12-31-06 | Printable Version

Suburban Publishing Groups Keep Getting Bigger

The 'burbs got a lot of attention in 2006.

Three companies assembled or added to suburban publishing clusters through acquisition to create some of the largest groups of their kind in the country.

These deals represented a continuation of a trend toward building huge scale under common ownership in suburban markets – usually through a variety of print advertising vehicles.

The strategy is to offer distribution at least as good as the metro newspaper or the largest group of radio stations in the market, while also catering to the local advertiser who just wants one community. Size also provides certain cost advantages.

While the problems plaguing metro newspapers have been widely reported, publishers of suburban operations we spoke to in connection with this story reported having decent to good years during 2006.

One big difference is that the suburban papers are not as dependent on national and classified advertising as their big city counterparts. As one operator put it, “community newspapers seem to be having their day.”

Shifting Ownership

The advent of suburban communities in the years following World War II provided fertile ground for publishing entrepreneurs who created new models for the industry.

Free distribution weeklies, voluntary pay programs and large-scale free dailies all gained traction in these new, growing neighborhoods. A number of successful publications were started on kitchen tables.

Today, however, as suburban groups grow in size, ownership is shifting away from independents to the large groups. The transactions in 2006 were no exception.

GateHouse Media completed three acquisitions in southeastern Massachusetts to put the largest number of separate mastheads under common ownership in any suburban market. GateHouse combined Community Newspaper Co. (already one of the nation’s largest weekly owners) with dailies and non-dailies in and around Quincy, Brockton, Taunton and Fall River.

MediaNews Group made its northern California group much larger with the addition of Knight Ridder’s newspapers in the Contra Costa and San Jose areas. This gives MediaNews more than 1.1 million distribution in the region, much of it paid.

Finally, David Black added suburban publisher King County Journal Newspapers and a large shopper group from Lee Enterprises to his Sound Publishing operation in greater Seattle, giving him more than 600,000 in total distribution in eastern Washington.

Defining Suburban

Joel Garreau coined the term “edge city” 15 years ago to describe growing communities evolving around urban areas.

While the traditional suburban community consisted primarily of single-family, tract homes, edge cities encompass a lot more: destination shopping centers, white-collar employment, and in some cases even a town center.

“Edge city” probably better describes the communities in which the publishing groups described above operate. However, “suburban” is still commonly used in the industry.

With deal activity increasing in these areas, Dirks, Van Essen & Murray compiled a list of the largest suburban publishing groups under common ownership. The list is based on distribution.

In compiling the list, we divided suburban publishers into two groups: those with significant daily circulation and those driven primarily by non-daily newspapers.

We excluded publishing operations that are principally shopper groups – that will be the subject of future piece in the newsletter. However, shopper distribution is included in the totals for those on the list. Also excluded were TMC distribution and any direct-mail component.

Another issue was determining what constitutes “suburban.” Generally, we looked for publishing groups operating around metro areas in communities where the metro daily maintains a relatively significant presence based on circulation market share.

For example, the North Jersey Media Group, despite its more than 600,000 distribution and strong daily newspapers, did not make the list because its markets were not deemed suburban enough. Similarly the Orange County Register and its large non-daily group did not meet our definition of suburban.

Additionally, we included all contiguous circulation for a group, even in cases where the communities being served are beyond the suburban markets. In this way, MediaNews Group’s northern California cluster, located around the Bay Area, did make the list, even though arguably a number of its markets might not be considered suburban.