How The Advocate conquered New Orleans (and most of the rest of Louisiana, too)

May 21, 2019
Category: Business & Work

Even before owners of The New Orleans Advocate bought the assets of its competitor, The Times-Picayune and NOLA.com, earlier this month, it charted a remarkable course of expansion in an industry that is relentlessly shrinking.

With papers in Baton Rouge and the Acadiana/Lafayette region, The Advocate has built a combined circulation of 100,000 and a news staff of 110. Both will grow as The Advocate absorbs The Times-Picayune’s paid print circulation (at 43,400, slightly bigger than its own circulation of 35,500).

The combined digital site will pick up the NOLA.com name and use its faster technology, probably by early July, though a date has not yet been set. And the New Orleans Advocate will grow its news staff hiring some of those who lost their jobs as NOLA.com and the Picayune dissolve.

That thunderbolt overshadows what The Advocate had already accomplished a month earlier: winning its first Pulitzer Prize for local reporting and being chosen as a finalist in editorial writing, both honors for a painstaking investigation of jury practices that discriminated against black defendants.

The contours of the Advocate’s success by now are familiar to many — a generous owner, John Georges; a deeply experienced and hard-charging editor, Peter Kovacs; and a host of strong news and business staffers as well.

However, I suspected there was a good deal more to this counter-cyclical tale and went to New Orleans earlier this month to see what I could find. I identified at least 10 reasons the Advocate became ascendant.

One: Community loyalty

You first need to understand that The New Orleans Advocate has been a Times-Picayune newsroom in exile since the day it launched in 2013. I asked Kovacs and publisher Dan Shea (both former managing editors there), in a joint interview: How many of the current news staff of 50 came from The Times-Picayune?

Well over half, Kovacs ventured.

More like 85 percent, Shea replied.

Two: Hire away

The two confess to “shock and awe” hiring raids both to peel away top talent and signal staying power. It is a strategy now being duplicated at The Acadiana Advocate property, which recently hired six editors and reporters from its competitor there, Gannett’s Daily Advertiser.

Three: Hire away, part two

The newsroom was buzzing the Monday I visited, counting up how many desks were being moved in for the upcoming staff expansion (the consensus was 21). In upstairs meeting rooms, laid-off Times-Picayune reporters and editors were already being interviewed.

Kovacs and Shea said that they will talk to anyone who applies but are still unsure how many of the 65 displaced NOLA.com staffers will be hired. Shea said he hoped over time to build the three newsrooms to 140 (The Acadiana Advocate will be expanding, too).

Shea also told me the organization will hire some from the Times-Picayune on three-month contracts — a window to see just how fast and how big the benefits of absorbing Times-Picayune circulation and advertising lists proves to be. If money to convert those to full-time positions doesn’t materialize, Advance has agreed to still pay the severance to laid-off Times-Picayune employees.

The hires will draw on the strength of the Times-Picayune’s environmental reporting and the bells and whistles of its digital operation, which is more sophisticated and enjoys much higher traffic than the Advocate’s.

Realistically, the total hired will probably be only a fraction of the 65 news staffers who lost their jobs — despite expressions of respect and regret I heard on my visit to The Advocate for the good journalists displaced. (When Poynter’s Tampa Bay Times bought and closed the Tampa Tribune three years ago, only about 10 reporters and editors were hired across the bay.)

Kovacs and Shea said they will not lay off any of their current staff to trade up for a NOLA.com star.

“Absolutely not,” Shea said. “They bet their careers on a very uncertain venture and that should equate to job security.”

The mechanics of merging operations of two papers are huge and can stretch as long as a year. But this one appears to have been very well planned. Shea and Kovacs said they hope to have much of the work done by fall. That is prime season for news in Louisiana, they explained, as the New Orleans Saints and Louisiana State University football seasons crank up.

Four: Keep it coming

Momentum will continue. The Pulitzer-winning special projects team is training it sights on lavish state subsidies to New Orleans’ thriving tourist industry. A pay meter for The New Orleans Advocate went up April 15, the day the Pulitzers were announced. (The number of free articles will vary and adjust over time, and offers will be pegged to data on who is most likely to subscribe. Right now the rate is $9.99 a month, with no discount for introductory subscriptions.)

The merger of two sites may makes selling digital subscriptions more than a little tricky. How do you hold onto NOLA.com’s most regular digital readers who have long been accustomed to getting it for free? But moving to paid digital is rightly an emphasis throughout the industry. As print advertising revenue goes down, audience financial contribution must go up.

So The Advocate, perhaps belatedly, is taking that step to a more secure future.

Editor Peter Kovacs of The Advocate in New Orleans.

Five: It’s OK to get owned

Success may have many fathers, but Advocate owner John Georges stands first in line for credit here.

By the time he was in his 40s, he had built out his Greek immigrant grandfather’s and father’s wholesale grocery distribution company, Imperial Trading. He started or bought other businesses and spread to real estate ventures, becoming a New Orleans mover and shaker in the process.

