Privatization

› bruce@sfbg.com
On Oct. 27, l966, my wife, Jean Dibble, and I and some journalist and literary friends published the first issue of the first alternative paper in the country that was designed expressly to compete with the local monopoly daily combine and offer an alternative voice for an urban community.
We called it the San Francisco Bay Guardian, named after the liberal Manchester Guardian of England, and declared in our statement of intent that the Guardian would be a new model for a big-city paper: we would be independent and locally owned and edited, and we would be alternative to and competitive with the San Francisco Examiner and San Francisco Chronicle, which were published under a joint operating agreement that allowed them to fix prices, pool profits, share markets, and avoid competition.
We stated that “the Guardian is proposed, not as a substitute for the daily press, but as a supplement that can do much that the San Francisco and suburban dailies, with their single ownership, visceral appeal and parochial stance, cannot and will not do.” And we played off the name Guardian by stating that we would be “liberal in assessing the present and past (supporting regional government, nuclear weapons control, welfare legislation, rapid transit, tax reform, consumer protection, planning, judicial review, de-escalation and a promptly negotiated settlement in Vietnam.)” But the Guardian would also be “conservative in preserving tradition (civil liberties and minority rights, natural resources, watersheds, our bay, our hills, our air and water).”
It was rather naive to challenge the Ex-Chron JOA with little more than a good idea and not much money and a wing and a prayer. We had almost no idea of what we were getting into in San Francisco, a venue that Warren Hinckle of Ramparts and many other defunct publications would later describe as the Bermuda Triangle of publishing. But we had, I suppose, the key ingredient of the entrepreneur — the power of ignorance and not knowing any better — and somehow thought that if we could just get a good paper going, the time being l966 and the place being San Francisco and the world being full of possibilities, we would make it, come hell or high water.
Well, after going through hell and high water and endless soap operas for four decades, Jean and I and the hundreds of people who have worked for the Guardian through the years have helped realize the paper’s original vision and created something quite extraordinary: an influential new form of independent alternative journalism that works in the marketplace and provides what little real competition there is to the monopoly dailies. And let me emphasize, the alternatives do not require government-sanctioned JOA monopolies and endless chains and clusters of dailies and the other monopolizing devices that dailies claim they need to survive.
Today I am delighted to report that there are alternative papers competing effectively with their local chains throughout the Bay Area (seven, more than any other region), throughout the state from Chico to San Diego (22, more than any other state), and throughout the nation (126 in 42 states, with a total circulation of 7.5 million, and more coming all the time). There are even cities with two and three competing alternatives, and there are cities where the monopoly daily is forced by the real alternatives to create faux alternatives to try to compete (it doesn’t work). And alas, there is now a Village Voice–New Times chain of 17 papers in major markets, including San Francisco and the East Bay, that is abandoning its alternative roots and moving to ape its daily brethren.
Jean and I met at the University of Nebraska at Lincoln in 1957. Two friends and I were driving around Lincoln one fine spring day, drinking gin and tonics, which were drawn from a tub of gin and tonic that we had mixed up and stashed in the trunk of our car. We happened upon Jean and her younger sister, Catherine, who had come from a Theta sorority function and were standing on a street corner waiting for their mother to pick them up and take them to the Dibble family home in nearby Bennet (population: 412). We stopped, convinced them to ride with us, and got them safely home. They declined our offer of gin and tonics, as did their astonished parents and grandmother when we arrived at the Dibble house.
Jean and I made a good team. We both had small-town Midwestern values and roots in family-owned small-business. Her father owned lumberyards in small towns in southeast Nebraska. Her maternal grandfather founded banks in Kansas and Nebraska and was the state-appointed receiver for failed banks in Kansas during the Depression. Her paternal grandfather owned a grocery store in Topeka, Kan. Jean had the business background and the ability to create a solid start-up plan — she was a graduate of the Harvard-Radcliffe Program in Business Administration and had worked in San Francisco for Matson Navigation as well as Hansell Associates, a personnel firm.
I was the son and grandson of pioneering pharmacists in Rock Rapids, Iowa. (Population: 2,800. Slogan: “Brugmann’s Drugs. Where drugs and gold are fairly sold. Since l902.”) I had the newspaper background, starting at age l2 writing for my hometown Lyon County Reporter (under the third-generation Paul Smith family); going on to the campus paper (which we called the Rag) and then the Lincoln Star (under liberal city editor “Sterl” Earl Dyer and liberal editor Jimmy Lawrence); getting a master’s degree in journalism at Columbia University in New York City; and then working at Stars and Stripes in Korea (dateline: Yongdongpo), the Milwaukee Journal (where I got splendid professional training at one of the top 10 daily papers in the country), and the Redwood City Tribune (where I plowed into some of the juicy Peninsula scandals of the mid-l960s in bay fill, dirt hauling, and the classic Pacific Gas and Electric Co.–Stanford University Linear Accelerator battle). To those who ask how Jean and I have worked together for 40 years, I just say we have complementary abilities: she handles the bank, and I handle PG&E.
