CHEYENNE, Wyo.—By most accounts, the newspaper industry is in a gloomy state, beset by declining circulation and advertising revenue.
Yet the Wyoming Tribune Eagle is making a major investment, purchasing a multimillion-dollar printing press to upgrade the daily newspaper and, in the process, expand the company’s commercial printing business.
While publishers have long tried to capitalize on idle press time with commercial printing jobs, it may be more important than ever to diversify their revenue sources. The trend is evident in southeastern Wyoming and northern Colorado, where at least three newspaper companies are vying for commercial clients with the lure of new presses.
“In this era of newspaper being under pressure from declining advertising revenues, a lot of them are trying to find ways to increase their other revenue,” said John Morton, president of Morton Research Inc., a media consulting firm in Silver Spring, Md. “Commercial printing is one of the paths that several companies are choosing.”
Tribune Eagle executives say the $15.5 million press expansion reflects the newspaper’s confidence in the regional economy and the reality of keeping up with advertisers’ expectations. The new manroland press allows for color on every page of the daily edition, and editors have seized on the opportunity with a redesign.
The company aims to grow commercial printing—jobs such as newsletters, shopping guides and other papers—from 5 percent to 15 percent of its business within three years. The company has no immediate plans to pay for the project by raising rates for advertisers or subscriptions, said Scott Walker, the paper’s vice president of marketing and operations.
“Certainly this helps us diversify our business,” President and Publisher L. Michael McCraken said. “It’s a smart move for the future. For the next couple of decades, I think, as we continue to see growth in commercial printing we’ll be able to take advantage of that.”
For many companies, the decision to buy a new press is also a matter of keeping up with the times. McCraken said the Tribune Eagle’s 37-year-old former press was becoming outdated.
“In theory, a production facility is just the cost of doing business,” said Lauren Fine, a former analyst at Merrill Lynch who now works at Kent State University’s College of Communication and Information. “If you have more efficient or newer equipment, it can help you lower your production costs.”
The Tribune Eagle won’t be without competitors for commercial printing jobs along Colorado’s northern Front Range, the fast-growing area along Interstate 25 between Denver and Cheyenne.
Down the road in Longmont, Colo., Lehman Communications Corp. recently broke ground on a $20 million printing plant to replace its 35-year-old press. Dean Lehman, president and editor of The Longmont Times-Call, said the old press “has been succeeded by a new generation of faster, quieter, more efficient presses that can offer more advantages to readers and advertisers.”
Lehman Communications, which also owns five other papers in northern Colorado, will be “friendly competitors” with the Tribune Eagle for commercial printing jobs, Lehman said. The company plans to open its new plant next May.
“We hope to continue to serve our existing commercial printing customers as well as attract new commercial printing customers as time goes on,” he said.
In Denver, about 100 miles south of Cheyenne, the Denver Newspaper Agency, publisher of The Denver Post and Rocky Mountain News, completed a $130 million project to build a new production facility last year.
“We are going after commercial printing, and we have picked some up,” said Larry Charest, the company’s production director.
Along with the new press, the Tribune Eagle installed a new high-speed inserting machine, a new conveyor system to move paper around the plant and an expanded loading dock for delivery trucks. The project will double the press’ hourly output to 75,000 newspapers an hour and streamline the way it inserts ads from large retailers.
“I think it’s significant that our family has decided to move forward, and fortunately the growth of the market has given us pretty good indication that we’ll continue to be successful,” said McCraken, whose grandfather bought the Tribune Eagle’s forerunner in 1926. “That said, that’s a big nut to crack. It’s so expensive to buy new press and production equipment that that’s a major, major decision.”
Industry observers agree that $15.5 million is a significant outlay, especially for a newspaper with a daily circulation of about 16,000.
The investment also signals the Tribune Eagle is committing to its print product at a time when the media industry is divided on whether print editions will ultimately survive with competition from new media and the Internet. Last month, the nation’s third-largest newspaper chain, McClatchy Co., announced that it was cutting its work force by 10 percent as it wrestles with rapidly dwindling advertising revenues.
“I think it’s fair to say that anybody who tried to tell you exactly what’s going to happen five or 10 or 20 years from now probably is trying to sell some agenda,” said Roy Peter Clark, vice president at the Poynter Institute, a Florida-based school and resource center for journalists.
But Clark said people of his age, in the baby boom generation, will probably keep subscribing to print newspapers for the rest of their lives.
“I can’t say the same for my children or grandchildren,” Clark said. “So in a way, there’s a 20-year period in which people will be trying in a thousand different ways to find out how to support quality journalism in the public interest.”
