Village Voice Media, Inc.

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Village Voice Media, Inc.

36 Cooper Sq.
New York, New York 10003
U.S.A.
Telephone: (212) 475-3300
Fax: (212) 475-8473
Web site: http://www.villagevoice.com

Private Company
Incorporated: 1985 as Stern Publishing
Employees: 500
Sales: $80 million (2000 est.)
NAIC: 51111 Newspaper Publishers

Village Voice Media, Inc. operates seven weekly “alternative” newspapers in large U.S. markets. Named after its flagship, New York City’s Village Voice, the company also publishes similar papers in Los Angeles, Seattle, St. Paul, Cleveland, Nashville, and Orange County, California. Village Voice Media was formed in January 2000 to buy out Stern Publishing, which had owned the Voice since 1985 and had purchased all but one of the other papers in the late 1990s. Funds for the buyout came from investment firm Weiss, Peck & Greer and members of Stern management. Weiss, Peck & Greer also owns the 68-paper Lionheart Newspapers chain and Regent Communications, which operates 29 radio stations. Village Voice Media is headed by former Stern President and Voice publisher David Schneiderman.

Roots

The company’s origins date to 1955, the year that the Village Voice was founded in New York City’s Greenwich Village. Long a haven for artists, writers, and other bohemian types, Greenwich Village was also home to three World War II veterans who got together to start a news weekly that would speak to the values of the Village’s residents. Dan Wolf had worked as a freelance writer of encyclopedia articles and had also done some editing. Ed Fancher was a practicing psychologist who had earlier written for his college newspaper. Author Norman Mailer, a friend of Wolf’s, completed the trio by matching Fancher’s $5,000 to help fund the startup. Wolf, Fancher, and Mailer each were considered 30 percent owners, with Mailer’s lawyer receiving a 10 percent stake in exchange for drawing up the corporate papers. After a small number of staffers were hired and ramshackle office space was rented, work on a debut issue began.

The first Village Voice, 12 pages long, hit the streets on October 26, 1955, selling for five cents at various locations in Lower Manhattan. Only about a fourth of the 10,000 copies printed were actually sold. From the beginning the Voice included news articles, comprehensive entertainment listings, and reviews of Off-Broadway plays, books, movies, and more. Mailer, originally expecting to sit on the sidelines, decided to begin writing a weekly column in early 1956. The erratically written, frequently controversial column proved short-lived, and after several stormy months the author returned to being a mostly silent partner, though he would later make contributions on an occasional basis.

When a second infusion of cash was needed, Mailer and Fancher each invested another $10,000, with new partner Howard Bennett also contributing funds. At the same time, Mailer’s lawyer dropped out of the partnership. Later, Bennett would sell his stake to Whitey Lutz.

The majority of the paper’s original writers were unpaid, but the Voice was able to attract talented people because it offered them an open forum for their views. Editor Wolf, who had no real previous experience in such a role, brought respect for writing to the job from his own background, and allowed his writers unusual freedom in the pages of the publication. At times several different viewpoints would appear on a subject in the same issue, with each staffer given his or her chance to express their thoughts. The use of four-letter words, then almost unheard of, was also tolerated.

The Voice’s finances remained shaky throughout the late 1950s, even as the paper stayed on its path of representing the alternative voices of Greenwich Village. Noted left-leaning jazz commentator Nat Hentoff joined the paper during this time, beginning an association that would endure for more than 40 years. Offbeat cartoonist Jules Feiffer also began working for the Voice, beginning his own long-term association with the paper which led to wide syndication of his work by the mid-1960s. Articles were published that covered such subjects as the luminaries of the Beat Generation, civil rights activist Martin Luther King, Jr. and avant garde composer John Cage, in addition to the daily events of the Village.

The paper also started its own awards ceremony to honor Off-Broadway theater productions. The first one was held in the summer of 1956, with the awards dubbed the “Obies,” after the initials of the words “Off Broadway.” The paper’s support of this alternative theater movement was crucial to its survival, and helped raise awareness of it far beyond the often obscure performance spaces in which it was presented. A number of performers who won Obies later graduated to mainstream acceptance, including James Earl Jones (whose father worked at the Voice as a janitor), Roy Scheider, George C. Scott, Hal Holbrook, Ruby Dee, and many others.

