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MEDIA OBSERVER Rags to Respectability BY RONAN G. LYNCH THE WAY MIKE LACEY tells the story, he had a few drinks one evening in a bar and punched out one of his employ ees, who resigned soon afterwards from the’ alternative paper Lacey publishes in Phoenix. No big deal; Lacey is a volatile guy, and the alternative newspaper business is, after all, a volatile place. The story is vintage Lacey, and when Forbes magazine published a profile of Lacey’s New Times Inc. last year, the incident framed the story in the lead paragraph. There’s no way to separate Michael Lacey and New Times Inc., the new owner of the Dallas Observer. “Mike Lacey has worked tirelessly for years to create an image of himself as an outlaw journalist, him and his paper, and he’s been very successful at it.,” says Darrin Hostetler, an editor at the daily Scottsdale, Ariz., Progress who used to work for the Phoenix New Times. “He’s never missed an opportunity for self-glorification, but while doing it, he’s made a good paper.” Actually, Lacey has strung together a few good papers. His company, New Times Inc., is a new phenomenon; a chain of alternative newspapers. In 1970, Lacey and fellow college dropout Jim Larkin founded New Times Inc. by selling 38,000 $1 shares to local activists. After buying out the original investorswho enjoyed a healthy 3,000 percent return on their dollarLarkin and Lacey took the company private in 1987. They now each own 40 percent of the stock. New Times Inc. now owns four newspapers; Westword in Denver, the New Times in Phoenix and Miami, and the Dallas Observer, which New Times bought last fall. Houston Press publisher Chris Hearne also had offered to buy the Observer, and was less than pleased when it was sold to New Times. After making unsuccessful bids for papers in Philadelphia and Chicago, Lacey and Larkin shelled out a reported $3 million for the Observer, which has a growing free circulation of 85,000 and grosses about $3 million a year. New Times had reported revenues last year of $16 million, and returned about $2.5 million in profits. Larkin and Lacey intend to turn their $30 million dollar company into a $100 million company by the end of the decade. The New Times chain now enjoys a combined free circulation of over 420,000 \(more than twice Ronan G. Lynch is a doctoral student in RadioTelevision-Film at the University of Texas in Austin. An anachronism in conservative Phoenix, the New Times is thriving, with its 140,000 circulation newsweekly reaching a quarter of the Phoenix market. Phoenix’s New Times has a quirky reputation, for good reason. A string of cover stories in February included the following: A cover story detailing Phoenix’s most famous murders, suicides and sex scandals over the past two decades; a long, chilling piece about the suspects in the mass murder of Buddhist monks west of Phoenix; and a cover story titled “The Lighter Side of the Kennedy Assassination.” The Kennedy story included a series of cartoons; one of them, titled “JFK’s Last Thought” showed a smiling Kennedy thinking “Check out the babe on the grassy knoll.” The quality of the New Times is erratic, and the paper is notorious among Phoenix journalists for its high turnover rate. But it’s no accident that the paper wins awards. ” They do very important storiesthere’s a reason that they win all the awards that they win, that’s because they take time and energy and effort putting together their stories,” says Hostetler. The Dallas Observer, which now is the weekly alternative to the newly monopolistic Morning News, certainly seems to have benefitted from the takeover. New Times beefed up the Observer’s editorial staff, from four to 10 and increased the number of pages it runs from 64 to 80. “It’s meant tremendously increased resources for the newspaper, and the tools to do a better job,” says editor Peter Elkind. “We now have about 10 people, a much larger budget, and we have much more space in the paper.” Although initially wary of outside ownership, Elkind says in this case it’s done nothing but good things for the Dallas Observer. “We’re already doing much more aggressive, ambitious stories. On a weekly basis, we’re already running a major feature which can run as long as six or seven thousand words.” Dailies could learn a lot from alternative newsweeklies; how to do good investigative reporting, well-written features and feisty social and political coverage. But media corporations are not interested in “alternative journalism,” although they see alternative weeklies as one of the few growing markets in the publishing business. Many dailies already try ‘to compete for advertisements with alternatives by publishing their own weekly entertainment listings, usually on a Thursday or Friday, though these supplements tend to be lamely written boilerplates that could be published anywhere. Now corporate media leviathans such as the Tribune Co. and Knight-Ridder are looking closely at a new way to get into the weekly market, by starting “independent” weeklies of their own. In Milwaukee and San Jose, weeklies have started up in competition with established alternative weeklies. Journal Communications, which already owns Milwaukee’s two dailies, has started a weekly which competes with the long established Shepherd Express, and Knight-Ridder’s San Jose daily has started the Weekly Eye, which competes with Metro. Naturally, some progressive publishers are getting alarmed, since the sales and marketing experienceand sheer financial cloutof a large corporation can pull advertising away from the alternatives. Other progressive publishers dismiss the corporate threat. Mike Hood, the publisher and current editor of the San Antonio Current, says that the alternative’s niche is “dealing with the social and political issues which the dailies don’t cover that well.” And though most alternatives sandwich social and political reporting between extensive food and entertainment reviews, publishers dismiss the specter of “corporate alternatives,” and argue that readers respond to a well-argued point of view. “Corporations are attracted to weekly newspapers because they’re successful and profitable, but they’re successful and profitable because they’re different,” says Elkind. “Corporations don’t get that, they don’t understand. They think there’s a magic formula where you publish a weekly newspaper and it makes money. If you publish a ‘weekly newspaper that offers a really different point of view and something different for the community, then they will do well. If you publish a weekly newspaper that has the same point of view as the dull daily, it’ll be terrible, and it won’t do well.” So the street-fighting, in-your-face, sock-itto-the establishment alternative newsweeklies may be the journalistic standard-bearer of the nineties, if the Michael Laceys are to be believed. Or will a take-the-money-and-run approach prevail? Darrin Hostetler’s story may be instructive. He also remembers the Lacey punchout storyfrom personal involvement and his account is backed up by several witnesses. Hostetler had already quit the New Times to work at another paper when Mike Lacey came up to him one evening Outside a bar in Prescott, Arizona. “He walked up to me,” says Hostetler, “he kicked me in the balls, and I fell like a sack of cement. He kicked me in the balls and took off running down the street.” 12 APRIL 10, 1992