People don’t care who owns the weekly barrel of ink, as long as it gets spilled in ways that allow them to be intelligent consumers of their respective civic cultures. That’s why when pet-products king Leonard Stern announced that he was selling his seven weeklies in various markets around the country — including industry flagships like the Village Voice and L.A. Weekly — it didn’t merit much more than a blip inside most daily papers. But within the industry, the move was viewed with seismic portend.
E-mails crisscrossed through alternative newsrooms all over the country, with the requisite chatter about this being a “dark day” for the industry. Oh, really? A pet products company — Hartz Mountain — fills its shopping cart with start-ups and going concerns in Cleveland, Minneapolis, Seattle, Orange County, Calif., and Long Island, N.Y., over a period of years. Then it notices there’s a lot of stupid money out there and decides to dump its properties while the getting is good. It’s good old fashioned American business, writ large over what used to be a bunch of grubby upstart rags but that are now increasingly in the habit of rigorously covering pressing lifestyle issues like finding the best gym to work out in. Where’s the tragedy?
The papers in question include two of the best known in the industry (the Village Voice and the L.A. Weekly) and five others, either suburban offshoots of the flagship papers or recently purchased titles in the hinterlands: the Long Island Voice, the Orange County Weekly, the Seattle Weekly, the Minneapolis City Pages and the Cleveland Free Times.
The chicken-littling comes from worries about exactly what sort of golem of evil will come riding over the horizon and pony up the $150 million to $200 million for a company that claims $80 million in annual revenues. Could it be New Times, a chain of 10 brawling weeklies, mostly in the West and South? The company has a big appetite — it’s been scrapping with Stern for papers for much of the last three or four years — but maybe not that much stupid money. Or will a large daily chain decide to stop banging its head on the wall trying to catch the attention of rich young audiences and just buy a place at the table instead? Just a few years ago, daily ownership was the industry bugaboo. Now, in this sudden age of ceaseless vertical and horizontal integration, there’s a new bogeyman: Could a daily publishing company use a weekly’s street cred as jewelry to hang on its local portals?
If it’s a dark day, it’s not the first. Times Mirror, which is mentioned among current suitors of the Stern holdings, paid $17.5 million last April for New Mass Media, a Connecticut chain of five alternative weeklies led by the Hartford Advocate. The company also owns the Hartford Courant, a daily that the Advocate continues nominally to compete with. The sky did not fall. Last summer, there was a movement at the convention of the Association of Alternative Newsweeklies to kick the New Mass Media papers out of the association because of their new affiliation with the dark side. The effort failed, in part because people in the industry have begun to see that opposing daily co-option of their respective franchises is congruent with the industry’s squishy lefty traditions, but doesn’t comport with the behavior of the invisible hand. Mass media will continue to, well, mass.
David Schneiderman, president of Stern Publishing, wasn’t publicly ruling out any buyers. (Although he did privately tell his staff that there would be no deal with New Times. A New Times source said that the company will be in the mix and “Stern will sell to the highest bidder, period.” Right now, the two companies compete directly in Los Angeles, where the tiny New Times Los Angeles goes up against the very large L.A. Weekly, and in Cleveland, where Stern’s Free Times is in a weekly jihad with the Scene of New Times.)
“I don’t have any great problem with a daily newspaper company if they are willing to leave the papers alone and finance good journalism by continuing to write the checks … I think you will see some interesting players coming out of the woodwork,” Schneiderman says. Stern is selling, according to Schneiderman, because none of his children are interested in spending their careers driving the bright shiny little media company he has assembled.
“I think you have to assume that there was a shrewd business calculation in the decision to sell the papers that goes beyond the fact that Leonard Stern’s children are not interested in running the papers,” says Richard Meeker, publisher of Willamette Week in Portland, Ore. He’s got a point. The altie news niche is relatively small: Revenues last year in the aggregate were $437 million. (A single daily in the Midwest — the Star-Tribune in Minneapolis — sold last year for $1.4 billion.) But it’s a niche that kicks out respectable profits and continues to accrete a tribe of young, spendy consumers.
Of course, these days, those people are accessing arts and entertainment data, deciding where to buy a futon and dating each other via a variety of media formats. This makes an Internet play for Stern seem logical. Daily newspaper giant Knight Ridder recently launched a national network of local portals. Its president, Dan Finnigan, told Editor & Publisher that he is “obsessed with being the No. 1 property of Web users in local markets.” Although the altie industry has been as slow or slower on the digital uptake than its daily brethren, Stern Publishing has been very aggressive in extending its brand into digital realms. (The company recently registered the domain name “NakedCity.com” — you can fill in the blanks at home.) It’s also well established in cities where Knight Ridder has no presence. Stern’s Voice site alone has 2.6 million page views a month, which is a lot of eyes for a local publication.
