Purchase of Paper Shows Faith in Community Journalism : Buyer Believes Daily Pilot Can Pull Out of Dive

Its staff has dwindled, its circulation has declined and it is about to lose a key printing contract, but the Orange Coast Daily Pilot has managed to survive as the largest community newspaper in Orange County.

The Costa Mesa publication has been badly bruised in the battle for readers and advertisers waged throughout this decade by the county’s two major metropolitan dailies: the Orange County edition of The Los Angeles Times and the Orange County Register.

But industry observers say there is room in the county for small independent dailies. And the willingness of an upstart Midwest media firm to buy the Pilot is testament to the belief that community journalism is alive and well.

“There’s a level of readership interest in strictly local affairs and a need by local advertisers to reach a local area, and for national advertisers to reach particular areas,” said Kirk Cheyfitz, president of the publishing division of Adams Communications in Wayzata, Minn.

Purchase Agreement Made

Adams Communications, which bought its first newspaper in a Detroit suburb last year, has agreed to purchase the Daily Pilot, the weekly Huntington Beach Independent and the Daily Tribune in Royal Oak, Mich., from Ingersoll Publications, a Princeton, N.J., newspaper chain. Terms of the transaction have not been disclosed.

Cheyfitz said Adams Communications--which would become the Pilot’s third owner in this decade--plans to reverse the daily’s sagging fortunes.

“I don’t think this paper is as sick as people think it is,” said Rosemary Churchman, who was installed as the Pilot’s publisher two months ago by Ingersoll.

Circulation has fallen sharply since Times Mirror Co., owner of The Los Angeles Times, sold the Pilot to Ingersoll in early 1983.

According to the Audit Bureau of Circulation, the Pilot’s circulation was 39,807 in 1982. Five years later, audited circulation was down to 20,142.

Contract to End

The Pilot won an important contract to print USA Today newspapers circulated in Southern California. But USA Today is consolidating printing operations in a new facility in San Bernardino, and its contract with the Pilot ends in August.

The Pilot has also found it difficult to attract advertising, especially at a time when advertisers across the country are cutting back on their purchases of newspaper space.

“I talked with the publisher of the Pilot some months ago, and he said the paper’s largest single advertiser was a foreign car dealer,” said Lee Dirks, a Birmingham, Mich., newspaper broker familiar with Adams Communications and the Orange County newspaper market.

“That’s got to be the only paper in the country where a car dealer is the largest advertiser,” Dirks said. “Normally, the largest is a national or local department store. But those Sears and K mart dollars are going to The Times and the Register.”

Churchman said she could not comment on the paper’s advertisers.

‘Had Some Problems’

“We understand the Daily Pilot has had some problems,” said Cheyfitz, the Adams Communications executive. “We also believe there are certain things about the Daily Pilot that have not changed. The paper serves an important role. And we believe it can bounce back from the difficulties it has encountered over the last few years.”

Those who operate community papers in and outside Orange County say the battle between The Times and the Register has made it tougher for daily community papers to hold onto local readers and advertisers.

Of the three other smaller dailies in the county, only the La Habra Daily Star-Progress added readers over a five-year period ended March 31, 1987, according to the Audit Bureau of Circulation. The other two, the San Clemente Daily Sun-Post and the Anaheim Bulletin, lost circulation over that period.

In addition to the dailies, 22 weekly newspapers serve communities throughout Orange County.

‘Very Tough Market’

“It’s a very tough market,” said David Nydegger, general manager of the San Clemente Daily Sun-Post. “I think the formula is to find the local news the readers want and publish it.”

Though the La Habra Daily Star-Progress is owned by Freedom Newspapers, the same company that owns the Register, publisher Nelson Roberts Jr. said he considers himself in competition with both the Register and The Times for readers and advertisers. Freedom Newspapers also owns the Anaheim Bulletin.

Roberts said he not only sticks to local news but also caters to the wishes of upscale readers. For example, he said the paper publishes stock prices only on companies his readers say they’re interested in.

Ron Spurr, general manager of the Ventura County Star-Free Press, a well-regarded community paper, said he believes community newspapers can carve out readers in Orange County’s unusual newspaper market.

“The Pilot will have to regain the confidence of its readers and advertisers,” Spurr said. “It will have to serve the community to the point where the community feels it’s their paper. That means local news, local sports, local people--a well-rounded newspaper with high community concentration.”

DAILY NEWSPAPER CIRCULATION IN ORANGE COUNTY

3/31/88 3/31/87 3/31/82 Unaudited Audit Audit Orange Coast Daily Pilot 21,221 20,142 39,807 Anaheim Bulletin 7,670 9,548 13,158 San Clemente Daily Sun-Post 7,652 7,199 7,663 La Habra Daily Star-Progress 5,090 4,665 4,181 Orange County Register 325,139 311,049 244,781 L.A. Times (Orange County) *169,451 163,683 165,549

Source: Audit Bureau of Circulation except * Los Angeles Times