What's in the black and read all over?

A girl reads a community newspaper

KAI RYSSDAL: The troubled Tribune company finds itself in the enviable middle of a bidding war today. Two Los Angeles billionaires have raised their offer for the corporate parent of the Los Angeles Times and the Chicago Tribune.

Like a lot of newspaper companies, Tribune's been fighting a losing battle against falling profits, lower circulation and disappearing advertising revenue. But Marketplace's Alisa Roth reports plain old newsprint can still be an attractive investment.


ALISA ROTH: The New York Times would like you to believe otherwise. But even in this age of media consolidation, the Big Apple is no one-newspaper town.

There are two tabloids. There's Newsday. There's even competition between the freebie papers that get handed out during the morning rush hour.

[SOUND: Vendors during rush hour]

And there's a whole host of community papers that cover neighborhoods throughout the five boroughs and the suburbs.

It's that last bunch that's been getting a lot of attention lately. Last fall, Rupert Murdoch's News Corp — which owns the tabloid New York Post — bought up a chain of weeklies in Queens. And another in Brooklyn. Now, rumor has it, the media mogul's looking to nab another one. In the Bronx.

These are papers whose biggest front-page headlines wouldn't merit a brief in the New York Times's Metro Section. So why would anyone want to buy them?

Michael Schenkler publishes the free weekly Queens Tribune. He gestures out his window toward two of his biggest advertisers, a local bank and a big geriatric care facility.

MICHAEL SCHENKLER: They get their response from us. Queens County Savings Bank gets to their readers not through advertising on CNN, not through buying a box on Yahoo, not through Google Ads.

That captive audience helps push up his ad revenue by about 10 percent a year. And, he says, his small, young staff knows Queens like nobody else.

Major metro dailies are stretching themselves thin to cover wars in Iraq and Afghanistan or shutting down bureaus to save money. People like Schenkler can comfortably cover the pothole on 179th Street that never seems to get fixed.

Miles Groves is an economist who studies the news business. He says smaller, local newspapers are thriving across the country.

MILES GROVES: They don't have the challenges their big newspaper brethren have. They don't have the competitive issues, and within their respective communities, they're really more vital.

That's not to say life is easy for community papers. Like the big dailies, they've seen a big drop in their classifieds.

Still, Schenkler says, there are times when local prevails over digital.

SCHENKLER: You're not going on the World Wide Web to look for a carpenter, because you're going to find one in Cleveland, Ohio. You're not going to find one in San Francisco.

What you want is the one who worked on your neighbor's house down the street.

Of course, success is also relative. Local publishers may be thrilled with a 10 percent return on their investment, while Wall Street expects much more.

So what's all this mean for the small papers being gobbled up by big corporations?

Tom Allon is president-elect of the New York Press Association and publisher of several community papers and magazines in Manhattan. He says the answer's in the execution.

TOM ALLON: If they keep the local managers and the people that have been running the business and making it successful and don't try to squeeze the margins, then I think those things can continue to thrive and grow.

But, he says, dailies are just as good as any other corporation at messing things up.

In New York, I'm Alisa Roth for Marketplace.

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