08/24/2012 11:42 am ET Updated Nov 03, 2012

Whither Alt Weeklies? A Reality Check

The latest wave of layoffs at the Village Voice and its sister Village Voice Media (VVM) papers LA Weekly, OC Weekly and Minneapolis City Pages has sparked renewed talk of impending doom for the Voice and a flurry of "whither alt weekly?" commentary.

The themes run the gamut: "How Management Killed The Village Voice," "The End of Alternative Media," "Are Alternative Weeklies Toast?" and "Village Voice Is Not Dead Yet."

The troubles at VVM echo the dire straits of such other leading alt weeklies as the Chicago Reader, which was sold three months ago for a song to the owner of the daily Chicago Sun-Times; the Boston Phoenix, which is being replaced by a glossy magazine called The Phoenix; and the Atlanta-based Creative Loafing chain, which filed for bankruptcy in 2008.

I claim no special insight about where alt weeklies are headed. (It's worth noting than many papers in smaller markets are doing much better than their big-city brethren.) But, as long-time publisher of LA Weekly (1984-2002) and short-time executive vice president of VVM (2000-2002), I can offer a reality check on some of the nuttier notions as to how we got here.

Former Voice staffer Rosie Gray wrote a piece for Buzzfeed thatsuffers from historical laziness and business naïveté, beginning with the wrongheaded notion that the Voice's "slide began in earnest" when the paper dropped its $1 cover price and went free. When Village Voice owner Leonard Stern bought LA Weekly in 1994, the Voice was in the throes of a sharp decline in paid circulation. Drops in circulation generally lead to drops in the price a publication can command for advertising. Leonard and Voice CEO David Schneiderman saw the potential for growth in taking the Voice free and made the move. The Voice made huge profits for at least the next decade.

In fact, alt weeklies were pioneers in making money by providing "free" information to their readers. As New York Times media critic David Carr--formerly an outstanding alt weekly editor in Washington D.C. and Minneapolis--writes, "Alt weeklies were onto the whole model of giving away content for free long before there was a consumer Web."

Gray also points to distrust of VVM owners Jim Larkin and Michael Lacey among Voice staffers. She says, "The (Voice) staff assumed that Village Voice Media Executive Editor Mike Lacey and his team were interlopers bent on squeezing the last drop of juice out of the paper before leaving it to die (emphasis mine). We had a sinking feeling that they'd be willing to hurt the Voice instead of shuttering or selling other papers in the chain."

Some financial history: During the late '90s, long before Larkin and Lacey owned the Voice, Leonard Stern, no liberal himself, sold his newspaper holdings--the Voice, LA Weekly and five smaller papers--to an equity group whose chief investor was Goldman Sachs. The heavily-leveraged buyers didn't care about the newspapers (aka "the product") or the people (aka "the head count"). What mattered was the "exit strategy"--how many years it would take until the company could be "flipped" to maximize the return on investment.

Now, with many more papers and far less revenue, VVM faces a mountain of debt with no discernible exit strategy. They wouldn't "hurt the Voice instead of shuttering or selling other papers" unless they could make more money by doing so--which they can't: without the Voice they lose the country's most important market and any hopes of selling significant national advertising.

As for trust, the famously cantankerous Voice staff has deeply distrusted management for decades, often with good reason. Rupert Murdoch once owned the paper, for God's sake!

There's plenty to criticize about Larkin/Lacey's handling of the decline at their papers, including the fiasco. But Carr gets it right when he says that whatever one thinks of Lacey and Larkin, their bottom-line business failure was making "a big bet at the wrong moment." Like millions of American homebuyers, they couldn't see the end to endlessly rising publication values--or could but were convinced they could successfully navigate the leap between old and new media.

It's painfully true that we in management at VVM pre-2002 hadn't a clue about how to adapt to the digital revolution. Our owners were hardly helpful: they paid a small fortune to a consulting firm for a "plan" that amounted to the functional equivalent of the magic word given to Dustin Hoffman in The Graduate. Instead of "plastics," the mantra was "Internet radio."

Another canard is that the downfall of the Voice began when Stern leveraged his assets to buy other papers during the '90s. The truth is that Leonard never borrowed a dime to purchase these papers, virtually all of which continued to be highly profitable until Stern sold them in 1999 at the top of the market.

And then came Craigslist.

This piece first appeared in Issue 12/13 of our FREE new weekly iPad magazine, Huffington, in the iTunes App store.