Knight-Ridder Adds to Its Bay Necklace
On March 23, the Knight-Ridder-owned Contra Costa Newspapers Inc. unveiled The Sunday Times, the first new mass-circulation newspaper to hit the Bay Area since Knight-Ridder scion Anthony Ridder remade the San Jose Mercury News in the late '70s. The launch marks a decisive step in the East Bay's long coming of age as a regional economic power in its own right. And the effort shows that Knight-Ridder, the country's second-largest newspaper chain, is willing to gamble millions on the East Bay and to challenge the Chronicle/Examiner directly for that growth market.
The creation of The Sunday Times comes a year and a half after Knight-Ridder paid top dollar to buy the five-newspaper Contra Costa Newspapers chain from the Lesher family, a longtime presence in Contra Costa and Alameda counties. With the paper's debut, Contra Costa Newspapers executives, who had been cagey in discussing competition for East Bay readers, have come out in the open with their challenge to the Chron. (The Ex's presence across the bay is too vestigial to warrant much notice.)
"We want you to have a newspaper that is so complete and relevant to your life," wrote Contra Costa Newspapers Editor John Armstrong in a March 30 note to readers, "that it not only is a 'must read,' it is the only newspaper you need to read."
The Sunday slot, typically a paper's largest profit-generator, is ripe for picking. The Chron/Ex Sunday paper's East Bay circulation declined about 10 percent from 1993 to '95. It's now down to roughly 180,000. By contrast, The Sunday Times' circulation has been rising steadily and, at 204,000, now tops the Chron/Ex in the race for Sunday East Bay readers by a healthy margin.
The weekday picture is similar. Although scarcely visible on this side of the bay, the Contra Costa papers have a combined circulation of roughly 194,000 in the East Bay. That's almost 20,000 more papers than the Chron sells in the immediate San Francisco market (San Francisco and south down to Daly City), and more than three times the number of papers the Ex sells in the city on weekdays.
The new papers give greater prominence to national and international stories. The graphics are more sophisticated, and, in the Sunday paper, a new tabloid insert was created, "Perspective," tripling the paper's opinion pages.
The Sunday Times isn't exactly new. It is the ably redesigned and restructured replacement for the five separate Sunday papers Contra Costa Newspapers used to put out. The five weekday papers, which are based in Richmond, Walnut Creek, Antioch, and Pleasanton, retained their individual names. They have undergone similar makeovers, so they resemble the larger-circulation Sunday paper.
The makeover of the Contra Costa chain was reportedly nine months in the making and is costing Knight-Ridder "several million dollars" in added costs each year, according to Contra Costa Newspapers Chief Executive Officer George Riggs. That extra expense load represents a pittance for Knight-Ridder; the company's 1996 revenues topped $2.7 billion and it recently laid out $1.65 billion for four dailies owned by the Walt Disney Co.
Still, the stakes in the East Bay are sizable. Knight-Ridder paid the Leshers a hefty $360 million for their properties, more than a 70 percent premium above the benchmark price of $1,000 per subscriber for daily newspapers. Granted, the papers were profitable, if parochial and retrograde in their editorial content. But Knight-Ridder was buying more; it was paying the price of admission into the fast-growing markets of the East Bay: Contra Costa, Alameda, and, to a lesser extent, Solano counties.
Knight-Ridder was also buying a neat geographic fit with its nearby property, the 280,000-circulation San Jose Mercury News, which has come to dominate the south end of the bay and much of the Peninsula. It, too, has prospered at the expense of the Chronicle, slowly seeping farther northward into San Mateo County.
Both Knight-Ridder papers can do well if they maintain growth rates that keep pace with those expected in their rising markets, but to flourish -- to win the coming East Bay newspaper war -- the papers must continue to steal readers and advertisers from the Chron/Ex.
As recently as a few months ago, Riggs sounded conciliatory toward his cross-bay rivals. "We'll keep doing a good job, and eventually," he said then, "people will realize you don't have to take the paper from across the bay." Riggs insisted last week that his papers will continue to "stick to our knitting" and leave the Chron to its own devices.
But for The Sunday Times, knitting looks suspiciously like a highly organized plan to acquire full newspaper dominance in the East Bay.
John Armstrong ended his March 30 note to readers with the advice to "Stay tuned."
His choice of a broadcast analogy is fitting. Television and radio stations determine what they show their audiences using the numbers in the Arbitron and Nielsen ratings books; while no such finely tuned measurement devices exist for newspapers, Knight-Ridder tries to achieve the closest thing. It invests heavily in market surveys, focus groups, and other techniques to measure market preferences. It then acts on those findings and shapes its papers -- both look and content -- accordingly.
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