There’s good reason community newspapers are selling

February 4, 2016

By Peter W. Wagner
Publisher | N’West Iowa REVIEW, Sheldon, IA

I’ve shared for years my belief that the printed community newspaper is not dead but actually alive and well. That belief is highly embraced in Iowa where smaller community papers are selling like once famous metro paper’s “extra edition.”

 

HAMPTON, IOWA

Want proof? Visit with Ryan Harvey, president and chief executive officer of Hampton, IA-based Mid-America Publishing. The all-Iowa chain has purchased five nearby weekly newspapers in the last eight weeks, since Nov. 4, 2015. Those recent acquisitions take Mid-America’s total holdings to 35 newspapers. It also publishes companion shoppers in many of the company’s newspaper markets. The paid circulation numbers of the five newspapers aren’t extensive by themselves. Two of the smaller newspapers have around 2,000 subscribers, while the largest tops out at a nice 7,000 households.

Harvey says there are three principle reasons for the increased sales of smaller newspapers across America.

The first reason is the realization smaller community newspapers can be pleasantly profitable. Unlike so many metro publications fighting for subscribers and advertising dollars, community weekly newspapers are still wanted for their unique local content by readers and for the solid audience by advertisers.

The second reason is the simple fact that the owners of many small town newspapers are reaching retirement age. It is somewhat a buyer’s market, and sellers often prefer to sell to a buyer in the area ready to continue the depth and quality of their publication. Many presume that can best happen when a nearby group with established publishing resources and market connections becomes the buyer.

“Part of the reason we buy nearby weeklies,” says Harvey, “is to continue to fill out our web press schedule.

“But there are many cost-saving synergies that lower publication overhead and increase corporate profit.”

Additionally, each new publication, says Harvey, opens opportunities for display advertising sales across a greater regional market.

“We try to be very careful when buying another newspaper,” Harvey told me. “We don’t rush into things or make rash decisions. We consider the size of the community, the volume of existing advertising and the opportunity for growth. We’re most interested in papers that are within 20 miles of existing Mid-America locations.”

So far the experience has been a satisfying one for Harvey and Mid-America. “It has been a two-way deal that has been good for us and for those wishing to retire,” he said. “Everyone has come out ahead.”

 

DE WITT, IOWA

Meanwhile, over in DeWitt, IA, former Shaw Media vice-president and publisher Trevis Mayfield is pleased with his year-old purchase of three smaller weekly and bi-weekly papers that were previously owned by the Melvold family.

“Contrary to the often-generated rumors,” says Mayfield, “not all newspapers are doing poorly. That problem exists mainly in the metro markets.”

Mayfield’s Sycamore Media’s twice weekly in DeWitt, IA, the Observer, the Maquoketa Sentinel-Press and the weekly Bellevue Herald-Leader are doing well. The three geographically close publications with their combined circulation of 9,500 homes have so far lived up to all of Mayfield’s expectations.

“Big market companies have dragged the value of smaller newspaper operations down,” Mayfield says. “But in local markets where there is a hunger for credible community news, the newspaper is still relevant. The publishing business can be profitable and satisfying.”

But there is a downside, according to Mayfield. Smaller markets require a greater commitment and stronger work ethic. You have to give the audience something for their money.

So what does Mayfield have to say about jumping from being a large chain publisher to small market owner?

“I only wish I had started when I was younger,” he says.

 

SHELDON, IOWA

My own company in Sheldon, IA, the Iowa Information Publishers and Printers, also purchased an area newspaper this past year.

The process began when Scott Beernink, publisher of the Sioux Center NEWS, decided he was interested in retiring.

The market was adjacent to our core area and one where we had existing relationships with many advertisers and readers. Additionally, we were anxious to retain the weekly printing business of the Sioux Center NEWS and companion Sioux Center Shopper.

Both parties decided to close the deal without a broker, but the assets-only purchase might have been completed more quickly if one had been involved.

Iowa Information Inc. President Jeff Wagner and his wife, Myrna, represented III’s interests, and overall, it has been a good acquisition.

All accounting and circulation functions were moved to Iowa Information’s corporate offices in Sheldon, and we moved the commercial printing work to our sister company, White Wolf Digital. The Sioux Center location had been producing commercial printing on a two-color offset press, while in Sheldon, we had recently converted to digital for the competitive advantage of short-run color work.

We’ve continued to maintain an office in Sioux Center with editorial and design teams, and we have added a sales staff to cover that aspect of the former publisher’s responsibilities.

Are there some things we’d do differently? Of course. We learned we needed to clarify terminology and document standard work. At the end of the week, these were two offices producing quality products, but with different methods and processes. Managing one process was essential to our success, and we needed to define what exactly that is.

“While we centralized some functions out of our Sheldon office,” Jeff Wagner said, “we also knew we wanted to take advantage of the skilled labor pool available in Sioux Center.”

With a population of 7,048, Sioux Center is the largest community in Sioux County, which is in turn the fastest-growing rural county in Iowa.

A new phone system, shared servers and faster Internet access have joined the two locations electronically in a way that makes it possible for employees to work on any publication from either office.

We are also introducing opportunities for combination advertising buys that give businesses greater exposure and better value. Owners can deal with one sales rep while making multiple advertising decisions quickly and efficiently.

“This is just one more way for us to stay competitive and spread our overhead over a larger base,” Wagner said.

Every day gets better. In addition to the Sioux Center purchase, 2015 brought the completion of our new printing facility to replace one that was destroyed by fire nearly 30 months ago. White Wolf Web now produces work on a 24-unit, six-tower Harris-Heidelberg web press for greater color capacity. The plant also utilizes automated pre- and post-press equipment to give customers faster turn times.

“My parents started this business in a small downtown building 54 years ago. They faced many challenges in those early years but were committed to the company and the region,” Wagner said. “My commitment and motivation is to grow it for the third generation.”

Will we buy another newspaper? Yes, when the correct opportunity comes along.

“We’re excited about the future,” Wagner added.

 

Peter W. Wagner is founder and publisher of the award-winning N’West Iowa REVIEW and 13 additional publications. He is often called “The Idea Man” and is a regular presenter at State Press Association and publishing group conventions and seminars. You can contact him regarding his programs “100 Ideas for Fun and Profit,” “Seven Steps to Selling Success” or “Watch Your p’s and q’s” by e-mailing pww@iowainformation.com or calling his cell 712-348-3550 anytime.

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