California paper cuts 1/4th of newsroom

The Palo Alto (Calif.) Daily News laid off six of its staffers yesterday including five from the newsroom, according to the San Francisco Peninsula Press Club. Given that the free daily only had a newsroom of 20, the cut represents a quarter of the paper's news department.

In addition, the seven-day paper will be reduced to six; its Monday edition will be eliminated. The paper's satellite edition in San Mateo, which lost its Monday edition two years ago, will stop printing on Tuesdays as well.

The Monday edition most recently was 28 pages, according to the Press Club's account. Three years ago, it ranged from 52 to 64 pages.

For several years, the Palo Alto Daily News was seen as one of the most successful free daily newspapers. It was based in Palo Alto, the wealthy home of Stanford University some 35 miles south of San Francisco and 11 miles north of San Jose. Starting in 1995 with an initial eight-page edition, the paper was profitable in nine months and eventually grew to dominate its market area despite competition from traditional dailies and healthy community weeklies. The Daily News branched out and started sister papers in the neighboring towns of San Mateo, Burlingame, Redwood City and Los Gatos. The five papers comprised a company that was known as the Daily News Group.

Owners Dave Price and Jim Pavelich sold the Daily News Group in 2005 to Knight Ridder for $25 million, which is probably a record for a free daily newspaper. The acquisition provided some breathing room for Knight Ridder's San Jose Mercury News, which had been struggling to sell ads in the Palo Alto area due to the Daily News.

MediaNews Group, headed by cost-cutting CEO Dean Singleton of Denver, acquired the Daily News Group when his company bought the San Jose Mercury and a handful of other Knight Ridder papers in 2006 for $1 billion.

Since the original sale, the Daily News has gone through a series of editors and its been redesigned. The paper's emphasis on local news changed. A recent edition contained only three locally bylined stories but more than two dozen wire service articles. And the Palo Alto Daily News literally moved out of Palo Alto to an office park in Menlo Park.

The changes apparently prompted previous owners Price and Pavelich — once their noncompete agreements had expired — to return to the market with a new paper, the Daily Post, which premiered May 27. They opened their offices in the building the Daily News abandoned when it left town. Their bet is that the readers and advertisers still want a local free daily.

The Daily News hasn't said what prompted yesterday's cuts, whether it was problems in Palo Alto or at its parent company. It should be pointed out that other MediaNews papers in San Jose and Walnut Creek, Calif., were laying off employees last week as well. Credit rating agencies say the company is at risk of defaulting on its loans.

Paper that 'lost touch' gets a competitor

The founder of the Vail Daily, who sold that free daily to Swift Newspapers in 1993, on Friday launched another daily in that Colorado resort town.

The first edition of Jim Pavelich's new Vail Mountaineer was eight pages. It contained about 50 percent advertising from local businesses.

Pavelich said he started the Mountaineer because he is frustrated with the direction the Vail Daily has gone in recent years.

“It was the biggest tourist holiday of the year, and the big headline on the front page, and I’m paraphrasing, said something like, ‘I hate living here.’ And although I don’t remember the details, I remember that the headline was so unbelievably negative about nothing,” Pavelich told www.realvail.com. “I understand this is a real town with real issues, but they’ve lost touch.”

The Mountaineer was the second free daily Pavelich started in the past month. On May 27, Pavelich and Dave Price started the Palo Alto (Calif.) Daily Post. The Post is going up against a newspaper the pair sold in 2005, the Palo Alto Daily News, one of the most successful community free dailies. The now defunct Knight Ridder bought the Palo Alto Daily News for $25 million in 2005; in 2006 it was acquired by MediaNews Group.

Non-competition agreements from both sales have expired, allowing the former owners back into these markets.

In both cases, the new papers are entering markets where readers are already hooked on getting their news from free daily newspapers.

Vail isn't the only Colorado market where two free dailies are competing. Swift's Aspen Times has been going head-to-head with the independent Aspen Daily News for 20 years.

Despite the economic downturn and pessimism about newspapers, the Mountaineer is the fifth free daily to open in 2008. The others are in Baltimore; Halifax, N.S.; Salt Lake City and Palo Alto. Since the beginning of the year, BostonNOW has closed, the Manchester (N.H.) Express switched to a weekly, and the Nashville City Paper transitioned to an online product with a semi-weekly print editions.

This Examiner doesn't belong to Anschutz

COMMENTARYWith a net worth last year at $7.4 billion (according to Forbes) and with gas prices soaring above $4 a gallon, it's our guess that oilman Phil Anschutz hasn't pushed a cart through a supermarket recently. If he had, the owner of the Examiner chain of newspapers would have encountered an Examiner he doesn't own. On the left is a front page from one of his Examiner newspapers and on the right is the "National Examiner," owned by American Media Corporation of Boca Raton, Fla., which also owns The National Enquirer, Star, Globe and Sun titles. Any attempt by Anschutz to go national with the Examiner probably won't be received well by American Media, which owns the National Examiner brand name. You've got to wonder if Anschutz's newspaper people, such as Ryan McKibben, knew this before announcing plans for a national rollout of the Examiner brand in 2004. That rollout, planned for 70 markets, stopped after three cities. Now it appears that the Anschutz Examiners are copying the National Examiner by putting crime and celebrity stories on the front cover.

Note: The Examiner chain has launched its attack on Democrats who oppose drilling for more oil. This editorial, however, omits any disclosure that the newspaper is owned by an oil industry tycoon.

Random notes & observations

AWARDS: The rap against free dailies is that their journalism is inferior. Well, in the San Francisco Bay Area, the big winner in the Greater Bay Area Journalism Awards was the paid San Jose Mercury News, with 31 plaques. But in second was the free San Mateo Daily Journal with 23 awards. The Palo Alto Daily News group wasn't far behind with 17 ...

QUICK DOESN'T MEAN QUICK READ: The Dallas Morning News has announced it plans to print a free 16-page broadsheet newspaper called Briefing, which will be thrown on the driveways of non-subscribers in high-income areas. Management is going out of its way to emphasize that the 200,000 circulation Briefing won't be anything like Quick, its 100,000 circulation free daily. “Quick is single-copy,” DMN president and gm John McKeon told E&P, whereas Briefing "is home-delivered. Quick is a tabloid, and Briefing is a broadsheet. Quick is a younger product, and the sweet spot for Briefing is 25-49. It does fill out a portfolio of products to serve different readers.” ...

ENTERTAINMENT? The Washington Examiner is planning to launch an entertainment oriented website. Given the conservative Christian views of owner Phil Anschutz, it will be interesting to see what the site defines as entertainment. Anschutz has produced movies such as the "The Chronicles of Narnia" series, which reinforce his beliefs. A lot of Hollywood keeps its distance from Anschutz since he has bankrolled anti-gay rights ballot measures.

SPEAKING OF ANSCHUTZ, various newspapers including the Wall Street Journal say that the Denver billionaire will be going on trial June 23 for failing to pay $140 million in taxes. The San Francisco Peninsula Press Club website says that his Examiner and City Star newspapers haven't mentioned a word about the case.