Lessons of a Bottom Feeder

Dave Morse has turned his most basic of businesses - community newspapers - into a success.

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Forget 21st-century industries and hot new markets. Dave Morse has turned his most basic of businesses -- a chain of community newspapers -- into a blueprint for success at the bottom of the food chain

"Why didn't you tell me this had happened?"
"We didn't want to spoil your first day on the job."

Dave Morse had just started at Courier Publications that morning, and at the end of the day he was learning from a fellow employee that Courier was about to lose its largest commercial printing account. And that wasn't his first surprise. When he'd walked into his office he found his desk swept clean, save for a telephone. There was no computer -- not in his office, and not next door in the accounting department, where people were making entries in a ledger by hand. "Look at this," says Morse, the wonder rising in his voice as he riffles through one such artifact, its inky scrawl as dated as cuneiform.

Morse recounts this chain of revelations with a glint in his eye, obviously energized by the memory. He is a man who eats circulation numbers for breakfast and gets through the rest of the day on a steady diet of Cokes. He pads relentlessly around the Courier building, dressed in a blazer, khakis, and sensible, thick-soled shoes, like an overgrown Boy Scout.

Morse started his newspaper career selling ads for the Los Angeles Times. At 26, he won the company's national sales award. He was subsequently recruited by the Christian Science Monitor, for which he served as national advertising director, assistant publisher, and president of Monitor Syndicate, the Monitor's for-profit arm. He left in 1989, after an unsuccessful bid to acquire the Monitor's television property. As a consultant to such clients as the Cousteau Society, Gannett, and a number of specialty magazines, Morse came to feel he was hovering at the edge of the fray. "I knew I wanted to stay in newspapers and be closer to the action," he says. He needed more of a daily jolt.

That brought him to Rockland, Maine, in 1991, where Courier Publications was rumored to be on the block. Morse tried to buy the small newspaper company. Its owner, Richard K. Warren, now 75, a reserved New Englander, rejected his offer but was sufficiently taken with Morse's vim and vision to make him an offer: come to Courier as publisher. Morse, now 44, was sufficiently crazy to accept.

The company had been publishing the local Courier-Gazette for 145 years, but the thrice-weekly paper was showing its age. The information superhighway was cutting through the old neighborhood, threatening local newspapers in small communities like Rockland, a town of 10,000 souls halfway up the Maine coast. News coverage had lapsed, circulation had fallen, and costs were rising. By the mid-1980s the paper had come to rely on outside commercial printing jobs to keep it afloat. But even that business had been faltering since the late '80s, with the advent of desktop publishing and quick-copy centers. By 1991 the company was on the brink, and everyone knew it. "Before Dave took over, everyone here was afraid we were going to lose our jobs," recalls Courier's production manager, Jim Smith, a 30-year veteran. Then he saw Morse come charging through the front door. "When I first met Dave I said to myself, 'Oh, my aching back. I'm not sure I'm going to survive this."

He has, and today Smith's cluttered office overlooks the clamor of the pressroom, where newsprint whirs through the presses. A chart on his office wall indicates that Courier buys newsprint in 17 sizes and weights from three suppliers. In addition to its own 7 papers, Courier prints 17 others on contract for publishers around the state. Smith now often finds himself working until 10 at night, overseeing the various pressruns.

The Strategy:
Be at the Bottom of the Food Chain
"Newspapers exist because they're the cheapest form of hard advertising around. People don't realize that newspapers are primarily advertising tools, and as long as an advertiser can efficiently place an ad in front of a lot of people, he will stay with something that financially works," Dave Morse expounds over lunch, drawing deep from his ink-stained well of knowledge. Now he leans forward for emphasis, arms crossed and planted on the table. "And I don't want anyone coming into the market beneath me. I don't want anyone coming into my niche."

Morse is alluding to the "bottom feeding" strategy he has pursued since coming to Courier. It is in the muck of the local newspaper market that he gets territorial, as that is where he sees plenty of profit settling. Morse knew that to the large media, small markets like Rockland were no-man's-land. The Rockland market is bounded on the north and south by the markets of the state's two major dailies, in Bangor and Portland. But those papers -- each 100 miles distant -- can't cover small markets effectively, as evidenced by their low penetration rates. According to a 1990 census, only about 11% of all households in Rockland subscribe to the Portland Press Herald, while 60% read the Courier-Gazette. When Morse got to Rockland he was convinced that if he did his job right, the local market would be his for the asking.

That was made all the more possible when in the wake of the recent recession many large dailies jacked up their ad rates. Moreover, says Morse, large daily newspapers have focused on international, national, and state news coverage. At the same time, the industry has gone through its worst slump since the depression. The New York Times saw total ad linage shrink by nearly 40% from 1988 to 1992. Less advertising means less news. Local news that really matters to a lot of people is the detritus at the end of the food chain, and it's been getting squeezed out of the large daily papers.

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