The Effects of Public Ownership and Newspaper Competition on the Financial Performance of Newspaper Corporations: A Replication and Extension

Abstract

This study supports the conclusions of a 1993 study by Blankenburg and Ozanich that the degree of public ownership affects the financial performance of media groups. High levels of stock ownership outside the media group result in increased returns to stockholders. The current study included competition as an independent variable and found that groups had lower operating margins and spent a greater percentage of revenues on expenses when a higher percentage of newspapers faced newspaper competition. Overall, the impact of public ownership was slightly greater than that of competition.

Capital and Control: Consequences of Different Forms of Newspaper Ownership

“…Blankenburg and Ozanich (1993) revealed that public ownership and outside control led to short-term financial aims and emphasis on higher return on equity and earning than found in privately owned papers. These findings were later supported by Lacy, Shaver, and St. Cyr (1996), Chang and Zeldes (2002), and Lacy and Blanchard (2003). In contrast to those results, An Jin and Simon (2006) found that institutional ownership is negatively correlated to the subsequent year's profitability.…”

Wall Street Made Me Do It: A Preliminary Analysis of the Major Institutional Investors in U.S. Newspaper Companies

“…Porter (1992) reported that the short-term focus of institutional investors was a systemic problem affecting the entire U.S. economy. They found that public companies that had greater inside control were less likely to be influenced by the stock market or pursue short-term returns, a finding affirmed by Lacy, Shaver, and St. Cyr (1996). They found that public companies that had greater inside control were less likely to be influenced by the stock market or pursue short-term returns, a finding affirmed by Lacy, Shaver, and St. Cyr (1996).…”

Revisiting Corporate Newspaper Structure and Profit Making

“…Although research suggests that larger newspapers and publicly owned newspapers are more profitable (Blankenburg, 1989;Blankenburg & Ozanich, 1993;Demers, 1996a;Lacy, Shaver, & St. Cyr, 1996;Tharp & Stanley, 1992), my research shows that larger newspapers and publicly owned newspapers (e.g., corporate newspapers) actually place less, not more, emphasis than smaller newspapers on profits as an organizational goal (Demers, 1991(Demers, , 1996a(Demers, , 1996b. In contrast, some research on chain newspapers suggests that they place more emphasis on profits than independently owned newspapers (Busterna, 1988b(Busterna, , 1989Demers: 1991;Demers & Wackman, 1988;McGrath & Gaziano, 1986: Soloski, 1979, but other studies are mixed or suggest that there is no difference between chains and independents (Coulson, 1994;Demers, 1996bDemers, , 1996cOlien, & Tichenor, 1989;Olien, Tichenor, & Donohue, 1988; for review, see Jeffres, 1994).…”