New Management Team Acquires Option to Buy Paper in Two Years.
It’s been a month since word leaked that Pittsburgh City Paper’s Brad Witherell was peddling his seven-year-old newsweekly to a family that owns two local radio stations. On Oct. 31 it became a done deal — kind of.
On that day, Witherell signed a two-year agreement turning management of the paper over to MGTF Paper Company, LLC, owned by brothers Michael, Gregg and Todd Frischling. Witherell will remain the paper’s sole owner and will continue to act as publisher, pocketing a monthly consulting fee from the management company.
The deal also gives MGTF an option to buy the 60,000-circulation paper in Jan. 2001.
The arrangement is a strange change of course for Witherell, who, just a month ago was talking like he was ready to unload the paper for the right price.
“[The deal with MGTF] addresses the concerns I had about selling the paper, namely whether or not I was selling too soon,” says Witherell. ” The bottom line here is it could very well mean more money [for me] in the long run. It’s just a better deal for me; it’s just a better deal for them.”
Gregg Frischling, a shareholder in WPNT Inc., the family’s holding company which owns Pittsburgh radio stations WLTJ-FM and WRRK, says he would have preferred to buy the paper outright.
“We would have loved to just buy it, but Brad had some concerns,” Frischling tells AAN News. “He wanted to make sure the people who bought the paper wouldn’t ruin it. We agreed to the deal because we truly believe that it’s a good purchase where we can increase our market share from an advertising standpoint.”
Frischling says the family is venturing outside radio because of increased pressure from large competitors like CBS, which owns four radio stations in the Pittsburgh market and Chancellor Media, the owners of five radio stations and a billboard firm.
“We’re doing this to stay competitive,” he adds. “It also gives us the chance to be more aggressive with our cross promotions in seeking advertisers.”
The deal will result in no editorial staff changes, according to Witherell and Frischling. Both men also say they expect to see the paper’s circulation increase in the coming months. Moreover, Frischling says one of the three brothers will be named as MGTF’s City Paper manager. That decision is expected early next year.
City Paper’s weekly circulation has increased by 10,000 since last year, when it was distributing 50,000 copies. The paper has also seen its page count double and its revenues swell by 70 percent during that period, according to Witherell. The paper will have gross revenue this year “in the range of $2.2 million,” he adds.
Citing confidentiality agreements, neither Witherell nor Frischling would disclose the deal’s financial terms.
“The final cost of the paper has to do with a bunch of formulas,” Witherell says. “We’ll see about that in a couple of years. For now, they’re calling all the shots and they’re paying me to run the paper.”