PRESSING AHEAD.

Black newspapers continue their light for readers and advertisers

SHOWMAN THAT HE IS, DON KING HAS NEVER HAD A PROBLEM DRAWING CROWDS. SO LAST JUNE, when the flamboyant boxing promoter/entrepreneur arrived to give the keynote address at the 59th annual National Newspaper Publishers Association (NNPA) luncheon, over 350 black publishers, journalists and editors packed the ballroom of the New York Sheraton to hear plans for his latest business venture. But what King came to discuss was not his signing of boxing's next title holder, or even a new sports-related venture. He came as a member of the family. King recently joined the fourth estate with his purchase of the Ohio-based Call & Post newspapers, a financially troubled black newspaper chain that he's intent on reviving.

The Call & Post was in Chapter 11 bankruptcy when King bought the four-paper chain from former publisher John Bustamante for $760,000 in June 1998. The papers--which include a weekly statewide edition and sheets in Cleveland, Cincinnati and Columbus--were suffering from falling circulation figures, inconsistent distribution, spotty editorial and declining advertising support. "Black newspapers are the essence of our community, and whatever positive recognition black people get comes from the black newspapers," said King when asked why he decided to take on the challenge of reviving the Call & Post papers. Altruism aside, it's clear King also views the papers as a potentially viable financial investment--that is, if he can get them up to speed and on the competitive edge. "I have the biggest problem bringing the black press into my [sport events] promotions because the producers say the papers aren't timely," acknowledged King. Black newspaper publishers must, says King, focus on addressing this negative but often accurate perception among advertisers and readers.

The challenges that King faces in turning around the Call & Post chain are not unique. But the near demise of this newspaper group, founded in 1919, brings to light the tenuous survival of many black newspapers across the country. More than 3,000 black newspapers have been published since the debut of the Freedom's Journal--the first African American newspaper--in New York City some 172 years ago. But just over 200 have survived, and none enjoy the significant circulation boasted by papers like the Chicago Defender and the New Pittsburgh Courier (both owned by the Chicago-based publisher Sengstacke Enterprises Inc.) during the 1920s, '30s and '40s. During these decades, the Defender claimed a national distribution of 200,000 readers. Today, the Defender's circulation is down to 25,000.

Declining circulation figures mean less revenue from newspaper sales and fewer advertising dollars for black newspapers. For King and other potential publishers, such as BE 100s CEO Don H. Barden, who made their fortunes in other industries and are new to the publishing game--getting barely surviving newspapers to thrive will mean redefining how business is conducted. Today, the only way black newspapers stay afloat is if the publisher is successful in some other business venture. It will also involve finding creative methods of improving editorial content, increasing circulation and attracting advertisers if they are to survive into the next millennium.

KEEPING UP WITH THE TIMES

Expensive technological developments, changes in readers' tastes and demographics, as well as changes in circulation vehicles and the way advertisers buy media have all affected black newspapers' bottom lines. Addressing these problems, however, can be a Catch-22 for publishers who are already working with scarce financial resources. Many black-owned newspapers have antiquated, time-consuming production systems and bare-bones editorial staffs struggling just to get out a single issue. This has proven detrimental to the circulation figures, advertising and sales revenue of more than a few African American papers.

While the Call & Post has the deep pockets of Publisher Don King to help finance its resurrection, most black newspapers are family-owned operations that don't have such well-capitalized resources. In addition, they're often unable to secure business loans because they're stretched too thin financially. But there's no reason for black publishers not to seek out resources by bringing in investors, or entering into joint-venture deals or partnerships with major daily papers in their market.

"There's a fear among black publishers to bring in investors or hook up with white-owned papers," opines Tim Lester, who is among a group of California-based investors looking to purchase the Los Angeles Sentinel. Lester, who worked in a variety of editorial and managerial positions at the Sentinel for close to a decade, says his group of investors will seek a joint-venture deal with a larger publisher should they purchase the Sentinel. "There's [concern] about being taken over, but you have to remember that 51% ownership will give you control. Fifty-one percent of a big pie is better than 100% of a small one."

CALLING IN THE TROOPS

Sengstacke Enterprises Publisher Myiti Sengstacke took the investor route when trustees threatened to sell her family's 94-year-old newspaper chain. At issue was approximately $4 million in assessed estate taxes following the 1997 death of her grandfather, John Sengstacke. "The easiest way to deal with [the taxes] was to sell [the papers], and I guess Northern Trust felt the best thing to do was not take a risk" says Myiti Sengstacke regarding the trust company's decision to put the newspaper chain--which includes the Chicago Defender, Michigan Chronicle, New Pittsburgh Courier and Tri-State Defender--up for sale.

