial support. So
far, so good.
But unbeknownst to the newspeople, the business side, in one of those
"later, unspecified joint projects" had carved out a deal with the Staples
Center to share profits on the special issue, thereby helping the
Times fulfill its founding-partner obligations. The special
section was well into production when, to the shock and chagrin of Los
Angeles Times editors and reporters, The New York Times
broke the story of the profit-sharing arrangement. The story, and the
resoundingly negative reaction to it from journalists and journalism
ethicists across the country, made the clear point that the work of the
Los Angeles editors and reporters had been compromised -- not only on the
magazine project, but also on any future coverage of the arena and its
Three hundred Los Angeles Times journalists signed a petition
condemning the arrangement, and even the retired but still-revered Otis
Chandler weighed in with a letter saying, "Successfully running a
newspaper is not like any other business," and calling the Staples deal
"unbelievably stupid and unprofessional" and "the most serious single
threat to the future during my fifty years of being associated with the
'Times'. . . Respect and credibility for a newspaper is irreplaceable.
Sometimes it can never be restored."
Willes and Downing were initially flummoxed, not grasping the
seriousness of the ethical breach, but soon they came to accept, if not
understand, the seriousness of the offense and apologized publicly. The
Chandler family decided it was not capable of managing the company and
newspaper without Otis Chandler in the picture. Without the knowledge of
Willes, the chairman and CEO, they negotiated a $6.1 billion sale to
Chicago's Tribune Company, and Willes, Downing, and many other key players
in the event were gone.
David Shaw, media writer for the newspaper and nationally respected for
his detailed reporting and analysis on newspaper matters, including those
involving the Los Angeles Times, spent months reporting on the
disaster. The result was a 32,000-word report in the newspaper. For Shaw,
the bottom line was that the bazooka shot at the wall created the
conditions for the ethical fiasco. "I don't know that the publisher and
the advertising department would even have conceived of such an idea were
Willes not pushing for new and innovative ways to bring in new revenue,"
he said in a 2004 interview.
By 2003, John Carroll, hired in the wake of the Staples affair as the
new editor of the Los Angeles Times, had fully rebuilt the wall,
and he needed an automobile critic. He personally sought out Dan Neil, who
had been through the Raleigh wars of the wall. In 2004, Neil was awarded
the first Pulitzer Prize for criticism ever given to an auto critic, one
of an impressive five the revitalized Times won in that year. How
high is the wall now?"I'm not allowed to talk to anybody in the
advertising department. It is forbidden," Neil said.
About the Author
DAVIS "BUZZ" MERRITT worked as a reporter,
Washington correspondent, and editor for Knight and Knight Ridder
newspapers for 42 years. For 23 of those years, he served as editor and
senior editor of The Wichita Eagle, the largest daily newspaper
in Kansas. Since his retirement in 1999, he has been an adjunct professor
of journalism at the University of Kansas and Wichita State University, a
consultant on public journalism with newspapers and broadcast stations,
and a writer. A grandfather of six, he lives in Wichita with his wife,
About the BookKNIGHTFALL
Knight Ridder and
How the Erosion of Newspaper Journalism Is Putting Democracy At Risk
by Davis "Buzz" Merritt
Published by AMACOM
0-8144-0854-0, 242 pages, photos, hardcover, $24.95)
this site or directly from the publisher:
With corporate balance sheets dictating what we read, freedom of speech
is in peril -- and freedom itself may be compromised.
The First Amendment to the U.S. Constitution is clear: Congress shall
make no law abridging freedom of the press. And yet a force seemingly even
more powerful than the supreme law of the land threatens one of our
nation's most precious guarantors of freedom.
