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A NEW AGE FOR NEWSPAPERS: DIVERSITY OF 

VOICES, COMPETITION AND THE INTERNET 

HEARING 

BEFORE THE

SUBCOMMITTEE ON COURTS AND 

COMPETITION POLICY 

OF THE

COMMITTEE ON THE JUDICIARY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

APRIL 21, 2009 

Serial No. 111–38 

Printed for the use of the Committee on the Judiciary 

( 

Available via the World Wide Web: http://judiciary.house.gov 
(II) 

COMMITTEE ON THE JUDICIARY 

JOHN CONYERS, JR., Michigan, Chairman 

HOWARD L. BERMAN, California 

RICK BOUCHER, Virginia 

JERROLD NADLER, New York 

ROBERT C. ‘‘BOBBY’’ SCOTT, Virginia 

MELVIN L. WATT, North Carolina 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

MAXINE WATERS, California 

WILLIAM D. DELAHUNT, Massachusetts 

ROBERT WEXLER, Florida 

STEVE COHEN, Tennessee 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

PEDRO PIERLUISI, Puerto Rico 

LUIS V. GUTIERREZ, Illinois 

BRAD SHERMAN, California 

TAMMY BALDWIN, Wisconsin 

CHARLES A. GONZALEZ, Texas 

ANTHONY D. WEINER, New York 

ADAM B. SCHIFF, California 

LINDA T. SA ́ NCHEZ, California 

DEBBIE WASSERMAN SCHULTZ, Florida 

DANIEL MAFFEI, New York 

[Vacant] 

LAMAR SMITH, Texas 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

HOWARD COBLE, North Carolina 

ELTON GALLEGLY, California 

BOB GOODLATTE, Virginia 

DANIEL E. LUNGREN, California 

DARRELL E. ISSA, California 

J. RANDY FORBES, Virginia 

STEVE KING, Iowa 

TRENT FRANKS, Arizona 

LOUIE GOHMERT, Texas 

JIM JORDAN, Ohio 

TED POE, Texas 

JASON CHAFFETZ, Utah 

TOM ROONEY, Florida 

GREGG HARPER, Mississippi 

PERRY APELBAUM, Majority Staff Director and Chief Counsel 

SEAN MCLAUGHLIN, Minority Chief of Staff and General Counsel 

SUBCOMMITTEE ON COURTS AND COMPETITION POLICY

HENRY C. ‘‘HANK’’ JOHNSON, JR., Georgia, Chairman 

JOHN CONYERS, JR., Michigan 

RICK BOUCHER, Virginia 

ROBERT WEXLER, Florida 

CHARLES A. GONZALEZ, Texas 

SHEILA JACKSON LEE, Texas 

MELVIN L. WATT, North Carolina 

BRAD SHERMAN, California 

[Vacant] 

HOWARD COBLE, North Carolina 

JASON CHAFFETZ, Utah 

BOB GOODLATTE, Virginia 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

DARRELL ISSA, California 

GREGG HARPER, Mississippi 

CHRISTAL SHEPPARD, Chief Counsel 

BLAINE MERRITT, Minority Counsel 
(III) 

C O N T E N T S 

APRIL 21, 2009 

Page 

OPENING STATEMENTS 

The Honorable Henry C. ‘‘Hank’’ Johnson, Jr., a Representative in Congress 

from the State of Georgia, and Chairman, Subcommittee on Courts and 

Competition Policy ............................................................................................... 1 

The Honorable Jason Chaffetz, a Representative in Congress from the State 

of Utah, and Member, Subcommittee on Courts and Competition Policy ....... 2 

The Honorable Lamar Smith, a Representative in Congress from the State 

of Texas, and Ranking Member, Committee on the Judiciary ......................... 4 

The Honorable John Conyers, Jr., a Representative in Congress from the 

State of Michigan, Chairman, Committee on the Judiciary, and Member, 

Subcommittee on Courts and Competition Policy ............................................. 5 

The Honorable Charles A. Gonzalez, a Representative in Congress from the 

State of Texas, and Member, Subcommittee on Courts and Competition 

Policy ..................................................................................................................... 7 

WITNESSES 

Mr. Carl Shapiro, Deputy Assistant Attorney General for Economics, Antitrust Division, U.S. Department of Justice, Washington, DC 

Oral Testimony ..................................................................................................... 9 

Prepared Statement ............................................................................................. 11 

Mr. Brian P. Tierney, Chief Executive Officer, Philadelphia Media Holdings, 

Philadelphia, PA 

Oral Testimony ..................................................................................................... 24 

Prepared Statement ............................................................................................. 27 

Mr. John Nichols, American Journalist, Madison, WI 

Oral Testimony ..................................................................................................... 39 

Prepared Statement ............................................................................................. 41 

Mr. Bernard J. Lunzer, President, The Newspaper Guild, Washington, DC 

Oral Testimony ..................................................................................................... 44 

Prepared Statement ............................................................................................. 46 

Mr. Ben Scott, Policy Director, Free Press, Washington, DC 

Oral Testimony ..................................................................................................... 48 

Prepared Statement ............................................................................................. 51 

Mr. C. Edwin Baker, Nicholas F. Gallicchio Professor, University of Pennsylvania, Philadelphia, PA 

Oral Testimony ..................................................................................................... 59 

Prepared Statement ............................................................................................. 61 

Mr. Dan Gainor, Vice President, Business and Media Institute, Media Research Center, Alexandria, VA 

Oral Testimony ..................................................................................................... 71 

Prepared Statement ............................................................................................. 73 

APPENDIX 

Material Submitted for the Hearing Record .......................................................... 99 

(1) 

A NEW AGE FOR NEWSPAPERS: DIVERSITY OF 

VOICES, COMPETITION AND THE INTERNET 

TUESDAY, APRIL 21, 2009 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON COURTS AND

COMPETITION POLICY

COMMITTEE ON THE JUDICIARY, Washington, DC. 

The Subcommittee met, pursuant to notice, at 2:07 p.m., in room 

2141, Rayburn House Office Building, the Honorable Henry C. 

‘‘Hank’’ Johnson, Jr. (Chairman of the Subcommittee) presiding. 

Present: Representatives Johnson, Conyers, Gonzalez, Jackson 

Lee, Chaffetz, Goodlatte, and Smith (ex officio). 

Staff Present: Christal Sheppard, Majority Counsel; Anant Raut, 

Majority Counsel; Elisabeth Stein, Majority Counsel; Rosalind 

Jackson, Majority Professional Staff Member; Stewart Jeffries, Minority Counsel; and Blaine Merritt, Minority Counsel. 

Mr. JOHNSON. This is the Committee on the Judiciary, the Subcommittee on Courts and Competition Policy, and this meeting will 

now come to order. Without objection, the Chair will be authorized 

to declare a recess of the hearing, and I will now recognize myself 

for a short statement. 

The newspaper industry is facing hard times. Newspapers report 

losing millions of dollars a week, and clearly this is an 

unsustainable situation. So, as a result, it is nearly impossible to 

open a newspaper, turn on cable news, or even go online without 

reading about another newspaper threatened with the closure of its 

doors forever. 

A key contributor to this phenomenon is the ongoing reduction 

in advertising revenue. Advertising revenue, which was once the 

lifeblood of the newspaper industry, has decreased by 25 percent in 

the last year alone; and over the last 15 years, public preference 

for news consumption has dramatically shifted from print media to 

online sources; and in that time, online readership has grown from 

essentially 0 to 63.2 million people. This has contributed to a vicious cycle as readership declines and newspapers earn less in advertising revenue, which results in less content, which results in 

fewer readers, and on and on, with no end, infinite. 

So most would agree, however, that online news is not a complete substitution for print media. Because of the digital divide, not 

everyone has access to the Internet or the news online. As print 

media disappears and content is moved online, entire segments of 

our society are being cut out from their access to the news. Thus, 
2 

the elderly, the economically disadvantaged, niche markets, and 

some physically challenged individuals are disproportionately 

harmed by the decline in print media. 

In this light, access to print media, particularly print media that 

covers the national news from a local perspective, and also the local 

news, becomes increasingly important. 

Another negative consequence of the decline of newspapers is the 

erosion of responsible journalism. Over the last decade, economic 

pressures have resulted in layoffs of journalists and newspaper 

staff. The loss of jobs is bad enough, since every job must be protected in this economy. 

Compounding the problem is the harm to the first amendment of 

the United States Constitution. I have always considered, as many 

others have, the media to be our fourth branch of government. It 

provides a check on government and private fraud and abuse that 

may be lost to local and regional newspapers close to Washington, 

DC, and international bureaus. 

Even the wire services, by the way, Associated Press, I think UPI 

went out of business at one time, but it is back in operation, unlike 

its former self. 

In addition, local news only of importance to small areas and 

niche markets may be lost forever if the smaller newspapers are 

unable to survive. In fact, it is exactly this premise that the marketplace of ideas is harmed when there is not a wide dissemination 

of information from diverse sources that led Congress to allow 

newspapers to collaborate by joint operating agreement as long as 

editorial content was kept separate. 

And you all excuse me. My voice is leaving because of the pollen 

count. 

As more and more newspapers merge and ownership of papers 

is consolidated, the free flow of information in the marketplace of 

ideas is therefore restricted. This poses an enormous risk to our democracy. And if Congress does not act or something does not 

change, it is certain that a major city in the United States will be 

without a major newspaper in the very near future. Kind of like 

global warming is upon us much sooner than anticipated. 

And today, we discuss remedies and whether the current business model of newspapers is sustainable. I look forward to hearing 

the suggested solutions to this problem from today’s witnesses. 

I will now recognize my good friend and colleague, Mr. Jason 

Chaffetz, from the great State of Utah for his opening remarks. 

Mr. CHAFFETZ. Thank you, Mr. Chairman. I appreciate your calling this hearing of the Courts and Competition Policy Subcommittee, and I appreciate all of you being here today. 

About a month ago, this Subcommittee considered the antitrust 

implications of the Troubled Asset Relief Program, otherwise 

known as TARP. That program of course deals with the financial 

institutions that have received hundreds of billions of dollars in 

taxpayer support. Today, we consider the health or lack thereof of 

the newspaper industry. Like the banks, the newspaper industry is 

in dire straits. Unlike the banks, the newspaper industry is not 

seeking a government bailout. I hope this continues to be the case, 

as I could not support such a bailout. Because of the protections 

of the freedom of the press, any such bailout could be constitu-
3 

tionally problematic, especially if it came with the types of constraints that were used with the TARP funds. 

The newspapers’ plight is largely the result of the newspapers’ 

failure to adjust to the changes in the marketplace. The biggest 

change has been the advent of the Internet. The Internet has facilitated the dissemination of news in a variety of forms, from blogs 

and streaming videos to online versions that were established with 

established news sources such as the Wall Street Journal and even, 

yes, Twitter, which I managed to send out that I was attending 

this event here today. 

So print newspapers must compete with this multitude of online 

sources for their readers’ attention at the very moment that their 

main revenue source, advertising, is drying up. The question we 

need ask ourselves is, why is the advertising drying up? It is moving to be more focused media, including cable television and, yes, 

of course the Internet. Loss of this revenue threatens the ability of 

the newspapers to use their strongest weapon; i.e., robust news departments full of eager reporters to compete against each other for 

cheaper new forms of news gathering. 

Some entities, notably the Wall Street Journal, have been very 

successful in monetizing their content. Others, like the New York 

Times, have tried and subsequently abandoned efforts to try to 

charge for certain news stories. However, with the rise of a la carte 

pricing for online music, it seems possible that there are a variety 

of pricing schemes that will ultimately prove successful, even if a 

number of news outlets go out of business in the meantime. 

Which brings us to the crux of this hearing. I mentioned a few 

moments ago that the newspapers have not requested a bailout. 

They haven’t. But that does not mean that they do not have powerful friends on Capitol Hill. Last month, Speaker Pelosi sent a letter 

to Attorney General Holder requesting that the Antitrust Division 

take into account changes in the newspaper marketplace, including 

for advertising, in the event of a merger of Bay Area newspapers. 

While it is appropriate for the antitrust agencies to take into account changed circumstances in evaluating mergers in newspapers 

or any other industry, this Committee should be wary of granting 

any new antitrust exemptions. This is particularly true given that 

the newspaper industry already has an antitrust exemption known 

as the Newspaper Preservation Act. 

Since the 1970’s, the newspapers have been able to combine operations to save money without fear of antitrust enforcement; yet, 

such joint operating agreements have failed to save the newspaper 

industry as a whole. Newspapers will only be profitable when they 

adjust to an ever changing marketplace. History has taught us that 

the marketplace is the best place to determine how to price goods 

and services. I am hopeful that this Committee will take a hard 

look at any efforts to allow newspapers to discuss or make agreements regarding the pricing of their online content. 

I would note specifically in where I represent, the State of Utah, 

we have the Deseret Morning News and the Salt Lake Tribune who 

thrive in their ability to contrast their editorial content and compete with various news report services, at the same time share a 

department that consolidates some of the advertising functions and 

other issues. So I have seen that in my own community. 
4 

And, with that, I would like to yield back the balance of my time, 

and look forward to hearing from each of our witnesses here today. 

Thank you, Mr. Chairman. 

Mr. JOHNSON. Thank you. And I appreciate your statement. 

We are going to go now directly to my colleague, the Ranking 

Member of the Judiciary Committee, my good friend Lamar Smith. 

Mr. SMITH. Thank you, Mr. Chairman. 

Thomas Jefferson once said ‘‘Information is the currency of democracy. Without access to all the facts, Americans cannot make 

informed voting decisions and our democracy is threatened.’’ 

Journalists have a responsibility to present information with 

fairness and objectivity. At their best, the news media help promote our democracy. Unfortunately, too often the media have fallen 

short. 

For example, an analysis by Investors Business Daily shows that 

journalists contributed 15 times more money to Democrats than 

Republicans during the most recent election cycle. In the 2008 campaign, journalists who gave to Senator Obama outnumbered those 

who contributed to Senator McCain by a 20-1 margin. A UCLA 

study rated 18 of 20 major news outlets as more liberal than the 

average voter. Just two scored as more conservative than the average voter. A Gallup Poll found that only 9 percent of Americans say 

they have a great deal of trust and confidence in the mass media 

to report the news fully, accurately, and fairly. The Gallup Poll also 

found that more than twice as many Americans say the news 

media are too liberal rather than too conservative. 

These studies reveal a troubling trend. Unfair news reporting exists, and can influence elections at the expense of qualified candidates. In fact, Newsweek editor Evan Thomas estimated that the 

media’s influence in the 2004 presidential election was worth 

maybe 15 points. That is a huge impact. And the media’s influence 

was even greater in the 2008 presidential campaign. They may well 

have determined the outcome of the election. 

Not all members of the media contribute to this problem. Many 

journalists with varied political views work hard to report the news 

fairly. But the media can and must do better. 

Recently, as the Ranking Member just mentioned, Speaker Pelosi 

sent a letter to Attorney General Holder asking him to take into 

account current market realities when evaluating any newspaper 

mergers in the Bay Area. Speaker Pelosi sent this letter in acknowledgement that the fundamentals of the newspapers’ business 

have changed. Subscriptions are down, and advertisers have new 

and different ways of targeting their sales. This economic reality 

has resulted in a number of newspapers filing for bankruptcy, cutting back on the days that they print papers, or going to an allonline format. 

And continuing the consolidation of newspapers may contribute 

to increasingly biased coverage. When there are two or more papers 

in the city, there in an incentive to compete vigorously to provide 

the most accurate and pertinent news to readers. When one company, such as the New York Times or the Tribune Company, owns 

papers in multiple cities, there is a risk that the editorial biases 

of the big city papers will find their way into other markets. 
5 

Our democracy is strongest when the American people make informed voting decisions based on accurate information about the 

major issues facing our country, such as homeland security, the 

cost of energy, immigration, educational reform, health care, and 

economic growth. Journalists are aware of their responsibility and 

should be held to a high ethical standard because of their tremendous influence on public opinion and debate. When journalists 

strive for the truth, the media are a tremendous asset to our society. When journalists falter, so too does our democracy. 