In 1959, just after weekly circulation broke the 10,000 mark, the Voice’s offices moved from their original loft location to the corner of Christopher Street and Seventh Avenue. The paper was now winning awards from the New York Press Association, and was becoming nationally known as a voice of alternative culture. By this time the newsstand price had doubled, to ten cents an issue.

Profitability in the Early 1960s

During the first seven years of its existence, the paper had lost more than $60,000. It had been able to survive only by tapping its initial investors for more funds, in particular relying upon Ed Fancher’s inheritance. Both Fancher and Wolf took very little in salaries, relying on Wolf’s wife’s earnings and Fancher’s psychology practice to support themselves. But the Voice was earning wide renown for its position on the left side of the political spectrum, its uncompromising editorial freedom, and its extensive coverage of New York’s underground culture. Subscription requests trickled in from every corner of the globe, and the mainstream media began to acknowledge the Voice’s importance, with stories appearing in Mademoiselle, Newsweek, and the New York Times. In 1962 an anthology of Voice articles was published by Doubleday.

The paper achieved profitability purely by luck, however. In December 1962 the typographical union representing the staffs of several major daily New York newspapers went on strike, and other papers’ staffs walked out in sympathy—shutting down the city’s main sources of news. The strike lasted more than three months, and in the interim Voice sales shot up to 40,000 copies a week, with coverage of city news boosted to fill the void left by the big papers. Once the dailies returned to operation this number declined to 25,000, but it was still nearly double what pre-strike circulation had been. The increase in earnings from sales and advertising was significant, and finally brought a profit to the paper’s owners. For the first time, Voice writers would also be paid, if only a nominal amount.

A second, month-long union strike in 1965 boosted circulation back up to 41,000, a number that did not drop off afterwards. Subsequently, several of New York’s seven daily papers folded or consolidated operations, and by the end of 1967 the Voice was up to 90,000 readers. Advertising content nearly tripled during this same two-year period, with between 40 and 48 pages of ads running per issue in 1967. The Voice’s stature was growing, with space now being purchased by such established publications as the New York Times and the New Yorker. Surveys showed that the Voice’s readership was highly educated and earning more than the average U.S. household. Circulation in the Village was roughly unchanged from earlier years, but now the majority of readers came from outside the area, with a third not from New York at all. The paper’s ad campaigns, created in-house, touted it as “American’s Weekly Newspaper of Non-Conformity,” among other taglines.

Growth in sales spurred a growth in staff, and the Voice’s headquarters were expanded in 1968, and then moved in 1970 to University Place in the East Village. The late 1960s was a prime period for the Voice, with extensive coverage of the local, national, and international turmoil that was taking place. Writers such as Jack Newfield and Marlene Nadle covered events, with critics Andrew Sarris and Robert Christgau reviewing the film and music scenes.

A competitor appeared in late 1965 in the form of the monthly East Village Other. It was founded with the help of Voice mainstay John Wilcock, who was later fired because of his work for the rival. Other new alternative papers in the Village followed, as did hundreds across the country. Few survived for more than a handful of years, however.

In 1969 the Voice became the target of protests after it refused to run ads for a gay dating service. After considering the issue, the paper reversed its decision. The Voice was now publishing many classified ads for escort services and unlicensed massage parlors, generally considered fronts for prostitution. Although these were temporarily banished in the early 1970s, they would return with a vengeance in the 1980s and 1990s.

Sale to Taurus Communications

In the late 1960s the Voice’s owners began to get offers to purchase the paper. In January 1970 a deal was finalized for the newly formed Taurus Communications, controlled by New York City Councilman and Vanderbilt family heir Carter Burden, to purchase 80 percent of the Voice’s stock. The price was approximately $3.5 million. Wolf and Fancher retained complete editorial control, but Bartle Bull, minority shareholder in Taurus, was named president of the Village Voice Company in 1971. Following the sale the paper’s writers demanded better pay, and they were given raises.

