even as so-called “news deserts” appear across America, millionaires are investing in new and existing newspapers. One investor even says there is now a “new path forward” for community newspapers.
In Colorado, Clarity Media, owned by billionaire Phil Anschutz, announced that it is starting the Denver Gazette in mid-September to compete directly with the resource-strapped Denver Post, which is owned by the budget-scrimping New York-based hedge fund Alden Global Capital.
In Arkansas, Walter Hussman’s WEHCO Newspapers, Inc. expanded its reach in late August by buying the Pine Bluff Commercial from Gannet, a heavily leveraged newspaper group that has drastically cut newsroom staffs.
Hussman believes eliminating printing and distribution costs will make his company — headlined by the Arkansas Democrat-Gazette — profitable while maintaining a fully staffed newsroom.
In Denver, the Gazette, slated to begin publishing in mid-September, will be 100 percent digital.
“We’ve long considered publishing a Denver newspaper,” said Clarity CEO Ryan McKibben. “Timing and marketing dynamics (are) aligned.”
The dynamics include Alden reducing the Post editorial staff (down from some 350 newsroom staffers in its heyday to some 60 today), abandoning its downtown Denver office, and shrinking the size, frequency and coverage area. It still claims to be the “Voice of the Rocky Mountain Empire,” but the Post’s reach has greatly diminished.
Anschutz — who made millions in oil and transportation — bought the Colorado Springs Gazette in 2012. He also bought the name rights, intellectual property rights and archives of the Rocky Mountain News, which was shuttered in 2009.
Anschutz, who also owns the conservative Washington Examiner, has magnified conservative voices in Colorado, which has moved from a traditional Republican state to a Democratic-run state government.
While conservative on its editorial pages, the Gazette says it plans to have down-the-middle news coverage.
“We see ourselves as presenting a news alternative for all consumers in Denver,” Gazette Publisher Chris Reen said in an article published in the Colorado Springs Gazette. “We’re focused on fact-based, straight, balanced, non-agenda driven news, which is more important now than ever.”
In Arkansas, Hussman has said his move to almost 100 percent digital was necessary for the survival of his newspapers. He said the model of continually cutting staff and other expenses won’t work. Besides, he said he’s not interested in publishing “lousy newspapers.”
Quality matters, Hussman says, and is necessary for long-term survival.
In October, Hussman will convert the Pine Bluff Commercial to a replica e-edition six days a week, with a Sunday print product delivered in tandem with the Democrat-Gazette. Hussman is using the same formula for his newspapers in Northwest Arkansas and in El Dorado.
“What we’re doing here … is really unique in American newspaper publishing,” Hussman said. “If this works in Pine bluff, this is going to be great for community journalism in America because it’s going to show a model and a path forward for other newspapers to be sustainable and survivable.”
If this is a path forward, as Hussman suggests, how can others follow it?
There definitely is a need.
Some 2,100 newspapers have folded since 2004. Pew Research estimates overall newsroom employment in the U.S. dropped by 23 percent from 2008 to 2019.
The trend to cut newsrooms has continued even as demand for local news has surged — page views have often doubled — in this virus-dominated year.
The economics seem logical: Demand for news is up, but supply is down. A vacuum exists to be filled.
So — you ask — how can a “news desert” be turned into an oasis?
There are reasons so many newspapers went out of business.
A huge problem is the death of local retailers caused by on-line ordering. COVID-19 has crippled or killed others.
Many remaining businesses have switched their ad spending from local media to Facebook, Google and Amazon.
In too many markets the news “habit” has been kicked as consumers think they can rely on social media for their news, information and marketing.
So, you ask, what would I do if I was thinking about starting a news organization in a so-called “news desert,” which could be defined as a market without a news outlet or a market greatly underserved by a downsized newsroom, or “ghost newspaper.”
Relying on my experience of editing and publishing a small weekly newspaper and traveling the country for many years to convince publishers to move to digital products, here are my suggestions for anyone who wants to start a news organization:
1. Find a good market — preferably one that you know and are known favorably in. Make certain there is a demand for a product among potential subscribers. Make certain there is the prospect of a decent amount of local advertising. Locally owned banks and credit unions, grocery stores and other retailers who can make local ad-buying decisions.
2. Have a solid business plan. Have realistic revenue projections and know your costs.
3. Minimize or eliminate debt. Find local investors who can help you establish financial staying power while giving you credibility in the market. This, also, will make it easier for you to sleep more soundly at night. (How much financing do you need? I’d suggest six months of operating capital based on a good business plan.)
4. Find a market that’s in love with its high school (and possibly college) sports programs. Local sports coverage will attract subscribers and advertisers.
Understand the media landscape. Is the market really a “news desert,” or is it well-served by nearby newspapers, radio or TV stations?
Be heavily involved in the market, meaning joining service clubs and the chamber of commerce. Plan to promote local events.
Keep overhead as low as possible. Concentrate on news and sports coverage, and ad and subscription sales. Outsource production (page layout, printing, HR, bookkeeping, etc. to companies that can perform these operations less expensively than you can.)
Think digital first because online is cheaper to deliver and because this is the part of the market that is growing the fastest. This is the lesson Hussman is preaching.
I’d limit print to once or twice a week (if at all), depending on advertiser demand (especially if there’s a chance you can attract pre-print advertising). Print has advantages, but it is slower and costlier to produce. Print will give you credibility, but also increase overhead.
Prepare to be a workaholic If you want to be the go-to source for news and information in your market, there’s no taking time off when news happens. To be successful, be prepared for a long grind that might not pay well, at least early on.
Good luck. Remember always: Free advice can be over-priced!
News and Tech Columnist Marc Wilson is founder and chairman emeritus of TownNews. He was a reporter for three daily newspapers and five bureaus of The Associated Press. He edited and published the 1,950-circulation Bigfork (Montana) Eagle for 14 years