It is up to the American people to demand objectivity in the 

media regardless of whether they get their views online, from television, or in a newspaper. 

Mr. Chairman, as we discuss the consolidation of newspapers, we 

must also address the larger issue of inaccurate and biased reporting that has become too common today. Before journalists can expect the American people to buy their reporting, they must first restore the American people’s trust in the news. 

Thank you, Mr. Chairman. 

Mr. JOHNSON. Thank you for your comments also, Mr. Ranking 

Member. And even though I have tried very hard to put this out 

of my mind, I must confess that I inadvertently left out the fact 

that Mr. Smith is Ranking Member of this Subcommittee as well. 

Without any further adieu, ladies and gentlemen, we are going 

to hear from a man who needs no introduction. So I will yield to 

the great Chairman, Mr. John Conyers from Michigan. 

Mr. CONYERS. Thank you, Mr. Chairman. You have a lot of 

friends on this Subcommittee. That is all I can say. 

This is a very complex hearing. We are asked to come to the assistance of an economic institution that, to quote Rupert Murdoch, 

who I have never quoted before in my life, says in his submitted 

statement, ‘‘Since the founding of our country, newspapers have 

been a cornerstone of our democracy. And I submit this statement 

in the hope that Congress will take all appropriate steps to help 

ensure that newspapers continue to be a vibrant and important 

part of our free society for the foreseeable future.’’ 

This is the one person in the United States of America that owns 

more media than anybody I know of, and he is telling us how important it is that the media remains free and viable because it is 

an historic predicate. So this really gets us off to an interesting 

start. 

Now, in 1996, I think it was in October, in the spirit of full disclosure, I was arrested in front of one of the newspapers in Detroit. 

I think the offense was disturbing the peace. There were other arrests made. One was Marianne, the late Marianne Mahaffey, the 

President of the Detroit Council. The other one was a labor organizer named John Sweeney. There were others arrested. I got a call 

in to James Hoffa, who was around there at the time, and peace 

activist, civil right advocate Al Fishman. And what we were doing 

was protesting the merger of the two newspapers, the Detroit Free 

Press and the Detroit News. Now, for some reason, I don’t have 

any idea why, our arrest, we were given a trial date, too, but somewhere along the line the case was dropped. I don’t remember even 

if I had a lawyer. 
6 

So I don’t come to this hearing with any bias or premeditated 

hard feelings or ill will toward the newspaper industry. As a matter of fact, we invited the Detroit News and the Detroit Free Press 

to come to the hearing to be a witness. 

Did they ever respond? You went to the Newspaper Association? 

Okay. So they will speak for them. 

But just to make sure I purge myself of any bad memories or ill 

will or hard feelings, I am going to ask their editors if I can meet 

with them now that they are in bad shape. Maybe I should help 

them. 

There is another thing that puzzles me. Professor Robert 

McChesney for years has been one of the people complaining with 

me about the undemocratic practices commonplace in the newspaper industry. Now, I think he has surfaced as one that is urging 

us that there are many grave and important reasons why we 

should rush in now and help them. So I will be calling my old 

friend Bob McChesney to help get me into the correct and fair 

alignment that will be required for us to determine what it is we 

do in the Committee. 

Now, newspapers remind me of automobile corporations; you 

never hear from them until they are on the verge of disaster. I 

mean, ‘‘How are you doing?’’ ‘‘Everything’s fine. Doing great.’’ And 

then all of a sudden they need help, and they need a lot of help 

and they need it fast. That is how the former Secretary of Treasury 

called the leaders of the House and Senate together. You remember 

that evening. He called them together, and he put three sheets of 

paper on the table, the leaders of the first branch of government, 

as far as I am concerned. 

And he said: First of all, I want extraordinary powers that no 

treasurer has ever had in history. And then he said, second: I want 

$700 billion, and I want it fast. And then the third sheet of paper, 

he said: I don’t want this to be reviewable by either the courts or 

the Congress. 

And so we are always put under the gun, and I am anxious to 

lay out my feelings before we go into this subject matter, not just 

for today’s hearing, but afterwards, to see if we can all be as friendly as our Chairman, who everybody is his friend on this Committee, including me, and let’s—can we all be friends together, everybody, on whatever positions that develop as this hearing goes 

on? 

So I thank you for your time, Mr. Chairman. 

Mr. JOHNSON. Thank you, Mr. Chairman. And I have always admired your even-tempered service on this Committee. That evenness has been marked by passion. And so I really appreciate the 

way that you run the full Committee, and I myself aspire to be just 

like you and so I am proud to be serving on this Committee, this 

Subcommittee, with you. 

And ladies and gentlemen, I have finally in fact become enlightened instantly; because I mentioned that Mr. Smith, my good 

friend, is Ranking Member of this Subcommittee, but I was trying 

to keep the great Howard Coble out of my mind but I can’t do that, 

either. Mr. Coble is the Ranking Member, and we appreciate his 

service. 
7 

Now, what I will do now is I will introduce the witnesses for today’s hearing. Well, we have Mr. Goodlatte, the gentleman from 

Virginia, who is next for a statement. You may proceed, sir. 

Mr. GOODLATTE. Thank you, Mr. Chairman. But I don’t have a 

statement at this time. 

Mr. JOHNSON. Well now, that is rather untypical, Mr. Goodlatte. 

I guess you are saving the ammo for a full assault later during this 

hearing. 

Okay. And also, we have the very quiet warrior. Mr. Gonzalez 

from Texas is here. Did you wish to make an opening statement, 

sir? 

Mr. GONZALEZ. Mr. Chairman, I will be very, very brief. I wasn’t 

going to make one, but I just want to put our witnesses’ minds at 

ease. I don’t believe that your testimony today, that you would be 

prepared to address bailouts or campaign contributions. And I don’t 

believe those are the questions that will be coming from Members 

of this Committee. The issue at hand is, and I truly believe this 

and I think all my colleagues would join me, is that laws have utility and meaning only when they are relevant to a society. The 

question today is whether antitrust laws as they relate to the 

printed media are relevant in what has transpired and what has 

been a technological revolution, which has been adopted by the majority of Americans, which truly jeopardizes the very existence of 

the printed media. So I am hoping that our witnesses will be able 

to shed light. 

Now, I am going to apologize to my colleagues and to the witnesses that I probably will be absent for much of the testimony. We 

have your written statements. There is a hearing going on in Energy and Commerce that will require that I be there as we prepare 

to mark up the energy bill. But again, I just want to thank my colleagues and hope that we have a fruitful afternoon. 

I yield back. 

Mr. JOHNSON. I thank the gentleman for his statements. And 

without objection, other Members’ opening statements will be included in the record. 

So now I am pleased to introduce the witnesses for today’s hearing. We have two distinguished panels of witnesses to assist us 

today. Our first panel features Carl Shapiro, the Deputy Assistant 

Attorney General for Economics At the Antitrust Division of the 

Department of Justice. Mr. Shapiro is also the Transamerica Professor of Business Strategy at the Haas School of Business, and 

also a Professor of Economics in the Economics Department, at the 

University of California Berkeley. He previously served as Deputy 

Assistant Attorney General for Economics in the Antitrust Division 

of the U.S. Department of Justice from 1995 to 1996. He later 

founded the Tilden Group, which was also a senior consultant with 

Charles River Associates, an economic consulting company. 

Welcome, Mr. Shapiro. 

Mr. SHAPIRO. Thank you very much. 

Mr. JOHNSON. Our second group of panelists will testify after Mr. 

Shapiro has concluded. Our second panel features Mr. Brian 

Tierney, Chief Executive Officer of Philadelphia Media Holdings 

LLC and a publisher and CEO of the Philadelphia Inquirer. Mr. 

Tierney is a nationally recognized expert in branding, marketing, 
8 

and advertising, and he is also an accomplished entrepreneur in 

addition to being a lawyer. Nobody can really hold that against 

you, Mr. Tierney. At least not today, anyway. 

His leadership of Philadelphia Media Holdings marks the first 

time the papers are under private ownership. This is since 1969. 

Mr. Tierney has received numerous industry related awards. And 

we want to welcome Mr. Tierney. 

Next, we have Mr. John Nichols. Mr. Nichols is a journalist and 

author, and has written about politics for American newspapers 

and magazines since the 1970’s. He is the Editorial Page Director 

of The Capital Times newspaper in Madison, Wisconsin, and writes 

about politics as a correspondent for the Nation magazine. Mr. 

Nichols is the author of many books on American politics and 

media issues, and he is also one of the co-founders of Free Press, 

the Nation’s media reform expert and, actually, media reform network. He has been honored by numerous journalistic organizations 

for his editorial and column writing as well as his investigative reporting. Welcome, Mr. Nichols. 

Next, I will introduce Mr. Bernard Lunzer, who is the President 

of the Newspaper Guild Communications Workers of America, 

which is affiliated with the AFL-CIO and the International Federation of Journalists. Mr. Lunzer was elected T&GCWA President 

and CWA Vice President in May of 2008. From 1979 to 1989, he 

worked in the newsroom in advertising, circulation, and promotionmarketing at the St. Paul, Minnesota Pioneer Press. Mr. Lunzer is 

also an integral part of the Newspaper Guild, and we welcome him 

here today. 

Our next witness will be Mr. Ben Scott. He is the Policy Director 

at the Free Press. And I thank Mr. Scott for his service in regularly 

testifying before Congress and the FCC. Before joining Free Press, 

Mr. Scott was a legislative fellow for then Representative Bernie 

Sanders out of Vermont. He has been quoted in publications, including the New York Times, Wall Street Journal, Los Angeles 

Times, and Salon, and featured as a commentator on MSNBC, 

BBC, PBS, C-SPAN, NPR, and local stations across the country. He 

is the author of several scholarly articles on American journalism 

and he is co-editor of the books Our Unfree Press and also The Future of Media. Welcome, Mr. Scott. 

And then we have Professor C. Edwin Baker. Professor Baker is 

the Nicholas Gallicchio Professor of Law at the University of Pennsylvania, and he teaches constitutional law, mass media law, and 

freedom of speech, and is the author of Media Concentration and 

Democracy: Why Ownership Matters. Professor Baker is also the 

author of a pending article on Viewpoint Diversity and Media Ownership. Welcome, Professor Baker. 

The last witness on today’s panel is Mr. Dan Gainor, who is the 

T. Boone Pickens Fellow and Vice President of Business and Culture for the Media Research Center. Mr. Gainor has served as an 

editor at several newspapers, including the Washington Times and 

the Baltimore News American. Mr. Gainor also has extensive experience in online publishing, holding the position of Managing Editor for CQ.com, which is the Web site of Congressional Quarterly. 

And he is also the Executive Editor for Change Wave. Mr. Gainor 

has made many radio and television appearances and is published 
9 

in a wide variety of publications including Investors Business 

Daily, the Washington Times, the Chicago Sun Times, the Orange 

County Register, the New York Post, and the Baltimore Examiner. 

Welcome, Mr. Gainor. 

And we thank you all for joining us here today. 

I wanted to ensure that today’s panel would be fair and balanced 

with equal representation from those on all sides of the issue. As 

part of that goal, we invited several entities to testify today that 

could emphasize the newspaper perspective, along with Mr. 

Tierney. And one such witness, Rupert Murdoch, Chairman and 

CEO of News Corporation, was not able to appear personally, but 

he has submitted his written statement for the record. And, without objection, that statement will be submitted for the record. And, 

without objection, the witnesses’ statements will be made a part of 

the record in their entirety. 

We would ask each one of you to summarize your testimony in 

5 minutes or less. To help us keep the time, there is a timing light 

at your table. When 1 minute remains, the light will switch from 

green to yellow and then to red when the 5 minutes are up. If anybody is colorblind, please raise your hand now. 

Mr. Shapiro, will you now proceed with your testimony, sir? 

TESTIMONY OF CARL SHAPIRO, DEPUTY ASSISTANT ATTORNEY GENERAL FOR ECONOMICS, ANTITRUST DIVISION, U.S. 

DEPARTMENT OF JUSTICE, WASHINGTON, DC 

Mr. SHAPIRO. Yes. Thank you very much, Mr. Chairman. I appreciate the opportunity to appear before the Subcommittee on Courts 

and Competition Policy. As somebody who has had some experience 

being an expert witness in court, I particularly appreciate Chairman Conyers’ suggestion that we all be friends together. 

As you noted, I have been a Professor at UC Berkeley for about 

20 years. During that time, I have been studying and practicing 

antitrust economics. One particular area of interest to me has been 

how advances in information technology, including the Internet, 

have affected a wide range of businesses, markets, and competition. 

I in fact wrote a book about these topics about 10 years ago. So the 

issues facing the newspaper industry are familiar to me and of interest to me as well as of course to the Antitrust Division in the 

Department of Justice. 

Newspapers play a unique and important role in our democracy. 

I myself very much enjoy sitting down in the morning with a cup 

of tea and reading the newspapers, and I count myself as a better 

citizen for what I learn while I sip my tea. 

Today, newspapers are facing financial pressures, most notably 

from the current recession on top of the challenge posed by the 

Internet. As a result, newspapers are experiencing a painful and 

ongoing decline in circulation and advertising revenues. 

Now, how does antitrust enter into this picture? Antitrust is the 

cornerstone of our free enterprise system. Antitrust is critical to ensure that the public obtains the full benefits of competition. This 

is especially true in industries experiencing technological change 

where competition can and does often spur innovation, including 

innovative business strategies and business models. And I noted 
10 

that some of the other witnesses discuss some of the plans they 

have for such business models. 

Today, a wide ranging and healthy debate is taking place about 

the future of the newspaper industry, with different participants 

adopting different strategies for survival and success. This is the 

essence of the competitive process that the Antitrust Division is 

dedicated to protecting. 

Our antitrust laws are over 100 years old. They apply to declining industries as well as growing ones. They apply during tough 

economic times as well as during good times. They have proven 

flexible and effective in addressing a wide range of economic settings and industries, including industries experiencing the pressures of new technologies. And the Antitrust Division has experience in a range of industries where these conditions hold. 

Nonetheless, some have suggested that the antitrust laws are 

somehow unsuited for the newspaper industries. We at the Justice 

Department disagree. If anything, the interest Congress has expressed in preserving editorial and reportorial diversity makes 

antitrust enforcement in the newspaper industry all the more important. And Speaker Pelosi’s letter to Attorney General Holder indicated as much. 

Some have suggested that antitrust enforcement at the Justice 

Department in the newspaper industry is mired in the past, failing 

to account for today’s business reality. Our investigation in any 

given matter is highly fact intensive. I would like to assure the 

Committee and the public that we are dedicated to conducting a 

legal and economic analysis that reflects current business reality 

and accounts for emerging trends in the newspaper industry. 

Thank you. 

[The prepared statement of Mr. Shapiro follows:] 
11 

PREPARED STATEMENT OF CARL SHAPIRO
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Mr. JOHNSON. Thank you, Mr. Shapiro. And we would now begin 

the questioning. And I will begin by recognizing myself for such 

time as I may consume. 

Mr. Shapiro, Attorney General Eric Holder has stated that he is 

open to reexamining government antitrust policies that limit mergers in the struggling newspaper industry. In your view, is a new 

antitrust exemption for newspapers necessary? 

Mr. SHAPIRO. We do not believe any additional exemptions for 

the newspaper industry are necessary. We believe the antitrust 

laws, as I have indicated, can work well in this industry, reflecting 

as well the Newspaper Preservation Act. 

Mr. JOHNSON. Well, tell me, do you believe that print media and 

online media are within the same product market and interchangeable? 

Mr. SHAPIRO. Print media and online media often do compete, for 

example, for advertisers’ dollars. The exact contours of the relevant 

antitrust market will depend on the specific facts and specific matter that will depend on the time period, the locale, and the products involved. 

Mr. JOHNSON. And I would like to know from you, is it prudent— 

considering antitrust policy and economic efficiencies of acquiring 

businesses and also considering the public good, is it prudent to remove impediments to further consolidation in the newspaper industry? 

Mr. SHAPIRO. Well, to the extent that antitrust can be an impediment, the goal is to prevent consolidation that will substantially 

lessen competition and harm consumers. That I would not really 

call an impediment; I would call it protecting the public interest. 

