"Boom Times for New Times: Skilled in the ways of proxy fights and leveraged buyouts, Mike Lacey and Jim Larkin hope to forge a national chain of alternative newspapers."
Forbes, October 14, 1991
(The complete text of this article is not available online)

"It's hard to imagine how two business partners could appear to be so different," Forbes' William P. Barrett wrote of Jim Larkin and Michael Lacey, heads of the business and editorial sides, respectively, of New Times Inc.

The October 1991 Forbes piece focused on the "terrific combo" of Larkin and Lacey, who in twenty years had taken New Times from an anti-war protest paper to the nation's largest publisher by circulation of alternative weekly newspapers. (And that was when the company published just Phoenix New Times, Westword in Denver, and Miami New Times.) Along the way, there were some nasty battles, including a "bruising fight that featured a showdown shareholders meeting straight out of the movies" in 1977, and a once "staggering debt-to-equity ratio."

"With revenues in the year ended June 30 [1991] of $16 million and profits of about $2.5 million, New Times Inc. is still pretty insignificant change in the world of newspaper publishing," reported Barrett. "On the other hand, the country's 100 or so alternative papers, most of them dumped in vending boxes and distributed free, do account for one of publishing's few growth areas as many dailies and city magazines founder from high overhead and an inability to appeal to readers.

"Straitlaced Larkin, who looks after New Times Inc.'s business side, and mercurial Lacey, who runs the editorial side, are doing a good job exploiting this situation."

In Phoenix, Barrett wrote, "the paper's vaguely populist, often contrarian coverage has become must reading for local business people as well as students and aging hippies. Editorially, at least, the paper is now serious competition for the Arizona Republic and the Phoenix Gazette." And advertising sales for the New Times papers were so healthy that Larkin and Lacey had just closed their biggest deal--purchasing the Dallas Observer for an estimated $3 million.

The company didn't plan to stop there. Larkin, Barrett reported, "is confident that over time he and Lacey will build a $100 million company, partly by buying papers from their about-to-retire founders. Even the liberals who own alternative media like to cash in when given the chance."
 
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"When the 115-year-old Houston Post abruptly shut down last week," wrote Laura Johannes, staff reporter of the Wall Street Journal, "more than 100 upset residents took to the phones. They were calling the Houston Press."

New Times Inc. had bought the Houston Press in November 1993, two years after it bought the Dallas Observer. Now, as in Dallas when the Times Herald shut down, the publishing company was in the perfect position to benefit from the loss of another daily. "We knew we could make it with or without the Post," New Times CEO James Larkin told the Journal. "But without the Post we will do it better, quicker."

The paper already had its admirers in Houston, "who see the Press providing an iconoclastic alternative to the more staid Chronicle," the Journal reported. "But there's more than just editorial content at stake. The Post's demise leaves a lot of advertising dollars up for grabs." Larkin said he hoped to siphon off 2 to 5 percent of them, increasing the Press's ad revenue by as much as 50 percent.

Overall, New Times' revenues have grown 20 percent a year for the past decade, "with revenue for its six papers nationwide expected to hit $50 million in 1995," according to Larkin.
 
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"Alternative weeklies have made a sport out of criticizing their daily counterparts," wrote E&P's Tony Case. "But Denver's Westword prefers beating to berating its more established competition."

The seventeen-year-old Westword goes "head-to-head with the Denver Post and Rocky Mountain News on local stories and has shown up the other guys on more than one occasion," Case continued. "Recently, it scooped the dailies on a story that made national news: the malfunctioning baggage system at Denver's new multibillion-dollar airport."

The dailies missed that story, according to Westword editor and founder Patricia Calhoun, bcause they'd fallen into "boosterism for the new airport." But they'd also wrongly subscribed to the newspaper industry's "dumbing-down trend," and they'd made a mistake in underestimating their readers.

"I think people in Denver are very intelligent, no matter what line of work they're in," Calhoun told E&P. "They're interested in the city and they like to read, and they want more depth than they're getting in the dailies."
 
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"As alternative papers grow in circulation and revenue even as some dailies struggle, success is reshaping the industry," reported Andrea Adelson in the Los Angeles Times. "New empires are emerging, breeding enmity among a once-collegial group. Los Angeles is the first battleground among the new corporate titans of the alternative press.

"The outcome, media executives say, may redefine the meaning of alternative papers and is certain to sharpen journalism in Los Angeles."

