New Weekly Business Paper Targeted for County

A new weekly paper is scheduled to hit Orange County’s already crowded business publication market Sept. 8, headed by a trio of veteran business journal executives and financed by an investors group that includes a former mayor of Laguna Beach.

But the publication, Orange County Businessweek, may be dogged by the checkered financial history of one of its three founders--publisher Gary Dunham.

In Nashville, where Dunham started and then sold a similar business newspaper earlier this year, at least a dozen creditors are seeking an estimated $50,000 in unpaid bills, lease payments and bounced checks from his publishing company.

And distribution of the proceeds of the sale of a Sacramento business paper Dunham started in 1984 and sold the same year has been hung up in an out-of-court dispute over the accuracy of circulation claims for the publication.

Denies Wrongdoing

Dunham denies any wrongdoing, claiming that his financial woes largely were caused by the buyer of the Nashville paper failing to live up to terms of the sales contract.

In addition to Dunham, the other general partners in the Orange County paper are Executive Editor James Smith, a former president of the Washington Star, and Madelon Maupin, one-time national sales manager for the Christian Science Monitor and former publisher of the San Francisco Business Journal. Maupin is president of the Orange County Businessweek Inc.

Smith and Maupin have “substantially more equity” than Dunham, said Smith, who downplayed Dunham’s troubles with suppliers of his Nashville paper, saying there “are two sides to every story.” Dunham has “run businesses all his life” and “brings a great deal of skill budgeting a small business. He is a creative guy,” Smith said. Dunham, a native of Houston, worked as a consultant for proposed business journals in Richmond, Va., and Newport News, Va., and helped start an advertising agency in Denver.

About 20 investors led by Jack E. McDowell, a former mayor of Laguna Beach, are limited partners in the Orange County venture, which Smith said will require about $1 million in start-up funds. Smith declined to discuss specifics of the financing but said the paper’s financial backing is secure.

McDowell could not be reached for comment, and Smith declined to identify the other investors. He said the limited partners will have no editorial voice in the paper.

Crowded Field

The paper will enter a publishing field crowded with six daily newspapers and at least a dozen monthly publications. But its owners say they are confident of achieving a paid circulation of between 12,000 and 15,000 at the end of their first year and of eventually reaching a paid circulation of 50,000 or more.

“There is a vacuum here. There is no serious business journal or high-powered business magazine,” Maupin said.

“That’s a lot of baloney,” said Paul Marengo, co-publisher of the Orange County Business Journal, a tabloid published biweekly.

But while Marengo’s paper lists only one staff writer, along with an editor and an executive editor whose bylines also appear on articles, Orange County Businessweek executives say they intend to have at least eight full-time writers.

So far, the new publication’s editorial staff includes two longtime Orange County journalists--Editor Chuck Loos, 52, a former managing editor of the Orange Coast Daily Pilot, and Associate Editor Sherry Angel, a former magazine editor and free-lance writer.

Three reporters already have been hired, including a former business journal writer from Boston and a health and medical technology writer who recently graduated from Stanford University with a degree in biology. Nine advertising salespeople also have been hired and at least two more, plus about five more reporters, will be aded to the staff, said Stuart Henigson, who is coordinating staffing at the paper.

Explored Other Options

Before deciding to start their own paper, Smith, Maupin and Dunham explored buying or obtaining publishing agreements with two existing Orange County business publications.

“They offered to buy the Orange County Business Journal at a ridiculous price,” Marengo said. He said Dunham, Maupin and Smith “don’t know the (Orange County) market” and predicted that they will have a difficult time getting a paid circulation.

None of the existing business publications in Orange County are paid-circulation, although the Business Journal and several others are attempting to convert to paid status.

Publishers of many of the existing business publications question whether the county will support a new weekly business paper--and whether the paper can gather enough advertising to survive.

“It takes a long time to establish advertisers,” said Bill Lobdell, president of the Orange County Media Group, which publishes four business publications and was the second company Smith, Maupin and Dunham looked at before deciding to launch an entirely new newspaper.

“Obviously, there is plenty of business news” in the county, said Martin Brower, publisher of the Orange County Report, a business newsletter.

For advertising and circulation, however, Brower reckons Businessweek will need “a lot of staying power, a couple of years really.”

Smith said the decision to launch a publication in Orange County followed several years of study. As a model of what Businessweek will look like, Smith offered a visitor a recent copy of the San Jose Business Journal, which Smith started in 1983.

Weighing in at about 50 pages, the San Jose Business Journal offers its readers a diet of general business news, profiles, columns, tables of area stocks and business feature stories like “Four sanitation firms vie for toilet dollars”--the saga of the intensely competitive portable toilet industry in the San Francisco Bay area.

Won Respect

In addition to a paid circulation of 10,800, the San Jose Business Journal has won a measure of journalistic respect in Northern California. “I certainly regard them as a competitor,” said Jim Mitchell, business editor of the San Jose Mercury-News. “They have done some good stuff.”

Smith has started several business publications and was a consultant to several others. Additionally, he was general manager of the Sacramento Bee from January, 1974, until April, 1977, when he was named president of the Washington Star. He was dismissed in March, 1978, shortly after Time Inc. purchased the Star, which folded in 1981.

Andy McCue, now business editor of the Riverside Press-Enterprise, was hired by Smith and Maupin to put together a prototype of a business paper several years ago. He called Maupin a top-notch salesperson and said Smith “had a very clear grasp of what needed to be done.”

But while Smith and Maupin are well-regarded as managers by former employers and employees, Dunham garners mostly negative reviews from colleagues and employees in his most recent ventures.

In addition to the Nashville paper, the 50-year-old businessman started a business newspaper and business magazine in Sacramento. All three publications were subsequently sold, and representatives of the buyers of both the Nashville and Sacramento papers say that Dunham was undercapitalized and mishandled the businesses.

In Nashville, where the debts include $5,000 in unpaid printing bills and tens of thousands due on a long-term office lease, Dunham said his financial problems occurred because the company to which he sold the paper reneged on part of the sales agreement, leaving him without the funds needed to pay his bills.

Barney DuBois, editor of the Memphis Business Journal and vice president and part owner of Mid-South, the paper’s parent, said payments to Dunham were halted because he “misrepresented the assets” of the Nashville paper when he sold it under financial duress last year. DuBois said Dunham listed items of equipment as assets when they either had not been paid for or were not owned by the paper.