Mr. JOHNSON. Thank you. 

I will now recognize the Ranking Member of the full Committee, 

Mr. Lamar Smith, for his questions. 

Mr. SMITH. Thank you, Mr. Chairman. 

Mr. Shapiro, I just had a question or two for you. Could you give 

us an example of a merger between two newspapers or of two 

newspapers that you would question? What would the dynamics be 

that you would not necessarily approve of? 

Mr. SHAPIRO. The situation where we would tend to be most concerned would be two local daily newspapers in the same town, the 

only two, where our investigation revealed that they were substantial direct competitors for readers or for advertisers or both. 

Mr. SMITH. Would you consider in that case a city that had a 

morning and an afternoon newspaper and you had one of the papers purchase the other, would you consider that to be questionable? 

Mr. SHAPIRO. That certainly could be. And those situations have 

arisen in the past. 

Mr. SMITH. And would you give me a real life example—I realize 

it is totally hypothetical—of two papers that currently exist in the 

United States somewhere, in some city, that you would question if 

one were to purchase the other? 

Mr. SHAPIRO. Well, there is—I am not sure whether you want 

real life or hypothetical. But we do have an ongoing litigation involving two newspapers in West Virginia where the acquisition 

took place, and the Antitrust Division is challenging that. 
21 

Mr. SMITH. That is the kind of example I was looking for. Thank 

you, Mr. Shapiro. 

Thank you, Mr. Chairman. 

Mr. JOHNSON. Thank you, Mr. Smith. 

And I will now turn to our distinguished Member from Texas, 

Mr. Gonzalez. 

Mr. GONZALEZ. Thank you very much, Mr. Chairman. 

Let me ask you, Mr. Shapiro, how would you describe the purpose of antitrust laws? 

Mr. SHAPIRO. To protect competition; in particular, by preventing 

abuses by monopolies, by preventing mergers that substantially reduce competition, and by policing cartels. 

Mr. GONZALEZ. And it is competition within—this is obvious—in 

the industry itself? What I am saying is, like—I am trying to describe it, and I apologize. Newspapers to newspapers, TV stations 

to TV stations, a certain type of enterprise to that certain type of 

enterprise. Right? Let me ask you, where is the competition to 

newspapers in America today? Is it among, between themselves, or 

is it something totally different, a whole different medium that is 

out there? Isn’t that the real competition? And what we are discussing here is the old laws may not accommodate the flexibility 

given to newspaper enterprises to compete with basically an information service that is a different platform? I mean, that is what 

we really have. 

So I guess, if I am hearing you right, you are saying we can remain with the same antitrust model, and the newspapers will still 

have the flexibility to adopt business practices that will allow them 

to compete with these other delivery systems? 

Mr. SHAPIRO. The antitrust laws will not, should not stand in the 

way of creative business practices and models that are part of the 

competitive process and create efficiencies and serve consumers. I 

know some of the later panelists want to pursue new business 

strategies, and there is no reason the antitrust laws would stop 

that so long as they in fact are pro-competitive. 

Mr. GONZALEZ. It is interesting, and I think the next witnesses— 

and I am going to be gone for part of their testimony but I hope 

to be back—will shed some light on that. I think they are going to 

look at it as from their business experience. And I understand 

where you are coming from, and I agree with you. I think if you 

listen to Chairman Conyers where we are all so rooted in the antitrust philosophy and the tremendous benefits that we have derived 

from it, but the world has changed. And the question then comes, 

we may not have a certain enterprise or certain industry because 

we are worshipping at this altar of what once was sacrosanct, 

which was the antitrust laws and what they attempted to accomplish. There won’t be anyone to protect. There won’t be any survival. That is what I am getting at. 

I am really worried that the printed media is really faced with 

a do or die situation that may encompass what we may have found 

objectionable in a different setting years ago. That is all I am saying. And I still don’t think that we are going to lose the integrity 

of the process and the enterprise and the professionalism, because 

the truth is that is what distinguishes the printed medium from so 

many of the others. 
22 

Now, I believe that you are saying they can just transport that 

quality product and have it delivered by this different platform of 

delivery system. I don’t think it is going to be that easy. I just don’t 

think. And even if it is, then you still have lost the traditional 

printed media. You won’t have a newspaper to sit there with your 

morning coffee or tea. And maybe it is generational, I just have got 

to have it. I don’t like looking at this at the coffee shop in the 

morning, to be honest with you. 

But that is—and I understand that this is a sincere belief that 

you hold, and I will just wait and reserve my own opinion until we 

hear the witnesses and I read their testimony. But thank you for 

the benefit of your knowledge and study. 

Mr. SHAPIRO. Well, let me just say thank you for that. I also 

can’t do without my newspaper in the morning. That is why I mentioned it. 

The fear that newspapers will close or the industry will be in 

grave trouble, we are here to protect competition. And of course 

that means if a company is in sufficiently bad shape, we have a 

failing firm doctrine, and so greater antitrust flexibility is allowed 

in certain circumstances. And that doctrine has been in place for 

40 years in the newspaper industry following the Supreme Court 

decision. So it is not in anybody’s interest to have there be no 

newspaper in any of our towns, and antitrust would not lead to 

that result. 

Mr. GONZALEZ. Again, and I don’t know the various opinions that 

are going to be expressed after your testimony. There may be some 

that would disagree with you. And maybe it is not necessary, and 

I don’t want to have to rework, modify, or alternate something that 

is so basic and that we have depended on for so long but it appears 

to me that there may be some adjustments that may have to be 

made. I do not know. But, again, I thank you for your testimony 

this afternoon. 

Mr. SHAPIRO. You are welcome. 

Mr. JOHNSON. Thank you, Mr. Gonzalez. 

I will now turn to Mr. Bob Goodlatte, a very cerebral Member of 

the Judiciary Committee as well as this Subcommittee. You may 

proceed, sir. 

Mr. GOODLATTE. Thank you, Mr. Chairman. 

And, Mr. Shapiro, welcome. Does the Justice Department have 

any role in approving the Joint Operating Agreements under the 

Newspaper Preservation Act? 

Mr. SHAPIRO. Yes. 

Mr. GOODLATTE. And, if so, how many JOAs has it approved in 

the last 5 years? 

Mr. SHAPIRO. I am not sure of the number. 

Mr. GOODLATTE. Can you get that for us and submit it to the 

Chairman of the Committee? 

Mr. SHAPIRO. That would be fine. Yes. 

Mr. GOODLATTE. Thank you. What factors do you consider in reviewing the JOAs? 

Mr. SHAPIRO. Well, let me just clarify. The Antitrust Division 

looks at these, but it is the Attorney General’s decision about 

whether to approve them. 
23 

Well, we follow the language of the Newspaper Preservation Act, 

which requires that the JOA include not more than one newspaper 

that is not failing and that the operating agreement be in the public interest. 

Mr. GOODLATTE. To follow up on Mr. Smith’s question, you stated 

that the Antitrust Division takes into account both the readers and 

the advertisers when it considers the impact of a proposed merger 

in the newspaper industry, But you didn’t really tell us how you 

balance that. Do you place more weight on readers or more weight 

on advertising? How do you arrive at a conclusion that is appropriate? 

Mr. SHAPIRO. I would say both groups we view as consumers or 

customers of the newspapers. They are both sources of revenue 

typically. I believe in most matters a balancing really isn’t needed. 

When we have seen a loss of competition, we believe that both 

readers and advertisers would be harmed by an anti-competitive 

merger. 

Mr. GOODLATTE. It is clear that online advertising has changed 

the economics of the newspaper industry. Last Congress, this Committee took a look at the proposed deal between Google and Yahoo 

for search advertising dollars. At that hearing it was alleged that 

Google already had a dominant position in search advertising. How 

does Google’s dominance in search advertising affect the Department’s review of newspaper mergers, particularly as to how such 

a merger would impact advertisers? 

Mr. SHAPIRO. When we look at a proposed newspaper merger, we 

are looking at the choices that advertisers would have and the extent to which the newspapers compete directly for each other—excuse me, for advertisers. Alternative choices for those advertisers, 

be it search advertising, be it television, radio, other media, would 

all be considered in our analysis. And we would typically—we 

would see a problem with the merger if the extent of direct competition between the merging parties was significant, even though 

there would typically be some competition; that is, advertisers 

would spend some of their money on these other media, including 

Google. 

Mr. GOODLATTE. In his written testimony, Mr. Tierney of the 

Philadelphia Inquirer calls for expedited Department of Justice review of these Joint Operating Agreements, and he also calls for a 

limited antitrust exemption for newspapers to discuss new business 

models. How would the Department view such an exemption? 

Mr. SHAPIRO. Well, we generally don’t believe exemptions are the 

way to go. We feel the antitrust laws are flexible and have proven 

that flexibility over many years. 

In terms of specific discussions among newspapers to pursue a 

new business model, those could easily be handled without running 

into antitrust problems. Obviously not price fixing discussions, but 

discussions about a legitimate new business enterprise. And if 

there are concerns about that on occasion we can issue a Business 

Review Letter to give assurance to companies who are doing something that is not or not clear to them how it would be treated by 

the Antitrust Division. 

Mr. GOODLATTE. Are these Joint Operating Agreements always 

entered into by newspapers in the same market, the same SMSA, 
24 

if you will? I mean, are they always newspapers within the same 

city? 

Mr. SHAPIRO. To the best of my knowledge, yes. 

Mr. GOODLATTE. How many cities still have more than one daily 

newspaper? 

Mr. SHAPIRO. I could not give you a number on that. It has declined, to be sure. 

Mr. GOODLATTE. Thank you very much, Mr. Shapiro. 

Mr. Chairman, I would ask that the statement by Rupert 

Murdoch, the Chairman and CEO of News Corporation, be made 

a part of the record. 

Mr. JOHNSON. Yes. Thank you, Mr. Goodlatte. And so it will be 

done, without objection. 

Mr. GOODLATTE. Thank you, Mr. Chairman. 

Mr. JOHNSON. You are welcome. 

Mr. Shapiro, I thank you for your testimony here today and the 

time spent today. 

And we will now move to our second panel. Hear ye, hear ye, 

hear ye, the next panel come forward and assume the position. 

Mr. JOHNSON. We will now begin with opening statements from 

Mr. Tierney. Proceed, sir. 

TESTIMONY OF BRIAN P. TIERNEY, CHIEF EXECUTIVE OFFICER, PHILADELPHIA MEDIA HOLDINGS, PHILADELPHIA, PA 

Mr. TIERNEY. Good afternoon, Chairman Johnson, Members of 

the Subcommittee. I am Brian Tierney, the Chief Executive Officer 

of Philadelphia Newspapers. We own the Philadelphia Inquirer, the 

Philadelphia Daily News, and about 30 weekly newspapers in 

southeastern Pennsylvania and southern New Jersey. 

In 2006, I joined forces with a diverse group of local investors, 

men and women, Black and White, entrepreneurs, CEOs, and a 

union pension fund to purchase these publications, and we are the 

largest locally owned news organization in America. 

Philadelphia Newspapers, like virtually all of our Nation’s newspaper publishers, have recently faced a severe revenue decline. 

Consequently, we have had to make some very difficult choices in 

order to continue serving as the top quality news source in the 

Pennsylvania and New Jersey area we serve. 

In order for our newspapers and other newspapers to succeed in 

the Internet age, in order for us to continue to serve as our country’s preeminent source of local news, the newspaper publishers 

and journalists need greater flexibility from lawmakers and regulators to discuss and implement new and sustainable business 

models. 

Newspapers serve as the vital source of local, national, and international information, and, as such, we provide high quality public 

service journalism that is critical to the functioning of a vibrant democracy. The news gathering resources and investigative arsenals 

commanded by our daily newspapers typically dwarf those of any 

other local media. In Philadelphia, for instance, we spend more 

than $51 million in news gathering operations, and we have more 

reporters on the street every day than all other local media combined. 
25 

In addition to serving as an effective watchdog of business and 

local government, newspapers play another role. We connect our 

communities to themselves. Newspapers serve as a primary source 

of information for other news outlets as well. Most local television 

stations in Philadelphia begin their news meetings by leafing 

through the newspaper and doling out assignments based on what 

we have reported that morning. 

In addition, while online news sources and citizen journalists certainly add a perspective to the news, they seldom provide original 

reporting, and even fewer ascribe to the same professional journalism standards. 

In short, many new sources of news are actually free riding on 

the investments in journalism made by newspapers. 

By all accounts, the industry is in a real crisis. The problem, 

ironically, is not a readership or an audience problem. In fact, more 

people read a newspaper the Monday after the Super Bowl than 

watched the Super Bowl. In fact, in Philadelphia, more people read 

the Inquirer today than they did 10 years ago when you add our 

print and online readership together. The problem is the business 

model we have today and the fact that advertising revenues, which 

account for 80 percent of our earnings, of our revenues, have 

dropped by 23 percent in 2 years. Recent news reports predict a 30 

percent decline this quarter alone. Classified advertisement has 

been hit the hardest, and dropped $4 billion just that year; and 

most of that is not coming back even when the economy returns. 

Online advertising, which was often hailed as the industry saviour, declined in 2008 and accounted for less than 10 percent of 

revenue. Our online traffic in Philadelphia is up over 300 percent. 

You can add up every other source of news or information in the 

marketplace; it doesn’t compete with it, but our revenue is flat. 

In fact, it is interesting, here in town, POLITICO.com, which is 

very successful, has about 30 or so reporters, maybe a little bit 

more, almost all of their revenue comes from the printed newspaper product that is distributed free. 

The result of these seismic shifts in advertising has been devastating. In February, our company announced that it was voluntarily restructuring under Chapter 11. The factors that led us to 

this difficult choice are similar to those facing publishers across the 

country. 

But even in these trying times, our commitment to the communities we serve has remained steadfast. And I am incredibly proud 

of the relationship we have also built with our unions. We are 

working hard to find efficiencies, cut costs and preserve jobs, good 

jobs that a man or woman can raise their family on. 

Other newspaper companies, such as Tribune company, Lee Enterprises, the Minneapolis Star Tribune, to name a few, have had 

to file for bankruptcy in recent months. The Seattle Post-Intelligencer is all online, but they have had to lay off 130 of their 150 

journalists. So it is hardly going to be able to serve the same function in Seattle. And of course, the Rocky Mountain News closed in 

February. Some analysts are predicting that major cities may be 

left without a single daily newspaper soon unless we act. 

While we may have once hoped that we could merely shift our 

operations online and continue operating as usual, the much small-
26 

er revenue generated from Internet advertising has shown that we 

must look for another answer, and we need the freedom now to experiment with new business models. 

With the critical role of daily newspapers, we at Philadelphia 

Newspapers believe strongly that we have the possibility to evolve. 

But in order to do so, however, newspaper publishers need the 

flexibility to explore new approaches and innovative business models without the delay, burdens, and uncertainty created by the competition laws we have now. When it comes to daily newspapers, the 

enforcement of antitrust laws has not yet caught up with market 

realities. Past enforcement actions have been premised on the now 

outdated view that daily newspapers compete exclusively with one 

another and that they dominate their local advertising markets. 

And in fact, newspapers’ share of overall advertising has declined 

so much that it is less than 15 percent today. 

In today’s precarious and ever-changing environment, antitrust 

enforcers must be vigilant to ensure they are not frustrating the 

possibility of a reinvigorated newspaper industry. Since, for many 

newspapers, time is of the essence, Congress, I respectfully request, 

should act quickly on legislation that would, one, provide for expedited Department of Justice review of newspaper transactions that 

can reduce costs and achieve other efficiencies; and, two, provide 

limited antitrust relief for newspapers and journalists to discuss 

and experiment with new and more sustainable business models. 

Mr. JOHNSON. Mr. Tierney, if you could go ahead and close out 

now. The light is green. 

Mr. TIERNEY. From my own experience, antitrust concerns are 

preventing the industry from even the most rudimentary discussions which could potentially lead to the next big idea. 

Thank you for the opportunity to appear at this hearing today. 

The publishing industry remains one of our Nation’s foremost providers of in-depth and locally oriented news, and it is my hope 

today that we begin the road back. Thank you. 

