By returning to the basics of journalism, Les Zaitz hopes he has found a successful business model for newspapers.
When Les Zaitz bought the Malheur Enterprise, it was about to go out of business.
It was also, in his view, the worst newspaper in Oregon.
The weekly publication in Vale, Oregon, ran entire press releases on the front page. The only local news concerned high school sports. It was eight pages in length. It had no sales staff. “It wasn’t reporting on the community,” Zaitz says. “It was just junk.”
But the Enterprise, which had been published since 1909, was the only source of news in Vale, a town of slightly over 1,700 in far Eastern Oregon, 12 miles west of the Idaho border. “I just couldn’t stand the idea of an area losing a newspaper,” Zaitz says in a promotional video about the Enterprise.
Zaitz — who now owns the Enterprise and the Salem Reporter, and is a two-time Pulitzer Prize finalist and former investigative reporter for The Oregonian — talked to the paper’s four-person staff. “I tore the finances apart,” he says. He and his wife, Scotta Callister — who had recently retired as the editor of John Day’s weekly newspaper, The Blue Mountain Eagle — bought the paper in October 2015 for an undisclosed price.
“At the time we bought it, I didn’t have any great ambitions for it,” Zaitz says. “It just felt like a civic duty.”
What appeared to be a simple business proposition at the time has electrified Oregon’s journalism community. Not only has Zaitz turned the Enterprise around, he has shown that small-town newspapers can be financially successful simply by reporting news that the community cares about, perhaps proving that a successful business model for journalism is not as mysterious as some think it to be.
Callister became interim publisher of the paper; Zaitz, the editor. The couple quickly set to stripping “out all the junk and putting real news in there,” Zaitz says, as well as hiring a sales staff, expanding the newspaper’s distribution to the rest of Malheur County — which expanded circulation to 33,000 from 1,700 — building a website and creating a Facebook page.
The Facebook page proved providential for building the paper’s circulation and reputation. During the snow and ice storms in 2016, the page became a de facto wire service, posting stories at all hours of the day about road and freeway closures, calls for volunteers to remove snow from roofs in danger of collapse, and news Malheur County residents needed during the weather event. The posts reached 100,000 people. “Our traffic was just enormous,” Zaitz recalls. “It shows how much value people will put on a news product that serves to give them their news.”
His business model is simple: There is inherent value in reporting the news. “If it’s information they need to know or should know, they will buy it,” Zaitz says. “My basic premise, at this time in the country right now, is that if you deliver responsible news — accurate news, important news — and explain to the community that to get that, they have to pay for it, people will engage in that bargain.
“That’s the whole ball game, the quality of the news,” he continues. “Everything else is secondary.”
The modest digs of the Malheur Enterprise
The Enterprise charges separate subscriptions for the print paper ($40 a year) and access to the website ($60 a year). When the paper unveiled its website, it immediately put up a pay wall. “The newspaper business has trained people to expect they will get it for free,” Zaitz says. Yet online news has its own costs — for the reporters writing the stories, web design and so on.
“We treat those as two separate products,” Zaitz says. “When you subscribe to the print paper, you get what is promised: a weekly paper. You subscribe to the online, you get what’s promised: 24/7 access to our online stuff.”
As a businessman, Zaitz describes himself as a “calculated risk taker,” but much of the risk relies on his belief that the American public has a deep desire to read news that matters to them, and that represents an appetite journalists are not feeding.
He eschews social media (unless it’s to share news) and clickbait-style stories, and he dismisses emerging, ancillary aspects of business models for news publications, such as product offers and event promotions. “I didn’t get into journalism to put on community parties,” he says.
“People do indeed distinguish between professional journalism and the stuff that is the garbage of today’s internet and cable TV,” he told journalism students at Linfield College on October 24. “We have to become even more committed to producing those sorts of stories — well sourced, well documented, clearly accurate and no hint of bias.”
