The E.W. Scripps Company

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The E.W. Scripps Company

312 Walnut Street, 28th Floor
Cincinnati, Ohio 45202
U.S.A.
(513) 977-3825
Fax: (513) 977-3721

Public Company
Incorporated: 1878 as Scripps and Sweeney Co.
Employees: 8,200
Sales: $1.3 billion
Stock Exchanges: New York
SICs: 2711 Newspapers; 4833 Television Broadcasting Stations; 4841 Cable & Other Pay Television Services; 4832 Radio Broadcasting Stations

The E. W. Scripps Company is one of the largest media companies in the United States, with 21 daily newspapers, 10 television stations, 5 radio stations, and cable television systems in 10 states. It is also a worldwide syndicator of newspaper features and comics.

The E. W. Scripps Company began life in 1878 as Scripps and Sweeney Co. when 24-year-old Edward Willis Scripps, with his cousin John Sweeney and other family members, founded his first newspaper, the Cleveland Penny Press. Scripps had $10,000 in capital and owned 20 percent of the paper. The rest was owned by his half-brothers George Henry and James Edmund Scripps—each of whom received 30 percent stakes in the company—and other partners.

E. W. Scripps was a populist who thought that most newspapers were geared towards the rich. He wanted his newspaper to keep the poor informed through short, simple stories that could be understood by those without extensive education. He got many of these ideas from James Scripps, an English immigrant who started the Detroit Evening News in 1873. E. W. also added his interest in personal stories to the mix, later giving a raise to an editor who published the fact that he had been fined $10 for riding a horse while intoxicated.

At the time the Cleveland Penny Press was founded, most newspapers had a party affiliation. They also sold for more than a penny, and many contemporaries were skeptical that the Press would succeed. E. W. Scripps’s formula proved successful, however, and within weeks the Cleveland Penny Press had a circulation of approximately 10,000. It was not a profitable operation, however, until James Scripps ordered E. W. to run the paper for $400 a week.

As soon as the Penny Press was making money, E. W. persuaded his brothers to buy the St. Louis Chronicle. He then spent a year in St. Louis managing the paper. E. W. bought a 55 percent in the Penny Post —part of which was already owned by James—went to Cincinnati to manage it, and changed the paper’s name to the Cincinnati Post. He subsequently began taking on political corruption and winning circulation.

From 1887 to 1889 James Scripps was in Europe receiving medical treatment while E. W. managed the Detroit News. Although E. W. expanded advertising and circulation, James was angry with the changes his brother made; upon his return, James removed E. W. from every position he could. In 1890 E. W. started his own paper, the Kentucky Post, in Covington, across the Ohio River from Cincinnati.

Also in 1890 E. W. Scripps entered into a partnership with his business manager, Milton McRae; the two called their newspaper company the Scripps-McRae League. McRae handled day-to-day management of the papers and received one-third of the profits, while Scripps set editorial guidelines and long-term policy. In 1890, with his business running smoothly, Scripps began building a ranch outside of San Diego, California.

In 1894 George Scripps joined Scripps-McRae. This gave the group a controlling interest in the Cleveland Press. Later in the 1890s the group started the Akron Press and Kansas City World. As his chain expanded, E. W. Scripps chose young, growing towns to start new newspapers. He invested as little in machinery or plants as possible, usually buying old presses and renting run-down buildings. He would then hire young ambitious editors who were given a minority stake in their paper; many of them became rich if their newspapers succeeded. With E. W. Scripps spending most of his time in California, McRae often exceeded his authority and put editorial pressure on newspaper editors. Scripps would periodically venture out of California, discover what McRae was doing, and reverse it.

Scripps next began a series of West Coast newspapers unassoci-ated with the Scripps-McRae League group. They included papers in Los Angeles, San Francisco, Fresno, Berkeley, and Oakland, California, as well as Seattle, Tacoma, and Spokane, Washington. In 1900 George Scripps died, leaving his stock to E. W. James Scripps contested the will, however, and James and E. W. settled out of court. E. W. was forced to give all of his stock in the Detroit newspapers to James, who in return gave E. W. all of his stock in newspapers outside Detroit.

In 1902 Scripps started the Newspaper Enterprise Association (NEA), a service for exchanging and distributing illustrations, cartoons, editorials, and articles on such specialized subjects as sports and fashion. Newspapers in the Scripps chain paid a monthly fee and received information and illustrations none of them could have afforded individually. Though the NEA was originally only for Scripps papers, demand for its services was so great that it soon became available to any newspaper.

In 1906 Scripps entered another period of expansion, buying or starting papers in Denver and Pueblo, Colorado; Evansville and Terre Haute, Indiana; Memphis and Nashville, Tennessee; Dallas, Texas; and Oklahoma.

