Family Affair

Merging for profit

When Iowa Banker Gardner Cowles bought the Des Moines Register in 1903, he planted the seeds of a family communications empire that flourished for three generations, eventually as three separate companies, sprouting Look magazine, and acquiring numerous newspapers, radio and television stations as they grew. Last week two of his heirs decided to merge their companies, the Des Moines Register and Tribune Co. and the Minneapolis Star and Tribune Co., presumably on the theory that the family that stays together profits together.

The news was expected: talks had been under way for several months between Des Moines Board Chairman David Kruidenier, 60, and his Minneapolis cousin John Cowles Jr., 52. Both companies have suffered financial declines recently. In Minneapolis, operating earnings slid from $6 million in 1979 to $3.7 million a year later, largely because of a 27-day newspaper strike and continuing losses from its latest acquisition, the Buffalo (N.Y.) Courier-Express (circ. 131,990). The smaller Des Moines company saw its earnings drop from $3.6 million in 1979 to $2.6 million in 1980, in part, because of the troubled evening Tribune (circ. 80,114), which has been losing readers steadily for more than a decade. Even more serious for Des Moines was its long-term debt of $40 million.

As talks progressed, apprehension grew at the Register (circ. 210,465), possessor of nine Pulitzer Prizes, that the Des Moines company would be swallowed whole by the larger Minneapolis company. Last week's agreement with its emphasis on preserving the independence of the papers allayed those fears. Said one relieved Register reporter: "I don't think we have to worry any more about a Minneapolis Mafia moving in." Register Editor Michael G. Gartner, who originally opposed the merger, agreed: "I feel it's the right thing to do; it will ensure that we have good, vigorous newspapers that are journalistically strong."

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