By: Mark Fitzgerald
Dean Singleton folds another newspaper; blames the demise the 111-year-old daily on rising newsprint costs sp.
SEVEN YEARS AFTER buying the Houston Post for $150 million from its Canadian owners, Texas native W. Dean Singleton unceremoniously folded the paper April 18.
In one fell swoop, Houston earned the dubious distinction of being the largest U.S. city with only one daily paper ? and the proud tradition of bare-knuckled newspaper competition ended in the Lone Star State.
Only three Texan towns are served now by two papers ? none of them business competitors.
In El Paso, Gannett Co.’s El Paso Times is in a joint operating agreement with Scripps Howard’s El Paso Herald-Post. In Tyler, both the Tyler Morning Telegraph and the Tyler Courier-Times are owned by the Clyde family. Morris Communications publishes both papers in Amarillo: the Amarillo Daily News and the Amarillo Globe Times.
In a joint statement with Hearst Corporation president and CEO Frank A. Bennack Jr., Singleton announced that the Post had published its last paper April 17, and that the paper’s building, five offset press lines, and other production facilities had been sold to its cross-town rival, the Houston Chronicle.
Terms were not released by Hearst or Consolidated Newspapers, the Post’s owner. However, the U.S. Justice Department said the price was $120 million.
The Justice Department’s antitrust division investigated the proposed sale to its rival and concluded that the Post was a “failing firm” that had no real hope of meeting its financial obligations or reorganizing under Chapter 11 bankruptcy protection, said Anne K. Bingman, assistant U.S. attorney general for the antitrust division.
Singleton blamed the folding of the Post on recent increases in the price of newsprint.
“The Post got hit in the head with a roll of newsprint,” Singleton told the Associated Press.
“While we all regret very much the loss of the Houston Post after 111 years of continuous dedication to the city of Houston and its residents, the recent unprecedented rise in the cost of newsprint has made it impossible to see viability for the city’s second newspaper,” Singleton said in a prepared statement. “It is unfortunate that we must all face the loss of a great institution.”
Post officials said the accelerating increases in newsprint added a projected $18 million in annual costs. In a memo to employees, Post president Ike Massey said “even the most stringent newsprint conservation measures . . . cannot overcome the pace and magnitude of these newsprint price increases.”
Closing with a speed that has become something of a Singleton trademark ? the Post was folded without having a chance to write its own obituary.
In recent years, Singleton has shut down a number of newspapers he acquired in a more optimistic era. They include the Ypsilanti (Mich.) Press and three New Jersey dailies: the Dispatch of Union City, the Elizabeth Daily Journal and the Paterson News. None informed readers of the impending doom.
Singleton once owned another big Texas newspaper, the Dallas Times Herald. After four years of ownership, he sold it to an associate, who closed it a year later.
Singleton could not be reached for comment. Within hours of the announcement of the Post’s folding, telephone lines were apparently shut down.
If the timing of the closing came as a surprise, it is also no less true that the paper’s fate was effectively sealed months ago.
Late in 1994, Consolidated Newspapers, the Singleton unit that owned the paper, disclosed that it had engaged newspaper broker Dirks, Van Essen & Associates, to shop around the Post.
“After a lengthy and exhaustive search, it was determined that there were no buyers for the Post,” Consolidated and Hearst said in a press release. The Justice Department also said the only buyer that could be found was Hearst.
The folding of the Post came just 16 days after the Milwaukee Journal and Milwaukee Sentinel ? which had a common owner but competed journalistically ? were joined into a single paper, the Milwaukee Journal Sentinel.
In that merger, too, the owner, Journal Communications Inc., blamed the rapid and continuing increases in newsprint costs for ending daily newspaper competition in Milwaukee.
The Post had problems that were more endemic than the recent price increases, however.
From the very start of Singleton’s ownership of the Post, the paper lagged behind the Chronicle.
In fact, Singleton in 1987 tried to buy the Chronicle when the paper was put up for sale by the Houston Endowment.
When the charitable trust instead chose to sell the paper to Hearst for $400 million, Singleton complained publicly that he had offered $415 million for the newspaper. Reacting to those complaints, Jim Mattox ? then the Texas attorney general and a pugnacious man who had already launched an investigation into the circulation practices of the Dallas Morning News and Dallas Times Herald ? announced he was looking into the sale. Hearst smoothed things over by agreeing to add another $15 million to the purchase price.
Later in 1987, Singleton, then 36 and a young man in a hurry, agreed to buy the Post from the Toronto Sun Corporation for $150 million in cash, as well as paying the Sun $1.25 for every $1 increase in revenue over the next five years.
Between then and the time the deal closed in December, the Black Monday stock crash of Oct. 19, 1987, intervened.
Like many another optimistic newspaper chain publisher, however, Singleton reacted to that event, not by walking away from the Post deal, but by simply renegotiating better terms.
Houston’s competition was ferocious, with both dailies publishing thick papers that sought readers as much through editorial improvements as rounds of promotions and price cutting.
The Post’s efforts, however, were not as fruitful as those of the Chronicle.
In September 1987, the Post reported a daily circulation of 301,100 and average Sunday sales of 347,052. In its last FAS-FAX report to the Audit Bureau of Circulations last September, the Post reported its daily sales as 281,628 and Sunday circulation as 313,876.
By contrast, the Chronicle achieved modest daily circulation gains by moving from all-day to morning publication. It also experienced substantial Sunday circulation increases.
Chronicle daily circulation rose from 406,776 in 1987 to 409,340. On Sundays, circulation increased from 534,771 to 605,343, almost double that of the Post.
With its victory in the newspaper competition, the Chronicle vowed to maintain quality.
“We fully recognize that the loss of the Houston Post ? which has fallen victim to the inexorable economic forces that have caused more than 98% of America’s markets to be served by only one newspaper ? increases the responsibility that the Chronicle has to the Houston community,” said Hearst chief Bennack.
Hearst said the Post presses and production facilities will be used by the Chronicle.
However, the chain did not comment on whether it would be hiring any of the 1,900 full-time and part-time employees ? including a newsroom staff of 180 ? idled by the folding of the Post.
Consolidated and Hearst did say that all employees will receive salaries “for at least two months.”
Begun on Feb. 19, 1880, as the Houston Afternoon Post, the Post is perhaps most closely identified with former Texas Gov. William Pettus Hobby and his widow Oveta Culp Hobby. Gov. Hobby bought the paper in 1939, and it remained in family hands until it was bought by the Toronto Sun Corp. in 1983.
?( Dean Singleton) [Photo]