The Washington Star, by all accounts, has succeeded inmeeting its first challenge.
under the leadership of transplanted Texan Joe L. Allbritton this city's afternoon daily (with morning editions on weekends) has been kept alive.
Moreover, many journalists and Washington area business executives say, the Star is a vastly improved editorial product and advertising marketplace than the one Allbritton took over finally in the fall of 1975 - when a series of complex arrangements permitted him to purchase control of Washington Star Communications, Inc., the Star's parent company of which Allbritton now is board chairman.
He first acquired an interest in the newspaper in the fall of 1974, purchasing 9.9 per cent of the stock for about $5 million and making a loan of $5 million which since has been repaid.
Today, Allbritton is facing a new challenge: After apparently halting the newspaper's hemorrhage of financial losses, he must build a base of profitability from increased advertising revenues if the Star is to survive.
In this regard, the Star is entering a significant era in its long history (it began publication in 1852). The Star's ability to regain economic strength in the next two years or so may well determine if the nations capital city is to remain a town with two quality newspaper - a statement that can be made today about just a handful of cities.
Recent statistics, incomplete and inconclusive, make it difficult to assess the Star's current economic condition. Allbritton and other Star executives declined periodic requests over the past six months for interviews in connection with The Washington Post's current series on the newspaper industry.
When Allbritton spokesman Steve Richard suggested that perhaps the Star company chairman might respond to written questions, The Post submitted 16 questions related to the industry in general and the Washington market in particular.
Later, Richard said Allbritton discussed the situation with Star editor James G. Bellows and other company officers and decided not to respond. "You're on you own," Richard told a Post reporter.
Although Washington Star Communications is a private company, like most firms that publish newspaper, some statistics on its business are made public routinely.In addition, Allbritton has been making public some figures on a selected basis.
From recent reports and talks, the following mixed performance emerges.
In terms of profits and losses, the Star newspaper has experienced a dramatic recovery - partially because of a freeze on wages which unions accepted. Losses that started to pile up in 1971 reached $8 million by 1975 and were running at a rate of $1 million a month during 1976.
By the April-June quarter of this year, however, the Star newspaper was reporting a profit from operations of $582,000. Other than during a strike against the Post, this was the first quarterly profit for the newspaper alone since the three months ended Dec. 31, 1970.
Because the July-September quarter is relatively weak in terms of newspaper advertising revenues, the Star newspaper on Sept. 30 with a loss, but the red-ink entry will be far less than in previous years. For the first nine months of the current fiscal period, the overall operating loss was $876,000.
While there has been no boom in circulation for the Star, the Washington publication has not experienced the significant decline in readers suffered by many U.S. afternoon dailies in recent years.
During the six month ended March 31. Star Monday-Friday circulation averaged 375,383, down nearly 4 per cent from the same time year. Sunday circulation averaged 374,251 in the six months, a decline of about 2 per cent.
Star officials have emphasized, however, their view that a better measurement of circulation is a two-year period. This is because a strike against the Post in the six months ended March 31, 1976, added temporary circulation gains at the Star. Using the Star comparsion - 1977 vs. 1975 - Star circulation is up slightly but remain belows a peak of more than 400,000 (after the Washington Daily News was folded in 1972).
The Washington Post first surpassed the Star in circulation after the Post purchased the Times-Herald in 1954, and its lead over fairly constant at about 130,000 until 1961, when a gradual gain was noted. After the Star and News were combined in 1972, the Post's lead was cut, but it soon resumed growth, as the following figures show:
Washington Daily Circulation (Six months ended March 31)(TABLE) (COLUMN)Times.(COLUMN)(COLUMN)(COLUMN) Year(COLUMN)Herald(COLUMN)Post(COLUMN)Star(COLUMN)News 1953(COLUMN)262,803(COLUMN)204,237(COLUMN)238,600(COLUMN)13,646 1955(COLUMN)(COLUMN)380,607(COLUMN)250,285(COLUMN)163,867 1960(COLUMN)(COLUMN)401,736(COLUMN)273,405(COLUMN)177,892 1965(COLUMN)(COLUMN)446,622(COLUMN)306,167(COLUMN)216,317 1970(COLUMN)(COLUMN)502,156(COLUMN)315,196(COLUMN)210,310 1972(COLUMN)(COLUMN)526,432(COLUMN)302,682(COLUMN)217,073 1973(COLUMN)535,016(COLUMN)418,682(COLUMN) 1974(COLUMN)543,084(COLUMN)405,173(COLUMN) 1975(COLUMN)(COLUMN)536,350(COLUMN)369,626(COLUMN) 1976(COLUMN)(COLUMN)514,849(COLUMN)690,414(COLUMN) 1977(COLUMN)(COLUMN)555,030(COLUMN)375,383(COLUMN)(END TABLE)
On Sundays, the Post has become more and more dominant. With the Times-Herald aquisition in 1954, Post circulation leadership over the Star was 120,138 - a figure that has grown steadily to nearly 400,000 today (766,241 vs. 374,251). Star Sunday circulation has remained in a range of 320,000-380,000 ever since the early 1960s.
