Consulting Pact Raises Eyebrows p. 9

By: Jeff Siegel

Dallas Morning News signs unusual agreement with
one of the city's two alternative weekly papers sp.

THE DALLAS NEWSPAPER war, virtually extinct since the Times Herald closed four years ago, may be on the verge of heating up again.
The Dallas Morning News, the remaining daily, has signed a consulting agreement with the second of the city's two alternative weekly papers. The deal has not only exacerbated relations between the Morning News and the dominant weekly, the Dallas Observer, but raised questions about why the staid, conservative Morning News would ally itself with The Met ? an 18-month-old publication best known for its irreverent, first-person accounts of News employees' personal lives.
"The best anyone here can figure out is that the News realizes there is more to newspaper publishing these days than the traditional way of doing it," said Rick Wamre, who publishes two community papers in Dallas. "On the one hand, the News is so big that you'd wonder why they would want to bother with the Met. And then you realize that this is one of the those niches that traditional daily newspapers don't serve anymore, and this allows the News to reach that niche."
The consulting and marketing agreement, announced at the end of August, calls for the Met to pay the Morning News to advise it on ways to bolster advertising revenue, increase circulation and improve its marketing skills. The deal is also notable for what it did not include: The News, said vice president and general manager Jeremy Halbreich, has no intention of buying its new business associate, "now or in the future," and the News will not have any say about the Met's editorial content, which emphasizes arts and entertainment for the 20-something crowd.
Terms were not disclosed, although Met editor Eric Celeste said a sliding scale was involved that will allow the Morning News to increase its compensation if the Met's revenues increase.
"We saw this as a business opportunity," said Halbreich about the apparently unprecedented alliance. Other daily newspapers own alternative weeklies or publish their own, but none seem to have gone this route.
"This deal is a way for us to learn something about a market niche that we would not otherwise have a chance to learn about," said Halbreich, pointing out that the Met's core readers are the 18-35-year-old men who have been deserting daily newspapers with increasing frequency over the past two decades.
"This was also an opportunity for us to increase our revenues," he said.
The Morning News will advise the Met on how to:
? Increase circulation. Currently, the free weekly distributes 50,000 papers at 900 locations throughout the Dallas-Fort Worth area. Celeste said he hopes to double the number of papers and outlets, using the Morning News' expertise to help, among other things, pinpoint new rack locations.
? Boost the Met's visibility. The Met will soon start an advertising campaign in the Morning News, highlighting its writers, features, and personal ads, said Celeste.
? Improve strategic planning. Most of the staff of the Met, said Celeste, knew little about the business end of the newspaper business when the Met was launched 18 months ago. An ownership change this spring, when Texas magazine publisher Ray Washburn bought the Met from its original 18 investors, highlighted the need for better planning.
Washburn, in fact, broached the deal with the Morning News earlier this summer after reports he had considered closing the Met.
"This gives us a chance to benefit from everything the Morning News knows and does," said Celeste. "And I think it gives the Morning News a chance to dip their toes into something they don't know a lot about, from a safe distance."
The deal did not sit well with the Observer, which has been sniping at the Morning News since the Times Herald closed.