There is one corner of the newspaper industry where circulation is rising, ad revenue is growing, and the Internet bears no relation to the grim reaper: weekly community newspapers.
"My display advertising grows 10% a year," says Michael Schenkler, publisher of the independently owned Queens Tribune. "The content in the community newspaper is not available on TV or the Internet."
Now News Corp. is moving in on that local action as one solution to its problems at the New York Post, whose advertising has been slow to catch up with the tabloid's circulation gains.
The media giant swallowed two local newspaper chains in Brooklyn and Queens last fall, and is now in talks to buy the Bronx Times Reporter, sources say. The Bronx paper puts out six editions that target most of the borough.
Neither the Post nor the Bronx Times Reporter would comment.
"The Post's weakness is that its sales tend to be concentrated in Manhattan," says newspaper analyst John Morton. "This is a way to expand its advertising footprint."
By some accounts, News Corp.'s recent acquisitions in the boroughs are already paying off, both for the local papers and the Post. The Queens and Brooklyn papers now carry ads for Cingular, an account the Post won with their help — and archrival the Daily News appears to have lost.
Marc Kramer, chief executive of the News, says it remains to be seen whether Cingular will advertise in the paper this year. The wireless company spent more than $7 million in the News last year, according to TNS Media Intelligence.
The News has also reduced the print run of its Brooklyn and Queens supplements, which launched last year.
"We've picked up quite a number of significant accounts that the Post has been able to place here — and that the Post was able to get as a result of having Brooklyn and Queens," says Steven Blank, publisher and former owner of Times Ledger Newspapers in Queens. News Corp. bought the chain's 11 papers, along with the Courier-Life chain in Brooklyn, in September.
Still, public companies like News Corp. have generally proven a bad fit with community weeklies, which operate on thin profit margins and have an intensely local, hands-on character. Gannett Co., for instance, launched a handful of Westchester supplements to its Journal News daily and ended up closing them.
"[Public companies] run them like dailies, or they bleed them to support the dailies," says Michelle Rea, executive director of the New York Press Association.
Rivals of the Post are already arguing that it is increasing ad linage by offering the local papers at a steep discount. In addition, the Post recently gave the chains an introduction to corporate life — firing 25% of the staff at Times Ledger and 13 employees at Courier-Life, including Caribbean Life's longtime publisher, on the same day.
Community newspaper insiders say the firings put the chains at risk of losing touch with the neighborhoods they cover. "The flavor of these papers depends on decision-making in the community, and [that connection] can't stay the same if an accountant is in charge," says the Queens Tribune's Mr. Schenkler.
But local media's robust growth is likely to continue attracting buyers.
Rochester-based GateHouse Media Inc., which owns more than 400 community papers, recently raised nearly $1 billion for acquisitions. And News Corp. remains in the hunt for local papers all over the city. Others are also looking.
"We get queried not infrequently by private equity groups that are interested in local media," says John Sutter, owner of Community Media, which publishes The Villager and Downtown Express.
News Corp. may have learned from other companies' mistakes. It has invested in its new properties, redesigning the papers and sharply upgrading the printing. The company has also given contracts to the former owners of the two chains, who continue to operate them.
"That was wise," says Tom Allon, president of Manhattan Media, which puts out nine local publications, including The West Side Spirit and Our Town. "But it's all in the execution. We'll see five years from now whether [these acquisitions] were a great move or not."
Comments? MFlamm@crain.com
