Living in an era of consolidation, we've come to regard media as more of a commodity than a public trust. The buying and selling, merging and behind-the-scenes lobbying that occurs with each ever-larger media deal makes for a good read and, at the same time, has elevated media company CEOs to celebrity status.
Some attention has been paid to the pressures placed on the newsrooms affected by such transactions. But there has been far less attention paid to the business side-and seldom a mention of how a media company does business and how those practices may impact the integrity of its editorial product. (Usually, it's the other way around.)
Not on Long Island, New York.
Here, in fact, is the biggest scandal in newspaper business history: Newsday, one of the largest daily papers in the country, is being sued for overcharging advertisers because it claimed its circulation was much higher than it was. How high? About 100,000 daily copies too high.
Now, anyone who's ever worked in the newspaper industry will tell you that circulation is hardly an exact science. In fact, it's easy to liken stated circulation figures to a new car's sticker price: You know there's value there, but there's also some wiggle room. But rounding up the numbers wasn't what occurred at Newsday. What did occur was the high-tech equivalent of keeping two sets of books using a computer program called "fudge ABC" (the ABC is the Audit Bureau of Circulation, the certification body for newspaper circulation claims); newspaper hawking programs that falsely claimed high sales; a standard of keeping customers on delivery programs after the customer canceled the newspaper; starting deliveries to customers without their consent, delivering to non-existent addresses and to deceased customers; and simply dumping excess copies. That's just part of the tale of fraudulent business practices behind Newsday's quest to build circulation at any cost.
Perhaps the Newsday story isn't getting the play it should on a national level because it's hard to grasp how such unethical behavior on such a grand scale could occur anywhere. Those in the know mostly chalk it up as another tale of corporate greed. Having spent three years at Newsday, I see it differently. There is, no doubt, an element of greed involved, but it's less about money and more about power. More than that, it's about arrogance and a culture devoid of a conscience. It's the convergence of all of those elements, aided and abetted by a handful of people, that is responsible for the downfall of Newsday's reputation.
For years, Newsday boasted of its market penetration rate: At 86 percent, it ranked No. 1 in the nation. High quality editorial and competitive business practices were credited. Seldom noted was the Long Island marketplace itself. With close to 3 million people living on an island, Newsday, the only daily paper specifically serving the region, was the only choice for advertisers who didn't want to reach the entire New York metropolitan area with the expensive big city daily newspapers. As with many monopolies, it came to be referred to as an 800-pound gorilla: A lackadaisical attitude toward customer service and an aggressive editorial-page department, which built its own reputation for bullying its subjects, overshadowed the work of some of the finest journalism in the business.
Started in 1940 by Alicia Patterson, daughter of the founder of the New York Daily News, Newsday grew quickly in a rapidly growing market. Selling the paper in 1970 to the Times Mirror Company (which, in turn, was later acquired by the Chicago Tribune company) created a culture shock for a homegrown business with a penchant for nepotism. Suddenly, it was subject to distant corporate masters.
In the mid 1990s, Times Mirror boss Mark Willes closed down New York Newsday, an attempt to spread from Long Island into the New York City maelstrom, and which had lost millions annually for years. The blow seemed more than Newsday could handle, and the staff charted a new course for the Long Island edition that would make up for the loss of New York. Failure was not an option. Recommitment to Long Island meant strong growth was necessary and circulation would have to increase.
In short order, Newsday became the crown jewel of the Times Mirror family. Bucking national trends, circulation continuously increased. Advertising revenue was flowing stronger than at any of its sister publications. Things seemed too good to be true.
Looking back, they were.
Such success in circulation seemed formulaic, and when I inquired about it, I was told that it was simply a matter of money. Any number could be obtained. That attitude was everywhere at Newsday, and it was unapologetic about it.
Today, the 800-pound gorilla is on life support. The circulation scandal has prompted some of its most respected journalists to leave, and a changing of the guard at the newspaper's helm is stressing the daily's personality. To the newsroom's credit, it is covering its own story as it would any other story-a vital service to readers who have nowhere else to turn. In the long run, the public here should be better off. The changing landscape is allowing new media voices to enter the market, and technology is accessing an area of the country long held to be inaccessible.
Having never been accused of treating either its subjects or its employees with dignity, the ill that ultimately felled the monopolistic giant is its own lack of conscience. At a time when corporate misdeeds are as commonplace as indicted executives, what makes the Newsday story different from the likes of the Enrons, the Worldcoms, the Adelphias and the Global Crossings? Credibility. You may turn to products or services for their reliability, or price, or out of loyalty, but no other industry is built on trust, and trust alone.
As media continue to be bought and sold, as business ethics are so lax we have the Sarbanes-Oxley Act (demanding some openness and responsibility in corporate governance) to contend with, let the Newsday story be a reminder to an industry in constant flux: Buying a newspaper is one thing. Buying and keeping a public trust is quite another.
The above article was published in Media Ethics , Spring 2005 (16:2), pp. 5-21.