The Austin Chronicle Begins Daily Publication

A New Daily in Town

The casualties are everywhere. The Houston Post. The Dallas Times-Herald. The Tulsa Tribune. Newspapers have been dying by the rack-load in recent years. The reasons are many. High newsprint prices, declining circulations, increasing use of electronic publishing, and the World Wide Web have all put nails in a big coffin containing dozens of dailies. So it's more than a little surprising that starting next Monday, April 1, the Austin Chronicle will move to daily publication.

But from the perspective of Nick Barbaro and Louis Black, the owners of the Austin Chronicle, the move to launch a new daily was simply a matter of time. "We've been growing so fast, we didn't know what to do with all the money we were making," said Black, the editor of the Chronicle, who has been at the paper since it kicked off in 1981.

"Plus," he continued, "Austin needs another daily for political balance. The Statesman's coverage has been so slanted toward growth and development that we think we can provide a counterbalance that will make the city a more vibrant place."

Barbaro, the publisher of the Chronicle, said Austin's demographic profile fits perfectly with the segment that buys and reads newspapers. "More people in Austin subscribe to The New York Times than in Newark, New Jersey," said Barbaro. "That shows that people here want hard news and they want it in a palatable format that makes sense. I think that means something."

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"We've been growing so fast, we didn't know what to do with all the money we were making." -- Chronicle Editor Louis Black

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The Chronicle's partner in the venture will be Scripps-Howard, Inc. Editorially, the Chronicle will remain autonomous, but the Cincinnati-based publisher, which owns several U.S. and international newspapers, will build a multi-million-dollar press plant in Southwestern Travis County to print the new product. Jim Daly, the company's lead negotiator on the deal with the Chronicle, said Austin was too good a market to pass up. "Just look at the last week in Austin," Daly said. "The Chronicle, through South by Southwest, attracted nearly 10,000 visitors to the city. With our marketing muscle, we think we could turn South by Southwest into a three-month-long event that could attract 100,000 people. That kind of exposure could make the Chronicle not just into a regional paper, but a national paper, which covers music, the arts, multimedia, and the computer industry. It's a format that a lot of people have looked at but no one has done. This is the ideal situation where we can learn from them and they can learn from us."

Nadar Spekdebar, a newspaper analyst with Morgan Stanley in New York, thinks the deal makes sense for Scripps Howard. "Even though the company will probably spend $175 million on a new press plant, that's not that big an investment for a city like Austin," he said. "After all, Samsung is spending over $1 billion on their new chip plant. And it seems to me that the new venture could get some very favorable tax breaks from the city that will make it a very attractive deal."

Spekdebar said the Austin American-Statesman's growth in circulation over the past few years has gotten a lot of attention in the newspaper industry. And he adds that it was only a matter of time before someone came in to compete with them. "Cox's revenues from the Statesman are likely over $300 million per year. That's a huge amount for a city the size of Austin," he said. "Meanwhile, alternative weekly publications have been very hot investments lately. Look at the growth of New Times. They've gone from a one-newspaper company to a behemoth in just a few years. By going to the daily market, the Chronicle has trumped New Times and will likely tap into a very lucrative market."

The analyst thinks the new Scripps-Chronicle venture could soon have revenues approaching $100 million. Scripps-Howard has already bought the land for the plant. Barbaro says he "regrets" the location over the Edwards Aquifer, "but the way the deal is structured, we have no say over that part."