Summary: Pursuant to a congressional request, GAO analyzed the missions, management, and operation of the Department of Defense's (DOD) European and Pacific "Stars and Stripes" newspapers to determine if consolidation could alleviate the newspapers' financial difficulties.
DOD decided that the newspapers' financial problems could be resolved without consolidation by authorizing the newspapers to sell advertising and use more appropriated funds. GAO found that: (1) in fiscal year 1984, advertising provided the newspapers with $1 million in revenues; (2) commercial publishers complained to the Joint Committee on Printing that the DOD advertising policy allows the newspapers to compete with them unfairly; (3) since 1981, appropriated fund support for the newspapers has increased; and (4) the appropriated funds were used to pay expenses that would have been paid with nonappropriated funds, allowing for expansion and modernization of the newspapers' operations. GAO concluded that consolidation of the two newspapers into one business and financial entity would: (1) improve the financial condition of the combined newspaper; (2) allow effective allocation of resources; and (3) enable DOD to fulfill the newspapers' missions more efficiently and cost-effectively. In the past, DOD objected to consolidation of the newspapers on the grounds that the newspapers would lose their local character, and that the news would be less timely. However, DOD did agree that a study should be conducted to identify actions necessary to ensure the viability of the newspapers. GAO believes that: (1) the local character of the combined newspaper could be retained by designating a certain amount of space for local news; and (2) the loss in timeliness of the news may not be a significant problem because timely news is available through other media.
