What’s next for the Pioneer Press?

MinnPost photo by Peter Callaghan
Business analyst Rick Edmonds: "Among Digital First’s 76 papers, the Pioneer Press is not an attractive property to my mind, because of its proximity to a strong competitor."

The decade-long speculation game on the fate of the St. Paul Pioneer Press has ratcheted up — again.

The paper is currently owned by a hedge fund group, Alden Global Capital, and doing business under the corporate banner of Digital First Media. Like other hedge funds that have dallied in newspapers, Alden has never hidden the short-term nature of its investment interest in the PiPress and the 75 other papers it controls, which include the Denver Post, the San Jose Mercury News and the Los Angeles Daily News. 

So after months of speculation, the company’s Sept. 12 announcement that it was officially putting the entire Digital First collection up for sale came as no great surprise. Former PiPress managing editor Ken Doctor, now an oft-quoted media analyst based in California, had been predicting as much since April. That’s when Digital First abruptly shut down its much-hyped, 100-person centralized newsroom hub in lower Manhattan known as Project Thunderdome. The hoped-for cost efficiencies of creating one hub for “news content” — mostly national features with some international news for re-distribution to 76 local papers — did not work out as planned.

That wasn’t exactly news to the folks working in St. Paul. Just days before Digital First announced the possible sale, the union representing the Pioneer Press newsroom staff was so fatigued by Digital First’s ownership it took out an ad in the Star Tribune calling for new ownership.

A perilous turning point

Given the calamitous, industry-wide slump in newspaper advertising over the past decade and the Pioneer Press’ traditional weak sister role in competition with the Star Tribune, a sale of all or parts of Digital First Media could be particularly perilous for the paper and its remaining employees. Or it could be the turn that leads to its resurrection, depending on whom you ask. 

These are the critical factors: 

• Of Digital First’s 76 papers, the PiPress operates in the most serious competitive environment. While the paper has shed roughly 60 percent of its newsroom staff since 2001, the Star Tribune, recovering from its own disastrous private equity experience with Avista Capital Partners and now owned by billionaire Glen Taylor, has stabilized its finances and boosted its newsroom numbers back up into the 250 range, according to local Newspaper Guild executive officer Mike Buscko.

• Once potential buyers — such as large newspaper groups like the Tribune Company, which operates the Los Angeles Times and the Chicago Tribune — are struggling under their own weight and not considered to have any expansionist aspirations, certainly not for a paper in cheek-to-jowl competition.

• Even hedge fund players may have tired of the newspaper game. No one contacted for this story could imagine another hedge fund or “investment group” having interest in the PiPress.

• Some kind of local angel investor, either a group or an individual with benign intent and devoid of hopes for anything but marginal returns, is usually cited as the best option. Who that might be in the Twin Cities, no one cared to speculate, although Vance Opperman — president and CEO of Key Investment (owner of MSP Communications, among other things) — is the name always in churn. But any local investor would be acutely aware of the PiPress’ competitive disadvantage, compounded by the decline of the print industry in general. In an e-mail from London where he’s traveling for business, Opperman said he currently had no interest in buying the paper.

• Glen Taylor. Given all of the factors above, this may be, at long last, Taylor’s game to play. Besides having the personal assets to buy the PiPress, (Doctor guesstimated a $20 million sale price, a number regarded as on the high side by some), Taylor can afford to take months watching to see if anyone else comes sniffing, months that will only force Digital First Media to lower its sale expectations. (Taylor’s response to requests for comment: “No comment.”)

Union leader upbeat

The most upbeat take on all of this comes, not surprisingly, from the leader of the union that represents the Pioneer Press newsroom, Bucsko, who naturally wants to do everything possible to keep his members employed. “I have no doubt the Pioneer Press is viable on its own,” he said. “It has great market penetration in Ramsey County. The Twin Cities are two distinct markets, and the paper is viable because of that fact.”

Bucsko is one of the few people outside of management who have seen the Pioneer Press’ books, though a confidentiality agreement prohibits him from disclosing the critical details. That said, he believes a local investor can see a way to continue operation. With the Star Tribune now printing the PiPress, plus significant staff reductions and the two remaining unions at the paper under new contracts, the PiPress offers something of a clean slate to new owners.

“The Pioneer Press is a lean machine right now, Bucsko said. All the heavy lifting has been done, and it is viable. But clearly the current ownership hasn’t functioned well and someone new, preferably local, with a commitment to the market, needs to step up. We recognize that the paper is an outlier right now, within Digital First and the hedge fund, but we absolutely believe that it could be resuscitated.”

The darker view of the paper’s future come from people like Rick Edmonds, a media business analyst at the Poynter Institute in St. Petersburg.

