The man who drove the Chronicle nuts

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Stephen Barnett, prominent UC-Berkeley law professor and noted First Amendment and antitrust scholar and activist, 1935-2009

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Photo by Jim Block

By Bruce B. Brugmann

(Special note: read Barnett's scathing indictment of Examiner/Chronicle/JOA news coverage in the San Francisco Bay Guardian (9/31/1970)

Steve Barnett would have been highly amused with the way the Associated Press and the San Francisco Chronicle handled the obituary of his death on Oct. 13 of cardiac arrest. He was 73.

The AP and the Chronicle ran respectful obituaries of his illustrious career as a UC Berkeley law professor, prominent First Amendment advocate, critic of the California Supreme Court, a director of the California First Amendment Coalition, and widely published legal scholar on media, antitrust, and First Amendment law.

The Chronicle even tossed in a couple of paragraphs pointing out that Barnett was "a frequent commentator on the Newspaper Preservation Act, the 1970 federal law that allowed papers in the same market to cut costs by merging some of their operations."

That, let me emphasize, was a classic understatement. The AP and the Chronicle and every obituary I saw omitted a key point and the local angle. For Barnett was not just a "commentator" on the JOA (yes, the Chronicle omitted the fact that it was locked up in a joint operating agreement with the Examiner from 1965 to 2001). He was the only academic I know in law or journalism who had the guts and the expertise to take on the big local monopoly newspaper combine on his home turf in print, in court, and in congressional testimony. In short, back in the late 1960s and 1970s, he drove the Chronicle and the Hearst/Examiner nuts.

In those days, the JOA combine had some serious antitrust and monopoly problems that were red meat for Barnett. The Chronicle and Examiner moved into a JOA monopoly in 1965 under the guise of preserving newspaper competition. They killed the third daily in town and then merged the Ex and Chron business functions to fix prices, pool profits, and share markets under a combination called a joint operating agreement (JOA.)

The big problem: the JOA was a violation of federal antitrust law and a U.S. Supreme Court decision in the famous Tucson JOA case that declared an existing JOA illegal. The Ex and Chron publishers were forced to work with the other JOA publishers to get a special act of Congress to legalize the merger retroactively, a most embarrassing position for the big daily newspapers. The San Francisco JOA was the latest and biggest JOA of them all and thus ought to have been the most newsworthy.

Barnett went to Washington in 1969 as an expert witness and testified against the special interest legislation before the House Subcommittee on Antitrust and Monopoly. It was his first major volley against JOA journalism. He drew on his newspaper background (president of the Harvard Crimson, the daily paper at Harvard University, and reporter for small town dailies), his legal experience as a clerk for the late U.S. Supreme Court Justice William Brennan Jr., and his UC legal credentials to put forth one of the most powerful statements against JOA journalism in San Francisco and against a total of 22 similar arrangements of 44 papers in 44 cities throughout the country.

He summed up the pre-merger Chronicle/Examiner position: "The Chronicle and Examiner presumably had competent legal advice, and any antitrust lawyer would have advised them in September 1965 that the Government had an excellent chance of winning the Tucson case (challenging an existing JOA); that their proposed combination was likewise vulnerable; that suit could be brought against it by a private plaintiff if not by the Justice Department; and that if they went ahead with the combination they were doing so at their own risk."

Barnett argued that JOAs were designed to protect monopolies, not competition, and should abide by federal antitrust law and the Supreme Court decision barring price-fixing, pooling profits, and sharing markets.

His most illustrative point came when he caught then Chronicle publisher Charles de Young Thieriot in a damning contradiction in testimony to the congressional committee in 1967.

Thieriot took the poverty oath when he testified on July 27, 1967. He said that he agreed to the merger with Hearst because he feared that Hearst might force the Chronicle out of business with its larger resources. In the same spirit, then Hearst publisher Charles Gould testified that San Francisco was a case of "three failing newspapers." Neither publisher bothered to produce financial statements to back up their claims of galloping poverty.

The day after the JOA publishers testified, J. Hart Clinton, publisher of the San Mateo Times and an antitrust attorney, blasted the two publishers by saying that the "failing status" of Hearst newspapers was the result not of "destructive competition" in Thieriot's phrase, but of the Chronicle's use of its profits from its government-licensed TV station, KRON-TV, to buy up expensive circulation in the suburbs and thereby gain the top position in the morning market and driving the Examiner "to the wall."

