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Has the Twin Cities' one-newspaper future finally arrived?

The future of newspapers in the Twin Cities could hinge on events in Southern California. Sound crazy? Let me explain.

One of California's largest newspapers, the Orange County Register, is for sale. Industry analysts expect a couple of companies to bid aggressively for it: Tribune and MediaNews Group. Both companies have extensive holdings in the Golden State, and the O.C. Register would help the winning bidder consolidate its position as California's leading media company. News industry blogger Alan Mutter explains things in detail here.

MediaNews, you might recall, is the current owner of the Pioneer Press. If MediaNews adds to its already-large California holdings, then St. Paul would become even more of a corporate outlier. The Pioneer Press is the company's only property in the Midwest, a lone ranger in an organization that has staked its future on the economies of scale offered by geographically clustering its news properties.

I suspect that if MediaNews buys the Register, it would be more inclined to look favorably at some kind of deal to dispose of the Pioneer Press. And in that case, the time might finally be ripe for the merger of the Twin Cities' two major newspapers – either through a joint operating agreement or even an outright takeover, most likely by the Star Tribune.

We're one of a handful of metro areas that still has two daily newspapers, and analysts have long speculated that we'd someday be down to one. The continuing struggles of the newspaper industry make that scenario more likely than ever.

Revenues decline
Industry-wide, newspaper revenue has dropped nearly 50 percent from its historic peak in 2005, and while other advertising media have begun a comeback from the recession, newspapers continue to lag. Several publicly traded newspaper companies reported single-digit revenue declines in the fourth quarter of 2010 and the first quarter of this year. That's an improvement from the double-digit hemorrhages of 2007, '08 and '09, but it's not encouraging at a time when other media have begun to show actual revenue gains — not just smaller losses.

Star Tribune

While the Star Tribune made a good showing in 2010, it's off to a slow start in 2011, as my MinnPost colleague David Brauer has reported. That could strengthen the case for the federal Justice Department approval that would be required for any kind of merger or takeover.

That's where the other part of the Southern California equation comes into play. It's hard for me to imagine a scenario in which the Star Tribune could buy the Pioneer Press unless the Strib can sell its land near the Metrodome for the $40 million to $50 million price tag that's been bandied about.

The only likely buyer for that land, at that price, is the Minnesota Vikings. And the Vikings won't be buying the Strib's property unless they get a deal for a new stadium. If they don't get it, the team could wind up in Los Angeles, where an investment group has announced plans to build a new stadium to lure an NFL franchise back to the nation's second-largest TV market. (It's also possible, of course, that the Vikings could build a new stadium here on some site other than the Metrodome area.)

So if the Vikings do end up in California, the Star Tribune potentially loses out on a big payday. That would make it tougher — not impossible, but tougher — for the organization to make any deals involving a buyout of its rival.

For years, I've believed that the Twin Cities would inevitably end up with one newspaper. That's been the trend nationwide for half a century. Why should we be the only place that bucks it?

Events in California could determine whether we finally succumb to that trend.

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Comments (6)

Let's hope that we keep the two papers and the Vikings go.

St. Paul and Minneapolis are two very divergent cities. They have different emphasis on their issues. They have different values and demographics. One paper would probably be dominated by the Strib. It would be a big loss to St. Paul.

As for the Vikings, I think it is absurd to spend almost a billion dollars on an entertainment venue when we cannot give our poorest proper medical care or support the disabled with the life-enhancing benefits. Let the Vikes go elsewhere. We'll do just fine without them.

Gannett, the nation's largest newspaper publisher, reported 1Q results today. Newspaper ad revenue dropped more than 7%.

http://bit.ly/hRgCmi

Gannett has historically been by far the most profitable publisher -- they are ruthlessly efficient. If their revenues are down 7%, that's not good news for any newspaper publisher.

McClatchy and the New York Times report their results within the next 10 days; if they show similar results then it's a clear signal about the state of the newspaper industry in general, and that would presumably include our local papers.

Sorry Tom. Setting aside the public funding, the Vikings are far more valuable to this area that the SPPPD. And it's an antiquated notion to think that there are vast differences between the 2 cities. The St. Paul paper is minor league and its disappearance would be virtually unnoticed.

On the other hand,if we end up the "Los Angeles Vikings" NFL football team the local newspapers might lose a significant portion of their "hard market".

We like to think of newspapers in terms of "hard news" and editorial sections but things like the sports still provides a lot of the motivation for subscribing. You can get things like box scores, game wrap-ups and such online often in far better detail than newspapers. On the other hand the newspaper sports section provides a commonality. ESPN's online Vikings commentator #4 might might write a more informed (and readable) column than "Sid" but in their social interaction there is a far greater chance of encountering people who the latest column by "Sid".

Actually the Twin Cities *don't* have two daily newspapers.

Minneapolis and great metro, especially west has the Star Tribune. A different city--St. Paul--has the Pioneer Press.

The difference isn't just semantic. There are more than a dozen major metropolitan areas in the US that have this kind of "twin cities" adjacency of daily newspapers:

Dallas - Ft. Worth, Miami-St. Petersburg, San Francisco - Oakland, NYC -- Long Island, Lois Angeles -- Orange County, Cleveland - Akron, Louisville -- Lexington.

There's a double challenge to combining newspapers in these cities (as the Chronicle in SF and the Times in LA have found) especially now that the business model supports half the editorial staff they had 20 years ago.

First there's the antiquated, ill-executed JOA rules overseen by the Department of Justice, a political force given by nature to erratic interpretation here.

Second is the considerable cultural mash-up of combining coverage into a newly re-defined "supercities" model. The Twin Cities may act like one metropolitan area in some ways, but fundamentally they are two adjoining cultural eco-systems.

I don't doubt the combination of the Star Tribune with the Pioneer Press will happen in the next few years, if not the next few months. I fear the result will be a loss of circulation from the combined total, especially "east of the river," where neighborhoods and family ties run deep.

Wiping out the identity of the "St.Paul Pioneer Press" may be an unfortunate requirement of any deal, but that's the city where people are born and raised--not migrated.

"The Twin Cities Tribune?" Sounds a bit like a "shopper" to me, unfortunately.

Rohn Jay Miller (#5): There is a significant flaw in your comments. In each of those metro pairings you cited, one city dominates the other.