Georges got the political bug and ran for governor in 2007, losing to to Bobby Jindal, and then for mayor of New Orleans in 2010, losing to Mitch Landrieu.

“A great experience,” he told me in a lengthy interview in his office. “Everyone should do it. You learn a lot even if you lose — maybe especially if you lose.”

His wife, Dathel, inherited her father’s business around the same time and the two eventually decided their next project should be buying a newspaper. Rebuffed after an initial approach to the Newhouses, who own Advance Local, they turned to The Advocate, an hour up the road in Baton Rouge — a 171-year-old paper, well-staffed and with gleaming new presses. Generations of the Manship family had owned the Baton Rouge paper, and they  ran it well, but thanks to family dynamics and the abruptness of industry decline beginning in 2009, current executives were willing to talk.

A deal was close, Georges said, but right then the Picayune announced the reduction in print editions.

“That probably delayed us a year,” Georges said, due to outcry from readers and some other potential buyers who mobilized quickly. The Manships pulled back from selling Baton Rouge and instead moved into New Orleans with a few employees and a lightly made-over edition, home delivered every day. It soon gained about 10,000 subscribers.

“They had defied the norms by launching, and we have said all along that there was a chance to grow geographically,” Georges said. “We could be true to journalism and still be viable.”

Not to sell short Kovacs, Shea and the rest, but such a venture could probably never have gotten off the ground without him.

I can’t gauge how much Georges poured into covering losses over the six years. However, Shea let drop that in the early days, he felt like “we were taking millions of (Georges’) cash and lighting it on fire on Canal Street.”

Shea said that the three papers together have operated profitably on a cash flow basis in the five years since.

Six: Find the model

When Georges enters a new business, he pours time into reading and networking, looking for a business model. He found one in how Hearst runs its Texas newspapers — especially the Houston Chronicle.

“They basically bought everything in their footprint, countering the natural decline of the business,” he said.

He also liked the way Hearst operated Houston in tandem with the San Antonio Express and four smaller papers in the state.

The Advocate’s large statewide presence — nearly all of the southern part of the state — generated a strong combined circulation number. Though the Pulitzer entry was mostly done by a New Orleans-based team, it tackled a statewide issue, was supported by editorials produced in Baton Rouge and resulted in legislative action: a referendum ending the practice of allowing 10-2 votes to convict on felonies.

I am wondering whether state news and state reach have been underestimated as an asset in the era of cutbacks. Research shows paying news subscribers want serious and impactful work rather than a preponderance of fluff. Statewide issues are a top hunting ground for those.

Oddly, Advance Local has seemed most successful when it configures multiple sites to cover a full state as with its outlets in Alabama, Michigan and New Jersey. Dropping days of print home delivery seems to have gone over much less well in its single city operations like New Orleans, Cleveland and Portland, Oregon.

Georges has kept on buying, most recently New Orleans’ strong alt-weekly, Gambit, in April 2018. An enthusiast for most things Greek, Georges explained his acquisition strategy by evoking Alexander the Great.

“He conquered you and then put you in charge. He would come back in three years and see how you were doing. (If all was well), you could stay; otherwise he would kill you,” he said, joking about that last part (I think).

The New Orleans Advocate. (Courtesy)

Seven: Hands off …

Beyond startup money, Georges has been a model for rich owners. Another of his businesses is Galatoire’s (“the Pulitzer of restaurants”). He offered this analogy to his approach to publishing: “I don’t know how to boil an egg, so I’m not going to go into the kitchen and tell the chef what to do.”

He said he is hands-off on important editorial and political matters, though Shea and Kovacs say they might get a note about how a high school tennis tournament was covered or an empty newspaper rack. He is paying close attention.

But Georges has “also been our secret weapon,” Shea said. “He is terrific as an ad salesman … opening doors for us places we could otherwise not have gotten into.” Shea also called Georges  “an incredible promoter,” citing the instance when he sprang for putting a copy of the paper on every seat in the Superdome for the Saints’ home opener one year.

Eight: … but never far away

To return to finances, let’s not minimize The Advocate’s advantages, housed in a beautifully refurbished old car dealership downtown that Georges bought and that carries no debt.

Georges has phased out of day-to-day involvement in his primary food distribution business. (It is now run by Wayne Baquet, nephew of New York Times executive editor Dean Baquet.) His primary office is on the second floor of the building along with his wife’s. Professionally, they live above the store.

Nine: People make the difference

There many knowledgeable pros on the business side backing Shea (an editorial guy at the Times-Picayune who had to learn publishing on the fly).

I met Judi Terzotis, a veteran Gannett publisher lured away in January 2018 from The Daily Advertiser, where she was both publisher of that paper and group publisher for seven others in the region. She carries the title of president at The Advocate and spends her work weeks circuit riding among the three titles. (Shea was promoted to CEO at the Advocate as Terzotis was hired. He indicated to me that he hopes to retire in a year or two but has agreed to stay on for the transition).