Neither Sengstacke nor a number of other family members wanted to sell the papers, so they removed Northern as trustee. The family has struck a pending $12 million recapitalization deal with Detroit-based businessman Don Barden. The plan calls for $6 million in cash from Barden, $4 million in bank loans and $2 million in equity.

Over the past decade Barden has crafted a reputation as a savvy entrepreneur who is often on the right side of an investment opportunity. Whether it's stints in cable television or business ventures in Namibia, Africa, Barden often seems to be in the right place at the right time to turn a profit. He sees a similar opening with Sengstacke Enterprises. "I see an opportunity in these newspapers," says Barden, who started his media business career 25 years ago at the Lorain County Times, an Ohio-based black newspaper. "They're a good [vehicle] to make a profit and it's important to preserve and build on the Sengstackes' legacy."

While the tentative deal has prevented the newspaper chain from being sold, the Sengstackes have had to make major concessions. The New Pittsburgh Courier and Tri-State Defender will go to Robert Sengstacke and Thomas Picou (the son and nephew, respectively, of John Sengstacke), and Barden will gain a 51% controlling interest in the remaining chain. "[We] decided to split [the papers] because it [made recapitalization] more economical and the papers still remain in family ownership," explains Barden.

Myiti Sengstacke feels that the deal was the best possible answer for satisfying the various concerns of her family members. "Don Barden has worked in the newspaper business, plus he understands the dichotomy of a family-owned business." She notes that finding a sympathetic investor was key to her family's decision to release a controlling interest in the company. "If there'd been a sale through Northern Trust, it's difficult to say that we'd still be involved here. We had no say over who bought the papers. I was very concerned about that and how it would affect the communities and our employees."

Funds from the recapitalization will go to pay off estate taxes, and make capital improvements and editorial changes on the remaining two newspapers, says Barden. Specific plans include purchasing equipment, and revamping the papers' editorial content to include more news and local investigative features. Barden believes improving content is key to increasing circulation. "We want to elevate the editorial content of the papers and well hire additional writers to do this," he explains.

Barden's goal to raise circulation is one he shares with other black newspaper publishers. Raising it, however, will also mean addressing the issue of accessibility. "It's a problem. [Black newspapers] aren't as available as the Washington Post or New York Times," says Ada Babino, a Washington, D.C., resident who admits she rarely reads black newspapers. The problem, according to Lester, is that desegregation has significantly changed our demographics over the past 35 years and most black publishers are still relying primarily on newsstand sales in traditionally black neighborhoods. "Markets that we formerly served are soft now, but our distribution systems haven't changed. Black people aren't moving into any one particular area en masse."

The fact that readers frequently have a hard time finding black newspapers means a loss of sales revenue for publishers, who often find it too expensive to ship their publications to retail spaces outside of traditional neighborhoods. There is also the concern and expense of returns on unsold papers. Yet despite the travails of many newspapers, some publishers, such as Mark Kimber of the California Advocate, believe the black press still serves a vital need in the communities it serves and often acts as a training ground for young journalists. "Young black journalists coming out of college have been very receptive," says Kimber.

The Advocate has been a part of Kimber's life since 1967, when it was founded by his parents, Les and Pauline, to serve a growing community of African Americans in the state's Central Valley. After taking over the reins himself in 1986, Kimber has seen his share of ups and downs as he sells approximately 25,000 copies a week. But Kimber says that through it all, surrender has never been an option. "Things have never gotten to a point where we said, `No. We're not printing the paper,'" says Kimber. "Not publishing has never been a consideration."

BLUEPRINT FOR SUCCESS

There are several strategies that publishers can employ to increase circulation while taking the focus off newsstand sales. Cyberspace is one key avenue for increasing readership. "We plan to take our papers online," says Barden. He believes that Websites can boost current circulation and provide an avenue for publishers to make revenue from archival issues. "We expect our Website to be a major profit center," he adds.

Increasing mail subscriptions is another vehicle for upping circulation. Chuck Morrison, executive vice president and partner in the Southfield, Michigan-based Don Coleman Advertising Inc., suggests that publishers build their mail-delivery circulation through subscription drives and by offering discounts for fully paid, long-term subscriptions. It's a strategy that has worked for Call & Post President Michael House. He believes the best methods for building this base is face-to-face solicitation. "We've gone into churches and set up booths at organizational conferences," says House. He also suggests publishers look at purchasing mailing lists from civic groups, sororities and fraternities for access to potential subscribers.

