Court Blocks Merger of 2 Detroit Papers : To Hear Challenge to Joint Operating Pact OKd by Meese

The Supreme Court today halted indefinitely the merger of two of the largest and most competitive daily newspapers in America.

The court agreed to hear a case challenging the merger of The Detroit News and the Detroit Free Press, two of the nation’s largest daily newspapers that have been locked in a debilitating struggle for dominance in the Motor City.

By granting review in the case, the court puts the merger on hold indefinitely. Because of the court’s schedule, the case cannot be heard until the fall with a decision not likely before the end of the year or early next year.

“This process has been an extraordinary lesson in patience,” said David Lawrence Jr., publisher of the Free Press. “The people of the Free Press have already waited more than three years to assure this newspaper’s future. The wait is not over.”

“Obviously, we’re elated that the First Amendment is alive and well,” said Ed Wendover, publisher of the Community Crier in suburban Plymouth and a leader in a group challenging the merger.

Wendover said the court’s action makes him more optimistic about the eventual outcome of the case. But he said he is disappointed the justices did not give the matter expedited consideration.

Joint Operation at Issue

At issue is whether the two papers should merge under a joint operating agreement under the Newspaper Preservation Act of 1970, a law that allows failing newspapers to combine non-editorial operations of the business to cut costs.

The goal of the act was to preserve separate editorial voices in a time of dying newspapers. Such mergers must be approved by the U.S. attorney general, which, in the Detroit case, happened in August, 1988, under then-Atty. Gen. Edwin Meese III.

However, the merger was opposed by a group called Michigan Citizens for an Independent Press and others who argued the two papers do not fit the definition of failing newspapers. They filed suit in federal court to block the joint operating move. They lost at both the district court and the appeals court level.

Seeking high court review, the group maintained that “both papers could quickly be restored to profitability through modest price increases--increases that would bring circulation and advertising rates in line with virtually all other papers in the country.”

The Gannett Co. Inc. owns The Detroit News and Knight-Ridder Newspapers Inc. owns the Detroit Free Press. The companies are the two largest newspaper groups in the United States and most of their properties generate large amounts of revenue.

In Detroit, however, the two papers have been locked in a fierce war for dominance for decades that led to price cuts, reductions in advertising rates and infusions of cash to put out better, more competitive products.

In other actions today, the court:

--Agreed to hear a Bush Administration appeal aimed at allowing the government to collect potentially hundreds of millions of dollars in taxes from multinational corporations.

--Refused to hear an appeal by Hawaii officials seeking to recover from asbestos manufacturers the cost of removing the product from public schools in the state.