• by David Goetzl  @dgoetzl, July 14, 2009

As part of its bankruptcy proceedings, Tribune Co. has a deal where a competitor will take over its rep firm selling ads for local newspapers' TV books. The business falls under Tribune Media Services and works for small-market papers, selling space in the Sunday sections that many believe have lost relevance.

 

Under the three-year deal aimed at trimming costs, TMS has partnered with Advantage Newspaper Consultants, where ANC will handle contracts with about 70 papers in markets such as Fayetteville, Ark. and Rock Hill, S.C.

In court papers, Tribune said it will retain 15% of the revenue that ANC takes in. Over the next three years, the percentage is estimated to provide TMS with total cash flow of about $453,000. Also, ANC will make a one-time payment to TMS estimated at $34,000.

TMS said the deal allows it to "maximize operating cash flow ... by eliminating operating costs."

A Delaware judge is expected to ratify the agreement later this month as Tribune continues to seek bankruptcy protection.

ANC has worked as a rep firm for TV books since 1996 -- back when the sections were a staple of Sunday papers and publishers wouldn't have considered abandoning them. Now, many feel they amount to a financial drag that could be eliminated. The sections usually feature a cover story and listings for the next week's programming.

ANC is much larger than the TMS rep firm, serving some 200 papers for publishers such as Gannett and Media General. Houston-based Print Marketing Concepts is a third rep firm for the TV supplements. Within the Tribune Co., TMS operates separately from the company's portfolio of daily papers and doesn't represent them. It declined comment on the ANC deal.

For the most part, ANC and TMS do not operate as national rep firms, but work in each market to sign local advertisers to one-year contracts. While the deals run a year, some advertisers may opt for alternate weeks or other arrangements.

In court filings, Tribune said the contracts ANC is taking over generate annual revenues for TMS in the range of $12,000 to $39,000 per paper. John Jones, vice president at ANC, said the deals should bring ANC average revenues of about $300 a week, or $16,000 a year. The contracts also allow ANC to sell for papers' online TV sections and daily listings in the print edition.

At TMS, the rep firm is a small, non-core portion of its operations, which include direct marketing, custom publishing and the TV Guide-like Zap2it.com. TMS also provides content, both listings and feature stories, for TV books.

Many newspapers both receive content from TMS and use it as a rep firm. TMS will continue to provide listings and articles to papers that ANC will now sell for. In court papers, TMS said its deal with ANC brings it "a valuable new strategic partner." ANC executive Jones said the companies will work to steer business to one another.

Like TV Guide, which has struggled as its previous core listings business has become increasingly outmoded in a digital world, newspapers' TV books are suffering. Electronic program guides have become a first stop to check what's on TV for many readers. And TMS said declining ad sales prompted it to look for "financial alternatives."

Several McClatchy-owned papers, such as the Kansas City Star and The Miami Herald have gone to an "opt-in" program for their weekly books to trim costs. Subscribers now have to contact the papers to receive them, then pay 25 cents extra a week. Papers owned by other publishers have also adopted an "opt-in" model.

"Someday down the road, TV magazines will go away," ANC's Jones says. But he adds the denouement is a long way from now, with so many people 50-plus still relying on the books for listings information.