On one side of the battle: James Larkin and Michael Lacey, who'd built "a Phoenix-based chain of seven nose-thumbing alternative weeklies with an estimated $50 million in revenue." The newest of those seven papers was New Times Los Angeles, which was created in 1996 when New Times bought two struggling L.A. alternatives, Los Angeles View and the L.A. Reader, for $1.5 million each, and consolidated them into New Times Los Angeles.

And in the other corner, Stern Publishing, the parent company of the Village Voice, which had bought the L.A. Weekly in 1995.

"The alternative press in L.A. is gutted," said one editor who lost his job when the View was sold. "Two out-of-state corporations are running the alternative press. It now resembles the mainstream."

Criticism of the deals wasn't limited to Los Angeles. In San Francisco, where New Times' SF Weekly competes directly with the long-time San Francisco Bay Guardian, Bay Guardian publisher Bruce Brugmann "scorns Mr. Lacey and Mr. Larkin as corporate carpetbaggers who publish 'cookie cutter' papers," Adelson reported. The SF Weekly had recently ridiculed the Guardian's "Best of the Bay" campaign with ads depicting Brugmann's impaled head over the line "Best Head on a Stick."

But that wasn't the only head New Times had recently collected. "In Phoenix," Adelson wrote, "New Times published articles credited with leading to the recent indictment of Arizona's Governor, J. Fife Symington."

New Times' aim, Lacey told the Times, "was for smart, writer-driven publications that explain the community you live in."
 
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"For a weekly newspaper with roots in the anti-Vietnam War movement, the role of corporate raider seems an odd fit," wrote Arizona Republic staff writer Bill Muller at the start to his piece about New Times. "But at Phoenix New Times, ringing cash registers have drowned out Bob Dylan tunes.

"Riding the crest of surging growth in a sea of car-stereo ads and risque romance personals, New Times Inc. seems intent on building a coast-to-coast empire of weekly newspapers, all cloned from their Phoenix parent."

The most recent addition to the New Times chain was New Times Los Angeles, in a city where New Times would be going head-to-head with Stern Publishing, owners of the Village Voice.

"The company was built from the ground up by finance guru Jim Larkin and pugnacious editor Michael Lacey, who has made a career, and a fortune, by goring the Phoenix estabishment," Muller wrote, adding that New Times is known for a bare-knuckle, in-your-face arrogance, personified by the 48-year-old Lacey."

Lacey "started a recent interview by cursing an Arizona Republic reporter and threatening a lawsuit. After calming down, Lacey reflected on his empire-building. 'This is flat-out fun,' he said, flashing a shark-toothed grin."

Lacey told the Republic: "We think that we offer writers the opportunity to do the kind of journalism they got into this business to do in the first place."

That kind of journalism costs money--and the Republic noted that the privately held New Times had significant debts, according to a confidential 1995 financial report the paper had obtained. (Obtained illegally, said New Times CEO James Larkin, who demanded that the Republic return the document.) Still, alternative papers are an increasingly profitable part of the newspaper industry, and competition was heating up across the country.

And nowhere was it hotter than in California. "Unlike mainstream papers, which usually don't write about their competitors," wrote Muller, "the New Times strategy is to savage their enemies in print. SF Weekly constantly harangues the Bay Guardian." Observers were expecting more of the same in Los Angeles.

"In Phoenix," Muller noted, "New Times has been critical of reporters who work for the Arizona Republic/The Phoenix Gazette, and the papers have never gotten along very well." In fact, the Republic had filed a $10 million libel suit against New Times in 1980 for a story alleging that the paper had bugged the telephones of union activists.

The suit was dropped in 1982.
 
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"We expect our readers to be able to understand that life is a mix," New Times executive editor Michael Lacey told the Republic. "Sometimes it's serious and tragic and sometimes it's funny as a crutch."

Such as: When Attorney General Grant Woods was happy to pose for New Times with a hot-dog vendor, who turned out to be an escapee from the local jail.

Or when state Senator Jan Brewer quoted obsene music lyrics she was trying to outlaw, and New Times turned it into rap music.

Although such stunts have critics, New Times staff writer John Dougherty said they don't have much impact on credibility. Nor do charges that New Times' stories are too black and white.

"I think our voice comes through in stories and I think that's good," Dougherty told the Republic. "We're not just reciting here's all the parts of the engine of an automobile, but we're telling people how it actually runs and how it works and what direction it's going."
 
