HOY LEADS THE WAY WESTWARD

By: Robert Neuwirth Newsday Seeks Dominion in Queens


Horace Greeley would be happy. Five-plus years after Newsday pulled the
plug on its highly regarded but money-draining New York City newspaper, the blue
flag of the Long Island tabloid is again "going west." But this time it's got a
secret weapon: Louis Sito's little Spanish-language paper.

You may not have heard of Sito. Although he serves as Newsday's senior
vice president for sales, he's not a corporate mandarin. He doesn't boast a
handful of business degrees. And he isn't a familiar figure on Wall Street. But
it was Sito who back in 1998 convinced leaders of the staid daily to pump money
into his risky pet project - Hoy ("Today"), a new Spanish-language
tabloid. And that decision was an important step in Newsday's
determination to move back forcefully into Queens, the largest of New York's
five boroughs.

"Absolutely," says Raymond A. Jansen, Newsday's publisher, president, and CEO.
"We look to growing Hoy for itself and growing Hoy as a companion
to Newsday. It makes sense to have a newspaper that serves Hispanics
- and as they assimilate, we want them to read Newsday."

With more than 80,000 copies circulating in Queens every day, Newsday is
second to the Daily News, which sells about 110,000 copies in the borough
(The New York Times sells 50,000 copies there, and the New York
Post moves 43,000). But if you add the approximate number Hoy
circulates in Queens, one-third of its 54,000 circulation, Newsday's two
papers are nipping at the News' heels, with a circulation right around
100,000.

And Hoy is also driving circulation gains for Newsday itself.
Jansen reports that about 4,000 Hoy subscribers are buying
Newsday, too. For these subscribers, he says with a laugh, "Hoy is
the first one into the home, and Newsday is the tail on the dog."

The publisher - recently named a senior vice president of Newsday's
parent Tribune Co. - credits Sito for the vision that made Hoy
possible. "He's the father of the publication," Jansen says. "He proposed it.
... He made it easy."

Now Newsday has beefed up its Queens staff, adding a dozen reporters and
editors - an expansion that has included some high-profile efforts to poach
well-regarded staffers from the Daily News and the Post. Jansen
hopes the New York presence, plus Hoy's inroads in the Latino market, will make
a compelling bid for national advertising.

This fits neatly into what has long been regarded as Tribune's grand plan: link
its major papers in seven cities - including its hometown Chicago, Los
Angeles, and New York - for one massive national ad buy. But it needs New
York, and only Newsday can deliver it. (Tribune fled the New York
newspaper scene a decade ago when it sold the Daily News.) To bolster the
plan, Tribune has agreed, in principle, to bring Newsday's Queens
archrival, the Daily News, into the advertising scheme - in effect
creating "coopetition": competition for readers, but cooperation in the search
for advertising dollars.

But it is Louis Sito who will head up the overall circulation and advertising
efforts that will ultimately determine whether Newsday's new experiment
in New York will pay off.

'Cash cow' parade

Sito is no stranger to profit pressures. He came to Newsday in 1992,
assigned to run its troubled Distribution Systems of America division. At the
time, DSA was bleeding big bucks - losing about $5 million every year. Sito
hit the ground running.

"Eighteen months later, we were breaking even - and we never looked back,"
he says. Under his watch, the company, now called DSA Community Publishing, has
grown into the nation's second-largest publisher of pennysavers. Sito says DSA
now includes 200 local shoppers with a weekly circulation of 2.7 million, and he
refers to them as "little cash cows."

Sitting in his corner office at Newsday's headquarters in Melville, N.Y.,
Sito, 55, looks every bit the modern executive. Nothing is out of place in his
corporate lair. His desk is uncluttered. The day's papers - both his
company's and the competition's - sit in rigorous straight lines on his
coffee table.

His stylish dark suit and white shirt are perfectly pressed. Yet, he insists,
he's a kind of dinosaur, because he rose to power in newspapering from the blue-
collar side of the business.

"What happened to me probably can't happen anymore," he says, "and I say that
not because I'm a special person."

Sito came to the United States from Havana, Cuba, in September 1960, at age 16.
He came without his family; his father, mother, and sister followed three years
later. Once in the United States, Sito didn't join the traditional exile
communities in Florida or New Jersey. Instead, he went to Chicago, where he had
relatives - his cousin, George de Lama, today is assistant managing editor
of the Chicago Tribune - and worked odd jobs.

As Sito remembers it, he was toiling for Dr. Scholl's when he saw a small ad in
the Chicago Sun-Times for Teletypesetter operators. He figured he could
type - so he applied. Sito got the job, moved into an apprenticeship
position, and, within three years, had his journeyman card. "I was getting like
$80 a week, and I was in fat city," he says.

Sito also recalls the day when Joe B. McAdams, the composing-room
superintendent, came over to his Linotype machine and asked him to forfeit his
union job security and join management as an assistant foreman. At the time, the
Chicago Typographical Union wielded awesome power, and Sito had what amounted to
a lifetime job guarantee.

