November 5, 2013 Last Updated 7:59 am

MediaNews Group chairman Dean Singleton to retire, founded newspaper group built on family owned dailies

Those in the newspaper business today look to Rupert Murdoch as the perfect model for what is both right and wrong with the business. But before Murdoch there was William Dean Singleton, the name that would make any newsroom shutter when mentioned. If a rumor was heard that Singleton might be in the market to buy your paper you immediately got your resume in shape because layoffs would surely follow any acquisition.

Dean Singleton, the founder of MediaNews Group, announced that he would retire as head of the Denver-based newspaper chain, now a part of Digital First Media. Singleton has been battling multiple sclerosis. “Fighting MS has actually caused me to be healthier in some aspects of my life,” Singleton told the Denver Post. “But it makes it more difficult to do the things you want to do.”

The Denver Post article on their boss is glowing. Not surprising, considering what the alternative would be. For many newspaper professionals, the mere mention of Singleton is enough to send shivers up the spine.

Singleton-APMy first contact with Dean Singleton and the way he ran his newspapers occurred early on when Singleton bought the Alameda Newspaper Group. ANG was the perfect target: a family-owned, small newspaper chain in a great market (the Bay Area). The chain consisted of newspapers in Hayward, Newark, Alameda and Livermore, California. For years it had somewhat competed with another family-owned chain, Lesher Communication, which owned papers in Contra Costa County and overlapped ANG in the eastern part of Alameda County. in what is known as the Tri-Valley – Dublin, Pleasanton and Livermore.

Even family run papers can compete hard against each other, and when the Valley Times went daily against the Tri-Valley Herald the race was on for the lucrative part of the Alameda County market. It proved an unfair fight, we employed a growth strategy while ANG was consolidating. Ultimately, though, our chain was sold off upon the death of its founder, Dean Lesher – first to McClatchy, then to Singleton (I had left for McGraw-Hill by then.)

The purchase was a textbook example of the Singleton method: buy a family-owned paper that likely is overstaffed, trim out the costs and rake in the profits. In the ’80s and ’90s, when newspapers went almost without serious competition the strategy all but guaranteed profits. But it is difficult to say that it produced growth as it is hard to determine if the revenue growth seen in the ’90s was due to the strategy or the robust economy. The double whammy of the economy and the growth of digital media certain ended the long winning streak for many newspapers.

My own thought is that the strategy did not produce growth. This can be seen in the fact that even those papers who claim the be digital first and not seeing revenue growth – the slash and burn philosophy does not lend itself to developing new products and new revenue streams. That is why I find digital first to mean digital last and continued declining revenues.

In 1992 Singleton picked up the Oakland Tribune, another paper that was not part of another chain, and added it to the group. Later he grew what became the Bay Area News Group further by picking up the San Jose Mercury News, and then the remnants of the old Lesher group – the Contra Costa Times and other properties. But none of the properties are in better shape today than they were in the ’80’s and ’90s. The staffs are reduced, headquarter buildings sold off, and readers fleeing to other media.

Is all this the fault of Dean Singleton? No, in fact, little of it is. The damage done to the properties often occurred right at the beginning of his ownership, and sometimes even before he picked up the properties. But MediaNews Group is hardly a leader in digital media, either. Like many newspaper groups, MediaNews Group has outsourced its mobile and tablet strategies to outside firms – for lower cost, of course. As a result, the papers are not really positioned for growth and the future of publishing.

But then again that wasn’t what this was all about. It was about maximizing profits.

Singleton’s biggest fault may be that he really was (is) a newspaper man. He does really love the platform. It can be seen in the fact that MediaNews Group did not act as a private equity firm – it did not turn over properties. Once bought, most MediaNews Group newspapers stay in the company, or were closed down.

DTH-lastfront-smWorking with Richard Scudder, the two co-founders of the company, bought the Dallas Times Herald, then the Houston Post and Denver Post. Only in Denver did things work out. Singleton probably realized that while picking up ailing papers on the cheap seemed like a good idea if one knew how to turn around the papers, a better strategy would be to pick up healthy papers, in good markets, from family owners eager to cash out. These healthy papers often could be made healthier still, at least on paper, by cutting out the overhead that had built up over the years. No wonder then that the first thing one could expect at a Singleton paper would be a fight with the unions, assuming they existed. This happened at the Oakland Tribune shortly after its acquisition.

Roll-up strategies are not exclusive to newspapers. In fact, after leaving the newspaper business for B2B magazines, I found myself in yet another industry facing consolidation due to roll-up acquisitions. But in the case of B2B, private equity firms are behind the move (they are in the newspaper business big now, too). The difference is that a PE wants to own its properties for a shorter period of time – typically three to five years depending on the economic environment.

Both work their businesses in a similar way: cut costs, pump up the bottom line. In the newspaper business, the idea was to pump up profits in order to make more acquisitions. This is true of B2B, as well. A PE can grow their portfolio of titles through acquisitions, thereby, in theory, adding value to the company – all the better when selling out after a few years. But both roll-up strategies suffer when the businesses are contracting. If the only way to grow the business is through acquisitions then it is a race against time – which will occur first, the sell-out or the bankruptcy? In Singleton’s case that bankruptcy occurred in 2010, and the management team ended up being replaced by the Digital First team.

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