“It is important to decide if the Twin Cities are one market or two,” he said. “The phase for Joint Operating Agreements [where local competitors merge many key production functions] seems to have passed. Where once there 28 around the country there are now only four or five. The lesson is that they really didn’t work very well, so I don’t see that as an option up there.”

Likewise, Edmonds has doubts that Taylor would buy the PiPress and fold its staff into a larger Star Tribune. “That’s something you only see now in magazines and trade publications. It could also present some legal challenges.” He adds, “Among Digital First’s 76 papers, the Pioneer Press is not an attractive property to my mind, because of its proximity to a strong competitor. The Star Tribune is in a good period right now. Which means the Pioneer Press may actually be in a worse situation than the rest of DFM’s papers, who at least have a clearer field in their home market.”

Alan Mutter, a Silicon Valley media consultant and former newspaper executive who now writes extensively about the news business, shares much the same view.

‘Truly competing papers’

“The Twin Cities are one of few markets that still have truly competing papers,” said Mutter. But the strength of the Star Tribune is a serious problem. For my money, the smart thing to do would be for the Star Tribune to buy the Pioneer Press and shut it down.”

In a bygone era, a shutdown deal like that would set off anti-trust sirens. But given the newspaper industry’s weakened state and the plethora of other news and information outlets — including Minnesota Public Radio, MinnPost and a vast range of blogs and websites — it may be difficult to make a case that either readers or advertisers would be lacking for alternatives. 

In any case, given the Pioneer Press’ unique position within Digital First Media, a any sale isn’t likely to happen quickly. Mutter expects a sale timetable stretching out “months not weeks.” 

Brian Lambert worked for the Pioneer Press for 15 years, leaving in 2004.

Comments (15)

  1. Submitted by Ray Schoch on 09/22/2014 - 11:29 am.

    It’s a conundrum

    I have no professional (or unprofessional) journalism credentials, so I speak merely as a long-time reader of newspapers.

    Yes, newspapers are in decline, and have been for quite a while. Whether that decline is a genuine death spiral might be open to a debate in which I’m not qualified to take part, but my experience in St. Louis, where the Globe-Democrat died decades ago, and in Denver, where the Rocky Mountain News met the same fate, hasn’t left a good impression about the resulting state of the news business, especially in terms of service to the public, when a good-sized city is reduced to a single print source for news.

    I can’t take television news seriously, even PBS, because of the increasing pressure from advertisers to tell particular kinds of stories, and in particular ways. Twin Cities TV news operations are – to the eyes of someone not a native Minnesotan – the proverbial “vast wasteland” of “stories” that might have merited 15 seconds of infotainment air time a generation ago, and are now multi-part features, apparently taken quite seriously by the people producing and reporting them. PBS is slowly succumbing to pressure from big-money sources in ways that make me uncomfortable about its reliability and its own particular biases.

    St. Louis is not better off with only the Post-Dispatch as the metro newspaper, though I think the paper does a fair job, and at least makes an *attempt* to be thorough, and a genuine news-gathering organization. Similarly, Denver is not better off with the demise of the Rocky Mountain News. An attempt to keep an alternative version of the RMN was made, but financing proved impossible, and what’s happened in Denver (under the same aegis as MinnPost, I think) is the Colorado Independent, which, like MinnPost, is online-only, and only 5 days a week. In both cases, it’s the more “conservative” of the municipal dailies that has died, and while that ought to make someone who’s occasionally liberal happy, the result has been a disappointment. Instead of the Post-Dispatch or the Denver Post becoming more liberal, the papers have simply become more corporate-dominated in viewpoint, which serves the interests of only a narrow slice of potential readership. In Denver’s case, that shouldn’t be a surprise, since it’s owned by the same hedge fund as the PP, but my point is that the editorial viewpoint is less “public service” and more “return on investment.” Those two are often antithetical.

    I’ve never read the Pioneer Press with any regularity, and from the newsgathering standpoint, the Twin Cities really *are* somewhat different from the other metro areas where I’ve lived, which don’t have a “twin” nearby. That complicates the picture to some degree. Still, my inclination is to think that the Pioneer Press serves a valuable metro-area function, and if for no other reason than it might serve to keep the ‘Strib more honest, I’d like to see the PP survive, whether Glen Taylor decides to spend more of his fortune, or some other “angel” investor with low financial expectations can be found.

    • Submitted by Claude Ashe on 09/22/2014 - 02:50 pm.

      In the interests of good journalism…

      Could you please cite your sources for the statement “PBS is slowly succumbing to pressure from big-money sources in ways that make me uncomfortable…”.

      Having worked in public broadcasting for a decade, I generally found that those who complained about “the biases” of public broadcast usually couldn’t supply any genuine, factual proof of their beliefs, nor did they have any working knowledge of how the newsrooms worked. Most often it came down to: “I didn’t like what I heard the other night. I bet they’re biased.” The comments to this article already seem to be taking on the “PP is too conservative!” / “PP is too liberal!” tone.

