The newspaper war between Dean Singleton and the Los Angeles Times is suddenly looking more like a marriage.
Under a deal announced May 14, Singleton’s five-paper Los Angeles Newspaper Group chain will begin carrying the same pre-printed advertising inserts that now appear in the Times. The inserts will be marketed by Times Direct, an advertising subsidiary.
Such an agreement between two rival newspaper companies is unusual, but even more surprising was the announcement that, as part of the deal, Times Mirror Corp. had agreed to invest an undisclosed sum in Singleton’s Garden State Newspapers Inc. “to strengthen the relationship between the two companies, which may identify other opportunities to work together in the future.”
Work together? Is this the same Dean Singleton who put together a 422,000-circulation newspaper chain to rival the Times in L.A. County?
Ike Massey, publisher of the Singleton-owned Los Angeles Daily News and president of the Los Angeles Newspaper Group, said the alliance is really aimed at a common enemy other forms of media that attract advertising.
“Newspapers have to work together to give advertisers the biggest bang for the buck,” Massey said, adding that the competition is no longer competing papers but television, radio and mass mailings. “Even bus-stop benches,” he said.
The Times will use the alliance to entice advertisers by offering a greater reach for their products, according to Robert Brisco, the Times senior vice president for advertising, marketing and new-business development.
In addition to the Daily News, Singleton owns the Long Beach Press Telegram, the San Gabriel Valley Tribune, the Pasadena Star News and the Whittier Daily News. Far from forming alliances with the Times, most media analysts were expecting him to turn up the heat on the region’s dominant newspaper.
Singleton did retain veteran newspaper editor Jim Bellows as a consultant to help develop shared editorial content, but even so, his papers are not strong enough to challenge the Times’ dominance, said Sherrie Mazingo, an expert on media economics at USC’s Annenberg School of Communication.
But, Mazingo said, similar alliances may become common as newspapers struggle to keep advertisers from defecting to TV and the Internet.
“We may be seeing a lot more of this as time goes by,” she said. “This is a tough market for newspapers. Readership is declining and so is the advertising dollar. We are going to be hearing about different strategies to improve the bottom line.”
From a business standpoint, an advertising alliance makes sense, said Bill Bird, an analyst at Salomon Smith Barney. “This is a rare win-win situation,” he said. “Singleton is already serving the same market and all he is doing is distributing someone else’s insert. The Times already has an infrastructure in place that is already amortized. They both can make a profit.”
“This is strictly a numbers game,” added Arthur Rockwell, an analyst at Drake Capital Management. “For the Times, it is how do you get the largest number of hits for an advertiser. This enhances your clout with an advertiser.”
Massey said the Times investment in Garden State was made to ensure that Times Mirror “had some sort of real interest in making the alliance work.” He emphasized that the Times had no equity position in Garden State Newspapers.
Massey said Singleton approached Times Mirror for the deal. He added that Singleton initially contacted his bigger rival about exploring a relationship with his three San Gabriel Valley newspapers in 1996.
The deal apparently became more attractive to the Times with Singleton’s acquisition of the Long Beach paper last year from Knight Ridder and his Jan. 30 purchase of the Daily News, the second-largest paper in the county, from the estate of Jack Kent Cooke.