"Believe me," Sito says with a laugh, "being an assistant foreman at the
Chicago Sun-Times at that time was scum. It was the lowest of the low."

Still, Sito decided to seize the opportunity. "I was probably the first guy who
gave up the guaranteed lifetime job," he says, "and that decision, without
knowing it at the time, fundamentally was the single largest decision I made
that changed the course of my life."

McAdams, who now heads Affinity Group Inc. - which publishes
Motorhome and Trailer Life magazines and sells related packages of
products and amenities to the nation's recreational touring enthusiasts -
recalls Sito as a talented manager. Adds James F. Hoge Jr., who served as
publisher of the Sun-Times and now is editor of Foreign Affairs
magazine: "Louis Sito is very bright. He is continually thinking about how to do
a job better. He motivates people well, and he's also fun to work with."

Sito deflects the praise: "I kept getting promoted to my level of incompetence,"
he says. He credits McAdams with giving him the tools that made him a skilled
newspaper manager. "He took the time to put me through every part of the
business."

In any case, as McAdams moved up the corporate ladder, so did Sito. By 1979,
McAdams was the paper's executive vice president and Sito was one of his
lieutenants.

Sito stayed at the Sun-Times after McAdams left, rising to become vice
president of operations. In 1983, it became clear that owner Marshall Field
would sell the paper and a group of top managers and editors put in a bid. Two
weeks later, Rupert Murdoch bought the Sun-Times. "Rupert buys the paper,
and it's a bloodbath," Sito says, switching to the present tense because the
events are clearly still vivid in his memory. "The day Rupert takes over the
paper, more than 80% of the management staff quits."

A 72-point hed case

That was January 1983. In June, Sito was summoned from Chicago to New York to
meet with the big man himself. Murdoch offered his 39-year-old vice president
the position of general manager of the Sun-Times. "In a very peculiar
way, Rupert Murdoch gave me the opportunity to really shine," Sito says. "It was
the most incredible year and a half of my life. It was incredibly rewarding and
incredibly disappointing."

Murdoch, Sito says, certainly understood the newspaper as a business - but
he had little sense of the tradition that endeared the Sun-Times to
readers. "It really became a 72-point headline every day," Sito recalls. "But
Chicago, even though it's a big city, is still the Midwest. On the human side,
Rupert Murdoch really didn't have the concept of the legacy of what the paper
was."

By 1985, Sito was burned out. He quit his job at the Sun-Times, convinced
that he'd never return to the crazy world of putting ink on newsprint every day.

It took failure to make Sito a success again. For seven years after he left the
Sun-Times, Sito worked on new businesses - but found himself losing
money because his ideas were just slightly ahead of their time. With a friend,
he created a local telecommunications consultancy, but he ultimately accepted a
buyout. Then Sito set up a company to build and market modular housing. By 1992,
that business had failed and Sito was desperate for a job - any job, he
says. He contacted old Sun-Times colleagues, and Robert Johnson, then the
publisher of Newsday, responded. Sito's been moving up the ladder at the
Long Island daily ever since.

Buzz light

Don't expect buzzwords from Sito. You won't hear him utter such phrases as
"total quality management" or "six sigma excellence."

"How are things, my friend?" he asks a local civic leader he hardly knows.
"What's up, buddy," he calls out to a Newsday worker, then walks off for
a quick powwow with the underling with his arm around his shoulder. "What can I
say? Life is beautiful, brother," he tells a reporter who wants to know some
bottom-line financial figures.

Without jargon but with a seemingly endless reservoir of good energy, Sito is
making things work for Newsday.

For instance: Newsday maintains an enviable penetration rate in its core
market on Long Island. The paper says it reaches 54% of the households daily and
64% Sundays. It's hard to beat that. (Newsday asserts that its
penetration rates are the best of all major U.S. metropolitan dailies.) To keep
that reach, Sito says, the paper has to provide better customer service. As a
result, Sito and his management team decided to revamp Newsday's phone
bank so that readers with complaints could get them resolved without having to
call back. In the new universe, the call center will handle all phone matters
- subscription and delivery fulfillment, questions about ads, complaints
about articles, and subscription marketing.

Circulation Vice President Robert M. Brennan concedes that Sito and other top
Newsday managers didn't invent this call-center concept - they stole
the idea from USA Today. But that might be a management text strategy,
too: to analyze industry practices, and adopt the best ones.

"Nobody deserves the business," Sito says. "You have to get the business. You
have to stay in touch with your customers - readers and advertisers."

Land a 'Hoy'

Almost as soon as he came to New York, Sito saw the nation's No. 2 Hispanic
market as a business opportunity. But it's not because he has a particularly
Latino identity. Although his English is musical and tinged with Spanish
inflections, his Spanish is extremely rusty and his meetings with Hoy's
top staffers are conducted in English.

