Originally published on News & Tech, July 1, 2020. Article by
The City Sun Times in June became the most recent newspaper to join family-owned media company O’Rourke Media Group. Since 2019, up-and-coming newspaper and digital marketing solutions company O’Rourke has acquired 14 newspapers in Vermont, Wisconsin, Minnesota and Arizona.
The City Sun Times marks O’Rourke’s first newspaper buy in the western U.S. Founded in 2002, City Sun Times is a monthly publication that covers local government, human-interest stories, entertainment, music, art, culture and local events in and around Phoenix.
News & Tech recently caught up with CEO Jim O’Rourke to talk about his group’s latest acquisition and what his company is doing to help his community newspapers survive and thrive.
News & Tech: What made City Sun Times an attractive buy?
O’Rourke: City Sun Times is a monthly print publication with content that’s different than a typical weekly or daily community newspaper, and a wide-ranging distribution footprint in the Phoenix area. The business has nice cash flow, and I’m intrigued with the opportunity to grow digital revenue and audience in this market, supported by targeted, monthly print, and possibly expanding this approach in other markets.
News & Tech: O’Rourke Media Group prides itself on retaining local employees at a time when many other media conglomerates have downsized or outsourced the bulk of work. What motivated you to take this approach?
O’Rourke: Our people at each level of the organization are the single biggest driver of our success now and as we build the company. We go into a new business and market with a plan and expectation to grow and diversify revenue. This is what’s broken at the company’s we’re acquiring. Cutting payroll expenses day one doesn’t address this issue; it actually makes revenue worse in many cases. While we do place intense focus on operating discipline and efficiency, it’s more strategic than just eliminating people or positions.
News & Tech: What are the advantages of retaining local employees vs. outsourcing to potentially cheaper alternatives?
O’Rourke: Because our strategy doesn’t call for maintaining or investing in printing operations and machinery, outsourcing printing is still a must in most of our markets. Still, keeping as much work and talent as possible in each local market is a big factor in building the culture we want in our company. I can’t tell you how many projects I’ve been part of over the years where outsourcing work actually increased cost and hurt efficiency.
We retain local employees wherever possible, with a focus on consistent processes and systems in each market very early on. This allows us to maximize talent and efficiency because most employees handle a variety of job functions.
News & Tech: Has this business culture and mindset helped you approach newspapers you wish to purchase?
O’Rourke: Yes. The family-owned sellers really care about their people and the wellbeing of the business. It’s a huge selling point when we tell the owner that we do everything locally and within our company. And, early on, we can speak to proof that we actually do it.
News & Tech: For many newspapers, the coronavirus pandemic exacerbated existing challenges in advertising and subscriptions. What measures have you taken to mitigate the negative impacts?
O’Rourke: COVID-19 has created challenges in each of our markets, but from a results perspective, we do have some positives: Subscription revenue is up to prior-year levels and has increased each month as a result of some aggressive marketing campaigns. That’s particularly true in our weekly markets, where we’re posting double-digit growth. Ad revenue was actually up to prior-year levels in April and May in our Vermont market, which I attribute 100 percent to our team there. In several other markets, it’s been down 10-15 percent, and while that’s not great, it’s probably better than most.
News & Tech: What are some of these aggressive steps you’ve taken to mitigate the fallout?
O’Rourke: We’ve been in attack mode with creating new programs to help local businesses, we’ve hired some new sales reps, and we have grown our digital revenue run rate each month since March. We didn’t lay off, furlough, or reduce hours or pay with any of our employees in response to COVID-19. This is a decision I made at the beginning of March.
We also learned how effective we could be working remotely and with hybrid in-office/work remote schedules. I’m really proud of the work each team has done over the past three months. We expect to grow revenue by at least 10 percent in the second half of the year.
News & Tech: What challenges are you facing in terms of morale, etc., and how are you handling those?
O’Rourke: We’re trying to create a fun work environment and culture that doesn’t act like a dying newspaper company. We’re working hard to make sure everyone knows where they stand at all times when it comes to job results and performance. Retaining people and bringing in new talent is mission-critical, especially in the sales, digital, and content areas of the business.
News & Tech: Have you made changes to printing or production schedules of your publications as a result of the pandemic?
O’Rourke: We reduced our daily in Vermont from six days to five. This was a strategic change before COVID-19, and we ended up improving our product by giving readers more content and features in five days than they were getting in six. Subscription revenue is up and we achieved significant cost savings. We were ready for the phones to light up after we announced the change to our readers, and it never happened.
Once the initial impact hit, we stopped printing three of our weeklies in Vermont. We didn’t cut any people or positions, and we actually added a digital reporter.
News & Tech: Will any of those be permanent or do you hope to return to business as usual?
O’Rourke: The weeklies weren’t performing well financially before the pandemic. However, we are considering a relaunch of print in these markets in October with a different approach, but it needs to work for customers. Everything else print-wise in our company was unchanged.
News & Tech: How do O’Rourke Media Group’s digital marketing solutions complement its newspaper interests?
O’Rourke: We have strong, reputable brands and thousands of B2B relationships across our markets. Leveraging cash flow and resources to intelligently and profitably build digital marketing solutions revenue is a critical component to our growth strategy. We’re intentional and not doing anything stupid to expedite the death of print (i.e. exponentially increasing price and providing a worsened print product).
News & Tech: How are your digital marketing services fulfilled?
O’Rourke: We fulfill a lot of what we’re doing internally with our teams in Vermont, and we complement these efforts with strategic white-label partners. Our sales teams represent the single biggest competitive advantage, which is leveraging their relationships with local businesses that need help with their marketing efforts. We expect our digital marketing services to account for 30—35 percent of our total revenue within the next year. This is additional to the other digital revenue that we’re building in each market.
News & Tech: What technologies or methodologies do you believe are essential to the growth of your company in the coming years?
O’Rourke: Building and leveraging data across our markets. This requires the right people and technology. We also have to be the best outside/inside selling organization in each market to position ourselves to diversify and grow advertising revenue. Finally, content publishing — engaging local news and information that we can effectively monetize across many revenue channels — is the centerpiece to our growth strategy.