TALKING BIZ NEWS EXCLUSIVE

American City Business Journals CEO Whitney Shaw became the head of the parent company of 40 weekly business newspapers across the country earlier this year after the unexpected death of his father, Ray Shaw.

Shaw was previously a senior vice president of the company and president of its sports publishing division.

He’s now overseeing one of the largest employers of business journalists in the country at a time when the industry is retrenching. Many daily newspapers have cut their standalone business sections, and ACBJ’s weekly newspapers have hired away staff members from those dailies, particularly high-profile business journalists in Seattle and Atlanta.

Shaw talked via e-mail with Talking Biz News about the state of the privately held company, part of the Newhouse media empire, and business journalism. What follows is an edited transcript of that conversation.

Given the overall state of the journalism business these days, how is ACBJ faring?

Maybe the best way to describe this year is to say that if daily newspapers have pneumonia (or worse), ACBJ has a cold. We haven’t escaped unscathed, but we’re still fundamentally very healthy. We’ve always kept staffing lean, we’ve never owned printing presses, we have no debt, we’ve never borrowed to finance an acquisition, we don’t have expensive retiree pensions — these things separate us from companies in all industries that seem to be dominating the headlines with day after day of discouraging news.

That said, there’s no question that this is the most challenging economic environment in the lifetime of virtually every corporate executive in America — it makes previous recessions and the dot com bust look minor league. This has been painful and, frankly, I’m not sure the recovery has started nationally. I think the first quarter of 2010 will continue to be soft.

Since ACBJ is a private company, we don’t release financial information. I can say that while advertising revenue is off from a year ago, it’s nowhere near the decline that the publicly owned daily newspapers have reported and continue to report. And our paid circulation will once again grow in 2009, as it has for several years. Few, if any, other publishers can say that.

Because we’re so tied to the small and medium-sized business market, we’re often the first into a recession and the first out. We’re obviously hoping that continues. Looking back, we can see where things started to slow in late 2007. That would put the start of this recession much earlier than many originally thought, though I’ve recently seen some reports pointing out something similar.

In the markets where ACBJ is going well, what are the reasons?

With 40 business journals, there are probably 40-plus reasons one does better than another. Some of our business journals are doing significantly better than their counterparts, but there’s not a single overarching reason I can point to. It could be the strength of the publisher and his or her ad director. It could be the depth of the relationship with clients.

It could be a function of what categories of advertising are strongest in a specific market -– a market that relied heavily on commercial real estate advertising has been affected more than one with a diverse roster of advertisers. Sometimes, it’s just a question of how nimble our ad staffs can be; if they got a heavy dose of advertising from big banks in years past, have they been able to show local banks how to grab market share in this environment?

We’ve never sold advertising based on cost-per-thousand. We’ve preached the value of who we reach, not how many. That’s been the same year after year after year. As a result, we’ve long told advertisers that business journals are an efficient and targeted medium. That argument resonates even louder when dollars are tight.

Geographic diversity has also been a significant benefit for us. It’s probably even more important now –- although no area of the country has missed this recession, some places have been hit harder than others. For every market where there tends to be a bigger spread between the great years and the slower years, we have markets like Louisville, Columbus and Milwaukee that turn in 5 percent, 6 percent growth year after year. It helps to have a mix of high-flyers and steady performers.

Are you seeing a trend where the better performing ACBJ markets are where the daily papers have downsized their business news coverage?

I don’t think we’ve ever looked to see if there’s a correlation. My guess would be that in cities where the daily has pulled back on its business coverage, the initial benefit we would get is added online and digital traffic. Once that online visitor becomes familiar with us, we have a better chance of getting someone to subscribe to the business journal.

Frankly, it seems odd –- even counter-intuitive -– for dailies to be cutting coverage of business and economic news right now. This is the time that people need accurate and reliable business coverage more than ever –- it’s not something that should be left to “citizen journalists.” The need for accurate, in-depth business coverage benefits us significantly.

With the recent release of daily newspaper circulation statements by the Audit Bureau of Circulation, we had an opportunity to look at our numbers versus theirs. In the markets in which we have a business journal and there is also a dominant daily, those dailies saw circulation drop 13.2 percent in the 12 months from June 2008 to June 2009. In the same period, our business journal circulation dropped 0.67 percent. That spread of almost 14 points is the largest we’ve ever seen. We still expect our circulation to grow about 3 percent for calendar 2009.

How have some of your non-print products held up, such as event that the papers hold in their markets?

Events are still a significant business for us, and one that has held up very nicely. In a lot of ways, events are the original social medium –- we put people together face-to-face with their peers. Attendance continues on pace with previous years, and we’re seeing more interest, I think, from sponsors who are looking to connect in a hands-on way with potential clients and customers. And frankly, a number of our markets are getting smarter about the ways they sell sponsorships. In previous years, if an event had two or three sponsors, we might have added another this year. The dollars tied to sponsorships are holding up well.

Not surprisingly, we’re seeing more attendees use our events to find new employment opportunities. To facilitate that and to get people talking, in some markets we’ve taken an idea from college fraternities and started holding “mixers” –- an informal opportunity for people to meet and talk. And yes, we sell sponsorships to the mixers.

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