North Dakota newspaper fears for its future

GRAND FORKS, N.D. - Sometimes a newspaper is more than a paper. Sometimes it's a lifeline.

The Grand Forks Herald was surely one to this community during the Red River's great flood of 1997, giving evacuated area residents strewn in every direction something to connect them, and cling to.

Now it's the Herald that has been cast adrift.

The newspaper's special relationship with the people and area it has covered and served since 1879 - predating North Dakota's statehood by a decade - has been jeopardized by uncertainty about who's going to buy the paper and, more important, how its new owners intend to run it.

"The thing they take for granted every morning could be different," said Mike Jacobs, the Herald's editor and publisher. "It's not necessarily going to be, but it could be different."

Knight Ridder Inc., under pressure from top stockholders, last week agreed to sell the chain to McClatchy Co. for $4.5 billion plus assumption of $2 billion in Knight Ridder debt. McClatchy Chief Executive Gary B. Pruitt said he intends to unload 12 of Knight Ridder's 32 papers, saying they "simply do not fit with our long-standing acquisition and operating strategies," though the sale is designed, in part, to help pay for the deal.

The Herald, which the Ridder family acquired in 1929, is among the papers to be sold.

Though the buyer was good news - McClatchy has a reputation for allowing its papers the freedom to be managed locally - the people of Grand Forks, as in the other 11 Knight Ridder cities like Philadelphia, San Jose, Calif., and Aberdeen, S.D., didn't dodge all the bullets. They remain squarely in the line of fire, vulnerable to investors' industrywide concerns about the future of newspapers in the Internet age.

"When McClatchy was announced as the owner, there was a big celebration around here," said Herald columnist Ryan Bakken, a 33-year-veteran of the paper. "Then, to find out the next day they were cutting us loose ... we went from elation to despair."

McClatchy's "no thanks" to certain papers intensified concerns that a new master might want to dictate coverage from afar and hack at an already lean operation to pump up a profit margin that's around 25 percent.

"What really depresses people around here is to know we've given our blood and we're still in limbo and the prospects aren't very good," Bakken said. "Without getting into specifics, a lot of us would prefer not to have the chains known for the slashing and burning and bottom-line obsession."

Among the companies most often mentioned are Gannett Co. and William Dean Singleton's MediaNews Group, which had weighed buying Knight Ridder outright. Lee Enterprises Inc., the Newspaper Guild and Fargo's family-owned Forum Communications Co., which owns a TV station in Grand Forks, are also seen as possible bidders for some properties.

Other buyers could emerge, but they would have to move quickly. McClatchy looks to close the sales around the time it closes its Knight Ridder purchase. One scenario has the bigger discards going to one owner and the smaller castoffs going elsewhere.

"I think about our grocery advertisers," Jacobs said. "The grocery business is notorious for its lean profit margins. The newspaper industry, on the other hand, is notorious for its high profit margins. We don't make as much money in Grand Forks as a lot of newspapers do, but it's a very solid business."

Between Grand Forks and East Grand Forks, Minn., just across the river, 57.7 percent of the households get the Herald during the week. That figure is 66 percent on Sundays. Across the 14 North Dakota counties and 11 Minnesota counties in the Herald's circulation area, it reaches 39 percent of all households during the week and 42 percent on Sundays. Daily circulation is around 31,000, and 35,000 on Sundays, according to the publisher.

That kind of penetration by a local paper is high in comparison to major metros. The combination of Denver Post and Rocky Mountain News, which have a joint operating agreement, claim the industry's best penetration rate among metros, with at least 44 percent of households in the Denver area.

"We're not the major source of national and international news and don't pretend to be and don't want to be," Jacobs said. "But we're, by far and away, the source of local and regional news for the great bulk of people not just in Grand Forks, but in a very large geographical area. The tentacles of the Herald go out a couple hundred miles east and west."

But what happens if the local paper everyone counts on for blanket area coverage is no longer so local and unable to cover the same amount of ground the way everyone has come to expect?

Back in the 1990s, the Grand Forks area endured a flood, a farm crisis, a drop in tourism thanks to a faltering Canadian dollar, and downsizing of the Air Force base west of town. Here it is seemingly recovered, and now this.

"Among the rank and file of the community, I don't think this has had time to bubble up, but among the business community, people are worried," said Rich Becker, chairman of the Grand Forks-East Grand Forks (Minn.) Chamber of Commerce. "Even though (Knight Ridder) owned the Herald, the Herald was pretty autonomous and, as far as we were concerned, it was a local business.

"But who's going to buy us? Who's going to buy the Herald? Are they going to merge it with some other paper and cut staff and all those kinds of things? That's of concern to the business people because we've already gone through a bubble in the last 10 years. Knight Ridder (already) has put its papers through such stringent cost-cutting."

That's something one notices when talking to area residents. They often refer to the paper as "us" or "we."

"It's a relatively small town, so it's an intimate relationship with the paper," said Richard Shafer, a journalism professor at the University of North Dakota, based in Grand Forks.

"It's more than a business to us," said Bruce Gjovig, director of the university's Center for Innovation. "Our No. 1 source of information is strictly the paper ... and for advertising, as well. It's very much a part of our community. It's where we have our community conversation."

The Herald and its roughly 150 full-time employees, including around 40 in editorial, are as much a part of the area as the rich black soil that yields its sugar beets and soybeans, the freight train tracks that criss-cross the city, the Air Force base, the university and its hockey team, burgeoning aerospace and biotech business or the regular influx of Canadian tourists.

"We've been here a very long time, and like any newspaper, it's a love-hate relationship," Jacobs said. "But Grand Forks has been distinguished by its newspaper for 127 years. ... The Herald very early on established a relationship as being bigger than the place, and that happened again with the flood."

In the flood of `97, the Herald earned a Pulitzer Prize for its community service, offering more than just the vital information gathered despite the loss of its newsroom to fire. It gave citizens a much-needed sense of normalcy, hinting that daily routines again someday would be routine.

"They never missed a beat. They had a paper out the next day and really did a good job," said Kim Holmes, a 20-year resident who's chef and owner of Sanders 1907 restaurant, which lost its original site to the disaster.

"It was a part of Grand Forks the people could hold in their hands," said columnist Bakken, who delivered the paper as a kid and joined the Herald staff right out of college.

Bakken concedes the paper wasn't very good then. But the staff grew and quality improved with time, he said. The flood made the paper "a community icon." The paper also took a strong advocacy role in the post-flood rebuilding.

"Even now when our staff has been cut," he said, "people in the community are quite gracious about the Herald and I don't hear people outside of radio talk show hosts criticizing the paper very much, and a lot of that is because they feel indebted."

Although the Herald's connection to its community is unusual, the pressures on it - economic and otherwise - are not. The paper has a blossoming Web site, GrandForks.com. Still, it faces challenges from up-and-comers such as Craigslist.org, a free, increasingly popular online listings service that has a site for all of North Dakota but hasn't had significant impact on the Herald yet.

"We know they're out there and we pay attention," Jacobs said. "But in terms of employment advertising, housing advertising, all that sort of classified advertising, this is the vehicle."

Part of it is the personal touch. "Virtually everybody in this community knows somebody who works at the Herald," Becker said. "If you can reach out and touch somebody personally, all of a sudden, it becomes your paper."

This is a community where "we all watch each other's back," said Ross Rolshoven, a local artist, boat racer and private investigator.

Right now, in its time of uncertainty, he and a lot of folks are looking out for the Herald. "I'm hoping for a strong bidder," Rolshoven said. "The Herald deserves to be a good paper."

---

(c) 2006, Chicago Tribune. Distributed by Knight Ridder/Tribune News Service.