" After a decade of modest portfolio growth through the 1990s, the division successfully completed the most ambitious acquisition program in Freedom's history. "
Jonathan Segal
President of Freedom Newspapers, Inc.




NAVIGATION


Table of Contents

High Desert Hero

A Paradigm of Time

The Perfect Political Storm

A Bravo Performance

An Inside Job

The President & Chairman's Report

Freedom Orange County Information

Freedom Broadcasting

Freedom Magazines

Board of Directors

Corporate Executives

Freedom's Family of Information & Entertainment Providers

2000 Annual Report Home

Freedom Communications, Inc.




At the Times-News in Burlington, N.C. Jason Lonon is affectionately known as the newspaper's "graphics guru." A self-taught artist, Lonon was originally hired as an ad assistant but quickly became the head graphics artist in the advertising department. "Jason not only trains and coaches our artists in advertising, but handles overflow from both advertising and editorial. He has also consulted with commercial print customers to help them utilize our technology and produce the best quality for their product," said Paul Mauney, general manger of the Times-News. "He truly represents the best of Freedom."




Dianna Farver heads home delivery for the East Valley Tribune and Scottsdale Tribune in Mesa, Arizona and that means a workday that can stretch from midnight to 6 p.m. making sure every subscriber gets a newspaper. "But Dianna's focus is not just the customer. She knows the carriers, district managers and zone managers have a tough job, and she is always ready to help. Sometimes that means helping a carrier understand his paycheck, helping a district manager out of a bind or recruiting for the upcoming month's dropped routes," said Georgene Squires, Customer Service Manager. "She is a true best of the best."




Before Courtney Walker joined the Advertising Creative Services Department at the Appeal Democrat in Marysville, Publisher Olaf Fransden said the department was in turmoil. "Courtney spent 45 days evaluating the department and then began to create new policies and procedures," Fransden said. "The result is ad flow has improved to where the retail department now receives completed ads in a fraction of the time. Quite an accomplishment considering retail advertising was up 7 percent and automotive double digits for 2000. There has been more ad production and Courtney improved productivity to the point of reducing overtime by 33 percent."




Freedom Communications' purchase of the The Telegraph in Alton saw protracted negotiations with the seller, the Journal Register Company. But fortunately Telegraph Controller John Gowin was on the job supplying crucial information and documentation of the newspaper's operations to speed the sale along. "He did this all the while maintaining the business office functions for our Journal Register Company ownership," said Telegraph Publisher Jim Shrader. "John Gowin put in countless hours of long nights, early mornings and weekend sessions to get the job done and never complained. Truly, his performance was above and beyond his regular job description."
Freedom Newspapers

Division Report



Newspapers 2000: There is little risk of hyperbole in terming the Year 2000 as "momentous" for the Community Newspaper Division.

After a decade of modest portfolio growth through the 1990s, the division successfully completed the most ambitious acquisition program in Freedom's history.

The first portfolio move was the swap with Scripps-Howard Newspapers in which we obtained its paper in Destin, Fla., for our paper in Fort Pierce, Fla. As it happened, our paper in Fort Pierce was located between two Scripps dailies and Scripps paper in Destin was nestled between our papers in Panama City and Fort Walton Beach. The swap provided a win-win situation – not only for each company but also for the associates at those papers.

No sooner was the ink dry on that deal than the Thomson Company put all of its U.S. newspapers on the block, a total of 55 papers in 19 strategic marketing groups. Realizing this was an opportunity to significantly grow the community newspaper division, our acquisition team hit the road doing diligence on the Thomson papers. Competing with dozens of other media companies, Freedom ultimately made bids on six of the clusters, encompassing more than 15 papers.

Following protracted negotiations, we were successful in obtaining the cluster in Yuma and also Thomson's crown jewel, the cluster in Phoenix. Included with those acquisitions are The East Valley/Scottsdale Tribune, circulation 90,000; The Sun City Daily News-Sun, 20,000; The Ahwatukee Foothills News, 28,000; and The Yuma Daily Sun; 28,000. Also included were a host of weeklies, shoppers and niche products.

The Thomson acquisition was followed closely by our purchase from the Journal-Register Company of its paper in Alton, Ill. The Alton Telegraph is a 30,000-circulation daily just across the river from St. Louis and 60 miles south of Freedom's paper in Jacksonville. The acquisitions added $100 million in revenues and almost 1,000 new associates to the division.

When the smoke cleared on the acquisition front, Freedom had stepped up to the plate and spent more than $235 million to grow the company. It was such a large acquisition package, it required – and received – widespread company support. It was a team effort, one that involved the corporate staff, associates from the other divisions and, ultimately, the Board of Directors. In addition, the division acquired partnership interests in several strategic media companies. In the Rio Grande Valley of Texas, it took a stake in a growing advertising agency called The Creative Spot. The division also purchased a half interest in Mexus Publications, the publisher of La Onda, a high-quality, Spanish language publication distributed monthly in Sonora, Mexico. The operating plan calls for the partnership to roll out other La Onda editions along the Northern Mexican border. The first new launch will be in Monterrey, Mexico, in April of 2001. That launch will be coordinated with the Rio Grande Valley group of papers, which will serve as printer and assist with advertising sales.

