Fold or float

By JEFF INGLIS  |  April 2, 2009

The family and their top execs continue to claim that the Press Herald is still profitable. And they're probably half right. Despite the massive revenue drop, it's a good bet that the paper is covering its expenses — except for debt-service payments and transfers of money to the parent company (either through inter-company charges or outright profit-taking to prop up the Seattle Times Company).

If there's a new owner, we need to hope that he or she or they pay cash and view the purchase as a long-term investment, so they won't need to make very big profits (or any at all) right away. The price will certainly be lower than $230 million, and perhaps as low as $11 million, according to documents released by PPH suitor Richard Connor in last month's failed attempt to convince the Maine State Retirement System to invest in the papers. But it matters less what the price is than the point that the buyer shouldn't take on significant debt to make the deal.

And whether the Blethens remain in control or there is a new owner, a key way to pay off debt is to do what the Blethens have already done in Seattle, and Connor has proposed doing here: sell real estate. In Portland, the Blethens own not only the historic flagship building at 390 Congress Street, ideally situated between City Hall and the federal and state courthouses, but also a building across Congress Street and the parking surrounding it. While the building at 389 Congress was formerly home to the printing presses and is therefore likely contaminated with all matter of toxic printing chemicals, its prime location may help preserve its salability.

Another option would be to seek support from an allied non-profit, along the lines of the non-profit groups helping to bankroll the for-profit St. Petersburg Times and The Nation magazine. Yes, strictly speaking, the Press Herald may need to start begging for cash to stay alive. That's why selling real estate is smarter.

Boosting readership
As noted above, losing readership means losing advertisers. If, however, ad reps can show a paper growing circulation (or, frankly, in this sector, merely holding steady), that's a good prospect for advertisers. So an early step has to be attracting readers.

But it's not quite that easy. Daily newspapers, in particular, have tried for many years to be all things to all people, offering the Red Sox box score, NASCAR results, photos from the local high-school football team, reporting on town and state government, updates from Iraq and Afghanistan, features on businesses and individuals, the weather, horoscopes, comics, puzzles, and recipes (plus many more things, too!), in hopes that every person will be interested in at least one of those myriad offerings, and will therefore buy the paper.

This actually causes two problems. First, readers find themselves marginalized — by design, any one reader's areas of interest are a small proportion of what's in the whole paper, but they had to pay for the whole thing, which results in flipping pages quickly and recycling whole sections unread. And second, it becomes almost impossible to describe an "average reader," because the interest areas and demographics are so broad.

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Related: Crossing the line, Death knell, PPH almost sold. Now what?, More more >
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