Case in point: The U.S. Postal Service recently entered into a special-rate agreement with one company – Valassis Direct Mail – that would give Valassis postage discounts of 20 percent to 36 percent.
This discount allows Valassis to go specifically after advertising inserts (like Belk, JC Penny, K-Mart, etc.) that are currently in the Sunday editions of local newspapers. The Postal Service has conceded that the sole purpose of this deal is to move advertising revenue from newspapers into the mail.
This special-rate deal has the potential of diverting up to $1 billion in advertising revenue from local newspapers to one of our national competitors. This advertising revenue is critical for newspapers to continue providing news and information in local communities.
The Postal Service estimates that if everything goes well, it will make $15 million in net revenue after three years under the deal. This is not even a blip on the screen to an agency that is losing $25 million a day!
Yet, the Postal Service is marching forward with a special arrangement that will harm an entire industry.
While Congress gave the Postal Service authority to enter into negotiated service agreements, it is hard to believe the intent was for the Postal Service to use this authority to move advertising revenue from local newspapers.
Congress should take action to stop the Postal Service from using its monopoly to pick winners and losers in the local competition for advertising.
Newspapers are the cornerstones of any community. We published today’s cartoon to bring focus on the importance of community newspapers. Can you imagine Jasper and Walker County without your Daily Mountain Eagle?
Jack McNeely is Publisher of the Daily Mountain Eagle and can be contact by phone at 205-221-2840 or via email at email@example.com.