[The prepared statement of Mr. Tierney follows:] 
27 

PREPARED STATEMENT OF BRIAN P. TIERNEY
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Mr. JOHNSON. Thank you, Mr. Tierney. 

We will now hear from Mr. John Nichols. 
39 

TESTIMONY OF JOHN NICHOLS, AMERICAN JOURNALIST, 

MADISON, WI 

Mr. NICHOLS. Thank you, Chairman Johnson, Chairman Conyers, and Ranking Member. 

My name is John Nichols. I grew up in Union Grove, Wisconsin; 

population 970. When I was 11-years-old, I rode my bike down 

Main Street and walked into the office of our weekly newspaper, 

The Union Grove Sun. I explained that I had read the Bill of 

Rights, Tom Paine, and I.F. Stone. I knew a free press was the essential underpinning of the American experiment and the journalists were front-line soldiers in the struggle for democracy. I 

snapped to attention and announced that I was reporting to duty. 

It would give you a sense of the Sun circumstance that the editor 

responded, I will give you $5 a story and $1 for every picture that 

turns out. I was a journalist. I have practiced the craft of journalism ever since as a reporter, columnist, and editor of metropolitan dailies, part owner of a weekly newspaper, editorial page editor 

of a State capital daily, The Madison Capital Times, and political 

writer for The Nation magazine. Along the way, I have written and 

co-written seven books on the state of American politics and media. 

So what is the state of the print press? Our country’s first great 

journalist, Tom Paine, would surely describe it as ‘‘the crisis.’’ A 

daily newspaper industry that still employs roughly 50,000 journalists, the vast majority of the remaining practitioners of this craft 

teeters on the brink. Media corporations, after running journalism 

into the ground, have determined that news gathering and reporting are no longer profit-making propositions. So they are jumping 

ship. 

The Denver Rocky Mountain News recently closed, ending daily 

newspaper competition in that city. The San Francisco Chronicle 

may soon close, along with the Boston Globe. The Chicago Tribune, 

LA Times, Minneapolis Star Tribune, and Philadelphia Inquirer 

are in bankruptcy. The Christian Science Monitor has folded its 

daily print edition, as has the Seattle Post-Intelligencer. Whole 

newspaper chains struggle as the value of stock shares fall below 

the price of a daily newspaper. 

Those are the headlines. Arguably uglier is the death by small 

cuts of newspapers that are still functioning. Layoffs of reporters 

and closings of bureaus mean that, even if newspapers survive, 

they have few resources for journalism. Job cuts during the first 

months of the year, 300 at the Los Angeles Times, 205 at the 

Miami Herald, 156 at the Atlanta Journal-Constitution, and on and 

on, suggest that this year will see more positions eliminated than 

in 2008, when almost 16,000 newspaper jobs were lost. Even 

Doonesbury’s Rick Redfern has been laid off by the Washington 

Post. 

Whole sectors of our civic life are going dark. Newspapers that 

long ago closed foreign bureaus and eliminated investigative operations are now shuttering Washington bureaus. The Cox chain, 

publisher of the Journal-Constitution, padlocked its D.C. bureau 

April 1, a move that follows the closures of the bureaus of Advance 

Publications, Copley Newspapers, and great dailies in Des Moines, 

Houston, Pittsburgh, Salt Lake City and Toledo. 
40 

Newspapers as we know them are dying, and there is little evidence that broadcast or digital media is prepared to fill the void. 

The digital day may come, but it is not here. Thus, those of us who 

believe in the essential role of an informed citizenry fear that we 

are facing not a journalism crisis, not a media crisis, but a democracy crisis. 

So it is appropriate to consider the steps the Federal Government, which has historically aided publishers with favorable postage rates and broadcasters with free access to the airwaves, might 

now take to protect the public’s right to know. The congressional 

response to the crisis must, however, recognize the importance of 

maintaining and expanding the practice of journalism as a tool of 

informing and engaging citizens. The emphasis should be on fostering competition, diversity and localism, not on protecting the 

bottom lines of media companies and speculators who balance their 

books by dismissing reporters and shuttering news rooms. 

A crisis for journalism and democracy must not become an excuse for eliminating existing rules that promote competition and diversity, especially antitrust and cross-ownership restrictions that 

prevent consolidation of print broadcast and digital newsrooms into 

one-size-fits-all content-provider services. 

Congress should recognize that the existing ownership model has 

proven in this crisis to be anti-journalistic. Government policies 

and spending should be tailored to support the development of new 

ownership models, not-for-profits, cooperatives, employee-owned 

publications, and on allowing citizens, unions, foundations and enlightened local owners to purchase financially troubled daily newspapers. 

We should encourage the consumption of journalism perhaps by 

providing tax breaks for newspaper and magazine subscriptions. 

Postal rates should be structured to help journalists of inquiry and 

dissent stay afloat. 

I am a journalist. I love my craft and hope to continue practicing 

it for a long time. But I love our democratic discourse and the diverse society it fosters more. I would ask my Congress to recognize, 

as did the Founders, that journalism and democracy are closely 

linked. James Madison was right when he said ‘‘a popular government without popular information or the means of acquiring it is 

but a prologue to a farce or a tragedy or perhaps both.’’ We are 

deep in the prologue moment. It is essential now to act wisely and 

responsibly to avert tragedy and farce. 

Thank you. 

[The prepared statement of Mr. Nichols follows:] 
41 

PREPARED STATEMENT OF JOHN NICHOLS
42 
43 

Mr. JOHNSON. Thank you, Mr. Nichols. 

And if someone would call the Physician’s Office and have them 

to come forward because we have several people who have developed a sudden case of color blindness. 

So our next witness will be Mr. Lunzer. 

Mr. Lunzer, please proceed. 
44 

TESTIMONY OF BERNARD J. LUNZER, PRESIDENT, 

THE NEWSPAPER GUILD, WASHINGTON, DC 

Mr. LUNZER. Chairman Johnson, I want to thank you, the Ranking Member and other Members of the Committee for this chance 

to testify. 

I am Bernie Lunzer, president of the Newspaper Guild of the 

Communications Workers of America representing media workers 

throughout the U.S. 

I have worked in the industry for 30 years, 10 of those at the 

St. Paul Pioneer Press, in the newsroom, in advertising and circulation. I welcome this opportunity to talk about the current crisis 

within American journalism. This crisis affects all Members of this 

Committee, all your colleagues, and all Americans. 

American journalism is and will continue to change radically in 

the next 5 years. The policies you promote will decide whether we 

have a strong and fair press or a limited-opinion press, regardless 

of the medium. 

The underlying premise of this hearing is that Hearst Corporation and MediaNews wants Congress to relax antitrust law. The 

Newspaper Guild is not convinced that such a remedy will be good 

for journalism in California or in the United States. History has 

demonstrated that relaxing antitrust law may actually do more 

harm than good. 

MediaNews purchased over 20 publications in northern California, some unionized, some not, to create a new entity called the 

BANG-East Bay. Once completed, the company withdrew recognition of the Newspaper Guild-CWA. We lost a legal challenge but 

later won representation of the full group through a hard-fought organizing campaign. 

Despite this, almost 2 years later, our members still don’t have 

a contract. If this exemption is granted in northern California, others will demand the same ability to create monopoly markets resulting in other workers throughout the country becoming targets 

for similar actions. 

There is now one combined copy desk for all of the publications 

within BANG-East Bay. MediaNews has laid off roughly one-third 

of the original journalists. The result is a homogenized mix of publications with readers complaining that their local newspapers have 

little local content and are increasingly irrelevant to their communities. 

Unhindered by antitrust law, a newspaper monopoly across 

northern California will lead to job loss and to diminished products. 

This is contrary to the notion advanced by Hearst, which argues 

that its proposal would save something vital to the community. The 

Hearst-owned Chronicle now has fewer than half of its original 

workers, and coverage in large sections of the community has already been diminished. 

History shows us that such a monopoly will not benefit the local 

market and will further marginalize underserved minority communities within the market. Currently, publishers have recourse to an 

antitrust exemption through the Newspaper Preservation Act, 

which maintains separate newsroom but combines business operations. The sole purpose of the exemption was to help preserve the 

diversity of journalistic voices. 
45 

But these Joint Operating Agreements, or JOAs, often resulted 

in inflated advertising prices. So they have not proved to be a panacea for newspapers’ problems. Furthermore, out of over two dozen 

JOAs, only 10 exist today. 

President Obama campaigned in favor of more antitrust enforcement, stating in Gresham, Oregon, May 18, 2008, ‘‘there are going 

to be areas, in the media for example, where we are seeing more 

and more consolidation, that I think it is legitimate to ask, is the 

consumer being served.’’ 

The fundamental question of what is gained through such consolidation remains very relevant. The largest concern we have 

about such a monopoly in northern California is that, is it an answer to the very real problems that exist in our industry? We think 

they will remain unanswered and that real innovation will be stifled. The two large corporations behind this initiative will only 

have forestalled the inevitable reckoning. The result will be underserved communities. 

If there is to be serious consideration of the problems facing 

newspapers, Congress needs to look at alternative ownership ideas, 

like employee stock ownership, nonprofit approaches and the new 

L3C concept. The L3C approach would allow publications to serve 

a stated social purpose in exchange for the ability to accept nonprofit money. Smaller, more committed news operations will be 

more successful in providing real coverage to communities. 

Bigger is not better. The current financial crisis is evidence of 

this. An antitrust exemption for such large corporations could create real barriers to entry for others. Without oversight, congressional and local oversight, this exemption may not work. While 

these companies become a single voice for over half of our most 

populace State, similar consolidations elsewhere would create incredible power for a select few. 

A commitment must be made to local coverage and local job creation. These same entities that are promoting this current proposal 

have been the loudest in supporting the outsourcing of jobs, causing one to truly question any commitment to local communities. 

Agreements amongst competitors to shut down or reduce capacity 

or output are normally illegal per se under the Sherman act. Any 

effort to assist the newspapers in this regard will have far-reaching 

consequences. 

Newspaper workers have made great sacrifices to invest in the 

future of their publications. We have given up a lot, pay increases, 

vacations, and other benefits, to preserve quality local media coverage and a diversity of voices. We have accepted these concessions 

with an understanding that we are investing in a long-term recovery plan. There must be a focus on new ways to generate revenue 

and on creating new business models that recognize the deep 

changes we are experiencing. 

We look forward to working with your Committee to address the 

long-term problems of the newspaper industry in an equitable and 

progressive manner. Thank you. 

[The prepared statement of Mr. Lunzer follows:] 
46 

PREPARED STATEMENT OF BERNARD J. LUNZER
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Mr. JOHNSON. Thank you, Mr. Lunzer. 

And now we will hear from Mr. Ben Scott. 

TESTIMONY OF BEN SCOTT, POLICY DIRECTOR, 

FREE PRESS, WASHINGTON, DC 

Mr. SCOTT. Thank you, Mr. Chairman, Chairman Conyers, Members of the Committee, thank you for the opportunity to testify 

today. 
49 

I am the policy director for Free Press, which is the largest public-interest organization in the country working on media policy 

issues. As the name of the organization implies, Free Press has a 

strong interest in the future of journalism and the vibrancy of the 

news marketplace. 

I would like to begin by addressing the nature of the problem we 

face, since the crisis in the newspaper business is often seen as 

monolithic, but in reality, there are several major problems hitting 

different parts of the news industry in different ways. 

The most immediate problem, of course, is the debt load carried 

by major news companies that are pushing them into bankruptcy. 

But a more general problem is the decline in print circulation and 

advertising revenue as readers shift to the Internet. And online papers are up against more national and international news competition. 

Some newspaper companies have made things worse and accelerated their demise by pursuing flawed business models of consolidation. The short-term benefit emerges, of course, as an increase in 

revenue and market share, but the long-term consequences are 

mounting debt, a debt that now threatens to sink the ship. The revenue declines, and shareholder demands then force budget cuts. 

Budget cuts force layoffs. Layoffs mean fewer journalists. Fewer 

journalists, fewer stories and a lower quality product for the American public. 

But that doesn’t necessarily mean that the core business of news 

production isn’t profitable anywhere, at least for now. Many papers 

actually have profitable newsrooms, complete with double-digit 

margins and executive bonuses. The demand for text-based news is 

at an all-time high, but the readership no longer translates into big 

dollars because of the Internet. And that is the fundamental problem. 

The historical alignment of technology, market demand and public good that made monopoly newspapers a revenue engine for decades is coming to an end. But the outlook is not all dark. There 

are new journalism experiments cropping up all over the Internet. 

However, none has the clear financial base to scale up to replace 

the quantity and scope of news production that is disappearing 

around them. 

So we are left with a conundrum. As the news shifts online and 

advertising dollars dry up, will the remaining revenue base be sufficient to pay for the journalism that a democratic society needs? 

If it won’t, then that is the policy problem that you have to solve. 

A decline of print newspapers doesn’t necessarily mean the decline of journalism. Journalism just needs journalists, and lots of 

them. And the risk that we face today is that market failure will 

result in the departure of tens of thousands of experienced reporters. 

So what is to be done? Combining the best elements of traditional and new media, we need to create and sustain journalism 

models where it is possible to earn a living writing the news. And 

we need the resources to cover expensive international and longterm reporting alongside the local daily news. 

We also have to recognize that the Internet can’t solve all of journalism’s problems. More than one-third of the country is not yet 
50 

connected to high-speed Internet. So solutions that rely on technology will have to deal with the digital divide. 

Quite rightly, people are alarmed when they hear that their daily 

newspaper is about to stop publishing. But we should avoid the 

temptation to turn to policies that resemble bailouts. Relaxing the 

antitrust standards to permit further consolidation won’t solve the 

problem. Uniting failing business models will not produce success 

any more than tying two rocks together will make them float. 

While expanding scale may pay short-term dividends, in the long 

rum, it will deepen debt, shed jobs and reduce the amount of local 

coverage. That is the exact opposite of what we should be doing. 

We should be expanding the diversity of ownership and with a special focus on minority ownership. 

There are no easy answers here. And that is why we need a comprehensive policy approach. Just as we have created national strategies to address crisis in health care, energy independence and 

education, it is time to craft a national journalism strategy to get 

out ahead of this problem and take advantages of the opportunities 

it creates. 

It will begin by understanding how this happened and recognizing that journalism and journalists are essential for democracy. 

It will begin by showing why the Internet is a powerful force for 

positive change but not a substitute for everything of value that 

has come before. And it will begin when we recognize that the future of journalism is a policy issue. Policy makers should seek to 

join the robust discussion happening already about the future of 

the news room. The answer is certainly not to relax antitrust 

standards and double-down on the bad decisions of the past. The 

most likely answer, based on the evidence available today, is that 

there will be many, many answers. And that is good news. 

I thank you for your time. And I look forward to your questions. 

[The prepared statement of Mr. Scott follows:] 
51 

PREPARED STATEMENT OF BEN SCOTT
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Mr. JOHNSON. Thank you, Mr. Scott. 

Now we will now hear from Mr.—actually Professor Edwin 

Baker. 

Please commence your testimony, sir. 
59 

TESTIMONY OF C. EDWIN BAKER, NICHOLAS F. GALLICCHIO 

PROFESSOR, UNIVERSITY OF PENNSYLVANIA, PHILADELPHIA, PA 

Mr. BAKER. Thank you. 

I wish to make six points. First, the market cannot be expected 

to adequately support professional-quality journalism. Much of the 

value produced by newspaper journalism goes to people other than 

the media companies’ customers. We all, including nonreaders, benefit from the work of journalists in exposing corruption. We all benefit when corruption and negligence do not occur due to news media’s reputation for watchfulness. We all benefit from the wiser voting of those informed by journalism. Newspaper companies cannot 

turn benefits to nonreaders into revenue. The gap between benefits 

provided and revenue obtainable results in inadequate incentives 

to put resources into producing news. 

Second, this inadequacy has been understood since the country’s 

founding. Recognizing both the vital role of newspapers in holding 

the fledgling country together and inadequate support provided by 

the market, Congress, beginning in the first years of the Republic, 

provided huge subsidies on which newspapers were highly dependent. By the early 20th century, the annual postal subsidy to newspapers was $80 million, which on a per-person basis equals roughly 

$6 billion in today’s dollars. 

