How a newspaper grows in a declining industry

BY LAWRENCE SOBCZAK
PUBLISHER and

CHRISTOPHER ROSE
GENERAL MANAGER

This week we celebrate both our 200th issue and another year of newspaper publishing. With four years behind us, we begin volume 5, issue 1.

As many of you know, this newspaper was founded in direct response to the closure of The Romeo Observer in June 2015 and the closure of The Armada Times two months later in August 2015.

We firmly believe that every community deserves a local newspaper. That’s our founding principal.

Our readers that have been with us since the first few issues have seen us grow.

At first, we published only twice a month as we ramped up our production capability. If you just did the math—that’s why were only at 200 issues this week—volume one only has 43 issues.

We began publishing on tabloid size newspaper sheets in 2015 before switching to larger “broadsheets” in early 2017.

Our layout and design has gotten progressively cleaner as time progresses.

The same goes for the website. You may have noticed a full-digital replica of the printed newspaper is available online to subscribers.

Readers may notice a few new bylines above the articles or stories written by newspaper syndicates—we’re expanding there too.

Along the way, we’ve already earned a few awards from the Michigan Press Association in 2016, 2017 and 2018.

No doubt this is good news to our loyal readers but you may ask why are some newspapers in trouble?

The answer is not the Internet.

The Internet was only the catalyst for change, not the cause.

Vulture capitalism is the cause.

Here’s the Cliff’s Notes version of how it happened as told through the recent history of The Armada Times.

From the 1970s to the early 2000s, corporate conglomerates were purchasing small and medium size newspapers and were borrowing millions of dollars to do so.

The goal of the buying spree was to create local monopolies which would allow the new owners to raise rates to repay their debts. In essence, readers and advertisers were financing all of these corporate mergers.

Former readers of The Armada Times may be shocked to learn this once locally-owned newspaper was sucked up by a very large corporation during the buying spree.

The Times was purchased in the early 1980s by Capital Cities Communications, the former publishers of The Oakland Press. In 1985, Capital Cities purchased American Broadcasting Company, better known as ABC. Interested in the television stations owned by ABC, The Walt Disney Company purchase ABC/Capital Cities in 1996. Tiny Armada Times was owned by Mickey Mouse, one of the largest corporations in the world!

The Armada Times was purchased in the early 2000s by a regional newspaper company, 21st Century Media, as Disney shed its non-broadcasting properties.

A “perfect storm” of events began to come together at the end of the first decade of the 21st century leading to the decline of some newspapers.

Internet sites such as Craigslist and eBay began to make a dent into newspaper’s classified ads. Both websites achieved economies-of-scale by the end of the decade which allowed them to steal away most of the local classified ad revenue.

Classified ads have always been essential to the revenue stream of a newspaper. Classified ads placed in Benjamin Franklin’s The Pennsylvania Gazette during the 1700s made him a wealthy man.

Apple introduced the iPhone in 2007 and by the end of the decade tens of millions of people were carrying around a mini computer in their pockets that provided easy access to Craigslist, eBay and Facebook (which would later develop its own online classified marketplace).

In 2008, The Economic Crisis caused the remaining classified ad revenues to dry up and that revenue has never recovered to this date.

All of the corporate mergers of the prior decades were counting on those classified ad revenues, in part, to repay debts.

This is when private equity firms stepped into the picture. Private equity firms purchase vulnerable companies for pennies on the dollar.

Corporate-owned newspaper chains found it impossible to pay back their loans from their buying sprees and the shareholders were desperate to rid themselves of their liabilities.

Beginning in the last decade, newspaper chains across the country were being gobbled up by private equity firms.

After most purchases, private equity firms raise prices as high as possible, cut staff to the barebones and sell off pieces of the company such as real estate and equipment for a profit since they only purchased it for pennies.

Under the control of private equity firms, newspapers saw their subscribers and advertisers flee in droves as the newspaper’s new owners began printing a far inferior product.

Now, here’s the good news for readers and advertisers of The Record.

We’re a locally-owned company that employs experienced local journalists and newspaper professionals.

We are not beholden to bankers, a far-off corporate office or a private equity firm.

We are obligated to you, our readers and our advertisers.

We promise to use our strength of local ownership to keep you informed and entertained about everything happening in our community.

Now, here’s what you can do to keep this newspaper strong.

Take out a subscription to the newspaper if you don’t already have one.

Purchase a gift subscription for a friend or relative. We will extend their subscription by your gift amount if they already get the newspaper.

Tell local businesses that their ad in The Record brought you in.

Take out an ad if you are a local business owner.

We wish you Merry Christmas, Happy Holidays and a prosperous, blessed New Year!