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Bay Area Reporter to Get New Partners

by Seth Hemmelgarn
Thursday May 2, 2013

The Bay Area Reporter's top managers have announced a restructuring plan that includes shareholders in the San Francisco Examiner and other local papers.

B.A.R. publisher Thomas E. Horn and general manager Michael Yamashita announced to the paper's staff Monday, April 22 that the Bob Ross Foundation, which owns the B.A.R. , has signed a letter of intent with Todd Vogt and Patrick Brown. Vogt and Brown are shareholders in the San Francisco Newspaper Company, which owns the Examiner, the San Francisco Bay Guardian, and SF Weekly.

"This solves a myriad of problems that just have to be solved," Horn said, while "the paper will continue to be LGBT-majority owned and operated."

A new company, BAR Media Inc., will be formed to acquire 100 percent of the stock of Benro Enterprises Inc., the principal asset of which is the newspaper.

The B.A.R. isn't being sold.

"We're not being bought out," said Yamashita, 47, who will own 31 percent of the new company and will become the paper's publisher. The foundation will own 20 percent. Vogt and Brown will own 49 percent, collectively.

Because of tax regulations, the nonprofit Bob Ross Foundation is legally required to divest 80 percent of its ownership interest by 2016. The foundation is named after the B.A.R.'s founding publisher, who started the paper in 1971.

Although the foundation currently owns the B.A.R. , the two entities have been required to be financially and completely independent, Horn said.

Horn, 66, the foundation's director, will be publisher emeritus and chair of the BAR Media board. Vogt and Brown will be management advisers.

The paper's current staff will maintain total, independent control over editorial decisions and content, those involved with the deal said. At the same time, the plan should help the paper survive and meet its legal obligations, while allowing Brown and Vogt to bring an LGBT audience to advertisers.

"We see a lot of synergies and common problems and common challenges, and we hope we can bring something to the operation," Brown, 64, said in an interview Monday.

Horn said that Brown and Vogt are participating as individuals, not as the San Francisco Newspaper Company. He also said that while BAR Media will have access to the other company's resources, "We will not become part of it."

Horn said he couldn't disclose how much Yamashita, Brown, and Vogt are putting forward in the deal because the information is confidential. There will be no changes in B.A.R. staff salaries, he said.

In a March interview about the foundation, Horn said that at one point, the B.A.R. was worth $5.3 million, but that figure has declined. Earlier this month, Mitch Richstone, the foundation's chief financial officer, provided a "rough estimate" of $2.7 million.

Horn said the restructuring should be closed within three to four months.

Under the deal, the B.A.R. could benefit from assistance in production and advertising, as well as accounting and other administrative areas. The plan could also mean expanded distribution in the East Bay and eventually the Peninsula and South Bay.

Like many media outlets nationwide, the B.A.R. , which is the longest continuously published LGBT newspaper in the country, has seen challenges brought on by the Internet and other factors, including the 2008 recession and a decline in advertising revenue that has affected the newspaper industry.

About 15 years ago, 35,000 copies of the paper were printed every week, but that figure is down to 29,000.

The paper still has an estimated readership of 120,000 a week, however, and the biggest part of the B.A.R.'s appeal appears to be the LGBT readers that the paper could deliver to advertisers.

Brown and Vogt "know how important our demographic is, and they know they can't get to it" otherwise, Horn said. Brown, who indicated that Horn had initially approached Vogt about a deal, confirmed that the B.A.R. offers a demographic he and Vogt aren't otherwise able to reach.

"We have no intention of changing the news perspective," Brown said, but "if we can enhance things, whether it be content or advertising or whatever, it would be silly, even foolish, if we didn't look at that."

At the same time, he said that he and Vogt would have "absolutely" no role in editorial decisions or content.

Vogt, 45, who said that Horn had approached him and Brown initially through a mutual acquaintance, praised the B.A.R.

"You guys do a phenomenal job, and your readership demographic is incredibly enviable," he said.

Vogt said that he and Brown wouldn't be involved in editorial operations "at all." He said he'd told Horn and Yamashita that "as a newspaper person, I thought it was essential that the existing management stay in place, and the integrity of the paper would really, really be damaged if it didn't retain LGBT management and LGBT ownership."

Vogt said while "the paper's done very well, even in these tough times," he and Brown bring "a little bit of a broader view and some more experience on specific aspects of newspaper publishing that we hope will benefit the Bay Area Reporter."

He said, for example, that other publications, including the Examiner, the Guardian , and SF Weekly "are paying significantly less every week to distribute throughout the city," and "we know we've got great relationships with all the distribution companies in the city." The B.A.R. will be able to benefit from that, he said.

Vogt said national advertising is another opportunity. The B.A.R. 's demographic is "so phenomenal," he said, and he's been "shocked at the lack of national advertising" in the paper from companies like financial service firms and airlines.

Horn told the staff Monday that the restructuring was by far the best of several alternatives he has explored over the last few years.

"We will maintain the paper as an asset and keep it local," he said.

Asked about the possibility of the B.A.R. and other papers sharing stories, Horn said, "I do see where they could want some of our content, and I don't see it working the other way around."

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