KEEPING UP WITH THE TIMES
Expensive technological developments, changes in readers’ tastes and demographics, as well as changes in circulation vehicles and the way advertisers buy media have all affected black newspapers’ bottom lines. Addressing these problems, however, can be a Catch-22 for publishers who are already working with scarce financial resources. Many black-owned newspapers have antiquated, time-consuming production systems and bare-bones editorial staffs struggling just to get out a single issue. This has proven detrimental to the circulation figures, advertising and sales revenue of more than a few African American papers.
While the Call & Post has the deep pockets of Publisher Don King to help finance its resurrection, most black newspapers are family-owned operations that don’t have such well-capitalized resources. In addition, they’re often unable to secure business loans because they’re stretched too thin financially. But there’s no reason for black publishers not to seek out resources by bringing in investors, or entering into joint-venture deals or partnerships with major daily papers in their market.
“There’s a fear among black publishers to bring in investors or hook up with white-owned papers,” opines Tim Lester, who is among a group of California-based investors looking to purchase the Los Angeles Sentinel. Lester, who worked in a variety of editorial and managerial positions at the Sentinel for close to a decade, says his group of investors will seek a joint-venture deal with a larger publisher should they purchase the Sentinel. “There’s [concern] about being taken over, but you have to remember that 51% ownership will give you control. Fifty-one percent of a big pie is better than 100% of a small one.”
CALLING IN THE TROOPS
Sengstacke Enterprises Publisher Myiti Sengstacke took the investor route when trustees threatened to sell her family’s 94-year-old newspaper chain. At issue was approximately $4 million in assessed estate taxes following the 1997 death of her grandfather, John Sengstacke. “The easiest way to deal with [the taxes] was to sell [the papers], and I guess Northern Trust felt the best thing to do was not take a risk,” says Myiti Sengstacke regarding the trust company’s decision to put the newspaper chain-which includes the Chicago Defender, Michigan Chronicle, New Pittsburgh Courier and Tri-State Defender-up for sale.
Neither Sengstacke nor a number of other family members wanted to sell the papers, so they removed Northern as trustee. The family has struck a pending $12 million recapitalization deal with Detroit-based businessman Don Barden. The plan calls for $6 million in cash from Barden, $4 million in bank loans and $2 million in equity.
Over the past decade Barden has crafted a reputation as a savvy entrepreneur who is often on the right side of an investment opportunity. Whether it’s stints in cable television or business ventures in Namibia, Africa, Barden often seems to be in the right place at the right time to turn a profit. He sees a similar opening with Sengstacke Enterprises. “I see an opportunity in these newspapers,” says Barden, who started his media business career 25 years ago at the