INDUSTRY MARVELS AT GROWTH

American Publishing purchased its first chain of 16 papers in 1986.

In the past eight years the chain has experienced phenomenal growth. Today it boasts 340 U.S. daily and weekly newspapers, including the Chicago Sun-Times.

But while the industry can marvel at its growth, not everyone agrees with American Publishing's tactics in removing the competition.

Harry Olson, publisher of a free distribution paper in Marion, Ill., calls the West Frankfort, Ill.-based corporation "vicious."

"The publisher of American Publishing Co., Larry Perrotto, told me to my face that he had X amount of hundreds of millions of dollars and he would squish me if I didn't play ball with them," said Olson, who publishes the weekly Marion Review. He distributes 9,000 copies free each Monday.

Perrotto was out of town, and could not be reached for comment.

"They're just part of this Canadian conglomerate, and they're giving away ads to take my advertisers away from me. I'm considering an anti-trust suit against them," he said.

Olson said even though American is a big chain, it doesn't like any competition.

"I'm a thorn in their side, one of the few people that have survived in their markets. It sends out a bad sign to other people that they can survive against them," he said. "That's why I survive -- you either have to compete against them or be at their mercy."

Southeast Missourian publisher Wally Lage feels companies like American Publishing are doing a disservice to the industry.

"Subscribers and advertisers are being short changed by these out-of-country mavens who go after the family-owned newspapers, which are becoming extinct," said Lage.

American Publishing is a wholly-owned subsidiary of Hollinger, a Canadian-based international newspaper company.

"I have worked for family-owned newspaper companies throughout my quarter-century newspaper career," he said. "The Boonville (Mo.) Daily News is one of the papers I was publisher of and American destroyed that newspaper's heart by cutting expenses to the bone and terminating anyone who was making a decent wage. I will never forget what American has done to these and hundreds of other small operators."

But Caruthersville Publisher Ralph Clayton said that while American is profit oriented, it still allows local editorial decisions in his town. The group purchased the Democrat-Argus in 1989.

"Both corporate groups I've been with feel profit is very important because that's the way they make money, that's the way you please stockholders," said Clayton. "It's no different than any other chain, like Thomson."

But Clayton said American Publishing doesn't dictate the news at Caruthersville "in any form or fashion."

Under American's ownership, the paper has tightened its belt. "But everyone has had to tighten up," he said. "Every grocery store I know has less people than five years ago."