Five California diocesan papers break with Catholic Press Assn

National Catholic Reporter, August 29, 1997 by John L. Allen, Jr.

Five Catholic newspapers in California have withheld their dues from the Catholic Press Association this year, charging mismanagement of the organization's advertising network, poor member services and a bias that favors East Coast papers.

In withholding their dues, the papers have effectively withdrawn from the CPA, a service organization that represents 167 local diocesan papers plus 13 Eastern rite and five national papers. It is headquartered in Ronkonkoma, N.Y.

The defectors include The Tidings, the paper of the Los Angeles archdiocese, the largest diocese in the country; The Inland Catholic in San Bernadino; The Catholic Voice in Oakland; The Valley Catholic in San Jose; and The Catholic Herald in Sacramento. Together the papers have a combined circulation of 221,000, based on figures in the 1997 Catholic Press Directory.

Perhaps the most vexing issue for the California papers centers on the Catholic Advertising Network -- CAN -- which is owned and operated by the association. CAN solicits advertising from national clients on behalf of local papers.

The California editors argue that the commissions charged by CAN have been too high, forcing them to inflate their own advertising prices, and that profits generated by CAN serve primarily to line the press association's coffers.

"[CAN] is about how the CPA can make more money, not about how it can help Catholic papers," said Tim Holden, business and marketing director for both The Catholic Voice and The Catholic Herald. "It's about benefiting a few individuals at the expense of the members."

"That's just blatantly wrong," said Owen McGovern, executive director of CPA. He argued that the association has not even recovered its original investment in CAN. Moreover, the network's purpose is ho serve the members," McGovern said, not to enrich CPA."

In fact, McGovern claimed that since CPA and CAN are legally separate entities, the network "does not generate a dime" for CPA Nevertheless, he acknowledged that he serves as president of CAN, that CAN is operated out of the press association's offices and that CAN has reimbursed CPA for some expenses. McGovern said he couldn't supply a specific figure for how much advertising income the network has generated to date, but said "it hasn't taken in a lot of money."

Until May of this year, whenever CAN sold an ad the local paper paid a sales commission of 15 percent as well as a 15 percent commission for administration. If an advertising agency placed the order, the paper also paid 15 percent to cover that agency's commission. Since CAN's contract specifies that papers must give the network their guaranteed minimum rate for advertising space, many papers were forced to mark up their rates for all advertisers, sometimes by as much as 35 or 40 percent.

In a letter dated Nov. 22, 1996, the editors of the California papers argued that CAN's commissions amounted to "excessive overcharging" and were arguably illegal as a form of price-fixing under federal restraint-of-trade laws.

At the national CPA convention in Denver in May, CAN unveiled a new policy on commissions. It now charges a 15 percent total commission to for-profit papers and 10 percent to nonprofit. "This makes us among the lowest around," McGovern said. McGovern said these changes were already "in the works" at the time of a February meeting in Oakland to air the editors' concerns.

"Twenty years from now when CAN is a tremendous success, our members won't even remember this struggle," said Christopher Gunty, CPA president and editor of The Catholic Sun in Phoenix.

The commissions might be worth it, said Julie Sly, editor of The Catholic Herald, if CAN brought in a higher volume of ads. "They don't generate enough ads to justify what they're charging," she said. Sly added that she was also irked by the CAN advertising agreement, which asks papers to sign over exclusive rights to solicit national advertising.

Holden argued that CAN sales patterns reflect a regional bias. "Most of the ads they sell run in the East Coast papers," he said. "It reflects the CPA's East Coast orientation."

"That's probably close to being accurate," said Gunty. "This is something I've been concerned about for years. ... It's hard to convince a New York agency that California or Arizona is the best place to spend their money," he said, adding that he hopes CAN will add a full-time sales representative in the West.

Instead of sales help, however, the California papers said that what they really need is assistance in marketing strategy. "When I talk to potential clients, they have no idea what a Catholic newspaper is, that they even exist," Holden said. "CAN needs to lead us in raising the visibility of the Catholic press, which doesn't mean you have to have salesmen in the field," he said.

McGovern countered that most Catholic papers rely on CAN to tap the national market. "If [the California papers] think they can go around the country and solicit their own ads, good luck to them," he said. "This isn't what I hear from most of our members."