In 1907 Scripps combined the NEA, the Scripps McRae Press Association, and Publishers Press into the United Press Association wire service in order to provide 12,000 words of copy a day by telegraph to 369 subscribers in the United States. A similar service, the Associated Press (AP), already existed and was far larger and better financed. Scripps viewed AP as monopolistic and too close to the establishment and deliberately set out to oppose it. AP was also geared toward morning newspapers, while most of Scripps’s were evening newspapers. Scripps therefore had each of his papers send out stories from their area during the day and combined them with information gathered at offices set up in important news-producing cities like Washington, D.C., and other world capitals.

In 1908 Scripps retired from active management, appointing his son James G. Scripps chairman of the board. During World War I, Scripps was a passionate advocate of United States intervention on the side of the allies and moved to Washington, D.C., to push his cause. Shortly thereafter, a family crisis erupted, during which Scripps’s son James detached the five West Coast newspapers and the Dallas Dispatch from the chain. In 1918 United Press caused a storm of controversy when it reported the end of World War I four days before it actually ended. Scripps’s health started declining during the war, and by its end he was largely living on his yacht. In 1920 he gave direct control of the chain to his son Robert and Roy W. Howard and in 1922 incorporated all of his stock, news services, and newspapers into the E.W. Scripps Company, based in Cincinnati. The profits went to the Scripps Trust, set up for his heirs.

Despite his semiretirement, Scripps had the energy to direct a last burst of expansion in the 1920s. He made Roy Howard chairman and business director in 1921. Howard had played an important role in building the United Press. By 1924, he was placed in full charge of both business and editorial by E. W.’s son Robert. The newspaper chain was renamed the Scripps Howard League. Beginning in 1921, newspapers were bought or started in Birmingham, Alabama; Indianapolis, Indiana; Baltimore, Maryland; and Pittsburgh. Sales for 1925 came to about $28 million. In 1926 the Denver-based Rocky Mountain News and Times were bought.

At the time of E. W. Scripps’s death in 1926, the Scripps Howard League was the second-largest newspaper chain in the United States, after William Randolph Hearst’s. E. W. Scripps was one the most successful newspaper owners of the era of the so-called Press Barons. Because of his reclusive personality, though, he was one of the least known. He stood up for the working class but in many ways despised them. And, he encouraged his newspapers to crusade for female suffrage but considered women inferior to men.

All in all, Scripps started 32 newspapers. Some of them did not stay in business long; some were unsophisticated but remained fiercely independent. Their emphasis on human interest stories was welcomed by new immigrants who had lost their former communities.

Roy Howard’s stock holding in the company was small, but with his strong personality he influenced the Scripps heirs and took working control of the company, managing it as if it were his own and bringing his own family into the company hierarchy. In 1927 Scripps Howard bought the New York Telegram. Four years later, it purchased the New York World and merged the two newspapers into the World-Telegram. In 1936 Howard gave up his position as chairman of the chain and became president.

In the 1930s United Press built a network of bureaus in South and Central America and in the Far East, though its coverage was weaker in Europe, and it remained smaller than AP. Also that decade the newspaper chain began to shrink as less-profitable papers were sold or consolidated and six-day evening papers began to lose their appeal.

After World War II Scripps Howard’s sales grew dramatically, from nearly $50 million in 1940 to more than $100 million in 1948 and $140 million in 1952. Profits, however, were not increasing. Due to the rising cost of labor, newsprint, and printing machinery, profits were hovering around $10 million, according to Forbes magazine. In 1953 E. W. Scripps’s grandson Charles E. Scripps became company chairman at the age of 33, and Roy Howard’s son Jack R. became company president at the age of 42. By this time Scripps Howard had 19 newspapers with a total circulation of 4 million. The company was also expanding into broadcasting and owned radio and television stations in Cleveland and Cincinnati as well as in Knoxville and Memphis, Tennessee. The Scripps family trust still owned nearly 75 percent of the company. Management was decentralized with general operations in New York, editorial policy centered in Washington, and finances handled in Cincinnati.

In 1958 United Press merged with the Hearst Corporation’s troubled International News Service to become United Press International (UPI). Hearst gained five percent ownership of UPI, but most former International News Service employees were laid off. Also that year Scripps bought the Cincinnati Times-Star and merged it into the Post, giving the company control of all of Cincinnati’s daily newspapers. The Cincinnati Enquirer —which had been acquired in 1956—was carefully kept separate from the other papers to diminish possible charges of a monopoly. In 1964, however, the U.S. Department of Justice accused Scripps Howard of owning a monopoly and ordered it to sell the Enquirer. The Enquirer was far stronger financially, but the trust’s lawyers advised the firm that it would be better off selling it, rather than trying to sell the Post.

In the meantime, Scripps continued building its broadcast division, buying WPTV in West Palm Beach, Florida, for $2 million in 1961. In 1963 the broadcast properties were taken public under the name Scripps Howard Broadcasting Company. The initial offering quickly sold out, leaving the E.W. Scripps Company with two-thirds ownership.

