"Only in variety is there freedom." - Walter Lippman

Democracy at Risk

Four months ago, at the University of Oregon, I was privileged to speak at the Ruhl Symposium on Ethics in Journalism. The title of my talk was:

"American Democracy At Risk: Can American Democracy Survive the Loss of an Independent Press and a Diversity of Voices?"

Think about the question posed in that title.

Can American democracy survive the loss of an independent press and a diversity of voices?

The answer is a resounding no!

Our democracy is still the world's foremost experiment in societal governance. Our success to date is the world's exception, not the norm.

Our democracy is far more fragile than we'd like to admit. And the concentration of our media in large, public companies is posing one of the greatest threats ever to its survival.

Four-legged Democratic Stool

American democracy is supported by a four-legged stool:

• separation of church and state
• inclusion
• Constitutional balance of power
• freedom of speech and a free press

Each leg is essential. Take one away, and it's only a matter of time until our grand 226-year experiment topples.

Make no mistake about it - today, as we meet, our democracy is in crisis.

Let's quickly examine the stool and the critical role played by a robust and free press if each leg is to remain solid.

Separation of Church and State

First, separation of church and state.

While this separation is fairly solid, we see examples every day of religious fervor and church doctrine attempting to influence and even usurp our political process. Our protection is our Constitution, enforced by our courts, and empowered by our press. A vigilant and aggressive press is essential here.

Inclusion

Second leg, inclusion.

In spite of the lofty language of our founding fathers, our original democracy was very exclusionary. But the majority of these framers of our Constitution understood that they were creating something new - something that contrasted with an exclusionary monarchy - something that had to evolve in its inclusiveness if it were to survive.

Contrast in your mind's eye the original face of America with today's face. We began our democratic journey with the face of privilege. Well-to-do, white male land-owners. Today, the face is far different. It's a melting pot of class, gender, lifestyle, race and culture.

But the road from then to now was difficult and painful. And we are nowhere near the end of our journey. Closing our societal fault lines and staying the course on inclusion is our nation's greatest challenge.

Simply put, inclusion is essential because those not included have no stake in democracy's survival. And the role of our nation's press is the singular most critical factor in how well, or how poorly, we deal with this challenge.

I fear that one of the greatest losses we are experiencing from concentration of newspaper and media ownership is the loss of our commitment to inclusion and diversity.

In regard to diversity and inclusion, our newsroom employment figures are shameful.

Concentration of ownership is all about money and power.

The bigness of chains and the singular financial focus of public companies drive out all values and objectives that are not short-term and financial.

Community and societal values such as journalism and diversity are mutually exclusive with the faceless investors and their money managers' relentless quest for short-term profits and higher stock prices.

In both of these critical areas - journalism and inclusion - we have witnessed an egregious disinvestment and lack of commitment.

Perhaps even worse than the lack of commitment to inclusion is the lack of will or resolve to tell the critical story of our changing society and the importance of diversity.

Few of America's newspapers, large or small, are telling this story.

The silence is deafening.

Constitutional Balance of Power

The third leg is our Constitutional balance of power.

Here too, vigorous reporting and storytelling is being lost on both local and national levels. Public awareness is essential to preserving the integrity of our system of checks and balances. When most media are controlled by a handful of investors, there is simply no passion, no interest and no incentive to tell this complex story. Indeed, there is a conflict of interest with these corporations' singular drive to bolster short-term stock prices and the personal wealth of their senior managers.

Misconduct at any level of government is an expensive story to tell. It is clear that institutionally-owned newspapers and media companies are loathe to spend sufficient money on routine news, let alone aggressive, robust investigative journalism.

Watergate and the Pentagon Papers! They seem so long ago.

But the distance is far more than time - it's the distance between journalistic passion and stock options.

With the notable exceptions of The Washington Post and The New York Times - both still family controlled - does anybody believe that the class of professional asset managers controlling today's public newspapers would step up to a Watergate or Pentagon Papers story?

Or that they would step up to the country's multitude of local watchdog issues?

I don't think so!

In fact, I'll bet today's public newspaper CEOs wouldn't even recognize the significance of Watergate and the Pentagon Papers.

Freedom of Speech and a Free Press

The fourth leg of the stool is freedom of speech and a free press.

This is the most important leg. It's the one that keeps the others steady through its quest for truth and openness. Through the light it casts into the shadows. And through its storytelling.

