THE BLOG
03/21/2013 11:59 am ET Updated May 21, 2013

Boston Phoenix Falls, Smaller Alt-Weeklies Survive

The abrupt closing last week of the 47-year-old Boston Phoenix was a shock to the alternative weekly ecosystem. It also underscored the divide between struggling big city papers and more viable smaller-market ones.

The Phoenix has for decades been one of the best and most successful alt-weeklies in the county, and owner Steve Mindich stressed that attracting readers was never an issue. Despite reader loyalty, advertising revenue had plunged. "Not getting major advertisers -- national/regional -- was the whole problem," he told me. He wished he could have kept things going: "I guarantee you if I was a billionaire I never would have said 'no mas.'" (Mindich had been subsidizing losses for several years, according to executive editor Peter Kadzis, and folded the paper rather than institute severe cutbacks that would sacrifice quality.)

Mindich said that when he canvassed some local, deep-pocketed potential buyers, they all asked, "Are you crazy?"

Unless the paper's reported $1.2 million debt and assets of $500,000 is wildly off the mark, it's puzzling that some kind of sale, joint venture or, at worst, takeover -- a path taken by other failing papers with far less to offer than the Phoenix -- couldn't have been arranged. Perhaps Mindich, at 69, was simply exhausted and saw no clear path to the paper's survival.

Jack Shafer, a superb media critic who has edited alt-weeklies in Washington, D.C. and San Francisco, analyzed the larger picture on his Reuters blog: "What's changed, and what probably convinced the Phoenix to exit, is that the papers are no longer a 30 percent (or higher) margin business, and that lost business is not returning. Publishers who hope to survive will have to content themselves with 10 percent margins."

The Boston Phoenix didn't have any profit margin. But the notion that a 10 percent margin (which once would have thrilled publishers) is cause for despair is a function of the wave of alt-weekly acquisitions over the past 15 years by corporations, venture capitalists and leveraged buyout specialists.

Most of the first-rate alt-weeklies were founded, owned and edited by the same person, someone with a vision to supply his community with a passionate voice in opposition to its daily paper -- and the relentlessness to survive, whatever it took. The Village Voice (Norman Mailer/Dan Wolf) led the way in 1955, followed by The San Francisco Bay Guardian (Bruce Brugmann), The Chicago Reader (Bob Roth), LA Weekly (Jay Levin), The Seattle Weekly (David Brewster), The Stranger (Tim Keck), The Riverfront Times (Ray Hartmann), Baltimore City Paper (Russ Smith) the Phoenix New Times (Mike Lacey/Jim Larkin) and on and on.

Once these papers became cogs in the machinery of larger companies or wealthy investors, their new owners required miraculous returns to service their debt and meet their numbers. Meetings once dominated by discussions of public policy and authenticity were soon driven by new anxieties: how to capture the youth advertising demographic, whom to lay off and, most crucial, how to "execute" an "exit strategy" in which investors, after just a few years, would "flip" the papers to another buyer for an enormous profit.

When LA Weekly, where I was publisher from 1983-2002, was bought in 2000 by a group whose chief investor was Goldman Sachs, our profit margin was close to 30 percent. (Still not satisfied, one of the buyers said cheerfully that he thought we could hit 40 percent pretty quickly!) After the dot.com bubble burst and we slipped to around 25 percent -- still a shitload of money -- a program of cost-cutting ensued which, over the years, gutted the staff and the editorial/design budget.

It's pointless to dwell on the glory days when alt-weeklies had edgier editors, more writers and generous page counts. The question is whether it's better, right now, to have a corporate-owned, smaller Village Voice, or LA Weekly, or Chicago Reader, than none at all. The answer is that while these papers may be shadows of their former selves, people willing to put Twitter on pause and read them will still find compelling news, arts and culture coverage and investigative reporting.

Mindich's announcement that his Portland Phoenix and Providence Phoenix will continue to publish makes sense, given the success of a number of smaller-market alt-weeklies.

These papers, for the most part, continue to be locally owned and operated, often by their founder/editors. Rather than simply selling ads, they seek to create partnerships with local businesses on virtually a door to door basis. Some have become innovators in finding non-advertiser revenue, via local business directories, online stores, social media management or other digital marketing services. (Larger papers try to do this as well, and some have scored with event sponsorships and street teams. But they tend to be less nimble than their smaller-market brethren. And, like the Phoenix, they've relied far too heavily on national and big-budget local advertisers which have virtually vanished from their pages.)

The Boise Weekly (circulation 32,000) is expanding its reach to serve as something of a hybrid of an alt-weekly and a daily, multimedia news source. AAN executive director Tiffany Shackelford says Boise Weekly owner Sally Freeman, "has positioned her paper to become the local breaking news source in town. She is also entrepreneurial in her approach to monetization streams -- she has worked with local technology companies to expand and promote programs like the 'Best of Boise.'"

David Comden, publisher of the Ventura County Reporter (35,000 circ) adds, "Warren Buffett is bullish on smaller market papers. We are too."

Of course, you can't hire a whole lot of investigative reporters on the budget of a low revenue/small circ paper...