Third, the highly publicized decline in newspaper circulation 

does not indicate any decline in public interest in newspaper journalism. Rather, it mostly arises from two factors. Primarily, it represents a shift to online readership of newspaper stories with little 

or no real decline in actual readership, only a change in people’s 

method of access. In addition, huge layoffs of journalists degrades 

a newspaper’s product. Circulation predictably declines from a level 

more reporters and editors could achieve. 

Fourth, bankruptcies, newspapers closures and huge layoffs, over 

30 percent, up to 50 or more percent at some papers, together represent the daunting nature of the crisis. But the key concern 

should be the last, layoffs. Bankruptcies primarily reflect papers’ 

inability to generate sufficient operating profits to make huge interest payments, usually from debt taken on to finance recent unwise purchases. Unduly lax laws exacerbate this problem by failing 

to restrict these sales of newspapers. Still, these papers will continue after reorganization. Losses to unwise purchasers merit no 

public concern. 

Next, closures of the second paper in two-newspaper towns, illustrated by the Rocky Mountain News or the Seattle P-I, merely continue a 100-year trend of towns being unable to support more than 

one English-language daily paper. 

In contrast, huge layoffs of journalists and threatened closure of 

the town’s only daily paper are major threats to democracy. As ad 

revenue declines, so does the value to the paper of journalism and 

attracting readers to sale of advertisers. The paper consequently 

lays off journalists, despite knowing that these layoffs cause a decline in circulation and paper quality. Temporary declines in ad 

revenue always occur during recessions. More worrisome now is a 

major long-term shift of advertisers’ budgets to online sites, especially to support search engines and the migration of previously 
60 

highly profitable classified ads to online specialty sites. Unless public policy can create replacements for these lost revenue streams, 

we may lose much of the professional journalism on which our 

country’s Founders knew any robust democracy depends. 

Fifth, corporate consolidation is a problem for a democratic press, 

not a solution. Relaxing antitrust laws can increase the problem. 

A primary rationale for mergers is to save money, often through 

laying off journalists, thereby endangering the democratic contribution to the media. In contrast, the widest possible dispersal of 

media ownership serves to democratize voice within the public 

sphere, serves to increase the number of watchdogs, provides a 

safeguard against demagogic abuse of media power, and places 

ownership in the hands of people most likely to be committed to 

quality journalism. 

Sixth, the crisis justifies a public policy response. The central 

problem, the decimation of employed journalists, follows from the 

inability of media companies to obtain revenue that even approaches the real value that journalists’ efforts produce for the 

community. The government would serve the public interest by giving media a tax credit for half the journalists’ salary. This tax credit would reverse newspapers’ incentive to lay off journalists. More 

journalists would in turn increase the quality of newspaper and 

cause circulation to rebound. 

For the roughly 48,000 journalists now employed by the Nation’s 

newspapers, this tax credit would cost about 1 and a quarter billion 

dollars, a fraction of the amount in today’s dollars, per person, that 

the country provided newspapers in postal subsidies 100 years ago. 

This targeted subsidy would duplicate the financial commitment 

that the country’s Founders made to the news media of their time. 

Thank you. 

[The prepared statement of Mr. Baker follows:] 
61 

PREPARED STATEMENT OF C. EDWIN BAKER
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Mr. JOHNSON. Thank you, Professor. 

And it has always been my dream to be able to gavel into submission one of my, or any, law school professors. And I was really 

at the 3-minute mark thinking that I would. It is just so tempting. 

But I was able to restrain myself. 

Next, we shall hear from Mr. Dan Gainor. 

Mr. Gainor, please. 

TESTIMONY OF DAN GAINOR, VICE PRESIDENT, BUSINESS 

AND MEDIA INSTITUTE, MEDIA RESEARCH CENTER, ALEXANDRIA, VA 

Mr. GAINOR. Thank you, Mr. Chairman, Members of the Committee, ladies and gentlemen, I am Dan Gainor, vice president of 

business and culture for the Media Research Center. 

It is an honor and a privilege to come here and speak about one 

of my favorite topics, newspapers. From the first time I ever read 

on my own, newspapers have been a part of my life. I have worked 

at three different dailies and several weeklies and online news operations following that calling. 

You don’t have to tell me that the newspaper business is changing. Three of those organizations I have worked for are now out of 

business. Until recently, I wrote a column for the Baltimore Examiner, but it closed, putting dozens of friends and fellow journalists 

out of work. 

The news media are going through a time of epic changes, and 

that is never easy. In a few short years, evening dailies have all 

but died out. The rise of the Internet has changed even more. 

Newspapers first lost employment advertising to firms like Monster.com and since have lost classified ad revenue to Craigslist. 

Other sources of revenue, from personal ads to real estate, have 

met with smarter, more nimble competition. 

While it is fair to blame much of this decline on newspapers to 

technology, it is not the only factor. The newspaper industry has 

changed too for the worst. Standards have slipped or all but disappeared. The concept of a journalist as a neutral party has become a punch line for a joke, not a guideline for an industry. 

We all saw how poorly the mainstream press covered the last 

election. According to the Pew Research Center for People and the 

Press, voters believed that the media wanted Barack Obama to win 

the presidential election. Here is a quote from them, ‘‘By a margin 

of 70 percent to 9 percent, Americans say most journalists want to 

see Obama, not John McCain, win,’’ Pew reported. 

Other surveys confirmed it. According to Rasmussen, ‘‘over half 

of U.S. voters, 51 percent, think reporters are trying to hurt Sarah 

Palin.’’ 

It wasn’t just the surveys; it was journalists themselves. According to Washington Post ombudsman Deborah Howell in a column 

headlined ‘‘An Obama Tilt in Campaign Coverage,’’ the paper’s 

election coverage consistently supported Obama in everything from 

positive stories to flattering photos. That same slant reappeared 

last week during the Tax Day Tea Party protests. The Post didn’t 

write a story about more than 750 events nationwide until the day 

they happened; far different than how they handled other protests. 

Their own media critic, Howard Kurtz, even knocked such minimal 
72 

coverage. While the New York Times did preview the events six 

times, five of those were negative. 

Such one-side reporting has destroyed the credibility of the print 

press. Among newspapers, the most trusted name in news is the 

Wall Street Journal, and just 25 percent of readers believe all or 

most of what that organization says, according to Pew. For the 

New York Times, the number is 18 percent; and USA Today, 16 

percent. The only publications lower are People Magazine and the 

National Inquirer. 

In fact, for the New York Times, the number who believe almost 

nothing in the newspaper is nearly identical to those who do believe. 

And while newspaper credibility has taken a hit among both 

Democrats and Republicans, it is lowest among Republicans, with 

the Times having just 10 percent credibility rating with that group; 

1 person in 10. You could write graffiti on a wall and have more 

people believe you. 

But the Times still has widespread influence, and a story on the 

front page can be picked up and appear in some form in countless 

media outlets. The Times’s former public editor, Daniel Okrent, answered the question, is the Times a liberal newspaper, by saying, 

‘‘of course it is... These are the social issues: gay rights, gun control, abortion and environmental regulation, among others, and if 

you think the Times plays it down the middle on any of them, you 

have been reading the paper with your eyes closed.’’ 

For decades, many in the media have been working with their 

eyes closed, convinced of their own neutrality when all around 

them feel otherwise. In study after study, journalists consistently 

admit they support liberal causes and vote for Democratic candidates. In 2004, Pew found journalists identified themselves liberal over conservatives by a five to one ratio. Were journalists the 

only ones voting for President, they would have elected a Democrat 

every time since 1972. 

The Society of Professional Journalists, to which I proudly belong, has a detailed Code of Ethics. At its heart, it says journalists 

should provide ‘‘a fair and comprehensive account of events and 

issues.’’ They do neither. 

It is fitting, then, in a hearing to discuss ‘‘diversity of voices,’’ 

that every one here grasp a key point, the diversity of voices in 

print isn’t about news. It is fiction. 

Thank you. 

[The prepared statement of Mr. Gainor follows:] 
73 

PREPARED STATEMENT OF DAN GAINOR
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Mr. JOHNSON. Thank you, Mr. Gainor. 

And before we commence with my questionings, I would like to 

recognize a large group of students who are here today to observe 

democracy in progress. I appreciate you all’s attendance. 

And do we know whether or not there are any spies amongst 

you? If anyone is—yes, I see one hand. 

Thank you, sir, for being honest. 
76 

More shall been revealed later with you all. Don’t forget that torture was once ruled legal. 

And so, but now I would like to at this point recognize the fact 

that I have heard through the grapevine a couple of times that 

there is a secret relationship that exists between some Members of 

Congress, who predominantly are of Republican. I understand that 

there is, and this is from folks I talk to, some believe strongly that 

there is an unhealthy connection between FOXNews and the Republicans. 

Mr. Gainor, I would like to hear your take on that, and also Mr. 

Lunzer. 

Mr. GAINOR. We are spinning a little out of newspaper territory, 

but I think what FOXNews does what a lot of publications do in 

journalism. They have a target market. They identified a market 

that is clearly underserved by the mainstream media because the 

mainstream media, by all reports, don’t pay attention to the concerns of conservatives, which represent a fairly sizeable portion of 

the American public. So Fox decided—and clearly records show, 

they are right—that they found a target market that was very viable. So since we had Rupert Murdock’s comments read into the 

record, I am not about to dispute Rupert Murdock’s business acumen. 

Mr. JOHNSON. Thank you very much, but I have been told that 

the tea party held last week was a result of an organized effort by 

politicians in conjunction or in conspiracy with the Fox TV Network that was an unholy alliance, if you will, between those two, 

as opposed to just a spontaneous outburst from uninformed people. 

Can someone comment on that? 

Mr. Nichols, please. 

Mr. NICHOLS. I attended one of the tea parties. And the people 

I saw at the tea party were grassroots Americans who are deeply 

concerned about the bailout of the banks and about the PATRIOT 

Act and a host of other matters, many of which this Committee has 

dealt with. I think we should be cautious about being too worried 

about media outlets, be they Fox or the New York Times, having 

a connection with their readers that might inspire them to go and 

do something, to go and turn out and act. 

You see, this is really the core of what we are talking about here. 

The core of what we are talking about is that we need a diverse 

media with many different voices. We need a media that will speak 

to those folks who would go to a tea party. We need a media that 

will speak to the folks who wouldn’t go to a tea party. What we 

desperately, desperately, need and what is dying, and I want to 

emphasize it is dying in this country today is that competition of 

strong media outlets coming from many, many different perspectives. 

And what troubles me the most is the notion that we have a liberal media or a conservative media. The fact is, by and large, we 

have a lousy media in this country. And I want to tell you how 

lousy it is. The fact of the matter is George Bush shouldn’t have 

been surprised that there weren’t weapons of mass destruction in 

Iraq. We should have had a media that was on top of that story 

and did a good job. It didn’t. And all these people, many people 

blame George Bush or criticize him; I will be very blunt with you, 
77 

I blame the media. Our media didn’t do its job. It didn’t do investigative, challenging, aggressive journalism. And the way you get 

investigative, challenging, aggressive journalism is to have a lot of 

media outlets that employ a lot of journalists and send them out 

from different perspectives to go do their job. 

Mr. JOHNSON. Thank you. 

And Mr. Ben Scott, would you like to respond to that vicious 

rumor that is going around? 

Mr. SCOTT. Well, I can’t comment on the veracity of that rumor, 

although it wouldn’t surprise me. I think what the key issue here 

that I am hearing is a widespread agreement at this table that 

what we need is a diversity of viewpoints in the media. It strikes 

me that, at a moment of crisis in the newspaper industry, the print 

newspaper industry, largely the daily newspapers, is also a moment of opportunity for us to take advantage of new technologies, 

to create new business models, to see the market and the government work together to figure out how we can support more journalists, not to replicate the status quo on the Internet that we once 

had on the newspaper pages, but to create a better media system, 

to create a media system that creates more journalists, to create 

a media system that can aspire both to the goals of objectivity and 

to the goals of partisanship, so that, for the first time since the 

19th century, when every major city had a dozennewspapers, we 

can see a robust marketplace of ideas in this country. 

Mr. JOHNSON. Thank you, and unfortunately, I wish I could hear 

from the other Members on this point. 

But I will at this point in time note that my time has expired, 

and it took a while for me to see that red light. 

Mr. CONYERS. Mr. Chairman, I would ask unanimous consent 

that the Chairman be given 1 additional minute. 

Mr. JOHNSON. Does anyone have the courage to disagree with the 

Chairman? 

Mr. GOODLATTE. Not me. 

Mr. CONYERS. Without objection, we shall do so. Thank you. 

Mr. Gainor, if you would respond to that. 

Mr. GAINOR. If I just might remind people a little bit about the 

history of the tea parties is, tea parties were spawned by comments 

made by Rick Santelli on CNBC, which is part of NBC and ultimately GE. Santelli had what is called the ‘‘rant heard round the 

world’’ complaining about spending in government. Soon after that, 

there was an event in February that, yes, did not get much media 

coverage, but it included 50 different tea parties on February 27. 

Mr. JOHNSON. Did it get covered on Fox like this one did? 

Mr. GAINOR. Actually, it didn’t get very much coverage. It did 

coverage on Fox some. Fox saw, again, I think an opportunity that 

people were not covering it much. But, again, the cause of this, and 

the tea party people themselves, proclaim on their Website that 

this was spawned by comments, inspired by comments made by 

Rick Santelli. So to say it is a Fox conspiracy, not one that I held 

any credence for. 

Mr. JOHNSON. All right. 

Thank you, sir. I will next turn to Mr. Goodlatte. 

Mr. GOODLATTE. Thank you, Mr. Chairman. 
78 

Mr. Gainor, to follow up on that, according to a Gallup poll, only 

9 percent of the Americans say they have a great deal of trust and 

confidence in the mass media to report the news fully, accurately 

and fairly. That is even lower than Congress’s approval rating. 

The same poll found that more than twice as many Americans 

say the news—we are not talking about just FOXNews here, by the 

way. We are talking about all sources of information through the 

media. That same poll showed that more than twice as many 

Americans say the news media are too liberal rather than too conservative. How has Americans’ lack of trust in the media exacerbated the news industry crisis? What can be done to restore that? 

Mr. GAINOR. What can be done to restore it, first of all, is to do 

a better job. That is something everybody on the Committee, the 

panel, can at least agree on. Before we get too lost in the woods 

talking about Fox in a newspaper discussion, I want to remind everybody the scale of the media in this country. If you talk about 

Fox and the tea party day, when they had 3.9 million people watching their one program, their highest rated program that night, they 

did very well. They are one-sixth of what ABC, NBC and CBS get 

on a typical evening news show. They roughly equalled that night 

what MSNBC, CNN, and CNN Headline News, so you are talking 

about a drop in the bucket by comparison, so it is not an applesand-oranges comparison. 

What can the media do? They need to do a better job. They need 

to recognize, we talked about diversity of voices; they need to recognize that there aren’t a diversity of voices in the newsroom. In a 

typical newsroom, you will see a diversity plan that talks about 

gender, talks about race, some of the more advanced diversity 

plans will talk about religion. They won’t talk about opinion. So 

you will find a newsroom where they were forced in one case, 

where they did a story on religion where they had to go to a graphic artist who actually was more actively religious because they 

didn’t have enough people in the newsroom who went to church. 

You need to have a newsroom, if we are going to have a newsroom 

reflect America, it certainly hasn’t been doing so for a long time. 

Mr. GOODLATTE. Let me turn to Professor Baker. 

In your testimony, you stated that huge layoffs of journalists 

have resulted in degraded newspaper product. 

Can you tell us more about what that degraded product is? Has 

it led to more one-sided or biased news coverage, or is it possible 

this degraded product has caused news consumers to switch to alternative news sources? 

Mr. BAKER. Actually, when they switch, they usually switch to 

the online newspaper product for the most part. When—— 

Mr. GOODLATTE. Is the online newspaper product a degraded 

product, too? 

