No Alternative To Ad Woes   

Alternative newspapers are no longer immune from economic pressures.

The 1990s were the days of wine, roses and sex ads for publishers of alternative weeklies. While daily newspaper circulation dropped, the hip and irreverent newsweeklies boasted that they were attracting the younger readers that dailies were losing. But in 2001, alternative papers had a rude awakening: The souring, sluggish economy applies to them, too.

Richard Karpel, executive director of the Washington, D.C.-based Association of Alternative Newsweeklies, confirms that the industry is cooling after years of feverish expansion. Karpel says though the industry grew 10 percent to 20 percent annually for most of the gilded '90s, "2000 was pretty flat for our business." As for 2001, Karpel says sales for some big-city alternatives are down as much as 10 percent.

That's a cold shower for many in the free tabloid business. Previous recessions left alternatives unscathed. "The last time the economy got bad was the early '90s," recalls Karpel. "Most of the papers were growing at a fairly rapid clip."

The classic alternative weekly formula combines elbows-out local news reporting and ankle-biting media criticism with impassioned arts and music coverage. Advertising staples include the sex industry, nightclubs and tobacco. Karpel says that the industry surpassed $500 million in ad sales in 1999, and has not grown appreciably since. The AAN trade association includes 122 papers in the U.S. and Canada.

While classified advertising remains strong, falling national retail ad sales have hit alternatives hard. John Morrison, advertising sales director for the Alternative Weekly Network, a cooperative of 103 papers that coordinates national advertising for weeklies, says, "It's kind of put an end to some years of tremendous growth in our industry." Tobacco advertising has been dropping for the past two years, and Morrison says national ads placed through AWN were down more than 20 percent in 2001.

For years, the Phoenix-based New Times chain of alternatives was growing fast, aggressively buying newspapers around the country. (See "Consider the Alternative," November 1998.) But in early October the company sold the Fort Worth Weekly to its publisher, longtime New Times staffer Lee Newquist. New Times had purchased the paper just a year earlier. Newquist declines to comment on the business issues that prompted his former employers to unload the paper but says, "It became apparent to me over the past couple of months that this paper needed heavier resources than [New Times] was able to give it."

This fall, according to a story posted on the AAN Web site, New Times, which owns 12 papers, laid off 12 staffers companywide; four took other jobs with New Times. Even more jobs were going unfilled. In a media column, the New Times-owned Dallas Observer noted that with three layoffs and four unfilled jobs, its staff had seven fewer writers than a year ago. The item appeared in a column about job cuts at the daily Dallas Morning News and conceded that the Observer cuts constituted a "proportionally greater reduction in editorial staff than the News." New Times executives did not return phone calls seeking comment.

Jim Mullin has been the editor of Miami New Times since the paper's founding in late 1987. Today, years of unabated growth for the Florida paper have finally ground to a halt. In November 2000, the paper peaked at 176 pages. A year later, Mullin was publishing 112-page issues. Mullin says since July the editorial department shrunk by seven full-time positions: six writers and a copy editor. He jokes that the remaining editorial staff "can all fit on my living room couch." Counting writers and editors, 17 full-time edit staffers remain in Miami. But Mullin insists the losses haven't hurt the quality of the newspaper. "We're not suffering any decline in quality, our quality remains consistently high," he says. "We're being more selective about those stories that we do publish."

An October memo from executives at the San Jose-based Metro Newspapers, which publishes alternatives in Silicon Valley, reported that staff had been cut through attrition and "a very small number of layoffs." Executives took pay cuts and floated the idea of a 5 percent pay cut for employees to stave off more layoffs.

"It hasn't been my favorite year," says Jane Levine, chief operating officer for the Chicago Reader and Washington City Paper. Through September, Levine reports that sales were up a few percentage points in Chicago and down a few points in Washington. Levine is cutting expenses and says, "I'm not anticipating layoffs, but the size of the staff may shrink through attrition."

The economy has also thinned the number of AAN members. In September, Pittsburgh City Paper bought and closed its longtime competitor, In Pittsburgh. Last spring, the Boston Phoenix shuttered its Worcester Phoenix satellite. In October, the Advocate-Weekly chain (now owned by the Tribune Co.) folded its Westchester County Weekly into its Fairfield County Weekly in suburban New York. Yesse! Communications, a chain of smaller-market alternatives in the Midwest, filed for bankruptcy reorganization in April after closing its weekly in Iowa City.

For 2001, Karpel predicts his industry will be flat or show slight declines in sales, with gains in some markets offsetting losses. Matt Gibson, publisher of the 10-year-old Missoula Independent in Montana, says his 2001 sales are up more than 20 percent. In addition to being a young, growing title, Gibson says his remote 20,000-circulation paper is somewhat insulated from national economic woes. "We don't have the big national advertisers here underpinning our budgets," he says.

Despite the sad state of the economy, Karpel believes broader media trends foretell a bright future for alternatives. "I think things are moving towards niche media in general," he concludes. "I think we will probably rebound quicker and higher than daily papers and some other mass media."

Edited by Jill Rosen