Advertising volume in the Star has been declining during the first part of 1977 compared with last year. The figures are somewhat distorted by the increased ad business in the Star during the early weeks of 1976, when the Post was experiencing a strike.
Nevertheless, the advertising linage data are disappointing for the Star, showing that the Post recovered its previous share of the local ad market.
According to data for the first five months of 1977, Star advertising lines were 16.69 million, down 616,044 lines from the 1976 period; the Star's share of the Post-Star market was 31.4 per cent. At the Post, ad linage jumped 4.1 million to 36.5 million.
To experts on the newspaper industry, such as John Morton of the brokerage firm of Colin, Hochstin Co., the advertising figures are seen as particularly discouraging.
But Allbritton has emphasized his determination to rejuvenate the Star's fortunes over a period of time and not overnight. Asked by Star reporter Stephen M. Aug last March about his decision to invest in the newspaper, Allbritton said:
"I came primarily because of the interest I have in saving a responsible newspaper in the nation's capital.
With an agreement to trade the company's WJLA-TV here, additional cash will be made available to continue the Star's "vastly improving program. . .we can launch as more agressive effort to increase advertising and circulation revenue," Allbritton added.
Washington Post publisher Katharine Graham said the Star "seems to be doing very much better. . .they have very smart people. They've saved a lot of money. . .so, I'm hoping that, and I have confident that, they will be able to make it. There's no reason why they can't. . . It's a terribly good paper and we need competition."
Adds Post executive editor BEnjamin C. Bradlee: (Star editor) Bellows has done a lot with a little. The town's better off for that."
Bellows, formerly with the Los Angeles Times and New York Herald Tribune, was hired by Allbritton and he has changed the Star from "a mediocre paper to one of the liveliest and best-edited afternoon newspapers in the country," according to an assesement published in the Bulletin of the American Society of Newspaper Editors last February.
The Star's gossip column, "The Ear," is talked about, design and graphics have been expanded on a much more lively editorial page and an innovative writer-in-residence program has given Washington readers the benefit of outside perspective.
According to the ASNE article, Bellows decided that the Post as a paper of record. And the Star's display of major stories often reflects an apparently conscious decisions to emphasize stories not already in the Post and to provide reduced emphasis for stories the Post had first.
One reader who has written for the Post and Star and monitored both Washington newspapers for more than 25 years is the bureau chief of the Watertown, N.Y., Times, Alna S. Emory. He said he finds the Star "more readable" today than back in the 1950s and 1960s, when the evening nespaper printed more of the daily U.S. Associated Press report than any other paper. "So much used to be dull, overnight stuff," Emory recalled.
The Watertown correspondent said the Star's bottom-of-page-1. "In Focus" articles are "very goodfs. . .much more enterprising," but he said he could do without the Star's page 1 daily "Q and A" interview to know what the guy is saying up top," he added.
"If the Star folded, there would ba a lot fewer stories covered and a lot keeps the Post on its toes," Emory said.
As an example, Emory cited Star reporter Jerry Oppenheimer's recent articles on a guard jury probe of possible organized crime ties to decisions by the Interstate Commerce Commission.
To keep the Star news report lively and growing, Allbritton is moving to strengthen the Star's parent company. In the last year, Washington Star Communications has purchased four smaller newspaper - the News in Paterson, N.J.; Westfield News and Wallace Pennysaver in Westfield, Mass.; York County Coast Star, Kennebunk, Me.; and the Sanford, Me., Star.
More important is the sale of WJLA-TV here to Combined Communication Corp. Subject to approval by the Federal Communications Commission, the Star firm is to receive $55 million in preferred stock - 550,000 shares - of the Phoenix-based Combined; the stock will pay $7 a share annually until redeemed on a schedule starting in 7 years and ending in 20 years.
In addition, the Star firm will take over KOCO-TV, an ABC affiliate in Oaklahoma City. The total value of the swap is osome $100 million.
Earlier, Allbritton sold WMAL AM-FM to the American Broadcasting Co. for $16 million. When the TV and radio agreements are added to the value of the Star and its other holdings, Allbritton would appear to have been successful in brightening the company's - and his own - future.
Washington Star Communications owns broadcast properties in Lynchburg (it has agreed to sell its radio station there) and a TV station in Charleston, S.C., as well as the Washington Star Synicate. The company has some 2,500 employees and annual revenues estimated variously at $50 million to $100 million. For the nine months ended June 30, the overall firm had operating profits of $5.3 million and net income of $2.9 million.
It has been reported that Allbritton invested some $65 million in cash and loan guarantees in Star Communication, of which he is sole owner. His investment now looks like it's worth well over $100 million.
If one takes Allbritton at his word, the figures above indicate that the Star could celebrate many more birthdays. In a Sept. 7, 1975, interview in the Star itself, Allbritton was asked "how long" he was prepared "to stick with the attempt to save the Star as an institution." He replied:
"I am prepared to invest heavily in the continuation of the Star. I don't think it would be proper, however, to spell out the exact amount, but let me assure you that I am prepared to see that substantial, additional sums are available to this paper, giving it every opportunity to return to profitability.I deeply believe that it will and can do so."