Rieder: Lots of buyers for newspapers

Few things have been as heavily chronicled as the manifold challenges of the newspaper business, thoroughly disrupted as it has been by the digital revolution. Readers have gravitated online. Advertising revenue has plummeted and continues to decline. Digital enthusiasts gleefully write obituaries for the old-school news outlets.

And yet people and companies continue to line up to buy them.

Monday, Gannett, which owns USA TODAY and more than 100 local media properties, startled the media world when it disclosed it was offering $815 million to acquire Tribune Publishing, owner of the Los Angeles Times, the Chicago Tribune and nine other dailies.

The move came shortly after Gannett had completed its $280 million acquisition of Journal Media Group, owner of the Milwaukee Journal Sentinel, Memphis' Commercial Appeal and 13 other dailies.

Gannett offers $815 million to buy Tribune Publishing

But Gannett hardly is alone when it comes to buying up newspapers. Last week, Utah's Huntsman family purchased the Salt Lake Tribune, the state's largest daily, from Digital First Media. And local buyers acquiredThe Berkshire Eagle in Massachusetts and three other New England papers from Digital First.

And while Digital First, controlled by investment firm Alden Global Capital, was a seller in April, it was a buyer in March, acquiring two California papers, the Orange County Register and Riverside's Press-Enterprise. And it wasn't the only suitor. Tribune Publishing also wanted the papers but ran afoul of the Justice Department because of antitrust concerns over Tribune's other Southern California holdings.

Late last year, Sheldon Adelson, a casino owner, major Republican donor and big Las Vegas player, made his debut as a newspaper owner when he bought Nevada's largest daily, the Las Vegas Review-Journal.

Rieder: Big plans for Adelson's Vegas paper

"Yes, it's paradoxical," says Rick Edmonds, who writes about journalism economics for the Poynter Institute. "If business is so bad, why do various people want in — or want to expand their holdings?"

One of the factors is cost. Prices have dropped dramatically as the newspaper business has struggled. "A newspaper organization is affordable for an acquisitive chain or for a local group or wealthy individual in a way such properties were not a decade or 20 years ago," Edmonds says.

It's also important to remember that "newspaper" is somewhat of a misnomer these days. After a slow start, many newspapers have worked hard on their transition to the digital world. And while the eye-popping profit margins of the past are long gone, and the business model of the future remains elusive, there remains the sense that these can be viable businesses as they transition to the future.

"There is a view that news will be a good business again in the future because people want it — and actually consume more of it than ever," says David Chavern, president and CEO of the Newspaper Association of America. "The delivery and economic system has been disrupted, but it’s not like people don’t want news. And no one has figured out how to automate reporters yet. If you are going to invest in a content business, what is a better — or at least better priced — one at the moment?"

Rieder: Battered newspapers still important

And while the digital era offers up a seemingly infinite variety of news sources, known quantities continue to have value. "Established brands matter a lot with news," Chavern says. "Whether your entry is Google or Facebook or a website, if something happens in Chicago, then people are still going to want to know what the Trib is saying."

But media analyst Ken Doctor, who writes at newsonomics.com, urges us to keep things in perspective.

"Overall, the newspaper's state is still deteriorating," he says. "It is like an aging patient no longer looking for the fountain of youth but symptomatic relief for all its aches and pains. The best indicator of the deterioration: continuing newsroom job cuts that have now brought the daily newsroom workforce to about half — 28,000 — of its 1990 top, at 56,000."

The heightened interest in buying newspapers comes from two trends, and Gannett's moves and Digital First Media's acquisition of the two SoCal papers reflect one of them, consolidation. By acquiring more papers, particularly in the same geographic area, companies can take advantage of economies of scale. In announcing the Tribune bid, Gannett also spoke of the desire to expand its geographic footprint to strengthen the USA TODAY NETWORK of news outlets across the country. Since it was spun off as a print-focused company last year, Gannett has made no secret of its desire to expand its roster of newspapers.

The Utah and New England transactions last week reflect another trend: that of wealthy individuals acquiring papers, often but not always in their hometowns, in an effort to safeguard their futures and help find new models for economic success. Other examples include Jeff Bezos and The Washington Post, John Henry and The Boston Globe, Glen Taylor and Minneapolis' Star Tribune, Gerry Lenfest and the Philadelphia papers and Alice Rogoff and the Alaska Dispatch News.

It's exciting that new players are coming to the fore and established ones are expanding their portfolios. But each type comes with its own challenge.

For the big companies, Chavern says, "the trick will be maintaining a sufficiently unique journalist and editorial presence with each individual paper to keep the connection to the community."

As for the rookies, "each new owner is an optimistic restart," Edmonds says. But there are no guarantees, he adds: "Individual owners may turn out to be inexperienced, unrealistic about the business adds, or pursuing a personal or political agenda."  

Follow USA TODAY columnist Rem Rieder on Twitter @remrieder