Company Name: Gannett Co., Inc.
Public Availability Date: 03-18-1993
[INQUIRY LETTER 1]
Gannett Co. Inc.
1100 Wilson Blvd.
Arlington, VA 22234
TELEPHONE(703) 284-6961 December 18, 1992 Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20459 Gentlemen: Gannett Co., Inc. ("Gannett") has received a letter from Rev. Michael H. Crosby
of the Province of St. Joseph of the Capuchin Order (the "proponent") dated
November 9, 1992, containing a proposal and supporting statement which he
requests be included in management's proxy material for the 1993 Annual Meeting
of Shareholders (the "Proposal"). Gannett believes that this Proposal may
properly be omitted from its proxy materials in accordance with the Securities
and Exchange Commission's (the Commission's) rules and policies. Enclosed herewith for filing pursuant to Rule 14a-8(d) are five copies of (1)
the Proposal and statement in support thereof as received from the proponent and
(2) this letter, which sets forth the reasons why management has concluded that
omission is proper. STATEMENT OF REASONS TO EXCLUDE The Proposal is substantially similar to the proposal presented by the proponent
at Gannett's 1992 Annual Meeting (the "1992 Proposal"). In 1992, the proponent's
proposal relating to tobacco advertising was soundly defeated by a vote of
91,697,223 against and 7,092,601 for, with 5,697,901 abstaining. The current Proposal requests the Company to prepare a research report on how
cigarette advertisements placed on Gannett billboards or in Gannett newspapers
are perceived by consumers. In addition, the report is to research and evaluate
what policies and practices Gannett may adopt to ensure that cigarette
advertisers adhere to their voluntary code of cigarette advertising. It is the company's position that the Proposal may be excluded from the
company's proxy materials because it involves matters of "ordinary business"
within the meaning of Rule 14a-8(c)(7). Gannett publishes 82 daily newspapers
including USA TODAY, and USA Weekend, a newspaper magazine. It also operates 10
television stations and 15 radio stations and the largest outdoor advertising
company in North America. The amount of cigarette advertising is not substantial
in relation to its overall advertising revenues. Gannett does not manufacture
cigarettes (see letter to American Brands dated February 28, 1991 dealing with a
similar proposal). The specific product oriented advertising policies of the
company are a matter of routine business and should not rise to the level of
shareholder consideration merely because one small aspect of those policies may
touch on a social policy consideration. As the Staff indicated in Cracker Barrel
Old Country Store, the line between includable and excludable proposals based on
social policy considerations is difficult to draw. We believe, however, that the
proper forum for social issues related to cigarettes is with cigarette
manufacturers and not media companies. In fact, a proposed policy, as embodied
in this Proposal which suggests censoring and suppressing certain types of
advertisements is contrary to the First Amendment principles which Gannett has
defended over many years. In a no-action letter issued by the Staff to Cracker Barrel Old Country Store on
October 13, 1992, the Commission deemed the omission of an employment-related
proposal from the proxy statement proper pursuant to Rule 14a-8(c)(7). The fact
that the proposal related to discriminatory employment policies based on sexual
orientation of the employees was not deemed to have such significant public
policy implications as to remove it from the realm of "ordinary business"
contemplated by Rule 14a-8(c)(7). Gannett recognizes that the manufacture and sale of tobacco products may be
controversial and may have certain public health and social policy implications.
However, advertising of tobacco product is a secondary activity only
peripherally related to the manufacture and sale of tobacco. The social issues
related to tobacco advertising do not pertain to basic human rights as many
would allege in the case of discrimination relating to sexual orientation. Hence
we believe the social policy issues in this Proposal are less significant and
more removed from ordinary business considerations than in the Cracker Barrel
Old Country Store letter. The Proposal in essence deals with a matter related to the company's ordinary
business operations. The fact that the Proposal touches on a social policy issue
should not change the legal conclusion that the proposal can be properly omitted
from the proxy statement by virtue of Rule 14a-8(c)(7). Gannett is a news and information company. Its mission is to maximize the flow
of information to its readers, viewers and listeners. As a corporation involved
primarily in gathering and delivering news and information, Gannett has a
special interest in preserving First Amendment freedoms and in opposing
censorship of any kind. The Supreme Court has pointed out that "The First
Amendment rests on the assumption that the widest possible dissemination of
information from diverse and antagonistic sources is essential to the welfare of
the public. . ." Citizen Publishing Co., v. United States, 394 U.S. 131, 139-140
(1969). Gannett endorses this view and has long been committed to providing
forums for the expression of different -- and often controversial -- viewpoints,
including those of its advertisers. Since it is legal to purchase tobacco products, advertising tobacco products is
intrinsically legal. The tobacco industry is heavily regulated by the federal
government. If there is to be any restriction on the advertising of tobacco
products, it should come from the legislature, not from individual shareholders.
Although drafted in precatory language, the Proposal in essence implies that
Gannett should discriminate against certain industry advertisers simply because
they are distasteful to certain shareholder interest groups. Adoption of the Proposal would force Gannett to betray its commitment to freedom
of expression by requiring it to censor and suppress a broad category of
information. Based on the foregoing, the management of the Company intends to omit Rev.
Crosby's proposal and the statement in support thereof from the proxy materials
for its 1993 Annual Meeting and respectfully requests the staff to confirm that
it will not recommend action to the Commission based upon such omission. In accordance with Rule 14a-8(d), a copy of this letter is being sent to Rev.
