This paper is also going into markets where the best daily newspapers are. The National is going to be outgunned in every instance. In Chicago, New York, and Los Angeles, it will have bureaus with 10 to 12 staffers in them, competing with papers with staffs of 40 and 50 in just the sports departments.
I think it's a misjudgment to place entertainment value on writers. People in New York know who Mike Lupica is, but if you asked 100 people in Denver or St. Louis who he is, they wouldn't know. Writers build a reputation by writing about local issues, teams, and personalities.
Finally, The National also incorrectly believes that the notion of a national sports daily is reinforced by there being more sports on television and radio. In fact, The National's reader is being wooed by TV and radio, which have never been more sophisticated, informative, and appealing than they are now.
ANALYST
KEN NOBLE
Media analyst, Paine Webber, New York City; has watched newspaper and magazine properties for 23 years
This may look like a newspaper, but economically it is a magazine. That means it'd probably be better off with a cover price of $1. The higher price would demonstrate to advertisers that indeed the audience is above average and therefore desirable. It would also enable it to generate profit sooner.
I'd also consider trying out the paper in one city at a time. That lowers the investment cost and allows it to test the concept in one market before committing to the next. By going national quickly, they've created a splash, but I'm not sure how much that splash is worth.
It's going to be tough to obtain the circulation numbers with a newsstand approach. Street sales are erratic because buying a magazine on the newsstand is an impulse buy. The newsstand circulation of magazines has been declining for years now, in part because of increased competition for what space there is. The magazine industry is going very much toward subscriptions. That attracts advertisers because it offers a more stable audience.
CUSTOMER
RON REILLY
Senior vice-president/executive media director, Ogilvy & Mather, Los Angeles; has bought ad space in The National for clients
The key to the paper's success will be selling its editorial excellence. The National hired some very good writers, and it needs to continually push that, because that will keep it attracting the audience it wants -- upscale, not kids or statistic fanatics. To do that, it should continue to promote Deford, do advertising that features the editorial staff.
The financials are somewhat optimistic on when they'll turn profitable. That's not a problem, though, as long as the pockets remain deep. It's refreshing to see people who still understand the value of a brand: that you can still create something with long-term value. Sports Illustrated wasn't profitable until its 19th year, but Time Inc. continued to invest in it and today has a valuable franchise.
The advertising revenue for year one is reasonable. The National will not have great difficulty attracting advertisers, because the audience it expects is an appealing one. Down the road, ad sales will be guided by the actual readers of the publication and the health of the circulation -- will people continue to buy it, or will it become a sporadic purchase? Will the circulation be stable on a day-to-day basis? I don't think it will; I think they'll see significant fluctuations.
Will they succeed? I believe that they have a good chance of succeeding. They've hired a good staff. It will not be a success like People magazine, which hit big almost instantaneously. The real question is, how deep are Mr. Azcarraga's pockets -- or how big is his ego, pick one. If his pockets are deep or his ego is big, then I think over time it can succeed.
COMPETITOR
THOMAS G. OSENTON
President and CEO, The Sporting News, a St. Louis-based sports weekly with 730,000 circulation
They've identified a market that has a great deal of vitality: advertising pages in the sports category have grown significantly over the years; the number of newsstand sales generated by the sports category has grown in the past several years, as has the number of subscribers in the category. Major-league attendance each year has been reaching record levels.
But The National is asking people either to add this source to their reading list or replace something else with it. I don't know that people have the time to add it.
Can it replace The Wall Street Journal? The New York Times? USA Today? You have to get almost market specific and person specific. To speculate is tricky -- there was so much speculation about whether ESPN would succeed or CNN or USA Today, and they all generated an interest and an audience.
I don't view The National as a threat because The Sporting News isn't daily. Our mission is to give retrospectives and previews of the sports world on a weekly basis. As a result, the time spent with each publication will differ greatly. A daily is designed for readers to move in and out of and then toss away; a weekly is slower and more thoughtful. Our relationship with the reader is very different, and from the standpoint of the appeal to the advertiser, more attractive, because we have the attention of the reader for a longer period of time.