Why leave a good job at one of the nation’s leading chains for a still-risky startup? Gannett seems to be winding down its print offerings, too, Terzotis said.

“I believe that there was a commitment (at The Advocate) to keeping the number of journalists up … We are going to have to oversatisfy customers and build incremental revenues … (but) I’m bullish on the next three years,” she said.

Terzotis oversaw lengthy preparation for the move to paid digital, enlisting two top consulting firms for a next-generation system, flexible rather than “one size fits all.” My quick take was that she is a next-generation experienced business-side manager, the kind an organization needs as it matures.

I also met Sara Barnard, vice president of advertising and marketing at The New Orleans Advocate, whose story is more or less the reverse of Terzotis’. Classified ad manager at The Times-Picayune, she was laid off in 2012 as the T-P pivoted digital, and she landed at The Advocate.

So she was New Orleans employee No. 1?

“I guess so,” she said with a smile. “I started working out of my house, and at first we couldn’t show (potential advertisers) numbers or much of anything.”

But local ownership was a calling card, and over the years, The New Orleans Advocate was able to add key categories like death notices (where daily print is still the preferred platform) and grocery store inserts.

For advertising, too, the transition will pose a challenge. It’s not clear how much of the Times-Picayune print audience will be retained and whether the demographic mix will be changing, which in turn will determine pricing, probably after some trial and error.

Ten: Are you experienced?

Experience counts, most obviously on the news side. The principals of the Pulitzer staff team —investigations editor Gordon Russell, New Orleans managing editor Martha Carr, and reporters Jeff Adelson and John Simerman — all came over from the Times-Picayune. The first two, along with Kovacs and Shea, date back to the Picayune’s much admired and Pulitzer-winning coverage of Hurricane Katrina.

In looking at the Advocate’s entry the afternoon the Pulitzers were announced, I could see an architecture typical of many contemporary investigative home runs — the careful assembly and analysis of a huge data set, taking the reporting back to powerful individual cases and then following through to be sure the stories lead to corrective action.

The long tail of Katrina plays a part in Georges’ commitment, too. His distribution business, mostly to convenience stores, was virtually wiped out and needed to be rebuilt from the ground up, he told me. Some took the insurance money and left town. He decided to stay.

“I look like a businessman on the outside,” he said. “Inside, I’m a guy who loves New Orleans.”

The Advocate will begin publishing its New Orleans print paper, under a combined nameplate with the Times-Picayune, around July 1. As the underline says, seven days a week, home-delivered and locally owned.

Looking to the future

At the lunch May 2 announcing the big news to senior staff, an empty chair was set at the table. With a flourish, Georges introduced Ashton Phelps Jr., the revered former publisher of the Times-Picayune in the Katrina era and before.

Phelps’ departure coincided with Advance’s abrupt digital-first strategy shift. He sat out the storm of protest, scrupulously refraining from criticism public or private. Now he gave his blessing to the outcome, saying in a carefully crafted statement:

“The Times-Picayune and The Advocate have played key roles in Louisiana history. The Pulitzer Prize Board, which gives the highest awards in journalism, has recognized both newspapers. Both Newhouse and Georges family members have told me they want the best journalism possible for the New Orleans area. This change, supported by both families, will hopefully give the best chance for that in the long term.”

I emailed Mark Lorando, editor of NOLA.com and the Times-Picayune, who found out he’d lose his own job along with the rest of his staff, to ask if he had a comment. He wrote back that he held no bitterness toward The Advocate team. But he was less bullish than some on what lies ahead.

“Here’s the great irony of our decision to reduce home delivery to three days and focus on digital: The end result was more and better journalism for New Orleans, not less,” Lorando wrote. “I’m proud of the groundbreaking work this newsroom has produced, and respect The Advocate’s. This was a never a newspaper war. It’s a war to preserve local journalism in New Orleans. It’s just heartbreaking to see so many having to leave New Orleans, or leave journalism altogether in the end.”

I went to New Orleans thinking that the confluence of circumstances that produced the drama and the result was highly unusual, not very likely to be duplicated elsewhere. And I came back still thinking that.

Even so, The Advocate crew has achieved extraordinary results — and fast. Let the naysayers know, yes, it can be done.

Comments

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  • As for the Advocate’s efforts, I totally applaud. But in New Orleans they did not win as much as it was Advance that lost.

    The Newhouses, sitting in their plush offices more than a thousand miles away, thought they knew the New Orleans market better than did much of the top LOCAL management of the Times-Picayune. Some day that story will be told, but for now, be assured that the decision to sign the eventual death warrant of the Times-Picayune was not co-signed by those LOCAL Times-Picayune managers who knew and understood the New Orleans market.

    This did not have to happen; this is a lesson to chains everywhere, in every industry: Listen to your local managers.

    To the very hardworking and very dedicated Times-Picayune employees who lost their jobs: You and the readers of the former Times-Picayune (pre-2012) are the real victims here.