For more than two centuries, American newspapers have
collected, organized, and disseminated the information that makes
democracy possible. Occasional opponents of a free press have not been
able to cripple newspapers and despite dire predictions, neither have
radio, television, or the Internet. But greed can kill American
newspapers, thus eliminating the crucial synergy between journalism and
The reality that newspapers must remain financially viable has always
dictated compromises between the competing missions of profit and public
service. But in recent years the essential balancing of those missions has
been replaced by a single-minded pursuit of profit. Whether the chosen
method is scaling back of content, cutting corners to control costs, or
dismantling the traditional wall separating the news and business
departments, the result is the same: the watering down of newspaper
journalism, which is the core of all American journalism. Without
fundamental change in newspapers' corporate boardrooms, the flow of
information that Americans need to govern themselves will dry up.
In KNIGHTFALL, Davis "Buzz" Merritt, a 40-year
newspaperman whose career runs parallel to the seismic shift in
journalism's landscape, examines one notable exemplar of this growing
trend, Knight Ridder, America's second-largest newspaper company with
holdings including The Philadelphia Inquirer, The Miami Herald, the
Detroit Free Press, and the Mercury News in San Jose.
Merritt was a participant-observer in the 1974 marriage of two
newspaper companies, a union that seemed made in heaven. Knight
Newspapers' longstanding tradition of excellence in journalism coupled
with Ridder Publications' business savvy should have created a unique
company offering the best of both worlds.
That it did not happen is a reflection of complex changes in American
society and the realities of modern business pressures driven by Wall
Street. There are no pure heroes or pure villains in this story; the
players were doing what their training, background, and respective family
histories urged them to do. But the story's outcome is ominous for
American democracy. Merritt's personal accounts of the 30 years since the
merger illustrate the degree to which what we know is being limited.
Further, his portraits of key figures, analysis of societal changes, and
dozens of interviews with others who were (and are) there reveal that not
only is he on target, he is also not alone in his unsettling
conclusions.A free press is a cornerstone of our democracy. The
erosion of that foundation is a catastrophe in the making: the real
possibility that the kind of journalism that gave rise to -- and preserves
-- our democracy will disappear.
"A daily newspaper can be regarded as a business not intrinsically
different from making coat hangers or carpets. But to do so is to
disregard the central role of newspapers and quality journalism in the
democratic life of our communities and nation. Buzz Merritt presents a
detailed social analysis of the trends that have undercut journalism's
critical role in public life. To understand where we are, how we got here,
and where we need to go, invest some time in
-- Maxwell McCombs, Jesse H. Jones
School of Journalism, University of Texas at
"KNIGHTFALL lifts the thin veil of corporate
respectability from the long, steady suffocation of America's newspapers.
Merritt's compelling case study is Knight Ridder -- yet the same sad story
is playing out in print and broadcast newsrooms across the land. The slow
but sure victory of outlandish profits over civic health endangers us all.
To respond, we must understand. Start here."
Overholser, Missouri School of Journalism,
former editor, Des
"Merritt presents a sweeping account of the changes in journalism that
are having an impact on the role newspapers play in our democracy. No one
is in a better position to explain why than Merritt, whose views are
informed by more than 40 years as a journalist. He is both an insightful
professional and a dedicated citizen."
-- David Mathews,
President, Kettering Foundation
"The story of the newspaper business in the 20th century is like a
Sophocles play where the protagonists can see that their actions will lead
to doom, but they are powerless to stop. Buzz Merritt built his career in
the middle of this real-life tragedy, and his well-written case study
helps us to understand the entire industry."
-- Philip Meyer,
author, The Vanishing Newspaper
"KNIGHTFALL is a troubling and revealing account of what
happens to journalism when it is yoked to the insatiable demands of Wall
Street. It will resonate and reverberate in newsrooms, and should be
required reading for anyone concerned about journalism and the future of
democracy. Buzz Merritt's status as an insider gives this hard-hitting
book unusual credibility."
-- Gilbert Cranberg, George H. Gallup
©2005 by W. Davis Merritt. All rights reserved. Reprinted here with
permission of the publisher, Amacom Books, http://www.amacombooks.org/. Please feel free to
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