After 8,000 Cancellations, D-G Takes Sunday Lead

After adding two newspapers and subtracting 8,000 subscribers, the Arkansas Democrat-Gazette has taken the lead in Sunday circulation in Northwest Arkansas for the first time, according to the most recent statistics from the Audit Bureau of Circulations, which monitors newspapers nationwide.

The 8,000 cancellations were expected and due entirely to duplicated subscriptions in the wake of the August 2000 “alliance” between the D-G and two daily newspapers owned by Community Publishers Inc. of Bentonville, said Paul Smith, general manager of the D-G.

“We’re pretty pleased,” Smith said of the D-G’s 5,959 lead on Sundays.

“That’s a lot of leakage,” said Sherman Frederick, president of Donrey Media Group of Las Vegas, which owns The Morning News. “I think they’re going to have a tough time pulling this one off. They lost circulation, period.”

It’s Alright, Ma

For the first time, the D-G’s ABC statistics include circulation numbers for the formerly independent daily newspapers owned by CPI — the Northwest Arkansas Times of Fayetteville and the Benton County Daily Record of Bentonville. As far as ABC is concerned, the CPI dailies no longer exist separately from the D-G.

CPI is owned primarily by the Walton family of Bentonville, one of the richest clans in the world. The D-G is owned by Walter Hussman’s Wehco Media Group of Little Rock.

According to unaudited numbers filed with ABC for the six months ended March 31, the D-G had an average paid circulation of 30,844 on weekdays and 42,313 on Sundays in Benton and Washington counties combined, the second largest metropolitan area in Arkansas with a population of 311,259.

For the same period, The Morning News had a circulation of 36,272 on weekdays and 36,354 on Sundays. (The Morning News also has a smattering of undisclosed circulation outside the two-county area.)

After initially saying the D-G’s numbers were about 2,000 down daily and on Sunday from where they wanted to be at this point, Smith called the Northwest Arkansas Business Journal back the next day to say he was mistaken. The daily stats were actually up 1,457 from projections made last summer, he said, and Sunday circulation was “right on target.”

I’m Only Bleeding

Breaking the Morning News’ dominance in Northwest Arkansas’ advertising market has been a goal for the D-G, but the Sunday surge has come with a heavy price tag.

After four years in the market, spending millions of dollars, establishing a printing press in Northwest Arkansas and amassing a staff of more than 400, the D-G’s circulation (combined with that of the two CPI dailies) was only 4,662 more daily and 9,885 more on Sundays in the two-county area than the circulation for two CPI papers alone a year ago. Without the additional D-G readers, however, the alliance newspapers wouldn’t have been able to take the Sunday lead.

The D-G is claiming a victory for its daily circulation as well, when its total 12-county distribution area is considered. In the 12-county area, which stretches from Russellville to the western and northern borders of Arkansas, the D-G has a circulation of 38,123 daily and 52,869 on Sunday.

But that’s not a fair comparison, Frederick said. If the D-G can count the entire 12-county territory, Donrey should be able to include the 44,000 readers of its Southwest Times-Record of Fort Smith with the Morning News stats for Northwest Arkansas. Only one county, Crawford, separates Washington County from Sebastian County, where Fort Smith is located. Donrey was founded in Fort Smith and previously had its corporate office there.

The Merge

Although Sunday is considered the biggest newspaper reading — and consequently, advertising — day of the week, the Morning News still holds the circulation lead for the remaining six days of the week in Benton and Washington counties.

In August 2000, Wehco entered into an “alliance” with CPI in which the Times and Daily Record was to be distributed with the D-G in the respective home counties of the two CPI papers, Washington and Benton. The D-G and corresponding CPI paper were delivered together to subscribers of either paper. In some cases, people subscribed to both newspapers, so they canceled the duplicated paper. In other cases, Smith said, the D-G cut subscribers who hadn’t paid from the list. He said “thousands” fell into the unpaid category.

The result is the CPI dailies have dwindled to become usually one local news section included with the Northwest Arkansas edition of the D-G in those two counties.

Jeff Jeffus said the Times is probably four to six pages smaller than before the alliance. Jeffus is publisher of the Times in addition to being general manager and vice president of newspaper operations for the D-G in Northwest Arkansas.

But Jeffus stressed that the Times now provides about 20 percent more local news than it did before the alliance. What has been cut was national and international wire copy, and syndicated features and comics — things that are still published in the pages of the D-G and would have been duplicated in the bundled CPI papers.

The front pages of the the Times and Daily Record refer to those publications as “editions” of the D-G. That designation allows certain circulation benefits through ABC, but the “editions” look more like what most people would refer to as “sections.”

Frederick had a different name for it.

“It’s an atrophied appendage,” he said of the Times, adding that the same is true for the Daily Record.

“I’m satisfied with their 8,000 circulation loss, too,” Frederick said, “and I hope it happens again next year. It’s a little like the ’emperor has no clothes’ story. I hope they continue the trend. The sad thing they don’t want to talk about is one whole newspaper disappeared in that magic act.”

Concerning the D-G taking the Sunday lead from Donrey’s Morning News, Frederick said, “I don’t think it’s bad. [The readers] know a Little Rock newspaper from a local newspaper. It’s a costly way to take the lead.”