Not only did I find my partner at the University of Nebraska, but I also got the inspiration for the Guardian. In fact, I can remember the precise moment of truth that illuminated for me the value of an alternative paper in a city with a monopoly daily press (then, in Lincoln, a JOA between the afternoon Lincoln Journal and the morning Lincoln Star) that was tied into the local power structure, then known as the O Street gang (the local business owners along the downtown thoroughfare O Street). The O Street gang was so quietly powerful that it once decided to fire the Nebraska football coach before anyone bothered to notify the chancellor.
As a liberal Rag editor in the spring of 1955, I had just put out an important front-page story on how one of the most controversial professors on campus, C. Clyde Mitchell, who had been under fire for years from the conservative Farm Bureau and others because of his liberal views on farm policy, was being quietly axed as chair of the agricultural economics department.
We had gotten the tip from one of Mitchell’s students and had confirmed it by talking to professors in his department who had attended the meeting where the quiet firing was announced by Mitchell’s dean. Our lead story was headlined “Ag Ex Chairman Mitchell said relieved of post, outside pressures termed cause.” And I wrote a “demand all the facts” editorial arguing in high tones that “any attempt to make professors fair game for irresponsible charges, any attempt by pressure groups unduly to influence the academic position of university personnel … is an abridgment of the spirit of academic freedom and those principles of free communication protected by the Constitution and the Bill of Rights.” It was a bombshell.
The Lincoln Journal fired back immediately with a classic daily front-page story seeking to “scotch” the nasty rumors started by that pesky Rag on the campus. The story had all the usual recognizable elements: it did not independently investigate, did not quote our story properly, did not call us for comment, took the handout denial from the university public relations office, and put it out without blushing. Bang, that was to be the end of it, on to the next press release from the university.
It made me mad. I knew our story was right, the daily story was wrong, and the story was important and needed to be pursued. And so I stoked up a campaign for the rest of the semester that ultimately emboldened Mitchell to make formal charges that the university had violated his academic freedom. He gave us the scoop for two rousing final editions of the Rag. The proper academic committee investigated and upheld Mitchell but dragged the case out and waited until I graduated to release the report.
Against the power structure and against all odds, Mitchell, the Rag, and I had won the day and an important victory on behalf of academic freedom in a conservative university in a conservative state during the McCarthy era. During this battle I learned how the power structure fights back against aggressive editors. At the height of my campaign defending Mitchell, I was kept out of the Innocents Society, the senior men’s honorary society, although my four subeditors and managers all made it in. The blackball, the campus rumor went, came directly from the regents president, J. Leroy Welch, then president of the Omaha Grain Exchange (known to our readers as the “Old Grain Head”), via the chancellor via the dean of men.
I am forever indebted to them. They taught me at an impressionable age about the power of the alternative press and why it is best exercised by an independent paper on major power structure issues. They also taught me a lot about press freedom, which they were trying to grab from the Rag and me, and how we had to fight back publicly and with gusto.
When Jean and I founded the Guardian, we did so in the spirit of my old Rag campaigns. In fact, we borrowed the line from the old Chicago Times and put it on our masthead: “It is a newspaper’s duty to print the news and raise hell.” We wanted a paper that would be willing and able to do serious watchdog reporting and take on and pursue the big stories and issues that the monopoly dailies ignored — and then were ignored by the radio, television, and mainstream media that take their news and policy cues from the Ex and Chron. In JOA San Francisco that was a lot of stories, from the PG&E Raker Act scandal to the Manhattanization of the city to the theft of the Presidio to the steady conservative downtown drumbeat on such key issues as taxes, social justice, the homeless, privatization, war and peace, and endorsements.
Significantly, because of our independent position and credibility, we were able to lead tough campaigns on public power, kicking PG&E out of a corrupted City Hall and putting a blast of sunlight on local government with the nation’s first and best Sunshine Ordinance and Sunshine Task Force.
Our first big target in our prototype issue was the Ex-Chron JOA agreement, which we portrayed in an editorial cartoon as two gigantic ostrich heads coming out of a single ostrich body, marked in the belly with a huge dollar sign. Our editorial laid out the argument that we have used ever since in covering the local monopoly and in positioning the Guardian as the independent alternative. “What the public now has in San Francisco, as it does in all 55 or so of 1,461 cities with dailies, is a privately owned utility that is constitutionally exempt from public regulation, which would violate freedom of the press. This is bad for the newspaper business and bad for San Francisco.”
