Odds are long for giveaway newspapers

October 19, 2005|By JAY HANCOCK

Welcome to metro Baltimore, Philip Anschutz - or at least to its wealthier driveways, the declared destinations of your forthcoming free tabloid newspaper, The Baltimore Examiner.

May you deliver stellar journalism, increase advertiser choice and enjoy the same success as A.M. Journal Express, a similar Dallas paper launched a couple of years ago.

"We know we were a hit with readers," says Jeremy Halbreich, head of American Consolidated Media, publisher of A.M. Journal Express. But the free tabloid flopped with advertisers and published its last issue in April 2004.

Life span: six months. Losses: Somewhere under $5 million, says Halbreich.

Nobody expects The Baltimore Examiner and billionaire Anschutz, who lives in Denver and made a fortune in oil, telecom and several other businesses, to fold as quickly. Or as cheaply.

"Mr. Anschutz has deeper pockets, I'm afraid," says Phil Murray, a partner with Dirks, Van Essen & Murray, a newspaper brokerage that sold Washington's suburban Journal papers to Anschutz's Clarity Media.

"He's going to find out whether this works. And he's going to spend the money to find out," Murray says.

But A.M Journal Express and other examples suggest that it's as difficult as ever to launch and sustain a free newspaper, which is what Clarity proposes in Baltimore, Monday through Saturday.

Maybe harder, in Anschutz's case.

Instead of being distributed on public transit and sidewalks the way free dailies are in Chicago, Washington and elsewhere, The Baltimore Examiner is supposed to be home-delivered in high-income ZIP codes, which will be much more expensive. Circulation is projected at 250,000, compared with a Monday-Friday range of 203,000 to 292,000 for The Sun.

Instead of going exclusively for the quick-read, distraction-prone, twenty-something crowd, Anschutz is presumably hoping well-off readers in Homeland, Columbia and Bel Air will prop their feet up with his product.

Instead of converting existing newspapers to its free, tabloid format, as it did with The San Francisco Examiner and when it morphed the Journal papers into The Washington Examiner, Clarity is starting in Baltimore from scratch. And although it relies largely on wire stories, as do other free tabs, Clarity spends more money than other free papers on reporters and editors to produce local articles.

Few free dailies make money. Papers in Aspen, Telluride, Steamboat Springs and other Colorado ski towns are exceptions, Murray said, but those papers are small and rely largely on tourists.

Metro International, a Swedish concern that gives away Metro tabloids in Philadelphia, New York, Montreal and many other cities globally, lost $11.4 million last year, according to financial statements published on its Web site.

Closely held Clarity won't reveal results for The Washington Examiner, which debuted this year and is also home delivered. But the paper is almost certainly unprofitable despite gaining advertisers that publisher Herbert W. Moloney III said include Best Buy, Sears, Macy's, and Home Depot.

Quick, a free tab launched by the Dallas Morning News to combat A.M. Journal Express, is losing money after two years but should break even next year, says Jim Moroney, the Morning News' publisher.

Quick was probably a large factor in the demise of A.M. Journal Express. American Consolidated Media's Halbreich, who was president of the Dallas Morning News before launching A.M. Journal Express, accuses his former company of underhanded tactics such as harassing his distributors and molesting his sales racks.

"It's not true, and I'm sorry that Jeremy feels like he has to blame his company's problems on his competitors," says Moroney.

The Sun, whose profitable, 20-year reign as metro Baltimore's sole big newspaper company would be challenged by Clarity, says it will rely on the strength of the newly redesigned newspaper and its strong relationships with its readers.

"We feel that as long as we continue to deliver value to our readers and advertisers that people will continue to look to us as Maryland's newspaper," says Alonza Williams, spokesman for The Sun.

But value is as value does. Of course I'm biased, but I don't expect The Baltimore Examiner to produce journalism of the quality done by The Sun. But neither will it be charging tens of thousands of dollars for a full-page ad, as The Sun often does.

A full- (albeit tabloid) page ad in all The Washington Examiner's editions goes for $4,323, according to its rate card. Maybe that's a good deal. Or maybe even that's too much for a paper that people haven't asked for or taken the trouble to buy.

In either case it's part of a bold long shot, one that will determine just how deep Philip Anschutz's pockets are: that the "traditional" daily newspaper of the future is a free one.

jay.hancock@baltsun.com

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