LaTanya Junior, director of media services for the New York-based advertising and marketing firm Stedman Graham and Partners, advises black publishers to tap into transportation companies for distribution sources. She says that airlines such as Continental have boarding terminal newsstands that offer free copies of a wide range of magazines and newspapers to their passengers. A study by Target Market News in Chicago suggests that airlines have a major incentive for making African American newspapers available to travelers. Black consumers spend $1.1 billion annually on airline travel, and readers of black papers account for $741 million of purchased tickets.

Providing free copies of your paper to travelers may not increase your sales revenue, but it can help significantly increase your readership, and that is the key to increasing advertising revenue. "The success of any paper is going to be contingent upon a strong advertising base," offers John Morton, president of Morton Research Inc., a Maryland-based consulting firm that analyzes media properties. Morton believes African American consumers are important to advertisers not only because of their growing economic power, but because blacks often tend to be more brand loyal than other ethnic groups. But Morton also notes that black publishers face a key challenge in convincing advertisers that they can reach African American consumers more successfully than large dailies. "A [specific] black community may feel underserved by [their] major daily and this can go a long way in a black newspaper establishing itself [with advertisers]," says Morton.

Not surprisingly, Elinor Tatum, publisher of New York City's Amsterdam News, believes black newspapers provide advertisers with a critical vehicle they won't find elsewhere. "We have a level of trust with our readers that [advertisers] won't get with other papers, so our readers want to support the businesses that support our paper," explains Tatum. She points to readers' response to a full-page sale ad that Blockbuster Video ran last year with the Amsterdam News. "Blockbuster on 125th Street [in Harlem] got a line around the corner with people with the newspaper in their hands saying, `We want this deal.'" Tatum says that her sales staff builds continuing relationships with advertisers by encouraging them to go beyond running one or two ads. "We stress the importance of community-focused activities and events."

But many readers also echo Don King's observation about timeliness of coverage and emphasize that it is a significant problem. "Because [the papers] only come out once a week, the news is a little old," says Andrea Greer, a Brooklyn resident who used to be a regular reader of the Amsterdam News. Greer still occasionally reads the newspaper, but it's usually to read about a news event that the dailies haven't covered.

Focusing on breaking local news stories that the large papers aren't interested in covering can be one method of addressing the issue of timeliness. Doing more investigative features and advancing community-related events are also strategies that black papers can employ. The Call & Post's president, House, is looking to attract readers by adding health and financial sections. He says that these are topics that African Americans have become more interested in over the past few years, but that few black newspapers cover them on a regular basis, or in a manner that is helpful to readers. "We're running stories that advise how to invest in real estate, set up a good [financial] portfolio or choose health insurance," explains House. He adds that the Call & Post has experienced increased advertising schedules from industry-related businesses such as Key Bank and area hospitals since including this coverage.

The good news is some national advertisers seem to be catching on to the inherent power of the black press, and to the importance of making long-term advertising commitments to these papers. Kmart, for one, seems to have embraced this philosophy. This past June, the national chain launched a media campaign that includes ongoing advertising schedules with black newspapers in markets where they have stores. "Black papers have a big presence in their communities and it made sense to add them to the mix," says Chuck Morrison, who developed the campaign for Kmart. He declined to say how much Kmart is spending with black newspapers, but added: "We're not using [the ads] as a public relations vehicle, but as marketing vehicles. I've seen examples of how people use these sales ads to make instantaneous purchase decisions."

If black newspapers are going to truly enjoy successful relationships with advertisers, however, Junior says publishers have to do better jobs of presenting information about their readers to the companies they solicit. "Advertisers spend $200 billion a year, but less than 1% with black, Asian and Latino outlets," says Junior. "Them are still papers that don't have press kits and don't do market research. A lot of black newspapers are small mom-and-pop operations, and it's never clicked with them that they need to determine how many people in their town use [a certain brand of] toothpaste." To this end Junior, who has developed black newspaper advertising campaigns for such clients as Merck Pharmaceuticals and State Farm, launched a program in January to provide black publishers with market research information and has helped them develop press kits.

Despite its struggle, industry pundits say that the black press is still a powerful, vital medium. The recent launch of City News and the Cleveland Monitor (two new papers in Cleveland), the potential purchase of the Los Angeles Sentinel, along with the recent spirited bidding wars for both Sengstacke Enterprises Inc. and the Call & Post seem to bear out this belief. "Black newspapers are really the last black voice that we have because black radio stations are being bought up by corporate America," says Pat DuPree, western regional manager for Amalgamated Publishers Inc. (a national advertising sales firm for black newspapers). "People complain that black newspapers are behind [the times], but let them go away and we'll see an uproar in the communities."