This article in the NY Times says very little about Cleveland, but the market clearly wasn’t big enough for two alt weeklies. Free Times’ competitor, Scene, has been around for 30 years, and there was precious little to distinguish between the two publications.
- Stung by brutal competition and an even tougher economy, the raging rock throwers of alternative media are behaving like civilized monopolists, dividing up markets and cutting their losses.
This became clear last week, when what had been a bare-knuckle fight to the finish by the nation’s two largest chains of alternative weeklies — New Times Inc. and Village Voice Media — suddenly became a much more collaborative affair.
New Times agreed to shut down its money-losing Los Angeles New Times when Village Voice Media agreed to shut down its money-losing paper in Cleveland. New Times received more than $8 million from the two transactions, according to people with knowledge of the deal.
The willingness of the two ferociously competitive chains to make a deal in their common interest could mean that the next big deal by the companies could leave only one standing.
The closings also raise the question of whether alternative weeklies are becoming pint-size versions of their daily counterparts — print media franchises that need a monopoly in their respective markets to prosper. New Times lost more than $15 million battling Village Voice Media’s more established LA Weekly, while Village Voice Media was losing more than $500,000 a year in Cleveland, with its Free Times.
Both chains, which each have revenues of around $100 million a year, have bought and closed competition in various markets in an effort to garner market share. New Times, which now owns 11 papers, bought and folded two struggling weeklies when it entered the Los Angeles market six years ago, but it never seriously threatened LA Weekly, a paper that had been around for 18 years.
“This fight was called on cuts,” said Michael Lacey, executive editor of New Times Inc. “This was the wrong economy to be the second newspaper in a tough market.”
….There are 121 papers that are members of the Association of Alternative Newsweeklies, the industry’s trade association, and they generate more than half a billion dollars in sales, according to Richard Karpel, executive director of the association.
That is a fraction of the $45 billion newspaper industry, but the industry as a whole was growing at a rate of 12 to 15 percent a year until recently, according to investment bankers who follow the sector.
But tobacco ads began to wither in 2000, and then national and classified ad sales fell over 20 percent in 2001, according to industry executives.
In the absence of that growth and with a lending market that has little enthusiasm for media properties, New Times and Village Voice Media needed to sacrifice money-losing papers to free up cash flow.
I used to write for a previous incarnation of the Cleveland victim – not that it matters.