      If we’re going to right the wrongs of current journalism in the Twin Cities, we might wish to make sure we have *our own * stories right.

      • Submitted by Eric Paul Jacobsen on 09/24/2014 - 12:50 pm.

        “Citizen Koch”

        That’s the name of a documentary that had a rather rough time being broadcast by PBS, due to the influence of a wealthy trustee of PBS station WGBH, namely David Koch.

        People who have been following the story of this documentary since last year have no lack of evidence for Ray Schoch’s worries about PBS. You can look up some details of the story in the NEW YORKER.

        http://www.newyorker.com/magazine/2013/05/27/a-word-from-our-sponsor

        Or you can simply look at this pithy summary from the Internet Movie Database’s “trivia” about the film “Citizen Koch.”

        “The film launched a kickstarter campaign for distribution after the Independent Television Service (ITVS), a public agency that funds and curates independent documentaries, pulled $150,000 it had previously committed.”

        “PBS was originally set to air this documentary, but reports indicate that David Koch intervened with its broadcast after having a negative reaction to another documentary the network aired called Park Avenue: Money, Power and the American Dream (2012), which was also critical of him.”

        http://www.imdb.com/title/tt2545338/trivia?ref_=tt_trv_trv

  2. Submitted by jody rooney on 09/22/2014 - 11:34 am.

    If the Pioneer Press wasn’t so conservative

    they might have more readers.

    Their editorials are a joke. They have articles on the opinion page citing “facts” that are elsewhere contradicted in news articles with citations. Really the would be smarter if they read their own paper before they wrote them.

    And don’t get me started on the comics.

  3. Submitted by Robert Moffitt on 09/22/2014 - 11:47 am.

    Now that the Strib is owned by a conservative…

    …we need a newspaper that represents other views, especially on the editorial page.

    That’s why we to keep the famously liberal PiPress around.

    😉

  4. Submitted by Jim Buscher on 09/22/2014 - 01:28 pm.

    If the PP closes at least we won’t be subjected to anymore editorials from Joe Soucheray. There’s a silver lining.

  5. Submitted by Thomas Swift on 09/22/2014 - 01:50 pm.

    “..someone new, preferably local, with a commitment to the market, needs to step up.”

    Isn’t there a Koch refinery in St. Paul Park?

  6. Submitted by Jackson Cage on 09/22/2014 - 03:06 pm.

    Koch already has its Media outlet

    I think they call it “The Republican Party”

  7. Submitted by Rick Johnson on 09/22/2014 - 03:51 pm.

    Koch

    Yes the Koch Brothers own a refinery in Minnesota. Just not the St. Paul Park one.

    • Submitted by Frank Phelan on 09/23/2014 - 07:33 am.

      Union Strong

      It’s in Rosemount, in fact. It was the Koch families first foray into refining, and it is the only unionized refinery in their portfolio and, not coincidentally, the safest operation they run.

    • Submitted by RB Holbrook on 09/23/2014 - 04:46 pm.

      The Kochs

      So buying the PiPress would give them another way to spew noxious vapors into the Minnesota atmosphere.

      Just what we need.

  8. Submitted by Jim Nash on 09/22/2014 - 03:56 pm.

    Typical blog reporting

    This artical is a good example of why we need TWO strong newspapers in the metro area.
    First, there are more then two unions under contract. The Teamsters are still hauling the paper out of the Strib plant and have always been the stronger of the unions at the paper.
    Second, western Wisconsin makes up a large portion of the paper’s daily/Sunday circulation and is what seperates it regionally from the Strib. The Strib barely penetrates the Wisconsin market and people don’t want it.
    The Pioneer Press has always been slightly more conservative albeit more balanced then in recent years.
    I would not rule out an owner from a neighboring state who is already in the market in the form of a weekly paper.

  9. Submitted by Amy Sweeney on 09/22/2014 - 04:12 pm.

    I struggled with their subsciption service

    I’ve been a subscriber to the PP for years – but after moving to an area lacking a set carrier I finally had to cancel. I was told by subscription services that without a set carrier my complaints didn’t matter, there wasn’t any action they could take. I live in a first ring suburb of St. Paul…

  10. Submitted by Britter Ritter on 09/25/2014 - 07:54 pm.

    The Simple Solution

    The Twin Cities need two papers badly, because, though you may not know it, the Star-Tribune does a very poor job of delivering vital news. It’s what you don’t see in it that matters. So if tons of people in Minneapolis would take out subscriptions to the PP as well, the income might save the paper. Good content makes for good reading.

  11. Submitted by Britter Ritter on 09/25/2014 - 07:55 pm.

    Then Again

    Why doesn’t the MinnPost merge with the Pioneer Press?

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