Says "Alternative Papers Are the Most Exciting, Have the Greatest Potential."
In one fell swoop, Art Howe joined the ranks of the alternative newsweekly chain gang late last week. By agreeing to pay an estimated $21 million for Alternative Media Inc.’s [AMI] three papers, Howe quickly emerged as one of the industry’s major players.
If the sale closes, Howe and his investment group will own four alternatives: the newly-acquired San Antonio Current, Metro Times in Detroit, Orlando Weekly, and Philadelphia City Paper, which he bought almost three years ago. Only New Times, Inc. and Stern Publishing own more newsweeklies. (The Atlanta-based Creative Loafing also own a number of alternatives, but only two are AAN members.)
Howe may be relatively unknown in the world of alternative weeklies, but he’s no stranger to newspapers. In fact, he’s been in the business since the age of 12, when he delivered papers for the Cleveland Plain Dealer. Later, he graduated from the University of Pennsylvania and earned an MBA from the Wharton School of Business.
In 1986, as a Philadelphia Inquirer reporter, Howe won a Pulitzer Prize for a 70-article series exposing woes inside the Internal Revenue Service. In the late ’80s he moved to the business side of Knight Ridder’s Philadelphia paper. Then, in 1989, he bought the suburban Philadelphia-based Montgomery Newspapers. Montgomery now owns 16 community papers, three magazines, several niche publications and the City Paper, which it bought in April 1996.
The second half of this year has seen a buying frenzy for alternatives. Papers in Cleveland, St. Louis and Louisiana have all changed ownerships. Many within the industry believe the papers are fetching inflated sums. And there are some insiders who think AMI’s price tag was too high.
Says one source who was among the group of six parties who showed an interest in buying AMI: “I was sweating. They were talking about a huge chunk [of money] for one paper [Metro Times ] which does pretty well, one [the Weekly] that makes a little [profit] and one that’s weak both editorially and market-wise. Who’s to say if he [Howe] paid too much? If the economy stays strong, maybe not. But if it slows down, he could find himself hurting.”
But Howe — who won’t say what his group paid for AMI — predictably disagrees.
“I paid a trillion dollars for AMI,” he says jokingly. “No, I don’t think I paid too much. All of the AMI papers have tremendous growth [potential], are all in tremendous markets and from an editorial and marketing stand point, are some of the best in the industry. I’m looking at [this as an investment] two or three years from now.
“From my background in dailies, weeklies and other papers, the perspective I bring to this is different than others. And in my judgment, I think alternative papers are the most exciting, have the greatest potential — and I love the energy — of any kind of newspapers today. We’ve had a great time in Philadelphia and when AMI came up for sale, I thought, ‘Why not?'”
Howe is still in the process of “cobbling together a group of investors and banks” that will fund the AMI acquisition.
“We haven’t determined the number [of investors] and who they are,” he says. “I anticipate being — not a majority owner — but a significant shareholder in this.”
Howe also says he may spin off the four alternatives, uniting them under a separate corporate banner. It may be “the most logical [corporate] structure,” he says.
Howe’s track record at City Paper suggests that he won’t make many changes at the AMI papers.
“[AMI’s purchase by Howe] won’t result in a mass execution [of the existing staff],” says City Paper News Editor Howard Altman. “It won’t be like when New Times comes in and fires everyone. When we were taken over by Art in ’96, the impact he had was providing us with additional resources: more money to hire more people editorially, new offices, new equipment … In my experience Art’s ownership has been a pretty good thing for our paper and I think it will be the same for the AMI papers.”
Howe says he intends to follow the same path with the new AMI papers that he established when he bought City Paper: “I plan on giving them the resources they need — making sure they have the resources. I don’t think there’s a need to come in and overhaul anything. The best plan is to let the people run the papers without interference and give them help when they need and ask for it.”