A review of recent newspaper and magazine transactions reflects a changing national reality. It’s now a landscape continually “refreshed” by rapid technological innovation and economic demands.
In this changing landscape the future belongs to clusters of non-daily newspapers. The economic advantages of clusters are obvious by way of synergies in composition, administration and shared sales. And depending on a cluster’s geography there can be additional savings with some shared editorial content. Further, a publisher representing a cluster has increased leverage when negotiating prices with printers. When selecting printers, options are expanded further now that pages are digitally moved to the printer.
Thanks to digital technology it now matters not whether a compositor is 30 feet down the hall or 300 miles down the road. And as print and digital venues merge, skilled IT personnel can efficiently manage multiple-publication websites from a single location.
Completed transactions point to another factor that’s dominating the media marketplace; namely, hyper-local news menus, distinguishing weekly and small to medium circulation dailies from publically traded large metro dailies. Dan Pulcrano with the Metro Newspaper Group puts it best when he states that his management team concentrates its acquisitions on well-defined markets with strong community identities that demand local, local, local news menus through multimedia platforms.
Sherman Frederick with Battle Born Media, LLC is committed to the old adage that “content is king.” His management team is filled with journalism resumes focused on producing must-read hyper-local content. Frederick is a former CEO of Stephens Media Group, and former publisher and editor of that company’s Las Vegas Review-Journal. That experience coupled with his Battle Born Media’s bevy of non-daily community newspapers in Nevada and California gives Frederick a valuable perspective on the fast changing industry and the logic driving many acquisitions.
What is it that gives Frederick and partners confidence in print publishing? He states, “There is strong demand for ‘content centered’ newspapers.” Frederick said that initially they believed small isolated communities provided the strongest demand for local content. He then added, “We’ve since found interest in local news is not limited to isolated markets.” He explained, “Regardless of size, communities care about their schools, clubs and local government.” Frederick is quick to add that multimedia options have increased readers’ demands for quality.
Regardless of the delivery system, the appetite remains stronger than ever for “refrigerator” journalism — story and photo clips of friends and families that fit handily on refrigerators.
A combination of these factors is motivating buyers’ preferences for non-daily clusters and small to medium circulation dailies, preferably surrounded by their own non-dailies. And interestingly, publications with strong “brands” (trustworthy content focused on community) in well defined markets (regardless of size) with strong identities attract more buyer interest.
Savvy publishers have been busy “reconstituting” their products — taking advantage of rich and fertile markets that marry print with a full array of digital platforms. Interestingly this expanded plate of platforms is attracting younger readers while stimulating renewed interest from citizens and local government administrators. Revenues increase when ad sales staffs have more arrows in their quiver.
After 10 years of chain ownership Voice Media Group (VMG) sold the OC Weekly to Irvine-based Publisher Duncan McIntosh. McIntosh’s purchase returned that weekly to local ownership. The Duncan McIntosh Co. also publishes Boating World magazine, Sea magazine, and The Log Newspaper. And since 2010, the company has owned the century-old journalism trade publication Editor & Publisher.
Duncan’s first newspaper was a weekly in Newport Beach. “Purchasing the OC Weekly brings us full-circle,” Duncan said. The OC Weekly is known for its independent and irreverent coverage of the local arts and entertainment news beat. But note that Duncan is onto something when he merges newspaper and magazine publishing operations.
Duncan is not alone. Metro Newspapers, also known as Metro Publishing based in San Jose, California is proving yet another benefit of clustering with their purchase of Out & About, a monthly magazine. Increasingly newspaper publishers are purchasing monthly magazines. A monthly magazine’s editorial content generally is more narrowly focused and thus opens an entirely new book of business — business not likely to appear in general circulation newspapers. And with production infrastructure already in place these magazines often generate 30 to 40 percent margins. Hmmm, change is inevitable! And it can be profitable!