Crosby. Very truly yours, Thomas L. Chapple
[INQUIRY LETTER 2]
Province of St. Joseph of the Capuchin Order
1016 N. Ninth Street
Milwaukee, WI 53233
TELEPHONE(414) 271-0135 John J. Curley, Chairman, President, and Chief Executive Officer
Corporate Headquarters
Gannett Co. Inc.
Arlington, Virginia 22234 Dear Mr. Curley: Last year the Province of St. Joseph of the Capuchin Order filed a shareholder
resolution with Gannett on the issue of the Cigarette Industry's "voluntary
code." We were very happy with the response of the shareholders. We were not
happy with the non-response of management after. The Province of St. Joseph of the Capuchin Order is owner of 190 shares of
common stock in Gannett. We will be holding this through the annual meeting of
1993 and will be providing you verification of our ownership under separate
cover. I am hereby authorized to inform you of our desire that you include the enclosed
resolution in the proxy materials for the 1993 annual meeting of shareholders of
Gannett. We submit this resolution in accordance with Rule 14a-8 of the General
Rules and Regulations of the securities and exchange Act of 1934. If you should,
for any reason, desire to oppose the adoption of this proposal at the
stockholders' annual meeting, please include in the corporation's proxy
materials the stockholder resolution and supporting statement as required by the
aforementioned Rules and Regulations. Again, I want you to know that I would be most happy to use the time between now
and the printing of the proxy materials for serious dialogue and direction on
this issue. Hopefully this might be of such mutual benefit that we would see fit
to withdraw our resolution. Sincerely yours, (Rev.) Michael H. Crosby, Original Text Illegible
Corporate Responsibility Agent enc. GANNETT
Billboards, Publishing, and Cigarettes WHEREAS Gannett is the largest billboard company -- billboard advertisements consistently promote two products contributing to
more addictions and deaths than any others: cigarettes and alcohol; -- in 1989 a third of all outdoor advertising expenditure came from tobacco
companies -- $421 million; -- research shows tobacco and alcoholic-beverage industries target low-income
neighborhoods with special advertising compaigns; WHEREAS our Company publishes 125 different newspapers; all accept cigarette
ads; -- In 1964 the cigarette industry adopted a voluntary code NOT TO: 1. directly or indirectly represent smoking as essential to social distinctions,
prominence, success or sexual attraction; 2. associate smoking with vigorous physical activity or athletic conditioning; 3. use models appearing to be under age 25; 4. suggest that the models' appearance and good health result from smoking; 5. use testimonials from athletes or celebrities having special appeal to youth; 6. make representations regarding health unless based on scientific data; -- This Code's enforcement mechanism was abolished in 1967; -- Cigarette companies using Gannett media have been accused of violating this
Code by using models allegedly appearing to be under age 25; who have just
participated in physical activity; by portraying women's brands as a way to be
beautiful and thin; by promoting "low tar and nicotine" brands as reducing
health risks; by gearing lower-priced cigarettes to low-income peoples; and by
implying use of cigarettes makes one "alive with pleasure" when its use is
lethal; RESOLVED that shareholders request a Report to be prepared for requesting
shareholders by September 1, 1994. This Report, prepared at a reasonable cost
and excluding proprietary information, shall research and evaluate: 1. Consumer perceptions of cigarette advertisements placed on Gannett billboards
and in Gannett newspapers, including but not limited to whether: a. Children perceive models in their popular brands to be under 25; b. Children identify with any cartoon characters used, particularly "Joe Camel."
(Since introducing this character on our billboards and in our newspapers the
percentage of children smoking Camels rose from -0.5% to 33%). c. Women perceive that the models in women's brands portray smoking as a way of
being thin and beautiful; d. Smokers perceive that cigarettes advertised with "low tar and nicotine"
actually reduce health risks; e. Cigarette advertising is false and misleading insofar as it portrays smokers
as happy and healthy, "alive with pleasure." 2. What policies and practices Gannett might adopt: a. To ensure cigarette advertisers adhere to their own code. b. Such as not accepting cigarette advertising, or the insistence on "tombstone"
advertising (ads without logos or models), as well as donation of space for
counter-advertising to public health entities. SUPPORTING STATEMENT Smoking causes more than one of every six USA deaths---over 430,000 people die
annually in the US from cigarette-caused diseases and over 50,000 die annually
from effects related to passive smoking. Our Company shares some responsibility
for promoting this addictive product. If you think that, at a minimum, our
Company should evaluate its role in promoting this lethal product, please vote
"yes" for this proposal.
[STAFF REPLY LETTER]
March 18, 1993 RESPONSE OF THE OFFICE OF CHIEF COUNSEL
DIVISION OF CORPORATION FINANCE Re: Gannett Co. Inc. (the "Company")
Incoming letter dated December 18, 1992 The proposal requests that the Company prepare a report on the Company's
policies and practices with respect to cigarette advertisements. There appears to be some basis for your view that the proposal may be omitted
from the Company's proxy materials in reliance on Rule 14a-8(c)(7) as relating
to the conduct of the ordinary business of the registrant (i.e. the nature,
presentation and content of news and advertising). Under these circumstances,
this Division will not recommend enforcement action to the Commission if the
Company omits the proposal from its proxy materials. Sincerely, Amy Bowerman Freed
Special Counsel
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