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February 19, 1996

Communities Worry as Newspapers Pass From Chain to Chain

By WILLIAM GLABERSON

MIDDLETOWN, Conn. -- For a generation, family owners of local newspapers in places across the country like this old city on the Connecticut River have been selling off to chains.

But a new phenomenon has arrived here in Middletown and from coast to coast: chains are now selling many of those same newspapers to other chains.

The result is a widespread churning of hometown dailies that is reshaping the newspaper industry, leaving communities confused about who their corporate publishers are -- or what they stand for -- and raising old questions about whether corporate control of newspapers is good for the country.

Many people in communities with new corporate newspaper owners said their towns seemed diminished when their papers became a commodity to be traded among outsiders.

Some people here in Middletown say the arrival of Journal Register Co., the second chain owner in four years, has meant a disappointing end to some of the local idiosyncrasies and autonomy that survived the first phase of chain ownership.

One example much noted by people here is the newspaper's new design, which made The Middletown Press look just like the newspapers that Journal Register bought not long ago in the nearby towns of New Britain and Bristol.

"You wonder whether The Middletown Press is just going to be one of those papers that changes hands every few years when the owner can make a profit," said Stephen Gionfriddo, a councilman and former mayor here, who echoed the sentiments of people in a dozen other places.

Some newspaper executives say groups of nearby papers are more efficient to manage and can benefit from economies of scale like shared printing plants.

Local news, they say, can be reused in neighboring papers, on computer on-line services and in printed "niche" products like tabloids on high-school sports and other topics.

The Middletown Press and four other Connecticut dailies owned by Journal Register Co. now share articles, and all the papers can rely on a single reporter to cover Hartford sporting events or news from the statehouse, said Robert Jelenic, the company president.

"To me," Gionfriddo said, "The Middletown Press no longer feels like a hometown paper, and that, to me, has been a loss."

During the last three years, 256 of the nation's 1,550 daily papers have changed hands, more than the total during the previous six years.

At the same time, the number of newspaper deals involving groups selling to other groups has increased steadily. Last year, 75 percent of all the newspapers sold passed from one group to another, up from just 16 percent 10 years ago, according to Dirks, Van Essen & Associates, a newspaper broker.

Newspaper analysts say the churning of local papers is a symptom of an industry reshaping itself to compete with new competitors like electronic information distributors. They say it also represents a new phase in the deepening trend toward consolidation that has been bringing newspapers across the country under the control of chains for decades.

With many newspapers struggling against higher newsprint prices and weakening circulation, some companies are shuffling their papers to "cluster" dailies so they can cut costs and share information gathered by their reporters.

Other companies are collecting small papers, which typically have much higher profit margins than big-city dailies. Still others are backing away from smaller papers to concentrate on larger dailies or electronic media as the newspaper industry grows more competitive.

Some industry analysts say such strategies reflect the reality that it has become harder to wring profits from newspapers of all sizes.

"There is a realization that the newspaper business is still a good business, but it has to be made more efficient and the way you become more efficient is by reducing costs and through economies of scale," said Kenneth Berents, a newspaper securities analyst at Wheat First Butcher Singer in Richmond, Va.

The shuffling of local papers has involved companies of all sizes, including giants like Gannett Co., which bought 11 dailies last year, and The New York Times Co., which sold five dailies last year, and smaller companies like the Journal Register Company of Trenton, N.J., a fast-growing chain that bought the Middletown paper in September.

Journal Register is owned by the New York investment firm E.M. Warburg, Pincus & Co.

In the newspaper equivalent of an odd-lot sale, Thomson Newspapers, based in Canada, sold 25 American newspapers last year, from the Barstow (Calif.) Desert Dispatch to the Herkimer Evening Telegram. The biggest buyer was Hollinger Inc., controlled by the Canadian press baron Conrad Black, which now publishes 111 dailies in the United States, more than any other company.

Executives at Journal Register, like those at other companies that are buying newspapers, say efficient management will give their papers new life.

But to some people here in Middletown, the arrival of Journal Register, the second chain owner in four years, has meant a disappointing end to some of the local idiosyncrasies and autonomy that survived the first phase of chain ownership.

One example of the second era much noted by people here: A new design was introduced by Journal Register this fall that made The Middletown Press look just like the newspapers the chain bought not long ago in the nearby towns of New Britain and Bristol.

In places like Fayetteville, Ark., and Sedalia, Mo., people said editors installed by new owners did not seem sufficiently acquainted with the towns to know who was prominent enough to merit an obituary.