Company Perspectives:

Our immediate goal is to maintain and even enhance the editorial quality of our newspapers. Our larger goals are to increase the pace of acquisition of alternative newspapers around the country, utilize the power of these brands in their local markets, to grow a substantial Internet presence and exploit opportunities in the radio market through cross-ownership and cross-promotion.

In 1973 the Voice purchased a printing company, Textmasters, Inc., and began using it to print the paper. The following summer Burden shocked the staff when he announced that he was merging the Voice with trendy, slick, upscale-oriented New York magazine, published by Clay Felker. Taurus Communications became a wholly owned subsidiary of the New York Magazine Co. in the deal.

Despite initial claims that the Voice would change very little, in July Wolf and Fancher were given their walking papers by Felker, now acting as Voice publisher. Ross Wetzsteon was named executive editor. Several months later Wolf, Fancher, Mailer, and Lutz, still owners of 20 percent of the Voice, sued New York Magazine, the Voice, and its owners for breach of contract and dereliction of fiduciary duties. With fears that the Voice’s staff might walk out in support, Felker gave them substantial raises as a preemptive move. An out-of-court agreement was reached with the minority shareholders in April 1975 that gave them $485,000 for their stake. During the months after Felker’s ascension, several key Voice staffers had left or were fired, and as time went by more followed. Discussions among the former Voice editors and ex-staffers about starting a new paper were held, but the project eventually fell apart.

During this period the paper’s cover price and ad rates were raised dramatically, and Felker brought in more of his own people to run the Voice. The new publisher’s goal was a national publication, one which could compete with the likes of San Francisco’s Rolling Stone Magazine. Milton Glaser redesigned the Voice’s look, and New York-centric articles and events listings were hidden deeper inside the paper. New editor Tom Morgan came on board in the summer of 1975, and a national advertising staff was set up. In early 1976 the biweekly national edition was rolled out. Though its first issue sold 80,000 copies, circulation soon dropped off, and it was folded within six months. Editor Morgan was out in September 1976, with Marianne Partridge taking his place.

Acquisition by Murdoch: 1977

Despite increased revenues from the Voice due to its higher cover price and ad rates, the New York Magazine Company was not doing well. The failed national edition had cost some $200,000, and an attempt by Felker to launch a new California-based magazine ate up further profits. In January 1977 Australian press magnate Rupert Murdoch bought 50.02 percent of the New York Magazine Company, giving him a controlling stake. He subsequently acquired the rest of the company from Clay Felker. One of his first moves was to fire editor Partridge, but he relented under pressure from the paper’s staff. However, two years later she was replaced by David Schneiderman.

Although many Voice employees feared that the paper’s quality would continue to slide under the owner of grocery store tabloids like the Star, Murdoch’s tenure actually brought it closer to its original form. As with the previous purchase, the acquisition by Murdoch led to a number of personnel changes, but he largely let the paper run itself. The staff, which had flirted with unionization before, finally voted to organize. Circulation now stood at a steady 150,000, and remained there for the next several years.

Murdoch, who also owned the New York Post, chose to put the Voice up for sale in 1985 when the FCC held up his purchase of a New York radio station pending sale of one of his New York papers. He found a buyer in Leonard Stern, heir to the Hartz Mountain pet food company and owner of extensive real estate holdings. Stern had previously purchased the Felker-edited New York Express, but quickly folded it when he discovered it was unprofitable. He gave Murdoch $55 million for the Voice, pledging he too would be a hands-off owner.

Stern kept David Schneiderman on as editor, then bumped him up to president of Stern Publishing in 1987. The company was working on a new weekly, to be called 7 Days, which would focus on entertainment in New York City. Dubbed “an uptown Village Voice” by Stern, the new magazine debuted in March 1988, reaching circulation of 80,000 by the summer. After two years of struggling to find its niche in a crowded field, 7 Days was put up for sale, its circulation dropping and with no profits in sight. When no buyers expressed interest, Stern folded the publication. The Voice, meanwhile, continued to do well. Its back pages had resumed featuring lurid classified ads for escort services and phone sex lines, many now featuring full-color, suggestive photos. By some accounts, this was the most profitable part of the paper, and one for which it was now sometimes best known.

