November 6, 2013

Morning News to print Star-Telegram

Beginning early next year, The Dallas Morning News will take over printing and packaging of the Star-Telegram, the daily newspaper in neighboring Tarrant County, eliminating about 275 jobs there.

"This makes all the sense in the world," said Jim Moroney, publisher of The News and chairman, president and CEO of its parent company, A. H. Belo Corporation.

In market after market across the country where there is geographic proximity, Moroney said, newspapers have been consolidating their printing operations to save money.

The two North Texas printing plants are about 50 miles apart, with The News' facility located in Plano and the Star-Telegram's facility in southern Fort Worth, near the intersection of Interstate 35 and Interstate 20.

Gary Wortel, president and publisher of the Star-Telegram, said the new printing agreement is a good long-term move for his news organization and will be "transparent" to readers.

"The Morning News has ample capacity to meet our needs," Wortel said in an interview. The arrangement is expected to begin in the first quarter of 2014.

He said the Star-Telegram printing facility, which has three presses and is located on a 35-acre site, will be offered for sale. About 75 full-time and 200 part-time employees will lose their jobs, Wortel said. They will be eligible for severance pay and benefits. He declined to specify those benefits.

Moroney said that when the work shifts to Plano, it could result in an increase of about a dozen jobs there.

In addition to The News, the Plano plant also prints regional editions of The New York Times, Wall Street Journal, USA Today and Investor's Business Daily, as well as smaller publications such as the Dallas Chinese Daily.

Financial terms of the Star-Telegram deal were not disclosed. Through the first nine months of this year, A. H. Belo reported that its revenue from commercial printing and distribution totaled $27.2 million, about 10.2 percent of total revenue and an increase of 3.9 percent over the same period a year ago. Advertising and circulation revenue declined in the nine months.

A. H. Belo also owns the Providence Journal, the Denton Record-Chronicle and the Press-Enterprise in Riverside, Ca. There is a deal pending to sell The Press-Enterprise.

Battered by digital distribution of news and advertising, metro newspapers have faced shrinking revenues for years, causing them to trim staff and expenses and, in some cases, sell assets to raise money. For example, The News' production plant in southern Dallas County is for sale,

The Star-Telegram was acquired by McClatchy Corp. in 2006 as part of a larger deal for the Knight Ridder newspaper chain, dramatically increasing McClatchy's debt load. In 2011, the Star-Telegram sold its downtown Fort Worth headquarters building to Bob Simpson, a founder of XTO Energy and an owner of the Texas Rangers baseball team.

Wortel said that cooperative agreements between the Forth Worth and Dallas newspapers are not uncommon. In the past they have shared news content. Currently, they have a joint distribution agreement involving Star-Telegram subscribers in Dallas County and subscribers of The News in Tarrant County.

The new printing arrangement will not affect deadlines for The News, Moroney said. The Plano facility will be able to run both The News and the Star-Telegram at the same time.

"We'll print and deliver to their distribution center and then they'll take over from there," said William May, vice president for production at The News.

May said a couple of presses in Plano will be converted so that the Star-Telegram can continue to run at its current page width, which is slightly narrower than The News.

With seven presses, the Plano plant currently prints a total of about 780,000 copies of newspapers a night, May said, including the national newspapers, The News, other publications of The News and other commercial jobs.

In its March publisher's statement, the Star-Telegram listed its average weekday print circulation as about 188,000, including several branded editions to suburbs. The News listed its average weekday print circulation as about 400,000, including the branded editions Briefing and Al Dia and Denton Record-Chronicle.