Village Voice/New Times Deal: David Carr does his usual bang-up job. Some data that stuck out:
New Times received more than $8 million from the two transactions, according to people with knowledge of the deal. [...]

The closings also raise the question of whether alternative weeklies are becoming pint-size versions of their daily counterparts — print media franchises that need a monopoly in their respective markets to prosper. New Times lost more than $15 million battling Village Voice Media's more established LA Weekly, while Village Voice Media was losing more than $500,000 a year in Cleveland, with its Free Times.

Both chains, which each have revenues of around $100 million a year, have bought and closed competition in various markets in an effort to garner market share. New Times, which now owns 11 papers, bought and folded two struggling weeklies when it entered the Los Angeles market six years ago, but it never seriously threatened LA Weekly, a paper that had been around for 18 years.

"This fight was called on cuts," said Michael Lacey, executive editor of New Times Inc. "This was the wrong economy to be the second newspaper in a tough market." [...]

Both chains have borrowed heavily to finance their businesses. The financial hemorrhaging has stopped temporarily, but the value of collecting weeklies into competing chains is open to question.

There's plenty more.

Posted by at October 6, 2002 10:05 PM
Comments

It seems to me that a good biz op is to open papers in big markets with the purpose of selling them later. Another spin on the "greater fool theory". That is until somebody refuses to buy and then your paper grows and grows and you have another "Producers" on your hands.

Posted by: Howard Veit at October 7, 2002 11:30 AM

I think the Cleveland Free Times shut down because of the voodoo hex curse I put on them when they misspelled my name in their lame blogging article.

http://www.bitter-girl.com/2002_09_01_blogarchive.html#001017

Posted by: Shannon Okey at October 8, 2002 05:13 PM
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