Mr. BAKER. But both of them are. Any editor will tell you that 

with more newspaper resources, they can do a better job covering 

the various things that newspapers ought to do. Now they may do 

it from a particular slant. Fox might do it from one slant. Another 

media entity might do it from a different slant. Under the first 

amendment, that is not really our concern. 

But for a democracy, our concern is that they do it in a quality 

way with resources. So when newspapers have invested in hiring 
79 

more journalists, they have actually increased their circulation. 

The trouble is that circulation isn’t as valuable to the paper as it 

costs the paper in salaries. So they lay off the journalists. 

Those journalists are providing a public service by providing a 

better paper. So when the paper fires their journalists, the data 

tends to show that they lose some of their readers. That is what 

I mean by degraded product. When you use more money to produce 

something and sell it for the old price, it is going to be a better 

deal—— 

Mr. GOODLATTE. Let me follow up on that point because I think 

it is a good point, but by the same token, newspapers have got to 

be able to raise the money necessary to be able to afford that quality reporting force. So why has the newspaper industry been unable 

to monetize its content in recent times? Is it strictly the fact that 

they are competing with free, on the Internet, oftentimes on the 

Internet—they may be competing with—anybody can be a publisher. Anybody can be a reporter on the Internet. The quality of 

that is often subject to considerable question. But nonetheless, they 

are having to compete with that. 

Is there a model that the newspaper industry could follow that 

they have haven’t? Itunes, for example, has changed pretty dramatically how you buy music by selling it one song at a time. Are 

we headed toward that where you are going to pay for your story, 

story by story? 

Mr. BAKER. Most everybody in the industry is looking for those 

models. And some of those people are pretty good business people, 

and they will probably find what is available. What they won’t find 

is enough to support the type of journalism that the country historically supported basically with government subsidies. As long as 

the benefits are going to people beyond the readers, there is no way 

to monetize those benefits. 

If you are talking about readers, there is at least the possibility 

of monetizing it. And newspapers are trying to find how to do that 

as a way of capturing more money from their online readers. They 

are not going to be entirely successful. They are going to do somewhat better than they are doing now. It is going to help a little. 

It is not going to deal with the real crisis problem. 

Mr. GOODLATTE. Well, I take it the subsidy—Mr. Chairman, if I 

might, I see my red light is on as well, if I might have leave to ask 

a follow-up question to Mr. Baker. 

Mr. JOHNSON. Mr. Goodlatte, if there is no objection, I will give 

you 30 seconds extra. 

No, to be fair, though, we will do 1 minute. Is that fine? 

Mr. GOODLATTE. That should do it. 

Professor Baker, to follow up on that point, you referenced government subsidies, is that in terms of the postal costs of sending 

newspapers? What subsidy are you talking about? 

Mr. BAKER. At this time, today, the newspaper industry is not 

being subsidized. One hundred years ago or 200 years ago, it was 

being hugely subsidized. One hundred years ago, the $80 million 

would be in today’s dollars per person $6 billion that they were getting from the government 100 years ago. Today, it is not there. 

Mr. GOODLATTE. You are saying the newspaper industry was 

subsidized 100 years ago? It is not today? 
80 

Mr. BAKER. One hundred years ago, the postal subsidy to the 

newspaper was worth—according to a Supreme Court case—was 

worth $80 million. 

Mr. GOODLATTE. But the reality is that now, the problem is that 

subsidy, at almost any price, would be very difficult to compete 

with getting information online. So are you proposing a subsidy for 

online journalism? Because that is where this is all headed. 

Mr. BAKER. What democracy requires is journalists. I think it 

also requires newspapers. But I am not as much concerned about 

newspapers as I am about journalists. If you gave a tax credit to 

newspaper companies for half the salary of their journalists, they 

would suddenly find it valuable, desirable to hire more journalists. 

Mr. GOODLATTE. Who would be eligible for that? In an online 

world, wouldn’t anybody be able to say, I have an online newspaper, I want to have a one-half subsidy of my journalists? 

Mr. BAKER. Most of the journalists today, most of the news being 

produced today is by the print newspaper sometimes also operating 

online sites. If you went forward with my proposal, one of the questions would be whether or not it should be made available to various types of online publications which had paid staff, paid journalists working for them. There is nothing in principle that would say 

that you shouldn’t, but we would be dealing with the problem even 

if we didn’t extend the subsidy that far. 

Mr. GOODLATTE. The Chairman has been very generous with my 

time, so I will yield it back. But I would be interested in any other, 

if any of you want to submit in writing any thoughts about how 

such a subsidy could be sustained in a world where anybody can 

define themselves as a journalist. 

Mr. JOHNSON. Thank you, Mr. Goodlatte. 

And now we will have questions from Chairman John Conyers. 

Mr. CONYERS. Thank you, Mr. Chairman. 

This is an important issue. And what we will begin to look at, 

as this examination of what to do with newspapers in crisis continues, is the exact nature of the crisis. I have had, I think pretty, 

good examples, but we need to know precisely what it is we are 

going to fix. 

But I was moved by the Scott recommendation that we come up 

with a national strategy for dealing with papers. And would like 

to have you and Nichols and others expand on that, if you would. 

Mr. SCOTT. Certainly. I think the first thing to do is to look at 

the different dimensions of the problem. That problem that is happening for a major daily newspaper is not the same problem that 

is happening for a rural weekly. It is not the same problem that 

is happening for a new experiment in online journalism. It is not 

the same problem that is happening for a hybrid that does specialization, like investigative journalism or government reporting. 

So I think we need to understand the different kinds of problems, 

and I think we need to begin to design solutions. And I think the 

main problem that we are trying to get at here is, if the historical 

accident of advertising-supported newspapers no longer works, and 

there is no longer a revenue model in the marketplace that produces the news that we need for our democracy, how do you fill 

that hole? 
81 

First, there is reduction of costs with the distribution model provided by the Internet. But there is always going to be a core expense for production of news. And I think we need to get at that 

through—— 

Mr. CONYERS. But how do we go about putting together a national strategy? Would this Committee be a place to begin? Or 

would we call in all the newspaper leaders in the country or invite 

them to start a conference themselves to come up with a strategy? 

Mr. SCOTT. I think you can begin by taking the leadership of 

those who have begun, such as the Knight Commission has a panel 

on this subject. A number of university professors have written extensively on the subject. I think that we need to begin to look at 

solutions that range the gamut from tax policy, bankruptcy policy, 

direct investments in education and public media. Those are all 

areas in which I think potential solutions lie. And it will be a combination of those things which produces a desired result. 

Mr. CONYERS. Which would include the subsidies that they are 

already enjoying. You know, when you raised the cost of a postage 

stamp, do you know what we are paying for? 

Mr. SCOTT. We are paying for the news media and the periodicals 

class. 

Mr. CONYERS. Exactly. 

John Nichols. 

Mr. NICHOLS. If I can just come off that and actually, Congressman Goodlatte’s very, very good questioning in this area, the notion of a subsidy from the government to a newspaper is, I think, 

abhorrent to most journalists. What you really want to do is—— 

Mr. CONYERS. That is capitalism at its worst. 

Mr. NICHOLS. Well, we did it with banks, and I am a little troubled by that. 

Mr. CONYERS. That was the same—and yeah, it applies to whomever. 

Mr. NICHOLS. What we are talking about here is democracy. We 

want the people to be able to get information. We have all said that 

in some way or another. 

And so the way that you might look at congressional action, one 

piece of congressional action, is to do what some European countries have done, which is to allow people to take the cost of their 

subscriptions off their taxes. You can deduct your subscriptions 

from your taxes. 

As a journalist today, professionally, I can deduct my subscriptions from my taxes. But a citizen cannot. I would just suggest to 

you that this is a way where we democratize a support of journalism. We come in, and Dr. Baker has offered some very wise proposals, but imagine this, where we democratize journalism by saying to people, yeah, if you want to subscribe to a conservative 

Internet site that charges or a liberal newspaper that charges, that 

is great. And you can, you pay your money in and then attach that, 

staple it to your taxes, like a lot of us did on April 15, and it is 

a way to support media that you approve of without sending the 

money—and this is my personal bugaboo here—without sending it 

down the rat hole of the existing companies, because the existing 

companies have done a horrible, horrible job of running newspapers. 
82 

Newspapers, I mean, imagine, we are all talking about how 

much we love newspapers. And yet somehow they have managed 

them into extreme crisis. And this crisis did not begin when somebody flipped the switch on the Internet. If you monitor the declining advertising revenues of newspapers, it started before the Internet hit its stride. 

And frankly, the bottom line is also on circulation. We have had 

basically stagnant circulation since the 1950’s. And so the reality 

is newspapering has had a long-term problem. It has come to a 

head in the current economic crisis. But what we need to do is realize that a lot of these companies that have been running these 

newspapers haven’t been doing a particularly good job, and I will 

close with one of the explanations for why they are in so much 

trouble right now that we have not talked enough about right now. 

They, big companies went to buying sprees. They spent too much 

money to buy daily newspapers in communities, took on huge debt, 

and now they are laying off working journalists so that they can 

pay their debt. And at the end of the day, what they will end up 

with is perhaps a paid-off debt but no newspaper that is worthy of 

reading. 

Mr. CONYERS. Mr. Chairman, I ask unanimous consent for one 

additional minute. 

Mr. JOHNSON. In the absence of any objections, please, sir. 

Mr. CONYERS. I just wanted to ask Mr. Gainor if he is familiar 

with an organization called Freedom Works. 

Mr. GAINOR. Yes, sir. 

Mr. CONYERS. I wanted to ask you further, are you familiar with 

an organization called Americans for Prosperity? 

Mr. GAINOR. Yes, sir. 

Mr. CONYERS. And are you familiar with an organization called 

the Heartland Institute? 

Mr. GAINOR. Yes, I am. 

Mr. CONYERS. I am glad to know that. I am not, but I think I 

am going to get more familiar with them. 

Mr. GAINOR. They are conservative. You should check them out. 

Mr. CONYERS. Thank you. Maybe that is why I never heard of 

them before. But I understand they are pretty effective, that they 

influence the business of getting news out to the people and, in 

their own way, quite effectively. 

Mr. GAINOR. I think they are public policy organizations that, 

like probably about a thousand of public policy organizations in 

Washington, try to do their best to get their word out. They are 

probably just fairly good at it. 

Mr. CONYERS. And you recommend them to my attention? 

Mr. GAINOR. Absolutely. 

Mr. CONYERS. And to everybody else in the country as well? 

Mr. GAINOR. Certainly. 

Mr. CONYERS. Thank you very much. 

Mr. JOHNSON. Thank you, Mr. Chairman. There being no others 

from the other side of the aisle who are present at this time, I will 

now turn to Representative Gonzalez. 

Mr. GONZALEZ. Thank you very much, Mr. Chairman. I am not 

sure that I would even have agreement among all the witnesses if 

I said, do we all agree that the newspapers provide us something 
83 

that is very unique, different from any other media source? And we 

can complain about the bias, the prejudice, the incompetence, and 

so on in the newspaper. The real question is, as opposed to what? 

TV? Radio? The Internet? Suddenly, newspapers truly become essential and vital in the professional product that they provide more 

often than not and that you will find in the newspaper setting that 

you will not find as often in any other delivery system. That is my 

premise. If we don’t agree with that, then we can all pack it up and 

go home and say let nature take its course, survival of the fittest, 

and the wonders of the free market, and it is over. 

The question is, are the laws antiquated? Do we need to do something about it? Maybe, maybe not. Or is it just a matter of the application of the laws in a manner that will take into account all relevant factors? Your competition not necessarily within the same 

similarly situated industry, but rather who are your competitors? 

Now, I am going to say, I saw everybody kind of shaking their 

head that we all agree that the newspapers provide something that 

is very unique and valuable that cannot be replicated elsewhere or 

presently is not being replicated. So, how did we get to where we 

are today? And now I am going to quote from newspaper articles. 

June 5, 2008. Whenever I find something interesting, this is the 

wonders of technology. Isn’t it? We used to just highlight it, cut it 

out, put it in the your file. Now it is in your BlackBerry or iPhone. 

June 5, 2008. Peter Moresky from the Post, quoting Steve 

Balmer, CEO of Microsoft. Quote. Here are premises I have. Number one, there will be no media consumption left in 10 years that 

is not delivered over an Internet protocol network. There will be no 

newspapers, no magazines that are delivered in paper form. Everything gets delivered in electronic form. 

And if that is what we need to prepare ourselves for, that is fine. 

But what happened is that businesses adopted certain business 

models and revenue streams. And maybe it is irreversible and it 

is an irrevocable future out there. I mean, we have set something 

in motion. 

June 6, 2008, New York Times, Paul Krugman column. Quote: In 

1994, one of those gurus, Esther Dyson, made a striking prediction 

that the ease with which digital content can be copied and disseminated would eventually force businesses to sell the results of creative activity cheaply or even give it away. Whatever the product, 

software, books, music, movies, the cost of creation would have to 

be recouped indirectly. Businesses would have to distribute intellectual property free in order to sell services and relationships, and 

we will have to find business and economic models that take this 

reality into account. 

That is where we find ourselves. The question is, is there a role 

for us? I think, Mr. Scott, you said the future of journalism is really dependent on policy. And I assume you mean policymakers, 

Washington and elsewhere, which I think is what Steve Kay said 

about the Internet: The future of the Internet is not dependent on 

technology but on regulation. So I think there is a role for us. 

So what is it that newspapers bring that is so valuable that we 

all have to work together to salvage the survival of the printed 

media in America? And I will start to my left. And that is the only 

question I have. 
84 

Mr. TIERNEY. Thank you very much. Congressman, I think it is 

an advantage, sometimes it seems like a disadvantage, actually 

running a newspaper. And I am not a theorist and I am not somebody who testifies here. It seems that the good ones can hit that 

5-minute mark right to the second. 

I actually have 10,000 men and women, full-time, part-time, and 

independent contractors that are depending upon me in this organization. We are probably as close to the ideal kind of an ownership group as you can want. Four Republicans, four Democrats, 

and four Independents, all self-made folks who really cared about 

it, who put up 30 percent so it wasn’t highly leveraged at the time, 

who are willing to put more money into it. 

The idea that somehow it is because the news media is too liberal or conservative; Rupert Murdoch is a really smart guy. Right? 

The New York Post is struggling. I hear it loses money. The New 

York Times is struggling, and the Boston Globe. So Republican, 

Democrat, liberal, conservative, the business model is not working. 

And part of that is as simple as classified advertising. 

I have only been in the industry 3 years, and I have found since 

coming in here that there were some mid-level business people in 

the industry that weren’t up to snuff. I know when I was at Penn 

there were people who wanted to go in to be reporters at the Philadelphia Inquirer, but nobody said at the Wharton School, ‘‘I want 

to go in to circulation at Knight-Ridder.’’ I understand that is the 

case. But at the top of these companies there are really smart people who are really successful in—Rupert Murdoch in television, and 

he is struggling in newspapers. Don Grant, a very, very bright guy, 

the Washington Post, 50 percent of their revenue comes from the 

Stanley Kaplan Learning Center. So they are not all dummies, and 

there is a real systemic problem here. And part of the problem that 

I have noticed repeatedly, most recently with a group of publishers 

in San Diego at a meeting, is everybody is afraid to talk to each 

other. We had an antitrust lawyer in the room. I have been in advertising for 20 years, I have advised large corporations, and I have 

never seen an industry that everybody is so afraid to even begin 

to have a discussion. Now, perhaps they are more conservative by 

nature, but it was shocking, about issues about, well, could we kind 

of cooperate on some kind of a free classified space? Couldn’t we 

cooperate? 

Listen, nobody is trying to decide whether they should buy the 

Philadelphia Inquirer or the Dallas Morning News tomorrow morning. They don’t. And there are opportunities but—to find a new 

business model. Because, you know what? Nobody does what we 

do. The bloggers comment on what we do, or they rip it off and 

copy it and put a sentence in front of it. 