Roy Howard died in 1964. One of the problems Jack Howard—who had succeed Roy Howard as president in 1953—faced was that the company was still run for the beneficiaries of the E.W. Scripps trust, and the trustees’ lawyers sometimes had a large role in significant corporate decisions. More importantly, with the rise of television after World War II, evening newspapers across the United States found their circulations declining: people read the newspaper in the morning and watched the news on TV in the evening. In addition, management of Scripps had become so conservative that critics charged it had no long-range plans and did little beyond preserve its assets. More and more Scripps newspapers took advantage of a law that allowed newspapers in danger of failing to partially merge with stronger rivals, keeping only editorial departments separate. By 1980 eight of the 16 remaining Scripps dailies were in such arrangements, a higher percentage than any other major chain.

In 1976 Jack Howard retired as president of E.W. Scripps but remained a director of E.W. Scripps and chairman of Scripps Howard Broadcasting. Edward Estlow became E.W. Scripps’s first chief executive officer who was not from the Scripps or Howard families; he had been the chain’s general business manager.

Scripps slowly began to change in the 1970s. In 1977 the company bought for $29 million the 90 percent of Media Investment Co. that it did not already own. Media Investment had holdings in some of Scripps’s newspapers and radio and TV stations. The purpose of acquiring the investment company was to permit employees to own shares in the diversified E.W. Scripps Company.

UPI losses were continuing to increase—$24 million between 1975 and 1980. In addition some of Scripps’s newspapers were operating in the red, including the flagship Cleveland Press. In 1980 Scripps sold the Press for an undisclosed amount to Cleveland retailer Joseph E. Cole. The chain then had 16 daily newspapers, making it the seventh-largest in the United States. Scripps continued a policy of not reporting financial data, but the Wall Street Journal cited its sales at approximately $550 million.

In 1981 the E.W. Scripps Company began looking for a buyer for UPI. Estlow said that part of the reason was the possibility that the beneficiaries of the Scripps trust fund might bring legal action forcing the closing or selling of the wire service. In 1982 the firm found a buyer for UPI: Media News Corporation, a private firm started for the purpose of buying UPI, which had 224 bureaus and 2,000 employees. The purchase price was not disclosed, but industry analysts felt it could not have been much more than the value of UPI’s assets, which the New York Times estimated were worth about $20 million.

In the early 1980s Scripps began funneling money into its chain of weekly business journals. The publications were losing readership and advertising revenue, and some criticized them as lacking hard news. In 1985 Lawrence A. Leser became president of Scripps and quickly began making changes. He sold many of the weeklies, as well as a videotape-publishing business, and concentrated on building the cable, broadcast, and daily newspaper operations, particularly in the rapidly growing South and West.

In 1986 the company bought two television stations from Capital Cities Communications and the American Broadcasting Co. Scripps paid an estimated $246 million for WXYZ in Detroit and WFTS in Tampa. The company was also building a string of cable TV systems. And in 1986 Scripps merged with the John P. Scripps newspaper chain, which was comprised of six California newspapers and one Washington newspaper.

These purchases, along with a cable system being built in Sacramento, left the company with millions of dollars in debt. Partly in an effort to pay off this debt, the Scripps family members who controlled the Scripps trust fund decided to take the company public. In 1987, as a prelude to its stock offering, the firm officially released financial data for the first time, reporting an operating income of $150 million on sales of $1.15 billion. It owned 20 daily newspapers and 9 TV stations and cable systems in 10 states. The 1988 stock offering left the Scripps Trust with approximately 75 percent ownership of the company.

In December of 1988 The E.W. Scripps Company formed Scripps Howard Productions to produce and market TV programs. In February of 1989 it sold the six-day Florida Sun-Tattler for an undisclosed amount and bought Cable USA’s system in Carroll County, Georgia. Profits for 1989 were $89.3 million on sales of $1.27 billion.

In 1990 Scripps began the Sportsouth Network to provide regional sports programming on cable-TV in six southern states. Most of the firm’s revenue continued to come from newspapers, but it believed that future growth would come from cable-TV. As of the early 1990s, the firm had 672,000 cable subscribers, making it one of the 20 largest cable system operators in the United States.

The E.W. Scripps Company also negotiated to buy WMAR-TV in Baltimore from Gillett Holdings for $154.7 million. Scripps backed out of the deal at the last minute and was sued by Gillett. The firms settled out of court, and Scripps bought the station for $125 million in cash. In late 1991 the company announced a modernization of the Pittsburgh Press delivery systems. The modernization, which would cause hundreds of layoffs, resulted in a crippling strike that lasted well into 1992; the newspaper was sold on December 31, 1992.

In February of 1993 The E.W. Scripps Company sold its Pharos Books and World Almanac Education to K-III Communications. In March of that year, the company offered for sale its four radio stations in a continuing effort to focus its attention on television.