Jane Gray, the mayor of Sedalia, said the sale of The Sedalia Democrat by Thomson Newspapers to Freedom Communications of Santa Ana, Calif., seemed to leave Sedalia out of the equation.

"It seems to me," she said, "there needs to be some kind of peer input, which you can't have if you don't even know who they are, where they are."

What has happened to The Middletown Press in recent months and the local debate about it in this city of about 43,000 south of Hartford, provides a glimpse of similar stories in scores of other towns.

For The Press, the latest chapter began four years ago with the D'Oench brothers, who had run the paper for 32 years and knew most everyone in town.

They realized, Russell D'Oench Jr. said recently, that no one in the family was interested in taking over the paper. "We were trying to put it into good hands," said D'Oench, who was editor while his brother, Woodbridge D'Oench, was publisher.

The natural choice, D'Oench said, was Eagle Publishing, a small chain owned by the Miller family, which published the respected Berkshire Eagle in Pittsfield, Mass.

But soon after the sale to Eagle, residents and staff members of The Press said, the match provided a disturbing first taste of the risks of chain newspaper management.

Executives sent in by the Massachusetts managers quarreled bitterly with each other and then abruptly changed The Press from an afternoon to a morning paper, a decision that some people here said betrayed a lack of understanding of the rhythm of Middletown. Some blame that switch for a rapid drop in daily circulation to about 13,000 from about 20,000.

Not long after that, Eagle Publishing slipped into its own financial troubles because of an ill-timed real-estate investment in Massachusetts. The Middletown Press, some people here say, seemed something of a stepchild after that.

By last summer, the Millers' financial troubles led them to sell their newspapers to Media News Group of Denver, controlled by W. Dean Singleton, one of the newspaper industry's most bottom-line-oriented executives. But by the time the dust had settled in September, Singleton had sold The Middletown Press once again, this time to Journal Register.

Journal Register, which owns The New Haven Register, The Trentonian and 15 other dailies, was from the start a different kind of corporate owner than Eagle. Known as intensely focused on profit, the company's reputation preceded it here.

Journalists at The Press said they were concerned about whether the new owner would block efforts to put out a quality paper. Some said they were especially anxious about several incidents that had received extensive publicity in Connecticut.

When Journal Register started a new Sunday issue in 1994 at its paper in Torrington, Conn., for example, a reporter for the paper wrote an article about delivery problems for the new issue. The reporter was dismissed. Then the editorial page editor resigned, saying the paper had refused to print letters to the editor protesting the dismissal.

News accounts had portrayed the episode as a sign that Journal Register would compromise journalistic values in favor of its business interests.

And just as the company was buying The Middletown Press last fall, The Hartford Advocate, an alternative paper that circulates here, described Journal Register as "a top-down, bottom-line, feed-'em-to-the-wolves corporation."

Jelenic, president of Journal Register, said in a recent interview that some of the bad publicity came from worried competitors.

He refused to discuss the Torrington incident, but he said Journal Register improved all its papers by, among other strategies, combining operations with nearby papers it owns.

"Because you have so much in the way of efficiencies," Jelenic said, "you can have a few fewer people but you can get a better product."

Within a few weeks of Journal Register's arrival, national and international news, which had long been featured prominently in The Press, was de-emphasized. Some of the paper's longtime journalists were not offered jobs. Soon, virtually the entire news staff was gone.

On Oct. 1, the familiar black-and-white layout was replaced with the new design, which emphasized bright colors, including a red banner on the front page and large pictures. There were new sections and many small local articles by reporters no one around here had heard of before.

James Normandin, the new publisher, said the newly designed paper had received an enthusiastic response because of an emphasis on local news.

But on Main Street, where the changes in The Press have often been a topic of conversation, the reviews have not always been good.

Vincent Amato, who has run Amatos toy store for 56 years, said the paper relied on young reporters "who don't know the background like the people who were here for a long time and lived here."

He said the paper was filled with insignificant articles. "It takes me about a quarter of the time to read the paper than it used to," he said.

William Corvo, a local Republican activist who wrote a political column for the paper until the new management stopped it, said The Middletown Press had lost the flavor of Middletown. "The substance is missing," he said.

Russell D'Oench, the former editor and co-owner, said the story of The Middletown Press had not worked out as he had hoped. The new publishers, he said, seem to have designed their paper without a sense of place. "It is definitely a chain cookie-cutter solution," he said. "It wouldn't have been my preference."

Jelenic said he was used to criticism and he did not dwell on it. In fact, he said, he was off on a trip: He was in search of other towns where papers like The Middletown Press are for sale again.


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