Justice Louis Brandeis, writing for the Supreme Court, once stated:

"Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient policeman."

Indeed, a diverse press is the watchdog that protects integrity of our Constitutional process.

Frighteningly, today's ownership concentration and the blatant disinvestment in news which we are witnessing is, in and of itself, an untold story that may lead to our eventual undoing.

Where is the watchdog?

Right now, it's a lap dog.

If democracy is to survive we must change the course of this terrible trend toward media concentration, and invigorate a diverse and independent press whose primary mission is news and public service.

Democracy in Crisis

Democracy is in crisis.

We are fast losing the free, open, diverse and accessible press essential to our future as a democratic nation.

It's ironic that the threats the framers of the Constitution envisioned and tried to protect us from - political and religious ideology - are not what is jeopardizing our independent press.

Today the greatest threat lies in ownership of the press itself. It is fostered by public apathy and government passivity, an egregious failure to recognize the threat and aggressively deal with it. Of course, recognition is difficult when those controlling the press are not telling the story - whether willfully or simply through disinterest and disinvestment.

The threat is relatively new. Its foundation is the recent evolution of the nation's financial markets which has led to so many of our industries and our local businesses becoming dominated by faceless financial investors. These investors are characterized by disinvestment in our local communities and a disregard for lifelong employees. To a frightening extent, they have eliminated long term investment and public service values in much of corporate America and in many of our local business communities.

Theirs is a singular focus that drives out all other values - and, as we have seen all too often recently, this focus breeds arrogance, insensitivity and a loss of ethical behavior. Not to mention, illegal activity.

This singular short-term focus is bad in any line of business and it has been very harmful to our economy and our workers. But where newspapers are involved, it is eventually fatal to democracy.

There are only about 290 newspaper owners left in the entire United States. And, chains control about 75-percent of all newspaper circulation.

The number of owners continues to dwindle and the amount of circulation controlled by chains continues to rise.

The clock is running down.

The Independent Newspaper in America

This gets to the heart of this week's symposium. The independent and the family newspaper in America: its future and its relevance.

Do independent and family newspapers have a future?

Will they be relevant?

These are terrific questions around which there should be robust public discussion. But before I address them, let me pose a couple of other questions.

How did we get where we are today?

And how do we change course?

The answers to these two questions are fairly easy.

What isn't easy, is if we have the will to create public policy necessary to preserve what, up to now, has been the world's most successful democracy and the wonderful diversity of independent newspaper and media voices essential to that democracy.

We got into this fix because of federal tax policy, lax government oversight, an absence of restrictive laws and an unhealthy domination of our economy by the publicly traded financial market. This combination not only encouraged but actually drove today's concentration.

While the level of concentration is a new phenomenon, the fear of concentration and its negative consequences is longstanding This was expressed in the original Federal Communications Act of 1934. The Act strove to preserve a diversity of local voices in radio and television, to complement what at that time existed in print.

The current battleground in the war to save diversity is the FCC. Specifically, their push to repeal the newspaper and television cross-ownership ban. If the public loses this battle, and cross-ownership is repealed, it will be a major blow to the preservation of independent journalism.

The appalling concentration we see in today's newspapers, as well as radio and TV, began gradually around 30 years ago. The ownership shift was driven at the seller's end by the Federal death tax, and at the acquirer's end by the growth of the public financial markets. Once concentration of ownership began to take hold, the growing trend was aided and abetted by timid federal regulation, lax antitrust enforcement and the absence of laws specifically restricting concentrated control.

And, it has been aided by the publicly-owned newspaper chain and media companies themselves. They are unwilling to tell this critical story because it conflicts with their financial interest. If you want a scare, just look at the companies that are aggressively lobbying the FCC and bullying Congress for cross-ownership repeal. Then consider whether they are telling this story.

As is often the case in the news business, the most serious failure is in what isn't being reported.

Are Independent and Family Newspapers Relevant and Do They Have a Future?

To those who suggest that independent and family newspapers and small chains are not viable economic entities and can't compete or survive, I say hogwash.

For the most part, newspapers, TV stations and radio stations are local businesses which should be serving and responding to their local communities. Not Wall Street.

They are excellent businesses producing strong cash flow and higher operating margins than most other businesses.

