NEWSPAPER WARS WAGE ON

By: Tony Case Battles Fought In Denver, New York, Tampa



Despite some recent uncertainty, San Francisco looks to remain a two-

newspaper town. New life has been breathed into the Seattle daily
battle, with both papers now going head to head for morning readers.
And with the Tribune Co.'s takeover of Times Mirror, suddenly there are
rumblings that the newly joined companies, both of which have operated
newspapers in New York City in the past, may be gearing up for yet
another round in that rough-and-tumble market.



Who says the daily newspaper war is a thing of the past? The number of
daily newspapers, and the number of cities able to sustain two or more
big metros, have dwindled dramatically over the past half-century, due
to increasing competition from other media, shifting economics and
changing reader lifestyles. Many survived by going into business
together, forming joint operating agreements (JOAs) that let them share
business and production operations while remaining competitive on the
news side.



But other markets - including New York City, Chicago, Los Angeles,
Boston, Denver and Tampa-St. Petersburg - have bucked the trend. In
many of those match-ups, the players are not only surviving, they're
thriving. While newspaper sales overall continue to slide, papers in
some of the most competitive markets - including The New York Times,
Los Angeles Times, Washington Post, and both the Denver Post
and Denver Rocky Mountain News - lately have managed to boost
circulation. Furthermore, the Newspaper Association of America and
Scarborough Research recently found that per capita newspaper
readership was the greatest in those metropolitan areas home to more
than one daily, including Boston, South Florida, New York, Tampa-St.
Petersburg and Denver.



Perhaps no modern-day newspaper war has kept industry observers as rapt
as the down-and-dirty scrap between MediaNews Group's Denver
Post and E.W. Scripps' Rocky Mountain News. For years,
rumors have flown that one paper was buying the other, or that the two
were planning to form a JOA. It's long been expected that one player or
the other would be forced to fold its tent. Top management has been
shifted about, even ownership has changed.


But through all the ups and downs on both sides, the Post and
RMN remain independent, vibrant and fiercely combative,
mystifying many who have watched the papers slug it out. 'In the next
five years, maybe faster if the economy goes down the toilet, I think
one of these dailies will go, but I don't know which one,' says
Patricia Calhoun, founder and editor of Denver's alternative weekly,
Westword, noting that editorially both papers are strong.



In fact, each took home a Pulitzer Prize this year for coverage of the
Columbine High School shootings, the Post for reporting and the
RMN for photography. Both papers are gaining circulation,
although the RMN has the edge at the moment.



Last fall, the daily tabloid overtook the long-dominating Post
in weekday sales. The RMN gained a staggering 19.3 percent in
circulation for the six months ended Sept. 30, compared to a year
earlier, selling 396,114 copies through the week, according to Audit
Bureau of Circulations figures. Its Sunday sales grew 16.5 percent to
504,487.



Meanwhile, the Post's weekday circ jumped 10.5 percent to
376,549. The Post remained tops in Sunday sales, with 520,049, a
7.3 percent gain.



The fact that the circulation of both the RMN and Post
have surged in the last decade, even as overall daily circ has slumped,
makes the Denver war all the more fascinating, and even more of an
oddity. Just five years ago, the RMN's circ stood at 336,071
weekdays, 449,550 Sunday, while the Post sold 302,125 through
the week, 453,032 Sunday.



On the advertising front, the RMN is also beating out the
Post. The RMN had 4,845,086 full- and part-run ad inches
last year, up 13.5 percent from 1998, while the Post grew 8.3
percent to 4,760,378 inches, according to Competitive Media Reporting.
CMR estimated both papers reaped more ad dollars year over year.



The circulation and advertising numbers haven't stopped the Post
from claiming top-dog status. 'Someday the end of the competition will
come and the Denver Post will still be standing,' crows a
confident MediaNews president/CEO William Dean Singleton - himself
partially responsible for the disappearance of the two-paper town,
having shut down the Dallas Times-Herald and Houston
Post.



Even Singleton admits the Denver war is 'almost laughable sometimes.
The guys across the street will announce a 90,000 circulation gain.
It's easy to do if you give it away,' he says, referring to his rival's
eye-popping penny-a-day subscription offer. (In fact, both papers have
gone after each other with cut-rate home-delivery and newsstand rates.)



