There's a perception out there that smaller, closer-to-the-ground community papers might weather the economic storm better than their big cousins. Locally, there's good reason to believe that, since several operations carry little or no debt.

Sun Newspapers is not among them. I wrote about them twice last summer; in July, a share of stock in their parent corporation, American Community Newspapers, had fallen from $5.63 a year earlier to 16 cents, largely due to a punishing $136 million debt burden.

Since then, the debt has risen, and ACNI stock is worth eight-tenths of a cent. In August, the AMEX exchange booted the company; a September filing said the company had defaulted on $145 million in debt, and in November, the company stopped making public financial reports.

Since everything has only gone to hell economically since then, I started wondering how these guys have managed to stay out of Chapter 11. Last week, I began an email dance with the company's spokesperson (I wanted an interview with a top executive; they've asked for questions in advance). Today, I received a memo with at least one small but concrete indication of stress.

Local group publisher Bob Cole announced the company will stop printing its South St. Paul/Inver Grove Heights community paper Feb. 26. A company source says readership wasn't huge, and, as the memo indicates, the blue-collar communities no longer fit "the premium demographic criteria we employ for our advertisers."

This sort of pruning is happening all over; ACN sold itself to investors years ago as a publisher that focused on wealthier communities, and it's hard to see how SSP/IGH ever fit. Cole indicates the money will be shifted to the mnsun.com website, "which will continue to serve as a valuable resource for readers in the South St. Paul-Inver Grove Heights communities."

However, I'm told the "community editor" for those papers — in effect, its local reporter — was laid off.

(Update: Sun also fired its three full-time photographers; the print-to-web transition has been especially brutal on shooters. Apparently, surviving reporters will take more photos, in addition to new videoblogging duties — which the photographers were coordinating.)

ACN's bar is likely to rise as economic woes mount; making you wonder which local title will succumb next.

Conflict of interest note: ECM Publishers, which competes with ACN in Dakota County, is a MinnPost affiliate, and we apparently have the same relationship with the South St. Paul Examiner, part of a nationwide blog network. Neither was involved in this story.

Here's the memo:

To All Sun Newspapers Employees:

In response to our ongoing efforts to maximize our Sun Newspapers portfolio and mitigate the challenges of a declining economy, we have made a decision to cease publishing our South St. Paul-Inver Grove Heights Sun Current weekly newspaper, effective February 26, 2009.

This decision is based on a number of carefully thought out factors including the premium demographic criteria we employ for our advertisers. Given the soft overall economy, the importance of ensuring that we maintain our business criteria for our local advertisers is more critical than ever.

Unlike our audiences in the broader Sun Newspaper group, the South St. Paul-Inver Grove Heights region no longer fits with our targeted business strategy.

This initiative will have a minimal impact on the overall daily operations of our Sun Newspapers group.

In this environment, we must make adjustments to ensure that our portfolio is aligned with current and future revenue opportunities, and that we manage our business as cost-effectively as possible. To that end, this decision will also provide us with additional cost savings and help us focus and deploy our resources to our other Sun Newspaper properties and assets where the opportunities are even greater. One of those assets includes our local Minnesota Sun Newspaper Web site, which will continue to serve as a valuable resource for readers in the South St. Paul-Inver Grove Heights communities.

Sun Newspapers will continue to have the highest weekday audited circulation in the Twin Cities. We will now publish 1 daily and 41 weekly newspapers in Minnesota with a combined circulation of 420,790. No other local medium can claim such a strong reach, breadth of services, or our ongoing commitment to serving our readers and advertisers.

In order to ensure consistent communications we would ask that all vendor questions be forwarded to Gene Carr or David Kosofsky. In addition, all media inquires should be forwarded to Joe LoBello at Brainerd Communicators, 212-986-6667 or Lobello@braincomm.com.

We are committed to keeping you fully informed and if you should have any additional question please feel free to contact me.

Respectfully,
Bob

Robert H. Cole
VP, Group Publisher
Minnesota Sun Newspapers