INDIANA'S NEWS TO CLOSE – WILL IT BEGIN A TREND?

Almost a dozen papers depend on good economy, cheap newsprint

And the other shoe drops.

Ever since Central Newspaper Inc.'s early 1997 closing of the Phoenix Gazette -- the weak afternoon sibling of Central's Arizona Republic -- speculation has mounted as to when the company would close its afternoon Indianapolis News to concentrate on the stronger morning Indianapolis Star.

Last week, the Nike salesman came to Indianapolis – the News will close in October.

As outlined by Senior Editor Pete Wetmore inside, Central is making all the right noises about closing the paper – there's regret, there's sorrow – and the News is obviously in circulation free fall. Further, since Central owns both papers, there are no joint operating agreement problems. (Conflict-of-interest alert: The Cole Group, publishers of NewsInc., has consulted with Central and the Arizona Republic on technology issues.)

It is striking, though, that Central announced the closure of the News seven months after the death of the paper's longtime editor and publisher, Eugene S. Pulliam, whose father, Eugene C. Pulliam, founded Central Newspapers. It wasn't a secret that Eugene S. loved the News. Coincidence? Probably not.

Nonetheless, every time a newspaper in America dies, we should all go to the funeral. And if I were you, I'd get a good set of black clothes, because there are going to be a lot of funerals to attend in the next few months.

Another of our stories this time details the world of newsprint price increases, and one that is ramping up right now. I believe that it has only been the soft newsprint market (coupled with the go-go economy) that has kept about a dozen newspapers afloat in the last year. If either the economy slows down or the price of the industry's primary consumable goes up, those papers are toast. It is still an open question about whether the newsprint price hike will stick, but it's probably safe to say there won't be a price drop.

Is closing a troubled daily the right thing to do? Almost always for the business behind the newspaper, the answer is yes. But the real question is of community – for example, will Indianapolis be served by only one paper?

Since the newsrooms of the Star and the News were combined four years ago, there probably wasn't any real competition for the gathering of news in the community anyway. The Star sets the news agenda for the community – which radio, TV and suburban papers then follow. But there will be communities across the country that will lose news competition because of failed dailies, and those communities will be hurt because of the loss.

Here in Northern California we've seen two interesting situations where dailies have died and new competitors filled in the resulting gap.

In my native Richmond, the family-owned daily folded in the mid-1980s, but shortly thereafter, Dean Lesher's Contra Costa Newspapers (now owned by Knight Ridder) started an edition in the community called the West County Times, which today has a circulation of 32,000.

In Palo Alto, the Tribune Co. of Chicago shut down the Peninsula Times Tribune in 1993, but two years later two entrepreneurs started a paper, the Palo Alto Daily News, which now has a circulation of 9100.

As has been voiced in this space many times over the last two years, the real question is whether newspaper managements have alternatives to closure. Have they been operating the paper in an offensive mode, or a defensive one? Have they wrung all the operating efficiencies out of the company? Have they explored alliances or sales?

These questions haunt me whenever a paper dies. In the case of Central and the Indianapolis News, there's no question that the paper has been on life support for years and the company had no real alternative. Nonetheless, the industry will mourn no less, despite the fact that it has taken a few years for the other shoe to drop.

– David M. Cole

Inside ...

• Indianapolis News to close Oct. 1 after 130 years
• Earnings good for Scripps, Gannett, Dow Jones
• Contests enticing to papers, but they are costly
• Newsprint suppliers seek a $50 per ton increase Oct. 1
• Hiring is one task; keeping people on staff is quite another
• Designers take notice: women on the Web
• Persons

From NEWSINC., July 19, 1999, Copyright © 1999, The Cole Group. All Rights Reserved.