Eric Schmidt said the average blog in America is read by one 

person, I am all for other things. And if there could be subsidies 

for subscriptions, et cetera, we have to look at the impact of some 

of those things. But fundamentally, you know, if I thought the answer was to hire more journalists to fix the problem, we would do 

that. The question is—I mean, and forget our debt. We have a lot 

of debt; it is going to be restructured. Even if I have zero debt— 

and we are the number three in advertising sales among top newspapers so far this year, number three among the top 25 papers, one 
85 

of the most efficient newspapers in the country according to an industry report as well. So, number three in advertising, one of the 

most efficient. At the same time, our profitability has gone from 70 

to 49 to 36 last year to 11 this year. And that is with making a 

lot of savings. So to somehow think that even if we had no debt, 

even if we had no debt—our investors are so committed to this that 

they haven’t received a dividend—the model doesn’t work. Conservative paper, liberal paper, however you want to do it. And I think 

most people just try to—over the course of the whole baseball season, it is pretty fair, most papers. But the fact of the matter is— 

and we have to look at that because there won’t be anybody here— 

like I had a great situation, whether it be Toys for Tots was struggling in Philadelphia, we wrote about it, they got 50,000 toys. Or 

somebody who wrote to me and said: I never thought of taking my 

children to the Philadelphia Orchestra. I am a construction worker. 

I happened to see something, and how neat it was for the first time 

at 52 years of age to walk in to hear the Philadelphia Orchestra. 

Or vice versa. 

I mean, nobody does what we do. And over a million people every 

day read our paper in Philadelphia, and another half a million people go online. We have to figure out how to charge them. All of us 

are afraid to talk to each other about how to create a one-pass system for that. I mean, we really need some help. We don’t need a 

subsidy, we just need a little bit of room for things that will come 

before the Justice Department again to be approved before they are 

done. We just want to be in Philadelphia. We are not trying to create a media empire. None of us would be interested in buying a 

paper in Chicago or Los Angeles. We are Philadelphians; this is the 

only reason that we are here. But we do need—I am telling you as 

a relative newcomer to the industry, this industry is in extreme situation. Once it goes, democracy will suffer. 

Mr. CONYERS. So why don’t you create a new model? 

Mr. TIERNEY. Well, we are struggling to some extent to do that, 

Mr. Chairman, in terms of what we have done. We have come up, 

and now we are willing—we are in negotiations with the banks and 

putting in more equity, et cetera. But even if we have—when we 

are competing to some extent with a Google, I mean, think about 

that. They have 70 percent of the search. And they—I mean, and 

they are in many ways a competitor to us. We don’t control the advertising. All the newspapers in the Philadelphia market together 

aren’t that powerful as an advertising vehicle compared to a 

Google. That is—I won’t get into that. But, anyway, that is probably for another hearing. Anyway, but so there are—and I guess 

what I am suggesting is that I have never seen a more fearful industry about talking about cooperation. Honestly. And I have advised people in the electric utility business, you name the business, 

and it is an industry that—and there is so little concentration. I 

think the largest chain of newspapers has less than 10 percent, 

and then it drops off after that. We are probably the most 

deconsolidated industry compared to cable or any other business. 

I am sorry, I know I have gone over the 5-minute mark, but I 

appreciate the opportunity. Thank you, sir. 

Mr. JOHNSON. Thank you, Mr. Tierney. 
86 

Mr. CONYERS. Mr. Chairman, I ask unanimous consent so that 

Mr. Gonzalez’s question can be gone down the row here. 

Mr. JOHNSON. Without objection, so ordered. Proceed. 

Mr. NICHOLS. I am very honored to be on a panel with Brian 

Tierney, because he stepped in at a time when we had a major 

chain breaking up and put together one of the few situations where 

local people actually bought their paper. And this is something we 

should be about. We should be about local ownership of newspapers. 

I can’t tell you how much damage has been done. I know it is 

a relatively unconsolidated industry, but let me tell you, chain ownership by and large has been a nightmarish situation for the daily 

newspaper business. And when you have distant owners who are 

taking profits out but not putting much back in, you see the 

dumbing down and the destruction of the daily newspaper. 

So at the end of the day when we start to deal in these consolidation, antitrust, cross ownership issues, all central to this discussion, we have to be very, very careful. If we simply make it easy 

for distant owners to consolidate more and do less, we will end up 

in the newspaper business with something much like what happened in radio. In 1996—— 

Mr. CONYERS. But isn’t that the nature of capitalism? 

Mr. NICHOLS. The nature of capitalism, frankly, if I understand 

it, has something to do with free markets. And when you have a 

monopoly owner—— 

Mr. CONYERS. Free markets. That means global. 

Mr. NICHOLS. When you have a monopoly owner in one place, I 

am not sure if that is a free market operating there. So what I 

would hope is that Congress would be in the business of trying to 

promote a real free market of ideas, where you set up a situation 

where it is possible for competing newspapers, competing media 

outlets in the same town to employ journalists and do something 

of quality. 

But just to close off that thought, I think it is the great danger, 

the great danger in saying, well, let’s just throw off the antitrust 

rules, let’s just throw off the cross-ownership rules, let’s just throw 

off the consolidation rules, is that we then begin to end up in a situation where people who have already shown a penchant—not Mr. 

Tierney by and large, but the people who have shown a penchant 

for taking freedom, more freedom as an opportunity to dumb down, 

downsize newspapers and newsrooms and to take more profits out. 

We saw this happen in radio when Congress passed the Telecommunications Act of 1996, allowing one company to own as many 

as eight radio stations in a market. These companies, Clear Channel is the first example, came in, bought eight stations, shut down 

seven or eight competing newsrooms, and put one kid running from 

microphone to microphone. And we ended up, as Senator Dorgan 

has revealed in his hearings, with situations in some communities, 

substantial communities, where there was not a single broadcast 

journalist on the job. 

Now, that is the danger of throwing off some of these controls, 

throwing out some of these rules in an irresponsible manner. You 

could well end up not helping newspapers but actually hastening 

the decline of newspapers and, more importantly—because this 
87 

isn’t really about newspapers—more importantly, the decline of 

journalism. And a democracy cannot function without journalism. 

Mr. LUNZER. If I may. In Chairman Conyers’ town just this last 

week two very enterprising journalists as part of a team won a Pulitzer Prize for the work they did in investigating an ethically challenged mayor. They didn’t ask what party he came from. They had 

heard the rumors, they did the work. It was something that ultimately was very tragic but also very important to that community. 

When people say what do newspapers represent? What will be 

lost? That kind of work isn’t being done by MSNBC or Fox News. 

This is the kind of work that good journalists do every day in organizations that are big enough to support this kind of information. 

They are hardworking. They really don’t pick sides. I reject all this 

talk of bias. I think that is more about the polarization of politics. 

But what I would say is this in terms of policy. You want to encourage journalism, you don’t want to try to pick winners. And that 

is the direction we need to go in. Thank you. 

Mr. SCOTT. Mr. Conyers, you asked me earlier how Congress 

could go about constructing a national journalism strategy, and I 

did a poor job of answering that question. But it occurs to me that 

the answer to your question is the same answer to Mr. Gonzalez’s 

question, and I think he is absolutely right, which is, what we need 

to do is we need to bring people together in the spirit of cooperation, which Mr. Tierney rightly points out has been absent in this 

space, and bring together the industry and the unions and the 

readers and the new Internet journalists and the academics who 

have all been thinking about these questions, and we need to identify what is the essential thing about print journalism that we need 

to preserve in this transitional technological environment. And, 

how do we support those things in a business model where advertising revenues have been decoupled from the value of news? And, 

third, what are the policies that we can put in place to facilitate 

that transition so that those essential elements are preserved? 

That is the challenge I think that sits before this body and the 

one that would be the first objective of a national journalism strategy. 

Mr. BAKER. Mr. Gonzalez’s question about what is unique about 

newspapers, I think it has to be the journalistic unit. And if that 

survives, whether the paper edition survives or not, is a somewhat 

marginal question. But to have those employed journalists—and 

most of the journalism done in this country today is done by newspaper journalists, not all of it. And we should be supporting it 

wherever it exists. But newspapers do most of it. And if we do 

something that sacrifices that, democracy suffers. 

Evidence is, from around the world and also within this country 

from State to State, that the biggest correlator with less government corruption is newspaper readership. When people are reading 

newspapers, corruption goes down. That happens place after place. 

My suspicion—these studies were mostly pre-movement of all the 

readers to online. I suspect it is not just the readership of the 

newspaper that has been crucial for this reduction of corruption, 

but it is the fact that there are journalists out there making reports on what people in government are doing. 
88 

It has been suggested by somebody that in the recent stimulus 

bill we would get much better use of that money if a small fraction 

of it was used to support investigative journalism; then the other 

money that is spent would be used much more wisely. 

As for how we keep these journalistic units together, the history 

has been that when you allow the exemptions from the antitrust 

law, the general result is, as has been mentioned in the radio example, is that the merged entities lay off the journalists, that that 

is the part that is hit first and hardest. The Newspaper Preservation Act, which I think was a wonderful idea in terms of keeping 

competing newspapers alive, keeping the competing journalistic 

units alive, has as a practical matter not turned out well: Once you 

have allowed them to join forces as a monopoly business enterprise, 

then they discover that it is really not all that valuable to still have 

to produce two products when they could have a monopoly with one 

product. So the JOAs have largely been hospice care. They keep 

one paper alive for a while and then eventually put that one out 

of its misery, and then the monopolists can split up the profits of 

a single newspaper in a town. 

The exemptions from antitrust laws have never been a good 

method of making sure that these journalistic units stay alive. 

Other policies of a variety of sorts, I offered a subsidy scheme, the 

notion of new ownership forms has been mentioned by other panelists. There is a variety of other things that could be usefully done. 

But it is these journalistic units that is the crucial thing that newspapers have offered us, and it has been something vital for democratic societies. 

Mr. GAINOR. First, I want to thank Congressman Conyers for giving us a chance to answer this question. It is very important. 

Yes, what newspapers or what news organizations do is unique 

but it is not always going to be in print. You can ask any of the 

people who work on your staff or any of your family, they are getting their news from other venues. They are getting their news on 

their BlackBerry or online in some form or another. Times are 

changing and changing very rapidly. 

But I get very concerned, people are thinking that there is no 

strategy. There are strategies that are working. People are paying 

for content. You can find financial news, people will pay, readers 

pay for financial news online. They will pay for health news online. 

They even pay for sports news online. There are models that work 

for the news industry where these are working. So I reject the contention that there are no business models. 

I think the problem is, and I think we would all agree that the 

industry has not been very well run, they haven’t found them yet. 

But nothing scares me more in the middle of a congressional hearing than three words that say: National journalism strategy. For 

Congress to be mandating a national journalism strategy results in 

what you to some extent have even here in this hearing right now, 

journalists lobbying government, and then in turn being beholden 

to the decisions and whatever moves you make to then aid them 

in protecting their career and their employees. It is natural. It is 

human. We all have friends in the industry. We all want the industry to survive. If Congress bails them out, how hard are they going 
89 

to be then treating those Congressmen who voted for that the next 

day? 

So I want to close just with—an editor and publisher actually addressed the issue of bailouts in September. This is an industry publication, and it came out against them. And it ended its editorial 

by saying: There is no reason to believe bureaucrats would do any 

better picking winners and losers among newspapers, and plenty of 

reason to fear turning the financial future of newspapers over to 

a Federal Government all too enamored of secrecy and surveillance. 

I second that opinion. Thank you. 

Mr. JOHNSON. Thank you, Mr. Gainor. I will now ask this very 

simple question. Mr. Chairman, Chairman Conyers is about the 

only one who actually ran with the dinosaurs, and he regrets that 

he can’t run with them today. But—because of course they went extinct, and we were not able to as a government save them. And 

now we are talking about the polar bears getting ready to leave, 

the famous seals whom our Navy is so fond of are threatened with 

imminent demise due to this alleged global warming phenomenon. 

And you know, so that being the case, things change, dinosaurs 

come and go. Newspaper industries come and go. Why is it so necessary for government to get into the pockets of the people and 

save this dinosaur? Why should we move toward socialism? 

Mr. TIERNEY. Let me just say from the perspective of somebody 

again who actually is running a newspaper, I can say our industry 

is not looking for a bailout. We are not looking for a dime, we are 

not looking for a dollar. We are just looking for the ability to have 

discussions which may or may not bear fruit. But the industry is 

still—when I hear about the monopoly. If it is such a great monopoly, there wouldn’t be dozens of newspapers for sale right now with 

no buyers. If this was the biggest monopoly in the world, you would 

think that somebody would want to buy a newspaper in town after 

town. 

The value of stocks like Gannett is down about 85, 90 percent in 

2 years. The McClatchy Company, the second largest newspaper 

chain, has dropped 99 percent from $60 to 60 cents in 21⁄2 years. 

The New York Times Company. And, again, we are not looking for 

a subsidy at all, unlike other industries that have come before you. 

We are just looking for the ability to, I believe, have a chance to— 

because you would be surprised, Congressman, if you were there as 

an attorney, the fear of these publishers to have any discussions 

at all even with a lawyer present I think stymies the ability to 

begin to kind of say, gee, how can we find some ways to save some 

money, or can we find some ways to compete with one of the big 

Internet sites, et cetera. 

Mr. CONYERS. Mr. Tierney, you are confusing cause with effect. 

The reason these big monopolistic newspapers may be going into 

the toilet isn’t because of the system. It is because of the way they 

have run it and the poor quality and the fact that there are competing technologies that weren’t there when the Founding Fathers 

started off bragging about newspapers. So to tell me what their 

stock is worth now may be a direct result of their causation, not 

anybody else’s or the government’s. 
90 

Mr. TIERNEY. Respectfully, Congressman, they are not all rotten 

operators, and they are all down. And they are not—and that is 

kind of what is going on. And what is going on now—— 

Mr. CONYERS. Wait a minute. You say they are not all rotten operators. How do I know that? 

Mr. TIERNEY. Well, it would be a—like, again, I will look at Rupert Murdoch. We think he is a good businessman. 

Mr. CONYERS. Well, I suppose there are people that think he is 

a good businessman. 

Mr. TIERNEY. Maybe I should find another example. No. You 

know, it is interesting, too, because people say I can get that information online. If you get that information online and it is about 

Philadelphia news, nine out of 10 times it is going to be coming 

from the Philadelphia Inquirer or the Philadelphia Daily News. It 

is just what we are now—and that is a whole issue of copyright 

and rights, because people can basically get it, paste it in, and 

what is fair use is what is—I mean, when people say information 

wants to be free, they are not in the business of paying people to 

create information. You know? I mean, I think that I have heard 

people related to Google saying that it all should be free. Well, the 

ads aren’t free. It is kind of like somebody who has the right to— 

you will excuse this analogy—but the right to sell, the exclusive 

right to sell beer at a dance club, let’s just say. So you think that 

dancers shouldn’t be paid, but the beers are 10 bucks each? Well, 

the dancers have to be paid, too, in this situation, not just the guys 

selling the beer. And we have too many situations where people are 

selling the ads around our content, the content that we create. And 

that is—you just can’t create something for free. We can’t have 

great journalists that we have, such as we have in our two papers 

from the Guild, and not pay them. 

Mr. CONYERS. Was your example in reference to a gentleman’s 

club? 

Mr. TIERNEY. I think that is the kind of club I meant, sir. Is that 

a first for Congress, I don’t know, for me to reference that? I am 

sorry, sir. 

Mr. JOHNSON. Ladies and gentlemen, we have been—I think I 

would be remiss not to recognize the imposter who has just entered 

the room. And though she is very low profile, you know, folks like 

me, nerds and that kind of thing, definitely know what she looks 

like. And—but the individual on stage on the panel with us, I guess 

we have checked her ID and everything. And I personally have— 

I want to say the real Sheila Jackson Lee. I missed her over the 

last couple of weeks when Congress has been on district work periods. 

And so I want to recognize that we have been joined by my good 

friend Congresswoman Sheila Jackson Lee from Texas. Welcome. 

Thank you. And we will ask you to proceed with your questions on 

this issue as soon as we can—I think instead of answering my 

questions, I will just yield—instead of you all doing that, I am 

going to yield again to Mr. Goodlatte. 