But of course if you're a Wall Street money manager with no regard for the quality of the products and services you have invested in, how would you know this? You manage money - you don't manage a business, let alone practice journalism and public service.

More than 50 years ago, journalist Walter Lippman traveled to Iowa to celebrate the 100th birthday of the then independent, family-owned Des Moines Register and Tribune. He told an audience of Iowa's editors and publishers:

"There is, I believe, a fundamental reason why the American press is strong enough to remain free. That reason is that the American newspaper, large and small, and without exception, belongs to a town, a city, at the most to a region."

The secret of a truly free press, he said, is "that it should consist of many newspapers decentralized in their ownership and management, and dependent for their support --- upon the communities where they are written, where they are edited, and where they are read."

Are family owned and independent newspapers relevant and do they have a future?

The answer to both questions is absolutely yes.

Lippman concluded his address in Des Moines by saying:

"There is safety in numbers, and in diversity, and in being spread out, and in having deep roots in many places. Only in variety is there freedom."

Lippman's secret of a free press - diverse, local ownership - is as true today as it was 50 years ago.

Imagine how Lippman would feel today if he could see the sorry state of American journalism and newspaper ownership. Imagine his shock at The Des Moines Register and Tribune having become a part of a faceless chain owned by financial investors.

Throughout the next two days, and as you carry this discussion forward, remember Lippman's quote.

"Only in variety is there freedom."

The Independent Family Newspaper in America: The Issues

In spite of the frightening trend, I do believe that independents have a future, and potentially a very bright future.

It is true we should be put on the Endangered Species List. And, as such we should receive special attention and protection from Congress. If we do - like the American Eagle - we will not only survive but again thrive.

Let's briefly examine six issues concerning the future of an independent press.

Democracy

First, democracy.

Our democracy is dependent on an informed public which is, in turn, dependent on a diversity of independent voices. This symposium is part of a nascent national dialogue among journalists, communications schools, the journalists' trade press, consumer groups, unions and enlightened members of Congress.

Anyone who cares about the role of a free, independent, diverse press has to be encouraged that today's crisis is beginning to draw attention to this previously ignored and under-reported issue.

Values

The second issue is values.

We lost our way.

The excesses of the 90's have come home to roost and surround us today. Our most prominent headlines are of public company CEO criminals and disastrous public company failures. Failures resulting from personal greed, concentration of ownership and nonsensical mega-mergers.

Underlining these headlines is a government and regulatory system that has been usurped by the powerful special interests that it is supposed to regulate and protect us from.

All breeding a terrible lack of ethics in our public companies.

What has driven this public company ethical lapse is the loss of local community connection and the loss of community values. With ties to Wall Street, values around public service and integrity, have all been shunted aside.

Often it take a crisis to see the light and turn things around.

Perhaps out of today's economic and ethical crisis, we have the opportunity to see a rebirth of values and ethical behavior.

Business Model

The third issue is the business model.

There are those who have been arguing that independent newspapers can't survive.

Amalgamation, convergence and synergism are their mantra.

They claim independents can't survive in today's fast-changing, competitive world.

Don't believe it.

Newspapers, television stations and radio stations generate cash and earnings that exceed most industries.

The false benefits of large size and concentration in newspapers and media are geared solely to the short term. They have been devastating to our journalism and our inclusiveness. They have created serious and unnecessary hardships on our local communities and the journalists and employees of our newspapers.

Media moguls preaching convergence and synergism are preaching falsely.

When you carefully examine what they say and what they do, they are talking about ways to reduce costs by disinvesting. Saving money by eliminating the breadth of reporting and editorial voices. They are talking about getting monopolistic control of local markets, so that they can further reduce competition, reduce news expense, control advertisers and increase advertising rates.

Local Markets

Fourth is the issue of local markets.

The beauty of newspapers, as business and journalistic enterprises, is that they are essentially local. When they stay focused on their local communities and regions, they are very profitable.

For multi-generation families, such as mine, creating a small, independent family of newspapers does make some sense as long as we continue to operate independently and ensure that management is firmly rooted in the local communities we serve. And there are examples, such as Newhouse, of families with larger chains that continue to admirably serve their communities and elevate their journalism.

The key is connection with and a deep caring for the communities one serves.

Business Excellence

The fifth issue is business excellence.

Perhaps the most unappreciated aspect of today's remaining family and independent newspapers is their business excellence.

