Local print media monopoly, Capital Newspapers (prints and generates advertising for the Wisconsin State Journal and the Capital Times) has announced a new weekly publication that targets long time, successful weekly Isthmus. Capital Newspapers, protected by a federally sanctioned joint operating agreement (Newspaper Preservation Act of 1970: the JOA allows two newspapers to “share” advertising, overhead and printing costs) is using those monopoly derived funds to compete with a traditional, non protected business – Isthmus publishing.
This is similar to a tactic that Microsoft used, illegally, to squish Netscape. See Lee Enterprise’s (owns 50% of Capital Newspaper) 2003 10-K (286K PDF) for a look at the Capital Newspapers (formerly known as Madison Newspapers Inc) local revenues (112M!) and net income of $16M (14%!).
Perhaps this is simply a negotiating/acquisition tactic? Capital Newspapers would likely enjoy acquiring Isthmus Publishing and thereby solidify control of the local print advertising business. This tactic has been used before, with a local business weekly and a children’s (Dane County Kids) publication.
What to do? Vince and Linda and the Isthmus have done a superb job for the community. Send a note to our representatives (Representative Tammy Baldwin | Senator Russ Feingold | Senator Herb Kohl) telling them that the time is long past to repeal the Joint Operating Agreement Statute. And cancel your subscription (if you have one) to the State Journal or Cap Times.
UPDATE – the act is certainly not helping quality, as Glenn Reynolds points out.
UPDATE2 – Perhaps this is the natural manifestation of the Clear Channel effect in Radio – played out in the newsprint business. Madison is fortunate to have two dailies – BUT – they should compete like anyone else, which would change things, significantly.