Manchester Consolidates Power with Second Newspaper Buy | Voice of San Diego

Economy

Manchester Consolidates Power with Second Newspaper Buy

Hotelier Doug Manchester’s purchase of the North County Times puts both of the county’s daily newspapers under his control.

 

The man who calls himself Papa Doug — a man who always operated outside San Diego’s cultural establishment — is now San Diego County’s most powerful media figure.

Doug Manchester, the U-T San Diego publisher, now owns both of San Diego County’s major daily newspapers, striking a deal Tuesday to pay $11.95 million for the North County Times, the 75,000-circulation paper that covers from Del Mar to Temecula. The deal closes in October.

The purchase consolidates the county’s two daily newspapers under the control of Manchester, a hotelier who built a reputation for being egomaniacal, litigious and unrelenting while developing San Diego’s downtown waterfront in the 1980s. Since buying the U-T in late 2011, he hasn’t hesitated to use its news and opinion pages as a bullhorn for his conservative political interests and a bludgeon for attacking opponents.

Manchester and U-T CEO John Lynch said Tuesday they haven’t decided what they’ll do with the paper and its brand. Peter York, the North County Times’ publisher, said he expected fewer than 50 layoffs to follow. A media analyst, Ken Doctor, said he expected advertising staffs and back-office jobs like accounting and human resources would likely be consolidated.

Whatever Manchester decides to do with the North County Times, this much is certain: The changes won’t be subtle. Look no further than the U-T for evidence. Since spending roughly $110 million on what was then called The San Diego Union-Tribune, Manchester has renamed and rebranded it, making the paper more partisan, petulant and provocative.

With the North County Times (and its companion paper, The Californian), Manchester gets an outfit with a newsroom of 70 people who have for years succeeded through their hyper-local coverage of San Diego’s northern suburbs.

While its parent company, Lee Enterprises, had struggled, filing late last year for bankruptcy protection under the weight of heavy debt, the Times had proven more resilient. Its print circulation better weathered the nationwide decline than the Union-Tribune’s. And the Times successfully defended its turf against the U-T’s failed effort to establish a North County newspaper and capture valuable suburban advertising revenue.

“Going back to Platinum (Equity) and the Copleys, they’ve coveted the demographics up here,” York said, pointing to the rapid population growth in cities like San Marcos. “That’s the demographic you want to reach. For readers and advertisers.”

The savvy developer in Manchester gets another printing press that could allow him to move printing operations away from the U-T’s Mission Valley headquarters, where he’s proposed a $200 million redevelopment project. The controversial ideologue in Manchester gets a powerful, consolidated platform to control what constitutes news in either of San Diego County’s two daily newspapers. He told Times staffers Tuesday that he expected them to be positive when they write stories.

Lynch told the U-T he doesn’t expect to move printing operations. Manchester told KPBS Tuesday that he remained interested in buying other newspapers.

After Manchester bought the Union-Tribune last year, he said he wanted the paper to become a cheerleader for San Diego. He repeated it so often we dubbed him San Diego’s Cheerleader-in-Chief.

He made similar comments Tuesday in his meeting with Times employees and in an interview with KPBS. “For so many years, the news media has not championed the military, has not championed the many success stories that are here in San Diego,” he said. “We’ve tried to in fact point out what’s right about America’s Finest City and we want to continue to do that.”

During the same KPBS segment, Kent Davy, the North County Times editor, said some in his newsroom were shocked by the purchase. He offered a differing view of his newspaper’s role. “We don’t work for corporate masters. We work for readers and the notion of doing good work,” Davy said. “We right wrongs, we show the community both its success and failures.”

Dean Nelson, director of the journalism program at Point Loma Nazarene University, said buying the Times was a smart business deal for Manchester. But removing the U-T’s lone daily competitor heightens concerns that Manchester’s advocacy for the military, local pro sports teams and businesses may color the paper’s coverage, Nelson said.

“I don’t think a Duke Cunningham story would be told now because I don’t think there’d be that same sense of outrage in the management that there was when the Union-Tribune discovered it,” Nelson said, citing the paper’s Pulitzer Prize-winning corruption investigation. Reporters then had to push the paper’s reluctant owners to publish stories about Cunningham accepting bribes from defense contractors, Nelson said.

“Now if you’re saying we’re going to be the cheerleaders of the military, why would you report on this guy that’s taking bribes?” Nelson asked. “Where’s the cheerleading there?”

The newspaper’s $11.95 million sale price is about 15 times more than its profit last year. Ken Doctor, a media analyst with Newsonomics, said most daily newspapers sold recently have cost between three and five times their profit.

The Times’ higher sale price “tells you that there is great synergy in owning a market,” Doctor said. “It’s worth paying a premium for that. And this is chump change. It’s Lee saying: ‘Thanks for taking it off our hands, you can have it.’ “

The purchase price is about $6 million less than what Manchester sold his former six-bedroom oceanfront La Jolla home for in 2009.

Doctor also noted that the Times is operating on a thin margin: Its $800,000 profit in the last year equals about 3 percent of its revenues. That’s lower than most other newspapers’ profit margins of between 5 and 10 percent, figures that are contingent on continuing staff reductions, Doctor said.

“They’ve cut enough costs to eke out a little profit, which is characteristic of the entire industry,” Doctor said of the Times. “It shows you essentially that these aren’t profitable enterprises at this point, considering that advertising is continuing to go down.”

Doctor said the deal was unlikely to attract the interest of the Justice Department’s antitrust attorneys. Large metropolitan newspapers have bought up suburban newspapers for a long time, Doctor said, without drawing government scrutiny.

Rob Davis is a senior reporter at Voice of San Diego. You can contact him directly at rob.davis@voiceofsandiego.org or 619.325.0529.

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