Exclusivity and Cooperation in the Supply of News: The Example of the Associated Press, 1893-1945

Exclusive sale and exchange agreements among news outlets reduce the cost each news outlet incurs in gathering the news and, simultaneously, increase the quantity of news available to each outlet. Such arrangements are common, but coordinating the exchange of exclusive news among a plethora of organizations is costly, which accounts for the propensity among publishers to integrate such exchange through the creation of associations. Associations for this purpose exist all over the world, many of which, although they operate in a variety of different ways, are modeled after the Associated Press (AP), which is based in the United States.¹ The principal difficulty that confronted the formation of these associations was not the prospect of free-riding after publication, but devising a method by which to encourage a multiplicity of publishers with different needs to share with one another the news they individually collected.²

The archives of the AP, which only recently have been opened to researchers, reveal that the newspapers that formed the AP were only able to devise, modify, and maintain rules and contracts for the exchange of news before publication by finding a balance between exclusivity and cooperation. Members were obliged to share with the association exclusively and before publication all the breaking news they gathered independently in return for exclusive franchises that entitled them to receive the news reports the association produced. The AP, in addition to serving as a clearinghouse for the exchange of exclusive news, was an exclusive club. Making entry to the association exclusive encouraged participation and compensated larger newspapers for sharing their news with smaller newspapers throughout the country. But exclusivity encouraged the existence of rival news associations, which either weakened the viability of an exclusive regime or diluted it. By prohibiting a considerable portion of the nation's newspapers from joining the association, the AP intentionally encouraged establishment of a viable rival to avoid accusations of monopoly. Tightly controlling entry to the AP encouraged rivalry among news agencies and associations, but at the expense of preventing some newspapers from accessing the news reports that the premier news organization generated.

The AP, by virtue of the way in which it overcame coordination problems among newspapers, had to tread a fine line between the private interest its members had in exclusive franchises and conceptions of the public's interest in access to the news reports that members of the association collectively produced. The courts and state governments recurrently attempted to stipulate the appropriate balance between exclusivity and cooperation by limiting the extent of autonomy assigned to the association and formulating responses to constrain or replace its external relations and internal operations.³ That the AP operated in two markets-those for newsgathering and for newspapers—complicated this task.

Although necessary to its formation and initial success, exclusivity brought the AP into conflict with policymakers' perceptions of the public interest and with the law. The AP was embroiled in the conflict between free competition and freedom of contract that engrossed jurists between 1888 and 1911; it was a symbol of the "era of cooperative competition" of 1911-33; and it was at the heart of debates surrounding the development of New Deal political economy between 1933 and 1948.⁴ Throughout the period, judges and legislators sought to protect plurality among newspapers by removing the barriers to entry that the AP erected, but such efforts threatened the ability of the association to moderate competition among newsgatherers through the valve of membership.

Conceiving Cooperation, 1848-1900

The exchange of news via post after publication, which the Post Office subsidized, was a long-standing and well-established practice before the advent of the telegraph.⁵ Newspaper editors clipped articles from the papers that arrived in the mails and then reprinted them, often with few alterations, in their own publication. Exchange post-publication, for which purpose the existing Post Office infrastructure served admirably, and which imposed no burden of secrecy, the news being publicly available once published, was inexpensive compared with exchanging news pre-publication. James Gordon Bennett, the ever-enterprising...