It's long been a classic mismatch: Educated New Haven, Conn., home of Yale University, didn't see much sophisticated reporting in its hometown New Haven Register.
Owned by a succession of budget-cutting owners, the Register has suffered staff loss after staff loss and a winnowing of its products for decades. Now, there's a new owner in town, and its intentions could be meaningful not only to the wider New Haven region of more than 470,000 households but more widely as Hearst Newspapers becomes newly acquisitive.
In early June, Hearst Corp. bought the Register and a couple of associated dailies and weeklies from cost-cutting owner Digital First Media Inc. That purchase, at an undisclosed price, followed Hearst's acquisition a year ago of other Connecticut properties. Hearst now owns seven of the top 13 newspapers in Connecticut. Perhaps, as importantly, it can claim the state's largest digital audience. That audience disproportionately resides in some of Connecticut's, and the nation's, most affluent areas, including the Gold Coast.
The sale of newspaper properties continues at a good pace month by month, but this one raises bigger national questions about the future and role of America's local press, even as its national press enjoys an unprecedented reading boom. In Connecticut, Hearst Newspapers CEO Mark Aldam said the company is reinvesting in its news properties, increasing staffing by 14%, adding 25 newsroom staff in the state. That includes bolstering a severely depleted Register newsroom staff, adding 10 positions for a new total of 48.
The Connecticut buys parallel two other regional Hearst acquisitions within the past two years. Last year, it bought 24 weeklies around its highly profitable Houston Chronicle and, in January, added smaller Michigan properties.
Aldam said he's not done.
Does Hearst Have a New Regional Model?
"We think it's good business to build scale, so we'll look at every opportunity to do that that makes sense. And you can also expect us to look outside of the markets where we presently have businesses when the right assets are available at a reasonable multiple."
While a number of chains have been buyers, they have disproportionately "clustered" newspaper titles geographically, combining lots of business-side and editorial functions. It's a classic strategy in any shrinking industry: consolidate and streamline costs. That's in part what Hearst is doing in Connecticut, but if the company is serious about making pointed, strategic reinvestments in its content and its products, its Connecticut move could stand out from the crowd. Aldam said he believes that Hearst Newspapers -- now operating 22 dailies and 64 weeklies -- has found a model to build on.
"We've had increasing profits for six years now," Aldam said. Further, the company has avoided big layoffs or buyouts, though it has done "targeted" ones.
The Hearst model, in short, is one that all regional dailies aspire to lock in: find enough new sources of revenue and profit to replace ever-declining print ad revenue. For Hearst, those sources include moves from the wider playbook of local newspaper business reinvention:
- Reader revenue has become a focal point, as advertising of all kinds -- print and digital -- becomes more challenging. Like most publishers, Hearst has priced up its local subscribers, but Aldam said it has consistently grown circulation revenue year over year. That's a trick many daily publishers have found difficult, as readers flee in overpriced, underperforming papers and sites. "When more than 45 percent of our revenue comes from the consumer, and that's growing, we have an obligation to provide a seven-day experience," Aldam noted.
- Marketing services and branded content: Hearst is in the custom digital agency business in its five largest markets, working the digital marketing services increasingly essential to medium and small advertisers.
- Events and podcasts: In these two newer areas of local exploitation, Aldam said Hearst is ramping up its investment, with announcements to come.
Those initiatives look similar to what others are doing, but, Aldam said, the company is executing on some of those areas better than its regional peers.