New York-based chain announces plan to create its own national ad network.

Just six months after Stern Publishing sold its prestigious chain of weeklies to a group of private investors, Village Voice Media (VVM) announced it plans to leave Alternative Weekly Network (AWN) to create its own national advertising group.

The departure of VVM will leave AWN with a hole in five of the top 15 markets, including the top two, New York and Los Angeles, as well as Seattle, Minneapolis and Cleveland.

VVM originally examined several options — including partnering with AWN’s competition, The Ruxton Group — before opting to venture solo into the national-sales market. Although VVM will stop paying commissions to AWN beginning on Jan. 1, 2001, both sides have expressed a desire to maintain a working relationship.

“I think the key thing for both organizations is [to find] a way to work cooperatively together,” said Brian Hieggelke, publisher of Chicago Newcity and Newcity.com and a member of the AWN Executive Committee that was appointed at the group’s board meeting June 2 in Phoenix. “I anticipate there will be some kind of relationship development in the next six months.

“We will have to wait and see what the ramifications are,” said Hieggelke, who was appointed by the AWN board to serve as the organization’s media spokesman. “It’s a little early to say, with any definitive sense, what is going to happen.”

Although VVM officials said they will be cutting their ties with AWN next year, they don’t know yet what form their own network will take. Nevertheless, Nashville Scene Chairman and VVM Executive Vice President Albie Del Favero said he presumes the new network will be managed less like the AWN cooperative, and more like the New Times Inc.-owned Ruxton Group.

And like New Times, VVM eventually hopes to convince non-VVM papers to affiliate with its national advertising network. “We hope that ultimately, we will have other papers not owned by Village Voice Media joining us,” Del Favero said. However, he said it’s likely that VVM will launch the new network with only its eight papers.

“We kind of want to make sure we have all our ducks in a row before we go out and bring in other papers,” Del Favero said, adding that this won’t preclude VVM from engaging in preliminary discussions with potential partners.

Russ Martineau, vice president of sales and marketing at AWN-member Willamette Week, said he believes the creation of another sales network is a good thing for the alternative newspaper industry.

“We want to get more advertising dollars in our newspapers,” said Martineau, who has been in discussions with VVM about its new ad network. “We want to get more advertising dollars that are not tobacco or alcohol and whoever can do that, I’m for them.”

Although VVM hasn’t decided what its network will look like once it’s formed, Martineau has his own thoughts on the subject. He would like to see VVM adopt a combination of AWN’s decentralized model — in which sales are handled by ad reps from member papers — and Ruxton’s button-down style that employs a sales staff.

“The perfect sales model for [AAN papers] is a mix,” Martineau said. “I’m hoping what VVM is going to do is blend a dedicated staff, like Ruxton, [with] the best sales people at AAN papers. If they do that, they will have by far the best rep firm in the country.”

If VVM followed this path, Martineau thinks the new sales organization would capture most of AWN’s larger clients, but he isn’t concerned.

“There is every chance there will be no need for AWN if VVM starts up a rep firm,” Martineau said. “If the major market [papers] that are represented by AWN join the VVM rep firm, then AWN will no longer need to exist.”

The ultimate role of AWN’s Executive Director Mark Hanzlik and his Hanzlik Media Management (HMM) staff has yet to be determined. HMM helped to found AWN and has had its management contract periodically renewed since then.

Hanzlik’s future has been hazy since last year, when AWN hired a consultant to investigate the feasibility of hiring a CEO for the organization. According to minutes of the June 2 board meeting, the board tabled the CEO search due to the uncertainty created by the impending VVM departure and the recent decline in tobacco-related ad sales.

The loss of tobacco revenue, which was partially offset by strength in other categories, led to the first year-over-year sales decrease in the organization’s short history.

Despite the unsettled nature of AWN activities, Hanzlik said last week it’s business as usual at the organization’s headquarters in Sacramento. He said AWN is still treating VVM just like any other member paper.

And regardless of what happens at AWN, Hanzlik may have a role with the new VVM network. “Most likely our national sales group will be working with Mark the way AWN works with Mark,” Del Favero said.

Monday afternoon, VVM posted a help-wanted ad on AAN’s web site for a national advertising director to manage its network.

At its meeting in Phoenix, the AWN board also voted to create a new category of membership for “Arts and Entertainment” papers. Two of the seven new members admitted to AWN during the meeting — Miami’s Street and Real Detroit Weekly — were accepted into the new A&E category.

The other papers that were accepted as AWN members were Crosswinds Weekly (Albuquerque, N.M.), The Source (Bend, Ore.), The Event Newsweekly (Salt Lake City), Toledo City Paper and, ironically, VVM’s Ace Weekly (Lexington, Ky.).