If Gannett’s Green Bay Press-Gazette Is Anything To Go By, Life For Small to Mid-Size Daily Newspapers Isn’t So Bad

Philip M. Stone December 11, 2008

At the UBS Media Conference this week in New York there was Gary Pruitt of McClatchy calling conditions 'lousy', the New York Times saying 2009 will be 'among the most challenging years we have faced.', and even Gannett, the nation’s largest newspaper group, bemoaning that print ad revenue is down 18% while digital has increased only 5%. But study what is going on at one Gannett mid-size newspaper, in Green Bay, Wisconsin, and one might ask, 'What crisis?'

Newspaper brokers have been saying for a long time that columns like this need to differentiate between the hell going on at the major metropolitan newspaper level and what is happening with smaller to mid-size dailies. And while they admit that things are not as rosy as they once were, things for the small to mid-size daily are still mostly going just fine.

For instance, would you believe that just last year Gannett’s Green Bay Press-Gazette had a profit margin of 42.5%. That is not a misprint, it was  42.5%. That figure came from an internal Gannett document leaked to a Gannett blog site, and while it may well be that that this year things may not be as good, for even last year to have had a 42.5% profit margin gives a real indication on how owning a newspaper in its prime was really a license to print money.

Green Bay is known primarily to most Americans as the home of the once mighty Green Bay Packers National Football League team. In the days of coach Vince Lombardi the word “Packers” was synonymous with “excellence”. But now Green Bay  should come to the attention of American publishers interested in seeing how to still make a buck in today’s newspaper world.

The Press-Gazette’s daily circulation is around 53,500 with Sundays a bit shy of  80,000, it’s down a bit from the really good days but overall it has held pretty steady. It saw off its daily competition three years ago. Publisher Kevin Corrado and Executive Editor John Dye wrote in a recent commentary that given today’s circulation  combined with the 18% of adults who read the online newspaper that “we reach more people than we ever have since our founding as a daily newspaper in 1915.” Print and Web combined reach 85% of local adults on a Sunday and 70% during the week. So how do they do it?

“Green Bay is a perfect example of a smaller to mid-size market where the daily newspaper is doing an excellent job covering both local and national news,” says Larry Grimes, president of W.B Grimes & Company newspaper brokers. “It’s not a huge employment development market so they are not as ‘at risk’ to losing key classified employment ads to the Internet as the other big city markets. It’s a market where local retailers play just as important a role as the big guys and where retailers are fiercely loyal to the media that has worked for them in the past---newspapers.  There is no housing bubble; it’s just steady as she goes.”

That’s not to say that the newspaper hasn’t been caught up in cost-saving measures. As part of parent Gannett’s cull last week of some 2,000 jobs across the country, Green Bay eliminated 22 positions, but management fiercely points out that none of those job losses was a reporter, or a photographer, or, for that matter, a sales person. The newspaper has changed paper size, it has reduced or eliminated some content, and it has combined sections – all common to many newspapers today – but as the publisher and editor wrote in their commentary, “We’re dug in to be part of this community and serve our readers and advertisers.”

This column has pointed out several times that Thanksgiving Day single sale performance is as good an indication as any of how people really regard their local newspaper. It may be the advertising they are after that day, but it goes to prove they know the newspaper is there and they know what it provides. In Green Bay, they sold 21,783 newsstand copies on Thanksgiving Day – 1,366 more than last year --  and each newspaper, because of the many inserts, weighed in at a hefty 3 pounds, 2 ounces (1.42 kilos).

Newspaper broker Grimes says the Green Bay newspaper, as differentiated from newspapers in many other markets, basically owns its market. “They are still the dominant media in Green Bay. And because they do such a strong job reporting local news, they have such strong household penetration, and there has never been much room for weekly competition in the market.”

Grimes says that while Green Bay may be doing better than many others, what is going on there, “mirrors many of the mid size and smaller markets in the U.S. where papers are holding their own and will continue to do so.  Yes, the economy may be depressing ad sales right now, but external forces, like the Internet, are not a factor. These papers have always strongly rebounded as the economy improves.  We see the same thing happening this go round.  Green Bay is an exception at 42% profit margin—but it is not uncommon to see 20%+ margins among its peers — which is still exceptional.” 

Want to bet what the likes of Gary Pruitt and Arthur Sulzberger would give to have that kind of margin?