Forced Divorce in Tucson

To many a newspaper in financial straits the "Albuquerque Plan" has borne the same relationship as a rope to a drowning man. Back in 1933, two papers in Albuquerque decided to cut their losses by sharing printing, advertising and distribution systems. Editorially they stayed separate.

The idea worked so well that newspapers in 28 U.S. cities are now operating under some form of the plan, and others are considering it. Or at least they were. In Tucson, Ariz., Federal District Court Judge James A. Walsh has just called a halt to such newspaper combinations by ordering a complete divorce of mutual ownership, advertising, and circulation departments between the city's morning and afternoon papers.

Watching Stopped. For years, the Justice Department has kept an eye on the joint operations of the Tucson Daily Citizen and its morning counterpart, the Arizona Daily Star. Since the Citizen was ailing, Government trustbusters watched suspiciously but did not interfere when the papers adopted the Albuquerque Plan in 1940. In 1965, however, they stopped watching and started acting when the fully recovered Citizen bought out its competitor for $9,999,790. The Justice Department filed suit against the merger and contended that the 25-year operating agreement discouraged competition.

In 37 pages of findings last month, Walsh ruled that the joint business operations of the Citizen and the Star had eliminated all newspaper competition in the area. After the 1940 agreement, advertising rates had been raised a dozen times while the papers' profits were increasing. Walsh concluded that joint operation "constitutes a price fixing, profit pooling and market allocation agreement illegal per se under Section I of the Sherman Act." The subsequent merger, continued the judge, represents a "conspiracy to monopolize the daily newspaper business in Tucson," a violation of the Clayton Act.

Act Pigeonholed. The papers and their publishers were given 90 days to disengage. They obviously would prefer not to do so, and will appeal the decision to the Supreme Court. Failing there, an avenue remains to the nation's many consolidation-minded publishers. The failing-newspaper bill, now languishing in a Senate subcommittee pigeonhole, would exempt from antitrust laws those papers combined along the Albuquerque Plan, provided that one of the pair was in serious financial trouble. The management of Tucson's dailies believe that their papers would qualify. So do scores of other publishers who are wondering this week what to do about the Walsh decision.

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