Let me say this about that

By Gene Klare

May 1, 1998

IN THE APRIL 17 Northwest Labor Press, this column related some of the history of the New York Newhouse family because captive readers and advertisers of the Oregonian should know about the rich and the powerful media barony that owns and controls Portland's highly-profitable monopoly daily newspaper, which also is Oregon's largest-circulation daily.

The late union-buster Samuel I. Newhouse Sr. acquired the morning Oregonian from a trustee and heirs in 1950 for $5 million. He immediately coveted the evening Oregon Journal because it would give him a monopoly.

Events moved swiftly in the Portland newspaper business after Newhouse snared the Oregonian.

Three years later in 1953, Journal editor and publisher Philip L. Jackson died. He'd run the newspaper since the 1924 death of his father, Sam Jackson, who in 1902 had taken over a struggling paper and renamed it the Oregon Journal. Sam earlier was the crusading publisher of the East Oregonian at Pendleton.

THREE YEARS AFTER Philip Jackson's death, his mother, Maria C. Jackson, died at age 93. Philip's death had left the Journal without a Jackson to take its helm. Philip's brother Francis had perished at sea in 1919 and Francis's son, Charles Samuel Jackson II, a World War II Navy pilot, had died in 1947 at age 32 in a crash of the Journal's pioneering news helicopter. Sam II left a young son, Peter Crockett Jackson. In 1956 when Peter's great-grandmother died, he was a teen-ager living with his mother in California. Maria's will left him only a $150,000 trust fund to which the trustees of her $2 million estate (plus the Journal) added $160,000 in an out-of-court settlement to end his contest of her will. To sweeten the buy-off, the trustees let the estate pay the $90,000 tax on the inheritance.

When Phil Jackson died, his will stipulated that William W. Knight, the Journal's business manager, should become publisher. He'd hired Knight in 1946 as assistant business manager. Before then, Knight, a former Republican state legislator, was the lawyer in charge of labor negotiations for the Pacific Northwest Newspaper Publishers Association. As his assistant, new publisher Knight hired a man who'd succeeded him as labor negotiator for the publishers. These two anti-union lawyers were the antithesis of Sam Jackson, the Journal's patriarch, who was a pro-worker liberal.

WHEN MARIA JACKSON died, her will decreed that ownership of the Journal should go to the Jackson Foundation, and she said its three trustees should be publisher Knight, prominent attorney David L. Davies, and U. S. National Bank of Oregon.

Why Philip and Maria Jackson put their confidence in a right-wing Republican lawyer to carry on the liberal tradition of Wilsonian Democrat Sam Jackson, who had a low opinion of lawyers, is a multi-million-dollar question that still begs for an answer.

Somehow, some way, Knight had ingratiated himself with the Jacksons. Maybe it helped that he had named his son Philip.

Sam Newhouse the Elder was a master at dealing with trustees and heirs of newspapers whose owners -- when they were alive -- wouldn't have let him in the front door. He'd bought the Oregonian that way and was to do likewise with the Journal.

Before Phil Jackson and his mother died, both had said they'd never sell Sam Jackson's Journal to Sam Newhouse. Maria wrote into her will that she'd prefer to keep ownership of her late husband's legacy local -- even if it meant obtaining less money for the paper.

It took three years for Maria Jackson's will to be probated at the Multnomah County Courthouse in downtown Portland. Her estate did not clear probate until late September 1959. Less than six weeks after Knight, Davies and the U.S. Bank's representative, who then was LeRoy B. Staver, got control of the Oregon Journal, there began a long, bitter strike against it and the Oregonian. The strike started Nov. 10, 1959. It did not end until April 4, 1965.

WAS THERE MORE than a calendar coincidence in the shortness of time from the final probating of Maria Jackson's estate -- giving control to Knight and his fellow trustees -- and the start of the strike?

The settlement of the Jackson estate put the troika of trustees in a position to sell the Journal. A strike could give them an excuse to sell, perhaps to Sam Newhouse even though Phil Jackson and his mother Maria made it clear they did not want the Journal to fall into the chain operator's hands. Unions involved in the strike and others in labor maintained that the strike was provoked by the Newhouse-owned Oregonian to provide a smokescreen behind which the Journal trustees could justify selling the paper to the New York press lord.

