NEWHOUSE 'ADVANCES' INTO SOUTHERN JERSEY

By: Lucia Moses Buy of MediaNews' papers makes chain the chief of the Garden State

With the addition of three more dailies to its New Jersey holdings, the Newhouse media empire added some prime demographic territory to its portfolio and reinforced its historic position as the most powerful news organization in the state.
Newhouse's Advance Publications, publisher of the state's largest daily, The Star-Ledger in Newark, gained a toehold in southern New Jersey by picking up MediaNews Group Inc.'s remaining three dailies in the Garden State.
The deal also included The Express-Times in Easton, Pa., which, located on the border with New Jersey, bolsters Newhouse's presence in the central part of the state. Newhouse also picked up a group of 40 weeklies that reaches more than half a million households in four New Jersey and two Pennsylvania counties.
Advance emerges with six New Jersey dailies with a combined weekday circulation of 576,616, widening its statewide edge over Gannett, whose seven dailies have a combined weekday circulation of 430,104.
Advance will further benefit from New Jersey's tradition of strong readership, owing to its residents' high income and the lack of state-based TV stations, said John O'Brien, executive director of the New Jersey Press Association.
""There's a void of electronic coverage of the state,"" he observed. ""If you want to find out what's going on in New Jersey, you read the paper.""
With the Easton paper, Advance adds coverage in some of New Jersey's fastest-growing counties. To the south, it gains The Gloucester County Times in Woodbury, Today's Sunbeam in Salem, and the Bridgeton News -- combined daily circulation 47,569 -- which bump up against Gannett's Cherry Hill Courier-Post and Vineland Daily Journal -- combined daily circulation 102,938. Another rival in the area is Knight Ridder's Philadelphia Inquirer, which sells some 80,000 copies daily in southern New Jersey. But Donald E. Newhouse, president of Advance Publications, said he doesn't see waging a newspaper war to the south. ""I think they have their own markets to cover,"" Newhouse said.
Robert Schoenbacher, who sells national advertising for the Newhouse papers, said while he hasn't closely analyzed the deal yet, the newly acquired papers are most likely too small to attract major new national ad dollars. However, he said, they could give Newhouse more clout in selling to local and regional clients.
""It does bring a certain continuity ... to the products we already have,'' he said.
With MediaNews leaving New Jersey, two companies now own 13 of the state's 19 dailies, mirroring a pattern of media ownership concentration nationwide. The deal came about when MediaNews, looking to get rid of the weekly group, got an unsolicited offer from Newhouse for weeklies plus the dailies.
MediaNews wouldn't disclose the sale price, but said Advance paid a sum representing about 13 times the papers' operating cash flow, which falls in the midrange of today's prices. MediaNews said it put the proceeds in an account that gives the company a tax advantage if it uses the money for acquisitions.
The new Advance papers are likely to see only subtle changes, as the Newhouses have a reputation for leaving their papers alone. Newhouse reinforced that perception, saying he plans to retain the existing publishers and adding, ""We bought these because of the quality of the markets, and we don't expect changes."

GARDEN STATE MATCHUP

Advance
The Star-Ledger, Newark 406,569
The Times, Trenton 77,994
The Jersey Journal, Jersey City 44,484
The Gloucester County Times, Woodbury* 27,260
Today's Sunbeam, Salem* 11,026
Bridgeton News* 9,283

Gannett
Asbury Park Press, Neptune157,179
Courier-Post, Cherry Hill 85,500
Home News Tribune, East Brunswick 71,909
Daily Record, Parsippany 46,436
Courier News, Bridgewater 42,273
The Daily Journal, Vineland 17,438
Ocean County Observer, Toms River 9,369

*Purchased from MediaNews Group Inc.
Source: Audit Bureau of Circulations, March 31, 2000

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(copyright: Editor & Publisher July 10, 2000)