The Guardian prospectus, used to raise money for the paper, bravely put forth our position: “A good metropolitan weekly, starting small but speaking with integrity, can soon have influence in inverse proportion to its size. There is nothing stronger in journalism than the force of a good example.”
It concluded, “The Guardian can succeed, despite the galloping contraction of the press in San Francisco, because there are many of us who feel that the newspaper business is a trade worth fighting for. That is what this newspaper is all about.” And we quoted the famous phrase used by Ralph Ingersoll in the prospectus for his famous PM newspaper in New York: “We are against people who push other people around.”
Our journalistic points were embarrassingly timely. A year before the Guardian was launched, Hearst and the Chronicle had formed the JOA with the Examiner and killed daily newspaper competition in San Francisco. The two papers combined all their business operations — one sales force sold ads for both, one print crew handled both editions, one distribution crew handled subscriptions and got both papers out on the streets. The newsrooms were supposedly separate — but as we pointed out over and over at the time and ever after, the papers lacked any economic incentive to compete.
The San Francisco JOA became the largest and most powerful agreement of its kind in the country, and San Francisco was the only top-10 market in the country without daily competition.
This was all grist for the Guardian editorial mills because the JOAs, most notably the recent SF JOA, were in serious legal trouble. The US attorney general was successfully prosecuting a JOA in Tucson, Ariz., claiming the arrangement was a violation of antitrust laws. Naturally, the local papers were blacking out the story. But if the Tucson deal was found to be illegal, the Chron and Ex merger would be illegal too — and the hundreds of millions of dollars the papers were making off the arrangement would be gone.
The JOA publishers, led by Hearst and the Chronicle, quietly started a major lobbying campaign in Washington for emergency passage of a federal law that would retroactively legalize their illegal JOAs. They called it the Newspaper Preservation Act. Meanwhile, the late Al Kihn, a former camera operator for KRON-TV (which was at the time owned by the Chronicle), had prompted the Federal Communications Commission to hold hearings on whether the station’s license should be renewed. His complaint: his former employer was slanting the news on behalf of its corporate interests. We pounced on these stories with relish.
For example, in our May 22, 1969, story “The Dicks from Superchron,” we disclosed how private detectives under hire by the Chronicle were probing Kihn’s private life and seeking to gather adverse information about him to discredit his complaint and to “harass and intimidate him,” as we put it. Later, I found that the Chronicle-KRON had also hired private detectives to get adverse information on me.
I was a suspicious character, I guess, because I had gone to the KRON building to check the station’s public FCC file on the Kihn complaints, the first journalist ever to do so. The way the story came out at a later hearing was that the station’s deputy director left the room as I was going through the records and called Cooper White and Cooper, then the Chronicle’s law firm. An attorney called their investigators, and four cars of detectives were pulled off other jobs and ordered to circle the building until I came out and then follow me when I left the station to return to my South of Market office. They also surveilled me for several months and even sent a detective into the office posing as a freelance writer. (The head of the detective agency and I later became friends, and he volunteered that I was “clean.” He gave me a pillow with a large eye on it that said “You are being watched.” I displayed it proudly in my office.)
Kihn and I were asked to testify before a Senate committee about the Chronicle-KRON’s use of private detectives at hearings on the Newspaper Preservation Act in Washington in June 1969. I took the occasion to call the legislation “the bill for millionaire crybaby publishers.”
I detailed the subsidies in their special interest legislation: “amnesty, immunity from prosecution, monopoly in perpetuity, the legal right to gun down what few competitors remain, and as the maraschino cherry atop this double-decker sundae, anointment as the preservers and saviors of the newspaper business.” And I summed up, “If you plant a flower on University of California property or loose an expletive on Vietnam, the cops are out of the chutes like broncos. But if you are a big publisher and you violate antitrust laws for years and you emasculate your competition with predatory practices and you drive hundreds of newspapers out of business, then you are treated as one of nature’s noble men. And senators will rise like doves on the floor of the US Senate to proffer billion-dollar subsidies.”
After I finished, Sen. Everett Dirksen (R-Illinois) rose as the first dove and characterized my testimony as “quite a dramatic recital” but said that I had not provided a “workable, feasible solution.” Sen. Philip Hart (D-Michigan) recommended that the publishers ought to “read their own editorials and relate them to their business practices.” Morton Mintz, who covered the hearing for the Washington Post, came up and congratulated me. His story, with my picture and much of my testimony, was on the front page of the Post the next day.
