Ottaway Chain Has New Leadership

By: Lucia Moses

Despite having worked the last 32 years at The Wall Street Journal, Danforth W. “Dan” Austin isn’t entirely new to the business of community newspapering.

When he was a kid, he worked as a janitor at The Salina (Kan.) Journal, where his father, Whitley Austin, was the outspoken editor and publisher. Hanging around the paper, he learned that by “shedding light in the community, you can do your community a great service.”

That experience becomes relevant as Austin, 56, takes over as chairman and CEO of Ottaway Newspapers Inc., the 14-daily community group based in Campbell Hall, N.Y., and owned by the Journal‘s parent Dow Jones & Co. Inc. He began preparing last year to succeed James H. Ottaway Jr., 65, the son of Ottaway’s founder, who retired this year.

The April 1 changeover came at a time of optimism and rebuilding for Ottaway. In recent years, its employees worked under Dow Jones’ stringent margin-improvement requirements and uncertainty stemming from speculation that Dow Jones would sell the group.

But Ottaway, bought in 1970 as a hedge against advertising swings at the Journal, is demonstrating its worth once again. While Journal ad linage sank 17.6% last year, Ottaway’s dipped only 1.8%. And two years ago, Dow Jones announced it’s committed to keeping the group and growing it via acquisitions.

“Ottaway Newspapers has become a larger and more important part of Dow Jones, partly because of the slowdown in advertising at the [Journal],” James Ottaway said. “I think we’ve more than proved our value to Dow Jones to balance the more-cyclical business of The Wall Street Journal.”

Austin’s challenges include fulfilling the goal of adding dailies in the 20,000-to-100,000-circulation range. (So far, Ottaway’s made good only on its pledge to sell some papers in the short term.) Now that Ottaway’s operating margins are around 26.8%, close to the top among its community-publishing peers, his focus is to boost revenue through nondaily publications and improvements in the core dailies.

“Community newspapers are the last mass medium in a lot of these communities,” Austin said. “That really requires paying attention to the quality of editorial content.”

One way the company plans to do that is through training: Ottaway has raised its budget for it by about 30% this year. It is promoting more best-practices sharing among its papers and has spent heavily to measure their Reader Behavior Scores (RBS), the metric developed by the Readership Institute.

On the revenue side, a new corporate database-marketing division was formed to support advertising and circulation, while some papers are making nice profits by delivering unrelated publications.

If Ottaway’s new No. 1 lacks experience operating community papers, its new No. 2 doesn’t. Company veteran John N. Wilcox, who succeeded retired President Joseph Richter in January, has spent his career at small papers, moving through news to circulation to advertising to publishing jobs.

“He’s got news ink in his blood,” said Cliff Schechtman, editor of Ottaway’s Cape Cod Times in Hyannis, Mass., which Wilcox published from 1996 to 2002. Wilcox supported “warts and all” coverage, such as the paper’s aggressive reporting on a local military base’s failure to clean up a polluted site, which threatened the water supply, Schechtman said.

Look for Wilcox, 58, to reignite Ottaway’s training programs, hire news staff where possible, and find ways to use RBS to improve the newspapers.

Some of his goals may have to wait until the economy improves. And the financial pressure isn’t totally off Ottaway — Dow Jones has said it plans to get its earnings growth back to its 2000 high in part through “significantly improved profits” at Ottaway, even as the Journal continues to flounder on the uncertain ad terrain.

Even so, Wilcox struck a positive note, saying, “I think the biggest and best days are still ahead of us.”

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