Clinton also placed in the record the July 1965 balance sheet of the Chronicle which showed, 60 days before the merger, that the Chronicle had $7 million in cash, of which $4,600,000 was cash on hand and $2,400,000 was in certificates of deposit. He said the Chronicle was making 15 per cent on its investment.

On Dec. 17th, backpedaling furiously, Thieriot responded to Clinton's charges in a letter to the subcommittee. The Chronicle's fortunes had taken a sudden and dramatic turn for the better. Instead of those "constant losses" from 1957 to 1963 that had prompted his fears for the Chronicle's survival, Thieriot now claimed that the Chronicle showed a profit for each year from 1959 to the time of the merger, with the exception of 1962.

Barnett pounced and summed up the contradictions in his 1969 testimony to the subcommittee. "The question arises," he said. "What kind of man, what kind of company, would submit to Congress, within the space of six months, two affirmations so fundamentally at war with each other?"

Barnett's point that JOA journalism kills competition was made clear back in San Francisco when the JOA partners blacked out his eminently newsworthy testimony. His point was made even more clear when the JOA partners either blacked out or watered down the JOA story for the duration. The other JOA papers and their chain papers performed in virtual lockstep.

In the spring of 1970, Barnett became a newspaper media critic. The FCC was holding hearings in San Francisco on whether to renew the lucrative television license of KRON-TV, owned by the Chronicle. It was an unprecedented and highly significant event in television history and was enormously important to the Chronicle and its JOA partner. The hearing was prompted by an explosive complaint to the FCC from Al Kihn, a KRON-TV cameraman, who charged that the station had slanted its news and programming to favor the Chronicle's ownership interests. Kihn provided many KRON memoes and specifics to back up his complaint and he testified at the hearing.

Barnett went every day to the 32 days of hearings, read the entire transcript of 6,396 pages, and then compared the coverage in both papers. He wrote a long, detailed story for the Guardian (10/31/1970) on his findings. He reported that he was hard put to realize the hearings and the Ex/Chron coverage were of the same event and that they came out as if directed by the Chronicle's family law firm.

"In sum," he wrote, "the hearing coverage was characterized by suppression, bias, obfuscation and just plain bad reporting. Of particular note: the Examiner and Chronicle both pitched in to slant and suppress the story to protect the interests of the Chronicle." He noted that the lengthy hearings went by without a word from the Chron/Ex star columnists Herb Caen, Charles McCabe, Art Hoppe, Ralph Gleason, Dick Nolan, Guy Wright, and others. And, he pointed out, the two television columnists, Terence O'Flaherty for the Chronicle and Dwight Newton for the Examiner, can point to "18 months of unblemished silence on the KRON case, the biggest story on their beat."

The hearing, he concluded, exemplifies JOA journalism. "The Chronicle and Examiner do not compete with each other with respect to news content. They have got what they wanted from their monopoly pact: the rich, quiet life of a journalistic leisure world."

Then, on July 25, 1970, one day after then President Nixon signed the Newspaper Preservation Act, Barnett dropped the bomb on the Ex/Chron/JOA. Barnett filed a lawsuit in federal court on behalf of the Bay Guardian challenging the constitutionality of the act. Barnett put forth an unusual argument: that the combination had taken the lion's share of print advertising in San Francisco through its monopoly-inflated joint rate, thereby leaving only crumbs for the Guardian and other papers in town. And this, he argued, violated the free press provision of the First Amendment.

It was a landmark case, pitting the four-year-old Guardian against the combined resources of the Chronicle and Hearst, with their family fortunes, and the resources of the largest and most powerful JOA chains in the country (Hearst, Knight-Ridder, Cox, Scripps-Howard, Block et al). Billions of dollars of JOA monopoly profits were at stake as well as the potential of serious fines and penalties for massive antitrust violations for years.

Barnett , an indefatigable adversary, recruited several attorneys along the way to keep the uphill battle going for five years. Alas, despite Barnett's magesterial briefs and legal maneuvers, the judge tossed out his First Amendment argument early on and the case was damaged. But he soldiered on with compelling federal antitrust arguments.

