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Paul Rolly: Mormon church ousted sugar rivals; will it do so with news?

Published June 9, 2014 8:22 am

This is an archived article that was published on sltrib.com in 2014, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

I wrote last week about the Deseret News cooking its Sunday circulation numbers by including its national edition and Church News that it provides as a supplement to weekly newspapers for free.

That elicited an interesting response from Ted Ellison, of Fruit Heights, who wove a historical parallel between what's happening today between the Deseret News and The Salt Lake Tribune to the sugar industry in Utah in the early to mid-20th century.

To recap: The circulation comparisons between The Tribune and Deseret News are germane because of the recent deal between the Deseret News and The Tribune's hedge fund owner that changed the profit share of the two papers from 58-42 percent in favor of The Tribune (based on its superior circulation numbers) to 70-30 percent in favor of the Deseret News.

The Deseret News got the ownership of the presses that the newspapers share and the outrageously favorable profit share, while the hedge fund got a boatload of cash.

The most cynical of the opponents have speculated the deal with the hedge fund was a scheme to do away with the newspaper whose editorial voice is independent from Utah's dominant church.

Ellison writes in his email to me and others at The Tribune that this has happened before — with sugar.

He referenced a "Living History" column that Tribune editorial cartoonist Pat Bagley wrote last August about the development of the Mormon church-owned Utah-Idaho Sugar Co. and how it squeezed out competing sugar companies by getting the faithful sugar beet farmers to sell only to U&I, even when competitors offered more money.

He also referenced a letter to the editor in The Tribune last August that was a response to Bagley's column.

Charlie Schmalz, of Ogden, wrote that he spent 40 years in the sugar industry — 12 of them with U&I Sugar — and he witnessed firsthand the tactics designed to eliminate the competition and create a monopoly.

"While the church as an entity did not engage in the less than honorable [by today's business standards] activities [Bagley] recounts, individuals who were also highly placed in the church did act to constrain trade and coerce growers to limit their contact with competing sugar companies," Schmalz wrote.

Ellison's ancestors, E.P. and James E. Ellison, started the Layton Sugar Co. in 1915 — "right in the middle of U&I Sugar territory. How dare they," he wrote.

Then, after years of lending money to help with the debt and obligations of the smaller Layton Sugar, the church owned 51 percent of Layton Sugar stock because it insisted on being repaid in stock, not cash.

In 1959, Layton Sugar's board of directors was mostly appointed by the church. Antoine Ivans was named chairman of the board and a proposed sale of Layton Sugar to U&I Sugar Co. took place.

"The bottom line is that is just the way the church does business. Eliminate the competition no matter what the cost," Ellison wrote.

So it happened with sugar. Could it happen with news?

prolly@sltrib.com