Academic journal article Newspaper Research Journal

Weekly Newspapers-Solid Industry with Many Variations

Academic journal article Newspaper Research Journal

Weekly Newspapers-Solid Industry with Many Variations

Article excerpt

Since television emerged in the late 1940s, daily newspapers have experienced a decline in household penetration. (1) Initially, the daily newspaper industry took comfort in rising circulation, even though that circulation did not keep up with population growth. Then in the late 1980s, even that comforting fact ceased to be true. (2)

The weekly segment of the industry has experienced the opposite trend. Weekly newspapers have thrived since the 1960s, just as people bought fewer dailies. Weekly newspaper circulation tripled between 1965 and 1998 to 74.3 million. (3)

Despite the growth in weeklies, media scholars have tended to ignore them. Unlike the daily newspaper industry that has been described in published research, (4) no published studies have looked at the nature and extent of the entire weekly newspaper industry. This failure seems odd because people obviously are interested in reading weeklies and because there is evidence that weeklies and dailies compete for readers. (5) In addition, weeklies long have been competitive with each other. (6)

Because of strong readership, weeklies have become attractive properties, with newspaper groups rapidly buying them. Some of these acquisitions involve groups with just weeklies, and others involve groups that also own dailies. (7) The decline of competition through acquisitions raises public policy issues. Will increased concentration of weekly newspapers adversely affect their quality and reduce their public service?

Such issues cannot be adequately addressed without a clear picture of the weekly newspaper industry. This is the first study to describe important elements of the business and to examine whether they vary by type of ownership, type of circulation, geographic area and publication cycle. It will serve as a base line for analyzing long-term changes in the weekly newspaper industry.

Background

Changes in the newspaper industry have made weeklies desirable properties. Daily newspaper companies see weeklies as a way to increase penetration in surrounding markets and to offer more flexible advertising packages. Many of the targeted markets will not support a second daily newspaper. Weeklies often have penetration in the suburban markets that the dailies have not been able to duplicate or have been losing. This situation makes buying out suburban weeklies cheaper and less risky than a start up. (8)

Although no systematic studies of the entire weekly newspaper industry are available, the trade press has provided several examples of the acquisition habits of existing newspaper companies and the reasons behind those acquisitions. Rapid sales of larger daily newspapers during the 1980s left few such acquisition targets by the 1990s. As a result, groups turned to buying weeklies, especially in the suburbs. Weekly newspapers have slimmer profit margins than dailies but are cheaper to acquire. (9)

The high demand for weeklies has pushed up prices. When the trend began in the mid-1980s, buyers paid prices roughly equal to a weekly's annual revenues. As the market heated up, so did prices. Successful weeklies sell for six to eight times the earnings. But multiples of eight to 10 are not uncommon. (10)

As sales of weekly newspapers accelerate, they often involve entire groups of weeklies. In 1998, 500 of the nation's nearly 8,200 weeklies changed hands in 160 transactions. (11)

During the past decade, about two thirds of the purchases of weekly newspaper groups have involved a daily in the same market. In late 1997, there were four major deals where groups of weeklies with a total of 56 papers were bought by newspaper groups that owned nearby dailies. (12)

It is estimated that from half to two thirds of weekly newspapers are group owned. More than 900 weeklies are owned by the 10 largest weekly newspaper groups. The top 25 own 1,388 weeklies. The listing includes 10 groups that also are among the top 25 daily newspaper groups. …

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