Back in San Francisco the Chronicle published a misleading short story in which publisher Charles de Young Thieriot avoided admitting or denying the detective charge and added he had no further comment. Less than a week later, Thieriot wrote the Senate subcommittee and admitted to the charge, saying the use of the detectives was “entirely reasonable and proper.” This statement, which contradicted his statement in his own paper, was not reported in the Chronicle. The “competing” Examiner also reported nothing — neither the original private detective story nor the Washington testimony nor the Thieriot admission.
Nor did either paper report anything about the intensive JOA lobbying campaign headed by Hearst president Richard Berlin, who twice wrote letters to President Richard Nixon threatening the withdrawal of JOA endorsements in the l972 presidential election if he refused to sign the final bill. This episode illustrated in 96-point Tempo Bold the pattern of Ex and Chron suppression and obfuscation they used to advance their corporate agenda at the expense of the public interest and good journalism, all through the years and up to Hearst’s current monopoly maneuvers with Dean Singleton and the Clint Reilly antitrust suit to stop them.
Perhaps the most telling incident came when Nicholas von Hoffman, in his Washington Post column that was regularly run in the Chronicle, called the publishers “as scurvy as the special interests they love to denounce.” He singled out the Examiner and Chronicle publishers, writing that they were “so bad that the best and most reliable periodical in the city is the Bay Guardian, a monthly put out by one man and a bunch of volunteer helpers.” Neither paper would run the column, and neither paper would publish it as an ad, even when we offered cash up front. “The publisher has the right to refuse to run anything he wants, and he doesn’t have to give a reason,” the JOA ad rep told us. The Guardian of course gleefully ran the censored column and the censored ad in our own full-page ad.
On July 25, l970, the day after Nixon signed the Newspaper Preservation Act, the Guardian filed a major antitrust action in San Francisco attacking the constitutionality of the legislation and charging that the Ex-Chron JOA had taken the lion’s share of local print advertising, leaving only crumbs for other print publications in town. We battled on for five years but finally settled because the suit became too expensive. The Examiner and Chronicle continued to black out or marginalize the story, but they and the other JOA papers gave Nixon resounding endorsements in the l972 election even though he was heading toward Watergate and unprecedented disgrace.
Well, in October 2006 the mainstream press is a different creature. Hearst and publisher Dean Singleton are working to destroy daily competition and impose a regional monopoly. The Knight-Ridder chain is no more, and the McClatchy chain has turned the KR remains into what I call Galloping Conglomerati. Even some alternatives, alas, are now getting chained. Craigslist has become a toxic chain. Google, Yahoo!, and Microsoft (known as GYM in the online world) are poised to swoop in on San Francisco and other cities throughout the land to scoop up the local advertising dollars and ship them as fast as possible back to corporate headquarters on a conveyor belt.
I am happy to report on our 40th anniversary that the Guardian is aware of the challenge and is gearing up in the paper and online to compete and endure till the end of time, printing the news and raising hell and forcing the daily papers to scotch the rumors coming from our power structure exposés and our watchdog reporting. The future is still with us and with our special community and critical mission, in print and online. See you next year and for 40 more. SFBG
STOP THE PRESSES: As G.W. Schulz discloses in “A Tough Pill to Swallow,” (a) Hearst Corp. was fined $4 million in 200l by the Justice Department for failing to turn over key documents during its monopoly move to purchase a medical publishing subsidiary, the highest premerger antitrust fine in US history, according to a Justice Department press release; (b) Hearst was also forced by the the Federal Trade Commission to unload the subsidiary to break up its monopoly and disgorge $l9 million in profits generated during its ownership; (c) Hearst-owned First DataBank in San Bruno was alleged in the summer of 2005 to have inflated drug costs by upward of $7 billion by wrongly presenting drug prices, according to a lawsuit reported in a damning lead story in the Oct. 6 Wall Street Journal. Hearst blacked out the stories. And the Dean Singleton chain circling the Bay Area hasn’t pounced on the stories as real daily competitors used to do with fervor.
STOP THE PRESSES 2: SOS alert to the city and business desks of the “competing” Hearst and Singleton papers: here are the links to the key documents cited in our stories, including federal court records of the Oct. 6 Boston settlement with the Hearst-owned First DataBank (www.hagens-berman.com/first_data_bank_settlement.htm), the Justice Department’s antitrust fine of Hearst in 200l (www.usdoj.gov/atr/cases/indx330.htm), and the Federal Trade Commission decision requiring Hearst to give up its monopolistic subsidiary, Medi-Span (www.ftc.gov/bc/healthcare/antitrust/commissionactions.htm).

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