Mr. GOODLATTE. Well, thank you, Mr. Chairman. But I am going 

to go back to my first statement: I don’t have any other additional 

questions. If Ms. Jackson Lee has any questions, you should go 

right to her. 
91 

Mr. JOHNSON. I am sure—Ms. Sheila Jackson Lee, how do you 

feel about that? And if it is okay with you, please proceed. 

Ms. JACKSON LEE. Thank you. I know that the hearing is winding down. I want to thank the Chairman of the full Committee, Mr. 

Conyers, and I want to thank you for your leadership. This is a 

vital continuation of this Committee’s assessment in this economic 

arena of the various entities and bastions of business. But in this 

instance, we are talking about a very vital aspect of the first 

amendment, something that we treasure here in the United States. 

And so my questions, in light of the fact that I apologize for just 

arriving back into town, and I wanted to have an opportunity to 

at least comment very briefly on this question that I think has to 

be a studied question and we have to come up with some answers. 

Because on one hand we are losing the Nation’s very vital source 

of information. One reason of course is the fact that everyone believes that they are tied to the Internet. I think there is something 

good about the morning paper and the afternoon paper and being 

able to have that. I also think that communities suffer, frankly, 

when—though I respect small papers—when papers close and there 

is only one source of information, explanation, if you will, in the 

arena that is necessary. 

So I guess, let me just try to go straight to Mr. Nichols, who is 

the man on the ground. And he has got his hands in the mix because he is a journalist. Let me tell you the respect that we have 

for you in this Committee. I know that you know that we have 

passed legislation to protect the rights of journalists as regards to 

sources, and the Chairman of this full Committee has been a leader 

on those issues and I have been glad to join him along with the 

leadership of Chairman Johnson. 

What are we looking at here from your perspective in essence to 

be considered not only a journalist but an employee if you were 

working for a major newspaper, what is the major economic impact 

that we are talking about? And I would appreciate if you would 

mix the economic impact question with the whole issue of the first 

amendment. Antitrust, obviously we are dealing with the economic 

impact, the business of newspapers, which I think is very important as well, deals with advertising. But economic impact, what it 

does to the first amendment if we begin to see either mergers or 

closings. We are looking at whether we should intervene governmentally. What is your assessment? And forgive me for asking a 

redundant question that you may have already answered. 

Mr. NICHOLS. It is not so redundant. And also, I would be remiss 

if I did not thank the Committee for—and Republicans and Democrats, conservatives and liberals, for their commitment to protecting reporters and the pursuit of information in this society. We 

have just had so many examples in the last week. 

Mr. JACKSON LEE. Absolutely. 

Mr. NICHOLS. Stories that have come out that relate to this Committee and—on surveillance and torture and other issues that were 

driven by journalists who felt free to do their job, and so it is very 

important what you do. 

I would just suggest to you that—I keep looking over at Chairman Rodino and remembering that Chairman Conyers was on this 

Committee when a newspaper revealed the wrongdoing of a Presi-
92 

dent and empowered, much more than any congressional investigator or any judge or any lawyer, the Congress of the United 

States to make the Constitution real. And the Constitution is real 

when we use it. When you held those impeachment hearings in 

1974, the Constitution became real. 

Similarly, free speech and freedom of the press is only real when 

it can be practiced in a meaningful way. And so if we lose newspapers and if we lose journalism, we begin to lose freedom of the 

press as something meaningful. And we have had this question 

bounced around somewhat before you came, Congresswoman, about 

the role of government, how government might step in. And I just 

want to remind you, I am a historian of these issues. I write books 

about it. And the fact is, government has always been involved in 

trying to assure that freedom of the press is real. This country was 

founded by journalists. Tom Payne was a journalist. Ben Franklin 

was a journalist. Jefferson and Madison were contributors to newspapers. 

So what we need to do at this point is figure out how the government can engage with these issues without becoming a Big Brother, a heavy hand, the institution that is giving you your resources 

so you have to be kind to them. We don’t want to recreate the king 

supporting his favorite newspaper. We want a free press. 

And I do think government has a role there. I think that role, 

though, is mainly in empowering the subscribers and the users of 

media, of journalism. And one of the ways that you can do this is 

to consider this notion that has been put forward of allowing subscribers to deduct or get a rebate for their subscriptions in their 

taxes. They get to choose what they read, what publications, what 

Internet sites they support. Not the government. And hopefully this 

provides some resources coming in, and maybe even an increase in 

readership and things of that nature. 

And I would suggest it has worked rather well with churches. We 

do allow people to take a bit of a deduction when they give money 

to their chosen house of worship. And I don’t say that I worship 

at the altar of journalism, but I come pretty close. And I would appreciate very much if Congress looked at all the creative ways in 

which it could involve itself in making sure that freedom of the 

press is real and that the Constitution is real. 

This democracy will not survive without newspapers and journalism. It won’t. And so you are at a very critical moment here. If 

you fail to take this task seriously, look at all the options, look at 

all the possible actions, make sure that you do it in the right way, 

you will be a part of watching those dinosaurs pass away. And I 

don’t want—I am young enough that I would like the dinosaur to 

last for a little longer. 

Ms. JACKSON LEE. Thank you for your eloquence. Let me ask Mr. 

Tierney and as well as—in fact, let me, other than Mr. Nichols, answer this question on the antitrust exemption. One would think 

that the legislation, the Newspaper Preservation Act, which allowed I think the merger of newspapers would have helped preserve some of these entities. And, however, it certainly merged 

newspapers and I think lost a lot in the political thought and independence of political thought. 
93 

Since we are at the end of the hearing, why don’t I ask each of 

you just to give me your perception of the kind of intervention now 

that we should have with respect to, say, newspapers? Why don’t 

we begin with you, Mr. Tierney? 

Mr. TIERNEY. It is interesting, this is my own perspective, the 

Newspaper Preservation Act of 1970—if your roof lasted for 40 

years, you would think that was pretty good. So I don’t think it is 

a failure in that it did help in the 1970’s, 1980’s, and 1990’s, and 

they don’t seem to be working as well now. The issue now isn’t so 

much preserving two newspapers in most towns, but it is preserving the one. 

And so I think that is—what we need is a period of time—we 

don’t need any subsidies or anything like that, although that is 

wonderful to have them but I think it is problematic in this, and 

then you will have a lot of people saying, ‘‘Me, too. Me, too.’’ But 

we provide something unique to our community, where the source 

of alt-journalism, television journalism, everything else springs 

from what we do in our communities, and what we are asking for 

is the ability—and we all agree that journalism should be saved 

and we play a unique role. So what we are just asking for is a period of time, perhaps it is 18 months—and I am not an expert on 

this, so I am probably speaking out of line in terms of the industry—but where there could be discussions which would then be reviewed with the Justice Department on some basis. So it is not as 

if anything can be done unless it is approved, so that we could 

begin discussions among newspaper publishers. 

And, again, I said earlier, ma’am, before you were in the room 

that here in Philadelphia we are a locally owned diverse group. We 

are not looking to build the next empire of newspapers. But I think 

if we could work with the folks in Dallas or Los Angeles and Chicago, we could come up with new products that would be national 

in scope which we don’t have now, but online classified advertising, 

all the rest of it, to compete against some other players. And we 

are afraid to even begin to have those discussions. And I said before you got here, it is amazing; I have been in advertising for 20 

years before this, the last 3 years, I have never seen an industry 

where people are paralyzed even with lawyers in the room to begin 

to scratch at the surface. 

Ms. JACKSON LEE. Is that because of the regulatory structure 

that the newspapers are operating under? 

Mr. TIERNEY. Exactly. Yes, Congresswoman. And I don’t have a 

history of it, but I feel like some people must have really been 

spanked sometime in the past, because it is amazing how afraid 

people are to talk. 

So if we could have a period of time where we could have some 

of these discussions, and again subject to the DOJ review and a 

final approval, I just think that would be one step without a subsidy or anything like this where the industry could begin to come— 

because we need to come up with our version of a Craigslist. And 

when it is Philadelphia for Free Rentals and then it is Dallas for 

Free Rentals, it is not a national brand. And I just offer that as 

one example. And that is how we can compete in our own way. But 

people are afraid to do that right now. 

Ms. JACKSON LEE. Mr. Lunzer. 
94 

Mr. LUNZER. It is very difficult to answer, because before this 

hearing took place there really has not been much specificity about 

what people believe the current barriers are. I frankly don’t see 

them. I do know that in the San Francisco Bay Area, where there 

was talk of a need for relaxation of antitrust, the only reason why 

they could have been requesting it is because they wanted to share 

journalists. And the fundamental fear that we have is the union 

that represents the vast majority of journalists—newspaper journalists in the this country is that if the solution is to further diminish these products by having fewer and fewer journalists and now 

use them across more publications and perhaps with broadcasts, 

we are going to have a dozen journalists working in one town chasing stories and you are not going to get the story. You are going 

to lose voice, you are going to lose diversity, you are going to lose 

a lot of things that matter. 

So you need to encourage journalism. The crisis is real. And we 

want these people to be successful, but you have to be cautious 

about the way you go about encouraging it. We need the discussion, 

and I applaud you for having this discussion. 

Ms. JACKSON LEE. Mr. Chairman, I know we are concluding. 

Could I get a quick answer from these remaining witnesses on just 

that question? 

Mr. JOHNSON. If there is no objection. 

Ms. JACKSON LEE. If they remember the question, which is the 

NPA and the structure that we have now. And thank you. That is 

important, Mr. Lunzer, for—with respect to the concept of what 

you do with the talent of journalists. 

Yes, Mr. Scott. 

Mr. SCOTT. I think that we have to evaluate a recommendation 

of relaxing antitrust standards in the context of policies to address 

the crisis in journalism. But before you came in, I suggested that 

we ought to convene a national journalism strategy. Mr. Gainor objected because he fears that as sort of a Big Brother intervention 

from the government in the business of the news. And I hear that 

concern and I share it. However, I think it is a historical—because 

the government has always been involved in the news business to 

some extent. And though the Constitution says do not abridge the 

freedom of the press, it does not say do not promote the freedom 

of the press. And in fact, many laws have been made in the history 

of this great country to promote the freedom of the press, including 

the Newspaper Preservation Act. 

Ms. JACKSON LEE. So we are looking for answers, and you think 

we should be meeting to get that? 

Mr. SCOTT. So I think, just to conclude that thought, convening 

a national journalism strategy and bringing together experts from 

all camps allows you to evaluate different proposals. One proposal 

is to relax the antitrust standards. Now, we have to evaluate 

against—that proposal against others and against the facts of what 

caused this crisis and what we are trying to achieve with a solution. So if what we are trying to achieve is more journalists and 

healthier business models and the diversity of business models to 

produce more and better news in the marketplace of ideas, we need 

to see whether that proposal meets that standard. In my view, on 

my analysis it does not meet that standard and should not be one 
95 

of the solutions on the table. But I think having a form in which 

to evaluate multiple policy options is a good idea. 

Ms. JACKSON LEE. Thank you. Mr. Baker. 

Mr. BAKER. I went into law teaching primarily because of my 

commitment to the first amendment and wanting to write about it, 

and I have been one of the strongest advocates of first amendment 

protections in the academy. 

The first amendment in the area of the—let me refer to both 

your question about the first amendment and about antitrust and 

the Newspaper Preservation Act. 

The first amendment in the press area mandates some things, allows a lot of things, and has been used perniciously to make a lot 

of irrelevant claims. It mandates that the government not engage 

in any type of censorship. When we earlier discussed whether or 

not Fox News was too connected to the Republican Party, I thought 

that, whatever your view on that subject is, that should be irrelevant under the first amendment. What we want out of the government is policies about how we can promote a media industry, not 

make judgments about the goodness or badness of particular publications. 

It has been irrelevant but been used perniciously to claim lots of 

things. Newspaper publishers claim that the first amendment was 

the reason why they didn’t have to pay their workers minimum 

wage. The Supreme Court slapped them down unanimously when 

they made that type of claim. It has also been used to claim that 

antitrust laws couldn’t be applied to newspapers. The Supreme 

Court rejected that claim in a stirring opinion by Justice Black that 

said that the first amendment doesn’t disable the government from 

protecting freedom of press from private combinations that would 

suppress it. 

The history of the country has been involved with the government being involved with the media. What the first amendment 

should do is make sure that the forms of those involvements not 

be of an objectionable sort. And so what we want to see is the objectionable forms of involvement, in particular censorship, not be 

allowed, but that the role of the government from the country’s 

founding has been intently involved—— 

Ms. JACKSON LEE. So we can’t intervene on the antitrust if we 

are trying to save newspapers, we have a legitimate standing in 

that instance? 

Mr. BAKER. You clearly have legitimate standing to try to save 

newspapers. Then the question becomes, would relaxation of the 

antitrust laws be an effective way to do that? If it is—you certainly 

would have the power to relax them for that purpose; however, the 

evidence seems to me—and this is what Mr. Lunzer suggested—is 

that the main result of relaxing antitrust laws historically has been 

and most likely now would be to reduce the key value of newspapers; namely, to fire or get by with less journalists. 

When I hear Mr. Tierney, who as an analyst of the industry 

seems dead right, everything he says about the industry situation 

is right. But when he says this is an industry that is more scared 

to talk than people in any other industry, well, why would they be 

scared to talk? They live, for instance, under the same antitrust 

laws under which everybody else lives. In the first panel, Carl Sha-
96 

piro suggested that if they think that the antitrust laws are interfering with them talking, they could just go to the Justice Department and ask for permission to talk. But there hasn’t been any 

suggestion that he has made of anything that they would talk 

about that would in fact do anything that would save journalists. 

What they might do with some alleviation of antitrust laws is to 

make money for the companies as they engage in their firing of 

journalists. 

So I see antitrust law reduction in this area as not accomplishing 

anything for the key value in the news industry, which is provision 

of news. It may do something to help some owners of businesses 

make more money, but not in a way that serves the public interest. 

Ms. JACKSON LEE. Thank you. 

Mr. GAINOR. Professor Baker makes the point that—raising the 

issue that you can intervene. The real question is, the better one: 

Should you? Should Congress get involved in trying to save newspapers? 

It is like we are trying to catch lightning. The situation is it is 

moving so fast. Almost every major newspaper in the country has 

already switched from just print to now providing video on their 

Web sites. The escalation of technology is so rapid. 

We are all sitting here. We love newspapers. With the exception 

of the Congresswoman, I would say we all love newspapers because 

we are old. 

Ms. JACKSON LEE. Thank you. 

Mr. GAINOR. I grew up with newspapers. Generally, the first 

thing I ever read was a newspaper. 

Mr. JOHNSON. Mr. Gainor, speak for yourself, sir. 

Mr. GAINOR. I gladly speak for myself, Congressman, on that 

point. 

But we like the technology. But news is not a delivery mechanism. News is the people providing it, how they provide it. And we 

now have more news sources and more opportunities for people to 

read than ever before. Newspapers are now competing, instead of— 

their national coverage is actually competing with global national 

coverage. 

So the situation is still being sorted out. To try to overreact and 

get involved in something that is just a rapid technological change 

I think would be a big mistake. 

So when you ask, what should Congress do? I would say nothing. 

Thank you. 

Ms. JACKSON LEE. Mr. Chairman, thank you for your indulgence. 

I think that we have just seen sort of a mountain being built, and 

I think we have got to find a way to overcome it and answer a lot 

of questions. Thank you for this hearing. I yield back. 

Mr. JOHNSON. Thank you, Congresswoman Jackson Lee. And I 

will say that there is no way that we can stop this ‘‘too big to fail’’ 

phenomena as it relates to the media and our precious first amendment right. There is just simply no way that I know of. 

But at any rate, I want to thank the witnesses for your testimony today. And, without objection, Members will have 5 legislative days to submit any additional written questions which we will 

forward to the witnesses and ask that you answer as promptly as 
97 

you can, and then those responses will also be made a part of the 

record. 

And, without objection, the record will remain open for 5 legislative days for the submission of any other additional materials. 

Again, I want to thank everyone for their time and patience, and 

this hearing of the Subcommittee on Courts and Competition Policy, though long and complicated, has now come to an end. 

[Whereupon, at 4:55 p.m., the Subcommittee was adjourned.] 

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