Key Dates:

1955:: Village Voice is founded in New York City’s Greenwich Village.
1959:: Offices move to larger space on Christopher Street and 7th Avenue.
1962:: New York newspaper strike boosts Voice circulation, brings paper its first profits.
1970:: Voice is sold to Taurus Communications, led by Vanderbilt heir Carter Burden; business relocates to East Village.
1973:: Printing company Textmasters, Inc. is acquired.
1974:: Voice merges with New York Magazine; founders Daniel Wolf and Ed Fancher are forced out.
1977:: Rupert Murdoch purchases New York Magazine Co.
1985:: The Voice is sold to Stern Publishing.
1988:: 7 Days entertainment weekly is launched by Stern; the venture folds two years later.
1994:: Stern buys LA Weekly, then creates Orange County Weekly as a sister paper.
1997:: City Pages and the Reader of Minneapolis-St. Paul are bought; Reader is shut down.
1997:: Seattle Weekly and Eastsideweek are purchased; the latter is merged into the Weekly.
1997:: Cleveland Free Times is acquired.
1997:: Long Island Voice is launched, then later folded due to lack of growth.
2000:: Stern Publishing is purchased in management buyout led by Weiss, Peck & Greer; the business is renamed Village Voice Media, Inc.

Acquisitions and Free Distribution

In the mid-1990s Stern looked again to expansion. In October 1994 the company bought the alternative LA Weekly, later creating a spinoff called the Orange County Weekly. The two West Coast publications were distributed free, and this attracted more readers, allowing their publisher to charge higher advertising rates. The Voice’s circulation had not grown much since the mid-1970s, and in the spring of 1996 Stern Publishing announced that it too would become a free paper. The move created a surge in demand, and circulation grew to 223,000 within a year.

In the spring of 1997 Stern made another acquisition, that of the Minneapolis/St. Paul-based City Pages. Shortly afterward a competitor, the Twin Cities Reader, was also acquired, and then folded. The free weekly City Pages had circulation of 100,000 at the time of acquisition, with the paper’s length and its circulation numbers rising following the demise of the Reader.

The same scenario was played out in Seattle soon after, with the purchase of the Seattle Weekly and Eastsideweek followed by the absorption of Eastsideweek into the former. At the same time Stern was making plans to launch the Long Island Voice, which was targeted at the upscale suburban population east of Manhattan. In November, the five-year-old Cleveland Free Times was also acquired. Negotiations to buy a Santa Barbara, California alternative paper fell through.

In late 1999 Leonard Stern announced that Stern Publishing would go on the block. He cited his children’s lack of interest in carrying on the business as one reason for the move. In January 2000 a consortium led by investment group Weiss, Peck & Greer and members of Stern management acquired the company for an estimated $160 million. Weiss, Peck & Greer had previously purchased control of the Nashville Scene, a weekly alternative paper, and owned a chain of small newspapers through its Lionheart Holdings LLC subsidiary. The investment firm, founded in 1970, also owned Regent Communications, which operated a chain of 29 radio stations. Weiss, Peck & Greer was itself owned by Robeco Group of Europe.

After the sale, Stern Publishing was renamed Village Voice Media, and the Nashville Scene was incorporated into its holdings. Voice publisher and Stern President Schneiderman was named CEO. His place at the Voice was later taken by Judy Miszner, former sales and marketing vice president for Stern. The money-losing Long Island Voice was not long for the world, and was folded by its new owners early in the year. CEO Schneiderman predicted further acquisitions, as well as development of related Internet businesses and cross-promotion with Weiss, Peck & Greer’s radio station chain.

Though it was a relatively new company, Village Voice Media was heir to a long and storied history. Its flagship publication had seen changes over the years, but it was still the leading news and entertainment weekly for the downtown New York scene. Ownership of similar publications in other major markets also gave the company a leading position in the U.S. alternative news weekly field. Consolidation of this segment of the publishing world was ongoing, and it appeared likely that new acquisitions would continue to expand the company’s portfolio.