Copley closes two dailies; can Breeze survive alone?

L.A.'s turbulent newspaper market got a double dose of bad news this month with Copley Press Inc.'s announcement that it would close its Santa Monica Outlook and San Pedro News-Pilot dailies.

Make that a triple dose - Copley also announced 100 layoffs at the sole survivor of its L.A. newspaper group. the Torrance-based Daily Breeze.

The closures, blamed on declining revenues, underscore both the difficult market conditions for small community newspapers and the fast-changing nature of the newspaper business here, which in the past year has seen a shakeup at the L.A. Times and major acquisitions by Denver media baron Dean Singleton.

"We finally made a business judgment that the Santa Monica marketplace could not support a daily newspaper," said Harold W. Fuson Jr., vice president and chief legal officer at Copley Press. "The Outlook has never been a thriving paper economically, and it wasn't in the best of shape when we acquired it in 1983. Our decision to close the Outlook was to protect our other papers in the more viable South Bay market."

Fuson and other Copley officials say they are not closing the San Pedro paper, saying instead that it will be "merged" into the Breeze. But in fact, it will no longer be a separate daily paper with an independent staff.

The closures sparked industry speculation that La Jolla-based Copley was seeking to make its L.A. operations profitable in preparation for a sale, most likely to Singleton's MediaNews Group Inc.

Sources told the Business Journal that Singleton was in talks to purchase Copley's L.A. holdings, but that negotiations broke off in the weeks before the closures were announced.

Singleton has aggressively expanded his local newspaper holdings over the last year, adding both the Daily News of Los Angeles and the Long Beach Press-Telegram to his Los Angeles Newspaper Group, which also includes the San Gabriel Valley Tribune, the Pasadena Star-News and the Whittier Daily News.

"The Copley papers certainly do fit in with Singleton's 'ring' strategy, clustering suburban papers around Los Angeles," said newspaper analyst John Morton.

Copley officials, however, insist that they have no intention of selling.

"The rumors regarding an imminent acquisition are fascinating to observe, but it is all manufactured by people outside of the company," Fuson said. "These rumors are foolish. If Mr. Singleton wanted to acquire us, and we do not comment on such issues, the last thing in the world he would want would be for us to shut down our paper in the niftiest demographic in the market."

Other officials, however, confirmed that talks did take place - although they were adamant that Copley was not interested in selling its remaining L.A. paper.

"I am obviously several steps removed, but I understand that there were discussions with Singleton," said James Box, editor of the Daily Breeze. "I also understand that our ownership is absolutely not interested in selling."

Ike Massey, president of Singleton's Los Angeles Newspaper Group, agreed, noting that "at this point in time, I don't believe that Copley is interested in selling their L.A. papers. It appears that Copley intends to make what remains of the paper profitable."

Copley, which publishes the San Diego Union-Tribune. insists that the closures were made in hopes of securing the future of the 76.000-circulation Daily Breeze.

"We believe that we can better focus on the South Bay community and better serve it (under the reorganization)." Fuson said. "This is too painful a process to go through unless we believed in that."

But whether it can succeed remains unclear. Attracting advertising has grown increasingly difficult under the shadows of the behemoth Los Angeles Times and the steadily growing Los Angeles Newspaper Group.

"What we're seeing in the L.A. suburban market is that the concentration of media ownership, in addition to the Times. has made it difficult for other papers to compete for advertising," Morton said. "The loss of that revenue is the reason why Copley closed The Outlook and merged the other two."

Massey points out that shrinking advertising has been a problem for all newspapers in the L.A. area, which is only now battling back from the recession in the early 1990s.

"Sadly, Copley dealt with their expenses in one fell swoop, but they are downsizing their resources to the point that they can become insignificant in the market," Massey said.

Even the Los Angeles Times has been forced to undergo painful layoffs and employee buyouts in recent years, and last fall underwent a major management restructuring in hopes of improving readership and profitability.

The closure of the 12,500-circulation San Pedro paper will mean the loss of six jobs: other employees will produce the new San Pedro section of the Breeze.

The closure of the Outlook, which had a daily circulation of 23,000 and was published for 123 years (the last 15 by Copley) resulted in pink slips for 45 workers.

To help fill the void, Jeff Hall, owner and publisher of the Brentwood Media Group. and Susan Wilson, a former columnist at The Outlook, have teamed up to produce a new weekly publication called the Santa Monica Sun. The new paper was scheduled to debut late last week.

"The Outlook stopped reflecting the community about 10 years ago." Wilson said. "After living in Santa Monica for 20 years and knowing all the aspects of business and community here, I believe that the Sun will be absolutely in touch with both the readership and advertisers in a way that The Outlook was not."