Sito laughs as he says that founding the newspaper has given him a new identity.
"I have been more Hispanic in the last three years [since founding Hoy] than I
was for the 37 years I've been in the U.S.," he says.

It didn't take too much expertise to understand a demographic shift at work in
the city, Sito says. For decades, New York's Spanish-speaking literary and
political culture has been dominated by Puerto Ricans. The leading Spanish-
language paper - El Diario/La Prensa (daily circulation 54,492)
- has long had a special focus on Puerto Rican issues.

Statistics show, however, that the fastest-growing Spanish-speaking groups in
the area are from Mexico and Central America - and Sito says that growth
has led to opportunity. For instance, Sito says, he noticed that baseball almost
always got top billing in El Diario/La Prensa's sports pages. Yet,
soccer, which is practically a religion for many people from Central and South
America, received short shrift. Sito believed there was room for competition in
the Hispanic market.

At first, Newsday attempted to buy the rival Spanish paper. But when the
price was too rich, Sito turned to Plan B: to establish his own paper and
compete for readers. He hired top editorial staffers from newspapers in Colombia
and positioned Hoy to go after a broader, non-Puerto Rican audience.

"I want them to look at it as if we're in a foreign country," Sito says. "I want
them to be unbiased and global, but still advocate for our issues." Only two
years after its founding, Hoy circulates about 54,000 copies from Monday
to Thursday and 162,000 for a Friday/Saturday edition. On Feb. 4, Hoy
rolled out a Sunday paper. Sito reports that Hoy became profitable in
February 2000, and hopes to push daily circulation
beyond 100,000 this year.

At a recent meeting with Hoy's top staffers, Sito showed the relaxed
demeanor that seems to make everyone like him. One staffer reported on
advertisers signed up for a special promotion. "We hope to hold this number," he
told Sito.

"You hope," Sito responded. "You hope to keep your job!" Everyone laughed -
but not nervously. They knew the boss wasn't entirely serious.

In relaxed moments, Sito sometimes refers to Hoy as "my little Spanish-
language newspaper." And there's not much doubt that Hoy is Sito's baby
- the newspaper, you might say, he was born to publish. Also, it's clear
that Newsday would have had a much tougher time entering the Spanish-
language market if Sito - bad Spanish and all - had not been there to
run the show.

Playing the numbers

Louis Sito and his boss, Ray Jansen, are moving into Queens because they
understand that the New York area is changing. Projections show that within the
next 20 years, 40% of Long Island's population will be people of color. So they
created a process called "Focus 2020" to plan for what kind of paper they would
need to sell to attract these changing readers.

"We've beefed up our coverage of diverse communities on Long Island," says
Charlotte Hall, Newsday's managing editor. "We've created a cluster of
reporters who cover demographic issues. When you turn the pages of
Newsday, you shouldn't see all white faces. It really is an issue of
accuracy."

And a key part of the effort is Newsday's sword-thrust into Queens (with
Brooklyn rumored as the next battleground). "For growth," Sito says, "the only
way you're going to go is west." For his part, Jansen notes that many of the
Latino readers who may now pick up Hoy are making more money and
ultimately may move to the Long Island suburbs. He wants Newsday poised to pick
up those readers.

Still, as usual, the bottom line in Queens will develop from the basics -
putting out a good product and knowing how to sell it. Sito credits his boss for
understanding the essentials of newspapering. "Ray Jansen is a fundamentalist,"
Sito says. Though Sito admits that he and Jansen seem like opposites in style
and temperament - he is by nature a risk-taker, while Jansen, who started
at Newsday in 1960 selling classified advertising, is much less impulsive
- he credits the publisher with building a frank and trusting working
relationship, enabling everyone on staff to get excited about the grunt work
that turns daily nickels and dimes into millions of dollars.

The things that will build circulation in Queens are not glamorous, Sito says:
"It's methodical, laborious, nasty work. It's people at 3 o'clock in the morning
driving around. It's pushing deadlines and providing service."

And yet, Sito insists, there's joy in the trenches. As he drives into New York
for a meeting, he reveals a tenet that is the basis of his management
philosophy. It's a principle that more business schools might want to teach: "If
you cannot get up in the morning and feel good about what you're going to do
that day, go do something else."

Jansen, meanwhile, though a self-professed cautious leader, waxes poetic about
Hoy's possibilities. He says there might come a time to make it a
regional paper - creating different editions for various parts of the
metropolitan area, including New Jersey and Connecticut. "It's growing faster
than we ever imagined," he says with satisfaction.

Hoy now has 500 newspaper boxes all around the city - and is said to
be considering moving its editorial offices to midtown Manhattan. With
Hoy in the lead, can Newsday be far behind?

Robert Neuwirth is a frequent contributor to E&P.



Copyright 2001, Editor & Publisher.