Charles J. Romeo

The Effect of Format Changes and Ownership Consolidation on Radio Station Outcomes

Format changes are used by radio stations to reposition themselves in an attempt to improve performance. Evidence reported below indicates that the track record of such repositionings in improving performance improvements only when the shift is made to a trendy format.

A Theory of Quality Competition in Newspaper Joint Operating Agreements

Newspaper Joint Operating Agreements (JOAs) are long-term, inflexible contracts between metropolitan daily newspapers in the same market. These contracts maintain two editorial voices while combining all business operations of the two competitors in order to capture many of the scale economies that have put an end to newspaper competition in most markets. The question we address is what, if anything, drives newspapers to compete editorially once a JOA is formed? With contract terms that run in the tens of years, one might reasonably question whether incentives exist to prod the partners to continue rigorous competition. Our study of JOA contracts indicates that the history of JOAs is filled with instances of unprogrammed renegotiations and that how the partners fare in these negotiations appears to be driven by each partys relative success in the market since the agreement was initiated. In essence, forming a JOA does not resolve the issue of which newspaper will remain in the marketplace once the JOA terminates. Editorial competition throughout the life of the JOA resolves this issue.

Appendices B and C: Incorporating Prior Information into a GMM Objective for Mixed Logit Demand Systems

Discusses formulation of the outside share and instrumental variable choice specific to an illustration using beer data.