Wednesday, October 03, 2007

L.A. may not have a pot of gold

COMMENTARY: A few months ago, when one of billionaire oilman Phil Anschutz's guys told me they weren't going to launch an Examiner free daily in Los Angeles, I asked why? It's the nation's No. 2 media market, an internationally known city with a five-county population of 17 million. He asked me, "Why do you think they don't have an NFL franchise?" Because the Rams moved to St. Louis and the Raiders back to Oakland? No, because LA is a dysfunctional mess. It's too big of a media market to cost-effectively advertise anything, including an NFL team, and the best you can do is divide the place up in to smaller portions. But that doesn't work because people live in one place and work in another. Plus you have a situation similiar to Miami, where a growing number of people speak Spanish and are not legal residents, limiting their purchasing ability. For many advertisers, LA doesn't make sense anymore. At least in English. La Prensa and La Opinion seem to be doing quite well.

And that brings us to the Tribune Company's plans to launch in LA a free daily oriented to the English-speaking 18-34 age group, similar to the company's RedEye in Chicago. While LA Times publisher David Hiller hinted at such an idea last week, it won't happen until Sam Zell has taken control of parent company Tribune, which could be six months or longer.

But they'll still be first. Anschutz has costed out the market and found it to be too expensive. Who knows, maybe Metro International or Dagsbrun (backer of the new BostonNOW) might want to enter LA, but how could they match the delivery and advertising infrastructure of the LA Times?

If the LA Times starts a RedEye clone in LA, it won't happen until Zell has full control. Maybe spring 2008.