The Purge

Smith said a study by Flake-Wilkerson Market Insights of Little Rock in the summer of 2000 indicated the D-G could expect to lose 61 percent of its daily circulation and 43 percent on Sunday after merging with the two CPI and dailies and canceling all the duplicated papers.

The weekday numbers ended up being slightly better than that. The D-G expected a daily combined circulation of 29,427 after the smoke cleared. Instead, the daily number was 30,884, an increase of 1,457, or 5 percent, over what was expected.

But it has been a year since the study, and the “circulation comparison” from Flake-Wilkerson seemed to indicate circulation immediately after the alliance, not a year later. Normally, some circulation growth would have been expected during the ensuing year.

“Sixty-one percent is a free fall,” Frederick scoffed. “That’s not a planned descent.”

On Sunday, the number was also up for the D-G — from 38,199 projected to 42,313 total — but Smith said that includes 4,171 Sunday papers that are thrown for free as a replacement for the Sunday Herald Leader of Siloam Springs, which CPI canceled before the alliance. Since it is being delivered as a replacement, ABC allows those Sunday newspapers to be counted as circulation.

Donrey has a similar situation in Farmington, Lincoln and Prairie Grove, where about 4,850 subscribers of its three weekly newspapers in those cities receive The Morning News on Sunday for free as part of a joint distribution agreement. If The Morning News’ free circulation in those cities was subtracted from the total, that newspaper would have actually lost circulation during the past year.

If the freebies in Siloam Springs were subtracted from the mix, the D-G would just be down 57 subscribers from its Sunday estimate a year ago of 38,199.

The “duplication” has not only affected circulation. Jeffus said the D-G fired 30 full-time and 38 part-time Northwest Arkansas employees in January. Those jobs were duplicated by the alliance, he said.

34-cents Worth

Under the alliance, Wehco/CPI newspapers match The Morning News’ display advertising rates on a cost-per-thousand basis, with some variances depending on specific contracts and frequency of advertising.

Currently, the D-G has an open rate of $12.02 daily per column inch and $16.43 on Sundays. The Morning News’ open rate is $12.65 daily and $13 on Sundays. The rates are based on last year’s circulation figures and amount to about 34 cents per column inch per thousand circulation.

The Morning News also offers a lower advertising rate for ads that run in fewer than all four of its editions (Springdale, Fayetteville, Rogers and Bentonville). In newspaper racks, The Morning News sells for 25 cents per copy and the D-G sells for 50 cents.

“They appeal to the kind of blue-collar market,” Smith said of The Morning News, “and we appeal to a more upscale market. That’s just the way it shakes out.”

“We don’t have any problem being associated with average readers,” Frederick said. “That’s what newspapers do.”

Green River Blues

Historically, The Morning News has had the advertising market sewn up in Springdale and Rogers. Last year, the Morning News had subscribers in 69 percent of households in Springdale and 67 percent of households in Rogers, making it a must-buy for advertisers trying to reach readers in those cities.

By aligning with the newspapers in Fayetteville and Bentonville, the D-G appeared to be attacking the Morning News from the north and south.

Last year, The Morning News instigated a redesign that appeared to be a knee-jerk reaction to the D-G beefing up its staff in Northwest Arkansas.

Shortly afterward, the D-G announced the alliance with CPI in what was beginning to look like a contest of one-upmanship.

Jeffus said the D-G has been trying to convince Springdale’s City Council to change a city ordinance that prohibits door-to-door solicitation. But the council rejected the proposal again June 12. The Green River Ordinance, as bans on door-to-door solicitation are usually called, dates to a 1931 ordinance in Green River, Wyo.

The D-G has relied on its three full-time crews of eight to 10 people who go door to door in the 12-county area to sell subscriptions.

“We’ve had great success increasing our circulation numbers,” Jeffus said, “but we would have better success if we could go door to door in Springdale. I think it’s a $50 fine. We’ve been fined several times. We pack it up and leave when they tell us to.”

But the D-G sales crew heads back into the streets of Springdale when nobody is looking.

“It’s a competition,” Jeffus said.

Democrat-Gazette Pre-alliance Projections

Proposed combination of “alliance” newspapers (from summer 2000)

ttDaily — Sunday

Arkansas Democrat-Gazette

Washington 7,469 — 10,789

Benton 5,597 — 7,931

Total 13,066 — 18,720

Less duplication 7,970 (61%) — 8,050 (43%)

Net total 5,096 — 10,670

Northwest Arkansas Times

Washington 13,267 — 13,922

Benton 420 — 484

Total 13,687 — 14,406

Benton County Daily Record

Washington 76 — 205

Benton 10,568 — 12,918

Total 10,644 — 13,123

Total of all three alliance papers 29,427 — 38,199

The Morning News

Washington 16,363 — 16,524

Benton 17,393 — 17,609

Total 33,756 — 34,133

Source: Most recent county-by-county figures from the Audit Bureau of Circulations (from six-month period ended March 31, 1999). Duplication study by Flake-Wilkerson Market Insights of Little Rock