'The competition is in a deep hole financially, and everybody who
analyzes Scripps' stock knows it,' Singleton says of the RMN.
'One of these days, it won't be bearable. I don't know if it'll be
five, or 10, or 20 years.'



Post vp/marketing Thomas J. Bothelho speculates that rock-bottom
pricing costs his competitor and its parent Scripps 'millions of
dollars a year.' DLJ Media Research, in a recent report on Scripps,
went so far as to call the RMN's pricing 'a kamikaze strategy' serving
to 'depress the profit results for the company.' (Unlike publicly
traded Scripps, Singleton's MediaNews Group is closely held, so less is
known about its financial position. Both the Post and RMN
have claimed to be profitable.)



RMN insists it's on the right track. 'I think it has always been
wishful thinking on the part of our competitor that our parent company
would grow weary, and that's just not the case,' says RMN
vp/marketing and new media Linda Sease. 'We're still fighting it tooth-

and-nail, and that's what makes this market so dynamic and the war so
much fun.'



Even the combative Singleton concedes that at the end of the day, the
Denver rivalry, as long as it lasts, spells a big payoff for
inhabitants of the Mile High City. 'The bottom line is, readers here do
quite well,' he explains. 'We have two Pulitzer-winning papers in town,
both of which are very good. Even though I wince at their penny-pricing
and everything else they do, I have great admiration for the product
they put out.'



Like everybody else, Sease hasn't a clue how the Denver war will play
out. 'If history is any indication, clearly at some point in time this
market will likely go the way of other markets,' she says. 'In whose
favor that is, who knows? Ten years ago, everybody said it was us. Five
years ago, it was them. It's really been a see-saw market. But never
before have the stakes been as high, or as valuable.'



Twin-city rivalries



Aside from the few cities that still play home to multiple dailies are
the scattered 'twin city' rivalries. Even though they're securely
entrenched on their own turf, papers like the Dallas Morning
News and Fort Worth Star-Telegram, the Minneapolis Star
Tribune and St. Paul Pioneer Press, and The Miami
Herald and Fort Lauderdale Sun-Sentinel fight mightily for
suburban readers and advertisers nestled between the giants. Figure
into the mix the smaller dailies and community weeklies in those metro
areas, and the competition really heats up.



Count among that group the Poynter Institute for Media Studies-owned
St. Petersburg Times and Media General's Tampa Tribune,
which continue to go at each other's throats - despite being separated
by a rather substantial body of water, Tampa Bay. While competitive,
the Times and Tribune have distinctly different
circulation strategies. For the Times, it's not enough to
dominate its own backyard, but the Tribune's territory and
surrounding, smaller markets as well.



'It's not just two places,' says Times editor and president Paul
Tash. 'The Tampa Bay area is increasingly a collection of communities
with their own identities. It's important for us to be a newspaper for
all the Tampa Bay area.' The Times not only publishes an edition
devoted to Pinellas County, home to St. Petersburg, but a range of
geographically tailored editions.



By contrast, the Tribune has, in recent years, scaled back its
distribution in outlying areas, choosing to focus on the core Tampa-St.
Petersburg area. 'You can't make a profit supporting circulation in an
area where you're not going to get advertisers to buy,' says
Tribune publisher Reid Ashe.



The Times is by far the circulation leader (selling 314,427
copies through the week and 400,581 on Sunday, versus 211,055 and
300,738, respectively, for the Tribune). Both weekday and Sunday
circ at the two papers declined during the period. Meanwhile, the
Tribune peddles much more ad space: 2,683,024 full- and part-run
inches last year, a slight, 2.4 percent drop from the previous year,
according to CMR.



In Tampa-St. Petersburg, the consensus seems to be that, as in Denver,
both papers are well-positioned to stay fat and happy, at least for the
moment. The Tribune's Ashe sees the Tampa Bay newspaper war as
the best kind of rivalry - in other words, one in which the players
aren't bleeding each other dry. 'It's competitive enough that it makes
you better, but not so competitive that it erodes revenue,' he says.
'It's a good, healthy market.'