Edward Wyllis Scripps founded the first newspaper chain—a company that owns several papers throughout the country—in the 1890s. By the 1920s, there were about thirty chains in the United States, each one owning an average of five papers. The emergence of chains paralleled the major business trend during the twentieth century: the movement toward oligopolies in which a handful of corporations control each industry.

By the 1980s, more than 130 chains owned an average of nine papers each, with the twelve largest chains accounting for 40 percent of the total circulation in the United States. By the early 2000s, the top ten chains controlled more than one-half of the nation’s total daily newspaper circulation. Gannett, for example, the nation’s largest chain, owns over eighty daily papers (and hundreds of nondailies worldwide), ranging from small suburban papers to the Cincinnati Enquirer, the Nashville Tennessean, and USA Today. (See “What Gannett Owns”.)

Around 2005, consolidation in newspaper ownership leveled off because the decline in newspaper circulation and ad sales panicked investors, leading to drops in the stock value of newspapers. Many newspaper chains responded by significantly reducing their newsroom staffs and selling off individual papers.

For an example of this cost cutting, consider actions at the Los Angeles Times (owned by the Chicago-based Tribune Company chain). Continuing demands from the corporate offices for cost reductions have led to the resignations of editors and publishers. Cuts have also caused the departures of some of the most talented staff members, including six Pulitzer Prize winners. In 2007, Chicago real estate developer Sam Zell bought the Tribune Company for $8 billion and made it private, insulating it for a time from market demands for high profit margins. However, by 2008 the company faced declining ad revenue and a tough economy and was forced to file for bankruptcy protection, which it was still receiving in 2012. While it continues to operate, its recent history indicates the sorts of troubles even major newspapers face.

About the same time, large chains started to break up, selling individual newspapers to private equity firms and big banks (like Bank of America and JPMorgan Chase) that deal in distressed and overleveraged companies with too much debt. For example, in 2006, Knight Ridder—then the nation’s second-leading chain—was sold for $4.5 billion to the McClatchy Company. McClatchy then broke up the chain by selling off twelve of the thirty-two papers, including the San Jose Mercury News and Philadelphia Newspapers (which owns the Philadelphia Inquirer). McClatchy also sold its leading newspaper, the Minneapolis Star Tribune, to a private equity company for $530 million, less than half of what it had paid to buy it eight years earlier.

On a more promising note, in 2012 and 2013 billionaire philanthropist Warren Buffett, CEO of the investment firm Berkshire Hathaway, spent $344 million and bought more than sixty newspapers (the company planned to retain about thirty). A newspaper junkie and former paperboy, Buffet has owned the Buffalo News in New York since 1977 and run it profitably. In 2011, he also bought his hometown paper, the Omaha World-Herald, for $200 million. Buffett has argued that many newspapers will thrive if they have “a strong sense of community” and do a good job of mixing their print and digital products. Buffet says he plans to buy more papers—“three years after telling shareholders that he would not buy a newspaper at any price.”⁴⁰

While Warren Buffett has concentrated on purchasing smaller regional papers, ownership of one of the nation’s three national newspapers also changed hands. Back in 2007, the Wall Street Journal, held by the Bancroft family for more than one hundred years, accepted a bid of nearly $5.8 billion from News Corp. head Rupert Murdoch (News Corp. also owns the New York Post and many papers in the United Kingdom and Australia). At the time, critics also raised serious concerns about takeovers of newspapers by large entertainment conglomerates (Murdoch’s company also owns TV stations, a network, cable channels, and a movie studio). As small subsidiaries in large media empires, newspapers are increasingly treated as just another product line that is expected to perform in the same way that a movie or TV program does. But in 2012, News Corp. decided to split its news and entertainment divisions, leading some critics to hope that Murdoch’s news operations would no longer be subject to the same high profit expectations of Hollywood movies and sitcoms.

As chains lose their grip, there are concerns about who will own papers in the future and the effect this will have on content and press freedoms. Recent purchases by private equity groups are alarming since these companies are usually more interested in turning a profit than supporting journalism. However, ideas exist for how to avoid this fate. For example, more support could be rallied for small, independent owners who could then make decisions based on what’s best for the paper and not just the quarterly report. For more on how newspapers and owners are trying new business models, see “New Models for Journalism”.