What Is The Main Argument For Joint Operating Agreements For Newspapers

In the press sector, JOas are used so that a defective newspaper can be coupled to a parent newspaper while retaining separate editorial and cover functions. In 1965, the Department of Justice challenged the legality of the JOAs by presenting cartel violations to two publishers of dailies operated under an JOA in Tucson, Arizona. In Citizens Publishing Co. v. United States, 394 U.S. 131, 89 P. Ct. 927, 22 L. Ed. 2d 148 (1969), although the newspapers used the defence of the failing company, the Supreme Court upheld the findings of breaches of the cartels. His decision limited the scope of the defeated defence. The Court has set three strict conditions for the exercise of the immunity of the bankrupt company: (1) The failing company must be on the verge of being liquidated and the JOA must be its last chance of survival; (2) the takeover company must be the only available buyer; and (3) The prospects for recovery in the event of bankruptcy must be cancelled or non-existent. The Newspaper Retention Act was presented as a relief measure to allow several newspapers competing in the same market to reduce costs, ensuring that no paper could dominate the market by pushing others out of the business.

However, there is growing evidence that the adoption of the law has not focused on the protection of editorial diversity in the Community press markets rather than on the swelling of the profit margins of national press channels. [3] By tacitly and informally interfering with certain cartel behaviours, large newspaper chains could make artificially high profits, while pushing independent newspapers out of the company (or forcing them to sell their share to a chain). [3] Note that many of the titles listed in the following sections have the same few ownership groups. Indeed, President Richard M. Nixon initially rejected the passage of the law (like his predecessor, Lyndon B. Johnson) as antithetical to essential practices and the character of free market capitalism. The Newspaper Preservation Act of 1970 was a U.S. Congress act, signed by President Richard Nixon, that allows the formation of joint enterprise agreements between competing newspaper stores in the same market area.

It exempted newspapers from certain provisions in terms of cartels and abuse of dominance. Its authors argued that this would allow the survival of several dailies in a given urban market, where circulation has declined. This exception was established by the fact that the alternative is generally that at least one of the newspapers, usually the one published in the evening, cease its activities. In the health sector, hospitals can form an AYA to create a stronger financial structure. The JOA, also known in this sector as virtual merger, allows hospitals to retain separate boards of directors, but hands management over to a separate company. Hospitals coordinate services, construction needs and the purchase of large equipment, while maintaining some of their own policies. Religious hospitals enjoy the benefits of a hospital network and retain their religious affiliation. For example, a Catholic hospital that takes a JOA can maintain its views against abortion and continue its individual programs for treating the poor.

He turned around when he received a letter from Richard E. Berlin, ceo of the Hearst newspaper and magazine chain. [4] In the 1969 letter, Berlin suggested that a failure of the law would have political consequences, suggesting that Nixon`s support would help the president and his allies.