Will the Great Macyization Come to Newspapers?

The Zeltdown leads Jon Fine to speculate on a newspaper industry with concentrated ownership. Quoting an unnamed executive: "You're going to see a big wave of consolidation that will be forced on the industry." Said another: "We're going to end up with one big, giant merger, facilitated in bank negotiations."

In other words, Associated+Allied+Federated+May+Carter Hawley Hale+Dayton Hudson+Marshall Field=Macy's Everywhere, but in newspaper terms? "Fill-in-the-blank Today" as your local newspaper, with lots of centralized back-office operations and some local reporters as the equivalent of your local manager and sales staff?

The department store industry started as the newspaper industry did: Mostly locally owned stores, but with the occasional national chain (a la Hearst and Scripps-Howard) or local tandem. As families got tired of running stores that required ever-increasing amounts of capital to compete, once you got out of the late 1930s-to-late-1960s world of enforced stability followed by incredible prosperity, they either closed down or sold -- to the owner of a nearby store they knew, or to a major corporation. Again, like the newspaper business.

These companies then found themselves running a plethora of regional brands and devoting a huge amount of effort to re-creating the wheel -- separate price tags, separate management structures, separate billing offices -- so they started to consolidate brands -- a concept that has come late to the newspaper business, where re-creating everything city by city has been almost sacrosanct until now. An L.S. Ayres would take over Wolf & Dessauer in Fort Wayne and Kaufman-Straus in Louisville; then you only needed one division manager instead of three, one set of shopping bags, one warehousing department. Shoppers in Fort Wayne and Louisville missed their local store; you lost market share, but you were losing it anyway. The question was whether you had cut your costs enough to compensate for lost market share.

Eventually, you had to do it again and again. The local department-store business -- a Famous-Barr competing with a Stix Baer competing with a Vandervoort's (St. Louis, for those who don't recognize the names) -- became a business of Macy's competing with Penney's competing with Wal-mart competing with Kohl's. There was still a place for the traditional department store as a store; but it was a smaller place for a national brand or a regional chain, a Boscov's or Bon-Ton, maintaining a precarious toehold. In the old days, the department store was the only place that sold everything. Now you could get TVs at the grocery and groceries at Target. Also, the department store business did not attract the entrepreneurial personality as it once had, the larger-than-life figure who had made the local store into part of the city's DNA.

The Internet is a national (or international) distribution model, but taking print as the bricks-and-mortar Barnes & Noble, the Web as Amazon, and assuming that there is room for both to stay in business -- well, there probably is, but not for the traditional local merchant such as Robin's Books in Philadelphia. The cost to compete is too high. And Barnes & Noble will never be as mindlessly profitable as it could have been before the Web enabled Amazon.

Which is to say that part of the reason for the Great Macyization is that the third-generation ownership that characterized many department stores in their later years were quite content to mind the store when things were good, but when things were bad, they cashed in. (Contrast this with Al Boscov, who in his late 70s put his life and fortune on the line to save his family's stores. But then again, it was he who created the modern Boscov's business. He is in many ways the first-generation owner in the manner of Marshall Field, or the inspired enterpreneur such as Fred Lazarus.)

Which leads to a post by Salon cofounder Scott Rosenberg noting that the great newspaper families weren't always everything they were cracked up to be. Newspaper people mythologize the Binghams, Otis Chandler, Jack Knight; yet they were always the exception, just as a Max Hess Jr., who made Hess's in Allentown into a nationally respected store, stood out among the Clelands and Bowmans and Stearnses who operated locally dominant department stores, yet were simply content, once they had the leading store in town, to operate the leading store in town until that became too hard and their own children lost interest in the idea. They did a good job, but they were minders, not creators. The Bancrofts' El Foldo to Rupert Murdoch -- was their ever a family ownership more benign than the Bancrofts at the Journal? Just keep the money coming in, and we'll let you publish whatever you want. Whoops, here's a guy with more money who is going to completely destroy the newspaper you have known (even if he replaces it with something respectable). See ya.

In the Indiana in which I grew up, the Crittenbergers, Rileys, Bradfutes, Bosses, Foellingers, Snyders, Marshalls, Harrises -- all were families that owned local newspapers. People may have fond memories of working for them, but they are not mentioned in the same breadth as William Allen White or Joseph Pulitzer. Other papers were owned by consortiums of local businessmen, as in New Albany, or by chains smallish (the Weils' Federated Publications) or largish (Scripps-Howard, Central Newspapers). Dick Neal in Noblesville published a great smalltown newspaper. Families such as the Nixons, Schurzes and Browns still do honorable work after generations.

But every family gets to the point of saying -- do we run a local institution, or is this a business and we will sell it for what we can get? If we hold on too long, do we just watch it run itself into the ground, and our fortunes with it? The Latzes in Fort Wayne sold W&Ds to City Stores; the Ayres and Block families in Indianapolis found ready buyers in national chains. The other myriad small department store-owning families -- the Levines and Ziesels and Weilers and Carstenses -- held on until the cost of competing with the mall became too high, and there was little point anyway because the grandchildren had no interest in running a department store. At that point they closed down and tried to cash in on the real estate. OK for them, or not; bad for their employees, who believed that the White House or the Boston Store had been there forever and thus would be there forever.

But until the 1930s, the history of department stores and newspapers is of businesses opening and closing with great regularity. From the 1930s to the mid-1960s, greater stability prevailed. Since the 1960s, relative decline in both industries -- because of other media or stores opening and closing with great regularity. Is our thinking still held prisoner by the 1940s and 1950s, decades which look increasingly as if they were the exception, and not the rule we still think of them as? Did department stores and newspapers become institutions, rather than simply well-liked businesses, simply because there were two decades (the 1930s and 1940s) when it was nearly impossible for new competitors to challenge them, because of depression and war? It will be interesting to see if the Great Macyization, which has contributed to newspapers' financial hell, will cause a Great Somethingization in newspapers as well. What emerges may well be a viable business; it will probably have little romance, however.