2000 Review

The Newspaper Division ended 2000 with operating cash flow 2 percent over budget and 8 percent over the previous year. Its combined cash-flow margin was a respectable 30 percent.

The division enjoyed strong financial performance during the first half of 2000 as the national economy was hitting on all cylinders. As the economy began to sputter in the second half, the papers began to see a fall off in advertising.

Insert volume for the year was strong, showing a gain of 4 percent. Contract classified lineage rose 22 percent while display lineage increased 5 percent.

Turning in the best financial improvements for the year were the papers in Marysville, Seymour, Sedalia, Burlington, Panama City, Fort Walton Beach, and the Rio Grande Valley. Finishing below expectations were ENC and Gastonia. ENC incurred substantial one-time costs associated with its consolidation efforts, and Gastonia had additional costs as it prepared to move to a new facility and staffed up for printing the regional edition of The New York Times.

With the acquisitions, average daily circulation of the division grew to more than 700,000 and full-time equivalents reached 4,000.

Other 2000 Highlights:

In addition to portfolio improvements, the division had many other accomplishments in 2000. Here are some of the highlights.

  • Under the auspices of Suzanne Deegan, a national sales team was hired to represent Freedom's papers. Formed mid-2000, early results were encouraging.
  • Ed Moss, a veteran publisher with Thomson and the Tribune Company was hired to lead an effort to launch new products and services across the division. The goal is to generate at least $3 million in new, non-traditional revenues during 2001.
  • The Gaston Gazette partnered with The New York Times to build a new office and printing facility in Gastonia. The facility, to be completed during 2001, will be the print site for The New York Times regional editions. New, state-of-the-art presses will give The Gazette much more printing capacity for its own editions and enable it to compete for other commercial jobs.
  • Freedom's papers in Eastern North Carolina – Jacksonville, New Bern, Havelock, Kinston and Jones County – were consolidated into a strategic group called ENC. Maureen Saltzer was named CEO of the group. Early accomplishments included consolidating accounting functions and telemarketing.
  • Thanks partly to synergies with the newly acquired Destin Log, our weekly in adjacent Walton County exceeded expectations for a startup paper.
  • Working with MORI, a well-respected research firm, each paper in the division undertook an advertising satisfaction survey. The survey highlighted strengths and weaknesses in the papers' advertising efforts and pointed toward a myriad of ways they could better serve their customers.
  • The reduction of the printing web from 55 inches to 50 inches not only saved the division newsprint costs, it was also welcomed by the readers, who found the smaller paper easier to handle. As a result of the positive reader reaction, the papers accelerated their efforts to reduce web size. In January, Victorville was the first community paper to cut its web. By year-end, all but a few had done so. The rest were scheduled for completion in early 2001.
To accommodate its rapid growth, the division expanded its management structure with the addition of three new regions.

Karen Hanes was named vice president with responsibilities for the Florida newspapers. Ray Stafford was named vice president of the newly constituted Southwest Region, which included the division's papers in Texas, New Mexico and Missouri. Within Texas, Doug Hardie's duties were expanded to include oversight of the lower Rio Grande Valley.

Olaf Frandsen assumed the vice president duties in the Pacific Region that were left open when Tom Porter moved to Freedom Interactive Newspapers as general manager.

Karen Wittmer, the CEO of the Phoenix cluster of papers during Thomson's ownership, joined Freedom's management ranks as vice president for that group.

Rounding out the vice president team are Freedom veterans Tom Mullen, who oversees the Central Region, and Steve Buckley with responsibilities for the papers in North Carolina and Illinois.

It is a very strong management team, one that brings with it a wealth of experience – both with Freedom and with a host of other newspaper companies. To facilitate learning and synergy, the vice president management group confers monthly and meets quarterly. One of its first major projects has been the development of a strategic plan for the division.

Taking a cue from CEO Sam Wolgemuth, the division's leadership adopted doubling its revenues by 2004 as its "big hairy audacious goal" (BHAG). To be sure, it is a very ambitious goal, particularly for a "mature" industry such as newspapers.

In order to achieve the goal, the team identified five "bold steps" designed to drive the division during the next four years. They are:
  • Double revenues by 2004 through acquisitions, innovation, and new products and services
  • Improve our journalism
  • Build our communities
  • Become a workplace of choice
  • Build our interactive businesses
Much background work on those "bold steps" has been done. And as 2001 unfolds, cross-divisional associate work groups will be working on ways to make those goals a reality.

When all was said and done, the year 2000 was a tremendously busy, exhilarating and, most certainly, successful year for the Community Newspaper Division.

- Jonathan Segal,
President of Freedom Newspapers, Inc.