Media execs discuss investment strategies, importance of strong newsrooms

Jim Moroney, publisher and CEO of The Dallas Morning News, told attendees at the 2018 Mega-Conference that his paper's investment strategy is focused on growing paid digital subscribers and growing MORE paid digital subscribers. View this three-minute clip from his remarks during a panel discussion on "Investing in Newspapers in 2018."

The importance of a strong newsroom and of newspapers publishing engaging, relevant, local news was emphasized again and again by media executives on the "Investing in Newspapers" panel at the recent Key Executives Mega-Conference.

The panel was moderated by Penelope Muse Abernathy, Knight Chair, Digital Media Economics, School of Media and Journalism at the University of North Carolina, Chapel Hill.

Panelists were:

  • Mark Adams, CEO, Adams Publishing Group
  • Mark Aldam, executive vice president and COO, Hearst
  • Jeremy Halbreich, chairman and CEO, AIM Media Management
  • Jim Moroney, chairman, president and CEO, A.H. Belo Corporation, and publisher and CEO, The Dallas Morning News

Over the last 13 years, the newspaper industry has lost more than 1,400 newspapers in the U.S. to closures, mergers and the downsizing of smaller free-standing newspapers that have become editions of larger regional ones, Abernathy said.

"The decline in circulation has been even more dramatic," she said. "It's been halved. Total print circulation – that includes all weeklies and dailies – has declined from 117 million to 67 million, the biggest drop coming in dailies."

She said, "The average print circulation of a daily newspaper in 2018 is 20,000. Since 2004, more than a third of all newspapers have changed hands and about half of them have changed hands two times or more."

When calculcated based on the number of newspapers (not on the circulation of those papers), she said the top 25 companies own a third of the nation's newspapers and control about 50 percent of print circulation. LEARN MORE

Three of those companies – Adams Publishing Group, Hearst and AIM Media Management – were among the conference panelists.

A.H. Belo

Differently from everyone else on the panel, Moroney said he's not buying newspapers. Instead, he's investing in The Dallas Morning News' current operation, specifically on growing paid digital subscriptions.

"The marginal cost of adding one more paid digital subscriber is virtually zero," Moroney said. "The marginal cost of adding 10,000 paid digital subscribers is virtually zero."

"Remember," Moroney said, "all revenue is not created equal. You want the highest margin revenue that you can possibly get because it's going to contribute not only to the top line, but to the bottom line through profitability." It also brings in recurring monthly revenue that gives you the opportunity to do additional things.

However, he said success with paid digital subscriptions is only available to those publishers who still have sufficient resources in their newsroom to publish enough relevant and local news that is differentiated from what local television stations are putting on their websites. TV stations are not going to put paywalls on their websites any time soon, he said. 

He warned that publishers can't pursue a paid digital strategy with success if their newsrooms don't have a competitive advantage and more resources than the local television stations and if they have cut their newsroom down so far that news on the website can't be differentiated from news on the television station sites. "People aren't going to pay for something they can get for free somewhere else."


Aldam said Hearst strongly believes in the viability of local media.  "We're demonstrating that," he said, "by reinvesting in strengthening the assets we currently have by targeting acquisitions that build both scale and diversification."

But, he said acquisitions and investments are only part of the Hearst strategy. The company also is working to build the size, capability and talent of its journalists.

"A culture of cost-cutting without innovation, without reinvestment, is a death sentence, in our opinion," he said.  

Aldam told attendees that he believes print will be around for decades – "long enough to print my obituary for sure ... if we keep investing in news content that (consumers) continue to value and keep them connected to the community." He said the print world may change in frequency, "but I don't think it's going away over the next 20 or 30 years."

He said the number of newsroom employees at Hearst has grown by 20 percent over the last three years. Most of this has been the result of acquisitions and full-time investments, but also as a result of investing in better talent, more assignments and new content that consumers are willing to pay for.

He also cited local sales teams as another area that is indispensable.  "Thirty years ago, it was a fairly easy business. It was relationship driven and it had two or three core products. Today, we have over 75 digital solutions in the toolkit and not every solution matches every need."

AIM Media Management

AIM Media Management also is investing in newspapers. Halbreich said, "There remains a driving need for what we do, as local newspaper publishers.  It's all about the content, what you do for your local community, and sales."

In deciding to invest in a given property, Halbreich said the property needs to be sizeable enough (minimum $3M - $5M EBITDA) and accessible by a single non-stop flight from Dallas-Fort Worth. The characteristics of the community and knowing that the perspective publisher can make a difference also is important, because content is at the core – it's our franchise, Halbreich said. 

"Every time we've been fortunate to make an acquisition," Halbreich said, "we have always increased news staffers and sales staffers."

Adams Publishing Group

Adams said his family decided four years ago that newspapers was a space they wanted to invest in. He said that decision was based on the strength of newspaper brands, the importance of the community service component, the availability of seasoned management at newspapers, fragmented ownership of properties (lots of newspapers were available for purchase), consolidation and integration opportunities, and low purchase multiples with high ROI.

Their strategy:

  • Buy quality newspapers in solid, growing communities that are underserved by other local media.
  • Buy newspapers from families, steering clear of private equity and/or public sellers that have stripped out the newsroom. "We all understand that taking a machete to the newsroom is a bad business decision," Adams said. "We simply won't do it."
  • Buy newspapers that have upside:
    • Digital: many newspapers still haven't exploited their digital opportunities
    • Retail: many newspapers have cut "boots in the street."  More "boots" = more revenue
    • Circulation: Many newspapers don't invest in marketing and promotion. Isn't this the business we're in?

Download the presenters' PowerPoint presentation (in PDF format) for additional details

future of newspapers, Abernathy, Adams, Aldam, Halbreich, Moroney
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