Insanity and Prosperity in the Midwest
May 14, 2020
When Joey Young was 27, his friends told him he was insane.
The reason? He wanted to buy a newspaper.
"Why sink a lot of money into that?" he remembers them asking.
Young didn't listen. He bought that paper -- a weekly in south-central Kansas that just happened to be his wife's hometown paper. Seven years later, Joey is now the owner of Kansas Publishing Ventures, which publishes six weekly papers in four Kansas counties.
OK, so perhaps his friends were right. You've got to be a little insane to be in this business, but Young also is successful. Editor & Publisher recently named Young one of their 2020 25 Under 35 in the news industry.
Young said he doesn't buy into the talk that newspapers are dying, and he's trying to prove it.
"I’m personally a print guy," Young said. "I think most of the money is in print right now. Until I see differently we will continue to print a newspaper. Certainly it is not helpful the coronavirus decided to kill off a chunk of our business. But that’s been everybody. For us there are ups and downs every year for every business."
Kansas Publishing Ventures prints The Hillsboro Free Press, Newtown Now, The Clarion, The Hesston Record, The Harvey County Independent and The McPherson News-Ledger. Three are free weeklies and three are paid-subscription weeklies.
"Newspapers in some way or some form will never die," Young said. "Unlike TV or radio, etc., we create original content. People still want to know what's going on in their town. We create content and people will pay to read that content. That business model has been working for hundreds of years. Now, you have to tweak it occasionally. We're in a tweak right now. But in 20-30 years, will people not care about how the government is spending their tax money?"
As far as digital subscriptions go, KPV is all in, but keeps it simple. If a weekly is free in print, you don't pay for it online. But if a subscription is required for the print product, you need to have that subscription to read it online. Very little is given away for free. There are no digital-only subscriptions, however, unless you live out of state. If you're in-state, you get both print and digital. If you're out of state, the paper won't be mailed to you.
KPV also practices what we've been preaching here at NewStart -- diversification of revenue. The company has a custom printing division that works with writers to self-publish books and with area high schools and colleges to publish yearbooks. It also has an IT division to help area businesses and residents with computer issues and services.
But that's not all. Young said they're also hosting community events, like an annual blues concert that brings in a "decent chunk of cash every year."
The key, Young said, is to find ways to bring in more cash during the normal downturns each year in newspaper advertising.
"Normally newspapers struggle in June and July, but we bill our yearbooks in June," he said. "That way you have this nice 20 to 30 percent profit margin right when the other starts to dip."
He realized that he couldn't have all his eggs in one basket soon after buying his first newspaper, The Clarion.
"Four to five weeks into buying The Clarion, our second-largest advertiser was a bank that merged with another bank, and that one had no money for print advertising," Young said. "So we knew that customer was gone. That was our second-biggest advertiser. We had to scramble and hustle to make things work."
So each year, Young, his wife (who quit her teaching job to work for KPV), and his other business partners "sit in a room, drink some beer, throw stuff against the wall and see if it sticks." Some of those ideas are successful and add to the company's bottom line, while others are not.
One example, which Young details on his blog, is the first newspaper he tried to start on his own -- the Maize Free Press. He said he lost a lot of money on that venture. But without that failure, he wouldn't have been able to succeed with the next one he tried -- Newtown Now.
"We should be doing a better job. Lord knows we could be," Young said. "Sometimes the ideas have hit, and sometimes they don't. We try to experiment. If one of the ideas pans out, we keep doing it. If not, we don't."
That constant experimentation allows KPV to learn on the fly, and gives him opportunities to try things that other chain newspapers are not able to.
And speaking of chains, that's a sore spot for Young, who battles them in South Central Kansas and has seen what they have done to competing papers that used to be independently owned.
He wrote an "obituary" for one competing paper when it was purchased by a chain, and got a little bit of flak for it. But he stands by it, and says that the way chains and hedge funds have run community newspapers is the main reason for the negative outlook on local ownership.
"It bothers me that these giant companies bought newspapers at 10 times cash flow thinking they would be able to print money for eternity," Young said. "But they couldn’t see the writing on the wall. They made a bunch of mistakes. ... 'We can’t print money any more, but we bought a bunch of newspapers.' That’s not newspapers dying. ... All of the big companies were greedy. And they’re paying for it now."
Young says it is still possible to buy a community newspaper and make a good living, despite what people hear about horror stories at corporate chains.
"We didn’t buy any of our papers at 10 times cash flow," Young said. "I don’t think they’ll be sold at 10 times cash flow again. That era is over. (Young's papers) are enough to make money, and not have a lot of debt. You can live a relatively comfortable life."
If you'd like to learn more about Joey Young's work in Kansas, here's an in-depth interview from earlier this year with Mike Blinder of Editor & Publisher.