We all know the old stories of poorly-run family newspapers. Many of them were true. But those operators are mostly gone. The current generation of family and independent owners is outstanding.

We've only been able to survive in a very hostile world because we have developed exceptional business operations and we have remained true to values of community service and journalism.

You will continue to hear many hackneyed old saws, such as private and independent companies can't raise capital. That we can't stand up to technological change or new competition. That cross-ownership and convergence are inevitable. Well, it's all bologna. These are false arguments the public companies put forward to justify their financial motivation to grow bigger with no concern for what that means to a healthy democratic society.

Relevance

The last issue is one found in the title of this symposium: relevance.

Independent newspapers are without question relevant.

Our democracy, our civil rights and our basic freedoms are dependent on the aggressive journalism and diversity of opinion generated by independent newspapers that are an integral part of the communities they serve.

Several books have been written about this recently.

I'm a passionate reader of newspapers, as I assume everybody in this room is. It doesn't take much to see the tremendous difference in quality and relevance, in what's reported in a newspaper owned by financial investors vs. those owned in the private, independent sector.

Neuharth and Fuller

Tomorrow, you will hear from Al Neuharth, and Jack Fuller.

Al and Jack are two men, two journalists, for whom I have deep respect and admiration.

In a previous era when family newspapers often were not run professionally, and their owners were not committed to journalistic values, Al brought a new level of professionalism and service to many medium- and small-size newspapers across the country. And Al led this industry in inclusion, doing as much or more for women and minorities in our business than anybody else has done.

And Jack, we all know, is a distinguished journalist, who has influenced the lives and values of so many of us.

Al and Jack should be proud of their personal influence on us. What I suspect they find disconcerting, however, is the direction of the industry today.

They are both products of America's newsrooms.

They both brought journalistic values and passion to the early stages of newspaper ownership concentration.

As long as our publicly-owned newspapers and large newspaper chains were led by people like these with news backgrounds and a passion for journalism and community service, things weren't that bad. In fact, the overall level of American journalism and the quality of our newspapers, both in the public and private sectors, were significantly elevated going into and coming out of the 1980's.

Unfortunately, Al and Jack are not representative of the leaders of today's publicly-owned companies and of those who are driving the media ownership concentration.

Today's leaders don't come from newsrooms. Often they don't even have newspaper operating background. They tend to be investment bankers, corporate financial managers and attorneys.

How Do We Change This Trend?

How do we change this trend?

The way to regain independent control of media is to reverse the factors that led to it in the first place.

Preserve the FCC Cross-Ownership Rule

First step is to preserve the FCC's ban on cross-ownership.

If the ban falls, the financial forces it would unleash will hit the media business like a tidal wave, bigger than any force, deliberate or unintended, before. Some journalists believe that if cross-ownership prohibitions fall, we will lose our opportunity to save an independent, diverse press.

Preserve All FCC Media Ownership Regulations for TV and Radio

Second is to preserve all the FCC media ownership regulations for TV and radio. In addition to the cross-ownership ban, these are valuable and reasonable regulations that limit TV ownership to 35% of the nation's viewers, limits the number of stations one company an own in a single market, and, bans corporations from owing more than one of the four major broadcast networks.

Repeal the Death Tax

The third step is to repeal the incredibly destructive and dangerous Federal inheritance tax that is still forcing family newspaper owners against their will to sell to chains.

New Laws

Finally, Congress needs to pass new legislation to limit the newspapers, media and information distribution channels any one corporation can control.

Close

As I said earlier, the solutions are clear - the question is whether we have the public will to demand change.

The majority of media in the United States is controlled by financial investors. Unchecked, they will continue to advance their own financial interests. They will continue to disinvest in news and, they will continue to fail to tell the story of media concentration.

Concentration of media ownership is eroding our democracy.

We are in crisis!

Bold action is required if we are to preserve our freedom and democracy.

The four steps I outline are bold, but they are also reasonable, logical and in the public's best interest. We must act soon or it will be too late.

Walter Lippman would have been shocked 50 years ago if he could have looked into a crystal ball and seen the state of newspapers, journalism and media ownership today.

I'm an optimist at heart and look forward to the next two days and the promise they hold that our nation is ready to act in response to this crisis. It is my fondest hope and dream that my 9 year-old granddaughter will experience the freedom and the variety of voices which Mr. Lippman held so dear.



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