TicketMaster Online-City Search and America Online, both of which are investing heavily in local portals, might view a Stern buy as a way to mature in a hurry. But would the Stern papers’ rigorous, hyper-vigilant cultural coverage go squishy under an electronic ownership paradigm? And the staffs of both the L.A. Weekly and the Voice (where there is an active union), which have had their share of fights with current owners and have a major issue with corporate America in general, might present a little bit of a management challenge to some Lord of the Net who expects content providers to know their place.
“I think it would be interesting to see what a digital company might do with this kind of property, but it could end up in some interesting ethical dilemmas,” says Steve Outing, who covers interactive news media for Editor & Publisher. “CitySearch has worked to integrate the commerce components of their sites into the contextual editorial content. I wonder how readers might react.”
Internet publishing consultant Mark Potts doesn’t see a sensible endgame in a Web play, especially in the wake of the butt-whipping Microsoft Sidewalk received after a well-funded assault on local markets.
“I can’t really buy the premise. I can see the fit, kind of, but I don’t think either [CitySearch or AOL] wants to be in the newspaper publishing business. I mean, what are they going to do, buy them looking for the electronic components and then shut down the print side?”
Indeed, this could be the saddest thing of all. A sensible Net company might view this collection of once-cutting-edge content as just a little fustian. A buyer may not see them as community assets, but as one more component of the bottom line. At best, Stern will get for his prize properties an amount that represents the mere stock fluctuations of many Internet brand names.
Mature digital companies are used to seeing profit margins in the 30 and 40 percent range. Many other start-ups make no money at all, but are capitalized in the jillions on the basis of their potential. Although a lot of weeklies make a lot of money selling all those futon ads, most sport net revenues under 20 percent and the cash flow they kick up is not meaningful to an industry engorged on IPOs.
Others suggest that a cabal of Wall Street investors might come together for their own play, or that perhaps a European company looking for a point of entry in the hot American media market might think that Stern is a good place to start.
Russ Smith, founder and editor of the New York Press, rightly takes credit for going up against the Village Voice and slapping it around with impunity. Norman Mailer and a few buddies created the Voice out of chicken wire and gum back in the 1950s, and it minted money on ads and newsstand and subscription sales for decades — until Smith and Co., with its free venture forced the paper to stop charging in New York. And he couldn’t care less who he terrorizes next.
“To me, it’s Darwinism. I don’t give a fuck,” Smith says. “The industry is so bad anyway, it couldn’t get worse … A reporter asked me, ‘Aren’t you afraid of a Times Mirror, say, with deep pockets, as competition?’ I say, ‘What the fuck are you talking about?’ Like Leonard Stern doesn’t have deep pockets? I am thrilled by the whole thing.”
But although Stern’s main business was keeping Spot in flea collars, he seemed to understand the fundamental imperatives of the alt-weekly racket, which can be loosely stated as, “Let those freaks down in the newsroom write what they want. We’ll find a way to sell it.”
Other potential buyers who didn’t grow up in an industry full of ex-hippies who were having fun making a paper and accidentally got rich may not understand that it is in their business interest to keep kicking the Man in the shins. Even if they are the Man.
“I think the danger is that the people who are going to buy it aren’t going to understand that to succeed in this business, you have to let a thousand idiosyncrasies bloom. I can’t think of a lot of large media companies who see the world that way,” says Richard Karpel, executive director of the Association of Alternative Newsweeklies.
Patty Calhoun, editor of New Times Westword in Denver and president of the association, says, “The previous owner was pretty hands off, and I’m sure the editors and writers are wondering if they will be able to continue to do the kind of work they have been doing.”
In an internal memo notifying the worker bees that they were for sale, Schneiderman harked back to the days of free love by saying, “Stern Publishing is ultimately about you.” Yeah, baby.
Burl Gilyard is one of the “yous” it’s all about. He works as a staff writer at Stern-owned City Pages in Minneapolis-St. Paul. “The outcome could be good, bad, or neutral, but it’s no fun working under a cloud of corporate uncertainty,” Gilyard says. So what possible good could come of it? “I guess there’s always Times Mirror stock options.”