Edward J. Whelan, then executive officer of the Portland area central labor council, issued a statement to a television news program on the seventh day of the strike which said, "...In the last three days, strong evidence has been piling up that the Stereotypers and other newspaper unions were deliberately pushed into this strike to help the Oregonian carry out a plot to take over the Oregon Journal..." Whelan quoted an unidentified Journal executive as one of the sources for his charge.

IN REPORTINGthe explosive story, James W. Goodsell, then editor of the Labor Press, wrote: "After Whelan's statement had been read on a television news program, Oregonian Publisher Michael J. Frey and Journal Publisher William W. Knight were so alarmed that they telephoned the editor of the Oregon Labor Press from Frey's office. By threatening a libel suit, they tried (unsuccessfully) to stop the Labor Press from publishing the Whelan charges."

Goodsell wrote that Frey and Knight denied that the Journal was to be sold to Newhouse. The union-busting Frey and Knight and their scab-produced newspapers were still denying it until the announcement of the sale in August 1961. They were scooped on the story of the sale by television newsman Tom McCall, who later became governor, and by the Portland Daily Reporter, a tabloid newspaper started by the striking unions, which published from February 1960 until Sept. 30, 1964.

SO, JUST AS THE UNIONS had predicted, the Journal trustees sold the paper to Newhouse. Before the trustees accepted Newhouse's offer of $8 million, a price that included the Journal's riverfront building, a group of Oregon businessmen, mindful of the fact that Mrs. Jackson's will said she'd prefer to keep ownership of the Journal in local hands, tried to buy the paper.

The Oregon group was led by newspaper publisher Elmo Smith, a former governor, and by electric utility executive Glenn (no relation) Jackson, also a newspaper owner. Smith and Jackson would have appointed a publisher from one of their Oregon newspapers, leaving Knight jobless.

Newhouse, after greedily coveting ownership of the Journal since buying the Oregonian, doubled the Smith-Jackson offer of $4 million so the trustees could rationalize selling the paper to him. But he clinched the deal by promising Knight a 10-year-contract to stay on as publisher. Knight was the key member of the triumvirate appointed by Mrs. Jackson to run the Journal. Once Knight was promised a long-term job, lawyer Davies and banker Staver went along with the sale. Knight tried to justify it by piously arguing that the Jackson Foundation would need the extra millions. But nobody asked him why.

FROM 1961-1982 the Newhouse Journal functioned as an anemic afternoon running-mate of the prosperous Newhouse morning Oregonian. But 16 years ago, Sam Sr.'s sons, Samuel I. Newhouse Jr., who styles himself as "Si," and Donald, pulled the plug on the Journal. They apparently felt sure no one would start an afternoon competitor to challenge their Oregonian monopoly. To solidify their monopoly, the Newhouses bought the This Week shopping news and the Portland Business Journal (along with Business Journals in other U.S. cities).

Now, in 1998, the Journal lies ossified in its Newhouse-dug grave. But not so the Jackson Foundation. Surprisingly, it is still in existence with an impressive bottom line of $12 million, according to the last report inspected by the NW Labor Press in the public records. Operating the foundation provides a solid six-figure source of income for U.S. National Bank of Oregon, which dispensed $469,000 in grants in fiscal year 1995. One of the larger disbursements was $25,000 to the High Desert Museum at Bend.

BUT INSTEAD OF a $12 million tombstone, Portland and Oregon readers and advertisers would be better served if the Journal had been sold locally for less than what Newhouse paid and kept alive as competition to the New York-owned morning Oregonian. Bill Knight, who sold the Journal down the river to feather his own nest, doesn't have a mere $12 million tombstone -- his is worth $25 million.

Thanks to the largess of his rich-as-Croesus son Philip, bossman of the Nike sport shoe empire, Bill Knight's name will be perpetuated on a law school building at the University of Oregon in Eugene, from whence he graduated decades ago.


THE NEWHOUSE-OWNED Oregonian recently decided to finally give some coverage to the bankruptcy-bedeviled past of William Lee Sizemore, a subject first explored in the NW Labor Press four years ago. Sizemore's the resident loudmouth of Oregon Taxpayers United and the leading Republican candidate for governor. But the ace reporters and editors of the morning Newhouse didn't dig deep enough into public records. If they had, they'd found that Dr. Duane Kelson, a Gresham orthodontist who lost $220,000 investing in one of Sizeless's companies, got a consolation prize from Bankruptcy Bill. According to a report in the public records, Sizeless gave Dr. Kelson a non-paying post on the OTU board of directors. Hey, that's more exciting than a weekend at the landfill in Arlington.


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