The Rochester Acquirer

The Gannett string of daily newspapers totaled only a modest 19 when its founder Frank Gannett died 15 years ago. All but three were concentrated in upstate New York. The Gannett image at the time was that of a celluloid-collar, low-budget exercise in small-city publishing, distinguished mainly by a ban on cigarette and liquor ads that reflected Gannett's personal prohibitions. Then Paul Miller took over as his boss's designated successor and the group took off. Today the Gannett Co., Inc. owns 52 dailies and 14 weeklies, more than any other U.S. chain, and the end of its expansion is nowhere in sight.

Gannett papers now serve state capitals as far apart as Hartford and Honolulu. Last year was the company's biggest ever for acquisitions: 17 dailies for a total of $130 million, mostly in Gannett stock. This year the group has already paid $14 million for the Nashville, Tenn., Banner (circ. 97,800), and next month plans to take over the El Paso Times (59,348) for an estimated $20 million. With Gannett stock selling at some 35 times earnings, stockholders at the corporation's annual meeting in Rochester last week authorized a doubling of outstanding shares to 20 million--a sure sign that more purchases are planned.

Board Chairman Miller, now 65, is an energetic Missourian who came to the chain's Rochester headquarters in 1947 as executive assistant to Frank Gannett after an editorial career with Oklahoma papers and the Associated Press, where he rose from night filing editor in Columbus to Washington bureau chief in only ten years. Miller collects dailies for Gannett with the enthusiasm of a kid amassing marbles, and journalism may well remember him in newspaper terminology as the "Rochester Acquirer." Because he travels so much for both Gannett and the A.P. (which elected him its president in 1963 and chairman last month), Miller says that he has "come to know someone, along with the newspaper situation generally, in almost every city and town in this country." That makes acquisitions easier: "So much of this is done person to person. We don't have to work through a middleman."

News-Oriented. Sometimes Miller acts upon sheer impulse. In 1969 he received a routine letter--having nothing to do with purchasing properties--from Louis Weil, president of Federated Publications. After glancing at the names of Federated's seven papers on the letterhead, Miller promptly phoned Weil. "Look," he said, "I see that you're not in any states where we are, and we're not in any states where you are. Why not talk about a possible merger?" Only four months later, Gannett agreed to buy out Federated. Miller shuns the biggest cities, where purchase costs are high and prospects for circulation increases limited. His general policy is to seek dailies that are "dominant in a growth market." Recent acquisitions have been principally in Florida, middle-sized cities in the South and West, and the U.S. Pacific islands. Gannett now even has morning, afternoon and Sunday papers on Guam, and Miller has plans for further expansion in the Pacific, which is growing in population and starved for newspapers.

Because Gannett concentrates on smaller communities and big-city suburbs, its group-wide circulation of 2,243,999 lags behind the likes of Newhouse, Knight, Scripps-Howard and Hearst. Only five Gannett papers exceed 100,000, and all but 13 are under 50,000. True competition is not a factor except in Hartford, where Gannett's afternoon Times (131,498) runs an insipid second to the legendary morning Courant. In Nashville, El Paso and Honolulu, the group has agreements to share production expenses and profits with competitors. Elsewhere, Gannett enjoys a monopoly.

Monopolies often mean mediocrity, and none of Gannett's papers could be called great. But most are the better for Gannett's ownership, and Rochester's Times-Union won a Pulitzer Prize this month for coverage of last year's Attica prison riot. "We are news-oriented," Miller insists. "I am a newsman. Certainly we believe in keeping earnings as strong as we can. But in making decisions, we always start with the news product." He is naturally pleased that Gannett rang up record revenues ($238,451,000) and profits ($19,747,000) last year; there are no longer any scruples about booze and cigarette advertising.

Gannett exercises tight central control from Rochester on the business side of its newspaper operations and is sometimes prone to penny pinching. At the Honolulu Star-Bulletin, where recession has cut ad revenue, the staff has been reduced slightly and morgue hours shortened to avoid payment of a night differential of $1.75 to a librarian. But Gannett editors enjoy broad editorial autonomy. Each daily is free to say what it likes, to play stories as it pleases, to use as much or as little as it wants of Gannett's own 24-hour wire. That service frequently pitches national stories to the group's individual papers with local-angle leads or inserts to make them more relevant to the reader.

News Vice President John Quinn sends out a weekly "wire watch" to keep editors and publishers abreast of what their colleagues are doing on other Gannett papers and offer an occasional suggestion. The wire watch commands respectful attention but not blind obedience. Exceptions to Gannett's editorial autonomy rule are nine afternoon dailies in New York's wealthy suburban Westchester and Rockland counties, the former Macy chain that Gannett acquired in 1964. Because of their proximity to one another, the papers not only run several common pages a day that are centrally printed but also use editorials written for the group as a whole under the direction of Executive Editor James Head, 46, a Gannett trouble-shooter who has brought both coordination and some editorial imagination into the scruffy Macy city rooms.

The Yonkers Herald Statesman (47,852), long dubbed the "Sterile Hatesman" because of its boring and often narrow-minded tone, quickly got Head's O.K. for a series on Yonkers Mafiosi that the previous managers had prohibited. Heavily Italian Yonkers was outraged, and Herald Statesman Editor Barney Walters had his car windshield smashed eleven times, but the paper was suddenly worth reading again. These days Head's papers even endorse Democrats from time to time, which would have been heresy under the Macys, but individual editors must check with him first. To capture suburban readers on weekends, a new Sunday edition was launched for Rockland County last year, and a Westchester County Sunday paper is in the advanced-planning stage.

Indefinite Expansion. The editorial benefits of common ownership can be considerable to individual papers. The Cocoa, Fla., Today (48,101) covers space shots with imagination and expertise for the whole chain, via the Gannett News Service. The Statesman in Boise has been filing with local insight for all papers on the recent Idaho mine disaster. The News Service circulates such group-wide features as an entertainment column from the San Bernardino Sun and a music column from the Times-Union. Small papers benefit from staff coverage by bigger ones and in turn serve as testing grounds for technical improvements that may be adaptable to larger papers.

Chairman Miller promised stockholders last week that he would continue his "aggressive acquisition policy," and feels that the group can be expanded almost indefinitely without spreading resources too thin. He no longer has to go looking very hard for profitable new properties. Having firmly established his interest, Miller now finds potential sellers increasingly eager to offer their properties before the Rochester Acquirer.

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