In 1975, the Ex/Chron/JOA forces had enough of Barnett and the Guardian and, concerned about their legal liability and bad publicity from the case and four related treble damage cases, threw in the towel. Barnett, with the valuable help of his latest co-counsel, the Joseph Cooper law firm, settled the case for the Guardian.

Barnett kept up his criticism of media monopoly through the years. "Steve became the leading critical commentator" on JOA legislation operating "under the umbrella of antitrust immunity," said Berkeley law professor Richard Busbaum in a UC Berkeley press release. "In legislative hearings, participation in litigation, and innumerable op-ed pieces, he kept the problematic exception under constant scrutiny." He was last heard blasting the Denver Post/Rocky Mountain News JOA for violating antitrust law when the Rocky Mountain News went out of business.

Barnett took on a lot of other battles and causes during his career, but to us at the Guardian his courageous JOA fight and his lawsuit were the most important and most enduring. He helped us define the Guardian as a real alternative paper and got us the money with the settlement to make the necessary move from bi-weekly to weekly circulation.

Barnett is survived by his wife, Karine, their son, Alexander, his stepson, Levon, and a sister, Linda Beiser of Avon, Connecticut. "Steve was a wonderful stepfather to Levon," his sister said. "As he pondered his accomplishments at retirement he rued the fact that he had never fathered any children of his own. He became a father for the first time at age 69 and they spent virtually every waking hour together and enjoyed a very close relationship."

Karine told me she and Steve had for months planned a party for Alex's fifth birthday. Steve had bought and wrapped a gift for him.

Karine decided to have a combined event of the birthday and a life celebration for Steve. It was held on Sunday, Oct. 25th in the Barnett home in the Montclair hills.

"The idea sounds strange," Karine said. "But it was good for everyone. Steve's old friends (faculty, neighbors, outside law school friends, family)and Alex's schoolmates with their parents and teachers with the kids came. All turned out to be very good. I had cooked all night the night before, so there was plenty of good food and drinks.

"All the guests went home with peace inside, seeing Alex, running around and carrying the life and the liveliness around, keeping his father's home alive. Steve would have loved seeing all the people around and especially his only son happy."

The family suggested donations in Barnett's memory to the Parkinson Association of Northern California, 900 Fulton Ave., Suite 100-5, Sacramento, Calif. 95825-4516.

Comments

The publishers were pushing more antitrust exemptions as the solution to the current demise of daily newspapers as recently as several months ago when John Kerry held a hearing on the plight of daily journalism.

What killed this business was the notion that monopolys were worth a lot to a prospective buyer even if they did not produce anything worth reading. Newspapers were traded for every larger amounts of money with ever more bank debt that could not be serviced. To raise money they cut the product to ribbons. Reporters were fired and coverage curtailed. When you add the insane amounts publisher invested in buying presses to produce newspapers capable of soaking up every advertising dollar, advertising rate structures that were anticompetitive, and money wasted on circulation promotion the marvel is they did not self destruct sooner.

We knew when the bill passed that newspapers were insanely profitable. It took a bunch of owners trying to turn the profits into capital gains to totally destroy the business.

Jack Blum - the staff member from the U.S. Senate Subcommittee on Antitrust and Monopoly who put together the hearings on the Newspaper Preservation Act in l967 and l969-70.

Posted by Jack Blum on Nov. 04, 2009 @ 10:46 am

Me, I remember what was maybe the first time I'd written anything for publication, a hard-hitting 1973 piece about how Macy's (the Chron's biggest advertiser then and now) cheated shoppers with deceptive pricing at its annual warehouse sale. The story ran in the Guardian, complete with my how-I-won-the-war account of how I'd taped a lying sales pitch with a recorder hidden in my purse. The next day the paper got an outraged call from Steve Barnett, saying that I'd just confessed to a felony in print. Jerry Brown's flunky has just learned what Steve told us then, that California law makes it illegal to tape someone without their permission. Luckily, Macy's didn't prosecute, so Steve never had to defend us in court.

Posted by Becky O'Malley on Nov. 03, 2009 @ 4:25 pm