Saturday, January 12, 2008

Why the Examiner wants Metro

Here's some analysis of yesterday's report that the Examiner chain is in talks to buy Metro's three U.S. papers (see below). By the way, the report today was confirmed by a second newspaper, the Boston Globe.

It's obvious why the Examiner chain is interested in Metro. The Examiner has never succeeded at attracting local advertising, so its executives have focused on national ads, though they have been hard to come by as well. What national ad buyer would just want Baltimore, Washington and San Francisco? By acquiring Metro, the Examiner could add New York, Philadelphia and Boston to the list. Sure, the chain still wouldn't have L.A. and Chicago. And it would lack growth markets like Miami, Atlanta, Dallas and Phoenix. But it's hard to imagine a national account being too concerned about Baltimore.

Adding New York, and to a lesser degree Boston, adds some prestige to the Examiner chain. It says that the Examiner is the Big Leagues.

But such an acquisition raises some questions:
    • Will the three papers retain the "Metro" names and formats? Or will they be re-done to look like the Examiners, which all follow the same format?

    • Will the acquisition get the LA Times moving on starting a RedEye-like free daily in the Southland to head off an Examiner there? The Examiner's owner, Phil Anschutz, has significant real estate holdings in L.A. as well as a hockey and soccer team. His soccer team's star is phenom David Beckham, who Anschutz is paying $250 million.

    • Will the Tribune Co., owner of the Baltimore Sun, start a free daily there to make life difficult for the Baltimore Examiner and keep the Anschutz chain in the red?

    • The Examiners have had trouble getting people to pick them up out of racks and instead have resorted to home delivery where they are thrown, unsolicited, on driveways in upscale neighborhoods (a practice which has drawn considerable opposition from residents). Will the Metros switch to a force-fed distribution model, too?

    • The Examiners have a right-wing slant with national "news" writers who moonlight as Fox News commentators. The Examiners carry ads for the conservative Heritage Foundation and owner Phil Anschutz's "Pass It On" campaign that pushed for the Iraq war. This Republican tilt one reason why the Examiner has had a tough time catching on in liberal San Francisco. Will a right-wing format work in New York, especially where the right side of the spectrum is well represented by the N.Y. Post and Sun?
Right-wing or left-wing, it's unlikely that many national advertisers would be interested in the Examiner because it seems to be designed for the over-50 crowd. For instance, we recently saw a story in the San Francisco Examiner about the opera followed on the next page by an ad for an assisted living facility.

The Examiners might be better off if they copied RedEye or Tampa Bay's *tbt, both of which reach a younger crowd coveted by advertisers. Unlike the Examiners or Metro, RedEye and *tbt exude energy and life. True, they focus on entertainment, music, clubs, contests and the like, but they also carry real news. Both RedEye and *tbt are attracting readers who would never pick up their paid parent papers.

Whether or not the Examiner chain buys the three Metro papers, the leading company for commuter free dailies is Tribune, with its RedEye and amNewYork free dailies both making money. After four years in business, the Examiner chain still hasn't figured out how to do that. And the Examiner chain's profitability problems will only grow if it acquires three money-losing papers and doesn't have a better plan than one it has today.