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"Circulation among daily newspapers is in a slow decline," wrote James P. Miller, staff reporter for the Wall Street Journal. "But robust growth is the big story in one segment of the newspaper industry: alternative newspapers. Since 1990, circulation and revenue have more than doubled among the nation's more than 100 alternatives, according to a trade group."

Much of that success could be traced to the papers' appeal to "active urban singles who dismiss daily newspapers as irrelevant," Miller noted. "Because of the print pipeline they offer to Generation X consumers, alternatives are starting to gain national advertising for liquor, tobacco and breath mints to supplement their local base."

"The newspaper business isn't dying," Jim Larkin, chairman of New Times Inc., told the Journal. The daily papers "have largely abandoned their franchise."

As the alternatives become more profitable, "hardball competitive tactics" have been introduced, the Journal noted. Stern Publishing, which owns the Village Voice, now had a total of seven alternatives in its nation-wide chain, having recently added Minneapolis and Seattle papers; New Times was in the process of starting up its eighth alternative publication. In Los Angeles, the two alternative publishers were in a "costly head-to-head fight" between the Stern-owned LA Weekly and New Times Los Angeles.

But the dailies, too, were paying attention to the success of the alternatives, and gearing up to go after a piece of their market. In Chicago, the Sun-Times introduced personal ads, Miller reported; to compete with alternatives, other dailies had launched Friday entertainment tabloids.

"The Tribune Co. of Chicago has taken it one step further," he continued. "The staunchly mainstream operator of big dailies prints its own alternative, dubbed XS magazine, in Southern Florida's upscale Broward County." And an official with Sun-Sentinel, the local Tribune publication that owns XS, had conceded to the Journal that the newspaper started its weekly to help block the Miami New Times from moving north.

Instead, New Times decided to start its own Broward County alternative, set to debut fall 1997.
 
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Jim Larkin and Mike Lacey, owners and operators of New Times Inc., can trace their media roots back to an anti-war collective that started a paper in Phoenix 1970. But by 1994, the addition of the Dallas Observer and the Houston Press to their three-paper chain had made "these mad-dog press lords from the desert into two of the most important players in Texas. Not bad for a pair of old lefties," reported Joe Nick Patoski in Texas Monthly.

In the interim, Larkin and Lacey had recognized that the declining number of daily newspapers represented a tremendous opportunity for weeklies, particularly a "hybrid paper that is not countercultural but rather niche-oriented, like a radio format." They purchased the Observer in 1991, in a deal that "neatly coincided" with the closing of the Dallas Times Herald, and bought the Houston Press two years later, expanding both papers in circulation and staff.

The typical Larkin-Lacey product, Patoski wrote, "includes a dose of good writing and strong reporting sandwiched among extensive restaurant, music and other entertainment listings." The concept worked well in Dallas, where the New Times-owned Observer had "proved to be a savvy alternative to the staid and sometimes smug News," he reported, although the Press "has a longer way to go" to make the same impact in Houston.

And New Times doesn't plan to stop there. As Lacey told Texas Monthly: "We can take this anyplace where there are warm, breathing bodies with IQs that can be measured."
 
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Twenty-five years after the underground press came up from under and gave birth to the alternative newspaper industry, "it becomes natural to compare some of the big guns in the alternative press to the press barons of yore," wrote Ed Avis in Quill.

For starters, there's Bruce Brugmann, "an American legend of sorts," who publishes the "gritty, openly advocatory" San Francisco Bay Guardian--sharing at least geography with William Randolph Hearst. "The alternative press [is] helping set the new model for American journalism," Brugmann told Quill.

Then there's Ray Hartmann, who started The Riverfront Times in St. Louis in 1977. "I'm a straight person who feels very passionately about gay rights," Hartmann told Avis. "I'm generally sober, let's put it that way, yet I believe in legalizing pot; I'm a capitalist who owns a business who advocates social justice issues; and on and on."

There's Ron Williams, who founded the Detroit Metro Times with his college sweetheart in 1980. "We were journalists, and people concerned about making this world a better place." William said. "We thought a nespaper was a potentially very useful tool in this regard."

And then there are Mike Lacey and Jim Larkin, who turned Phoenix New Times, an anti-war paper founded by a collective in 1970, into a chain of papers that stretches across the country. New Times, Otis wrote, "is perhaps the easiest target for accusations of selling out...But there's simply no evidence the corporatization of the company has hurt the papers." In fact, he noted, one of the first things New Times Inc. does when it acquires another weekly is to hire full-time staff writers--the kind of commitment to quality that "brought success to New Times in the first place."
 
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