Zaitz comes from a newspaper family. His father, Clarence, was a reporter for the United Press International and other newspapers. Zaitz, who grew up in the Salem area, entered journalism right out of high school, first working for Salem’s Statesman Journal, then The Oregonian. His family has owned the Keizertimes, the weekly newspaper in Keizer, since 1987, which his brother, Lyndon Zaitz, publishes and operates.
He compares today’s media climate to the circulation wars of the late 1800s, when Joseph Pulitzer’s New York World and William Randolph Hearst’s New York Evening Journal ran sensational, questionably sourced stories to drive circulation. “It’s today’s clickbait,” Zaitz said at Linfield.
But Zaitz, throughout his professional life, has looked to a third newspaper publisher from that era, who bought a dying newspaper in New York City and insisted on reporting accurate, fair news with integrity.
The man was Adolph Ochs, and the paper, The New York Times. Zaitz has read Ochs’s biography, An Honorable Titan, more than a dozen times, and Zaitz admits he can become “evangelical” about the role journalism plays in democracy and civic life.
Zaitz speaks to journalism students at Linfield College
“I’m a very big believer in the absolute necessity of providing news for these local communities,” he says. “You can’t find Vale High School sports pictures on Google. You can’t find out about the local debate over marijuana repeal in Ontario. Rural newspapers or rural online sites are essential,” he says, noting that many rural areas do not have local television or radio stations.
So far it’s working. Circulation has increased dramatically, and digital subscriptions make up 20% of the Enterprise’s paid circulation. There is no shortage of news, and the paper has received numerous accolades, including the Investigative Reporters and Editors FOI Award for the Enterprise’s reporting on Anthony Montwheeler, a man who is accused of murder.
The reporting relied on public records from the Psychiatric Security Review Board, which the board refused to release, suing the Enterprise and causing Governor Kate Brown to intervene and order that the records be released.
Businesses are buying ads. “What we’re finding is that if you have a credible news source, they like to be associated with that reputation for integrity, fairness and accuracy,” he says. “It’s all of a piece. One thing supports the other.”
Rick Dentinger, the owner of Dentinger Feed and Seed, which his family has owned and operated in Vale since 1938, says all the changes Zaitz has made to the Enterprise are for the better.
“I think the whole community is glad he purchased the paper,” Dentinger says. “He has made it a good paper. When he says something, you know it’s the truth. The articles are well written. You know that they’ve researched it. He’s a good reporter. And he’s a good person.”
Dentinger says his business buys an ad “three or four times a year,” and while he cannot identify an uptick in business due to the ads, he thinks it’s reaching a wider audience than before.
“They’ve been pretty aggressive on a lot of things,” says Kay Riley, the general manager of Snake River Produce, a Nyssa-based onion distribution company. He didn’t elaborate on which stories or issues. “They’ve been up to speed on local issues more than their competing newspapers, I would say.”
In small towns, a newspaper’s coverage can burn bridges with advertisers or businesses that disagree with that coverage. Zaitz experienced that firsthand when, in 1996, the Keizertimes published a series of stories investigating Charles Stull, the police chief, who had been accused of intimidating and harassing subordinates. “We lost a lot of business,” Zaitz says.
But the paper continued reporting; the city eventually began an investigation, which resulted in the firing of the chief. Afterward, “every one of those businesspeople who had canceled came back and came back bigger than they had been before,” Zaitz remembers.
“In a small community, there can be a financial price for journalistic courage,” he says. “You have to make the decision whether you can weather that. Because no matter how principled you are, you can’t serve the community if you go out of business.”
Zaitz is now putting the lessons he has learned, as a businessman and journalist, to use with the Salem Reporter, the online news publication he started with funding from Larry Tokarski — the president of Mountain West Investment Corporation, a real estate investment firm. Tokarski first approached Zaitz in 2017. Lamenting the decline of the Salem Statesman Journal, he asked Zaitz if he would consider starting a news publication. Zaitz “laughed him off the phone.” Tokarski persisted, and Zaitz sketched out a rough business model, which included a six-figure dollar amount.
“I was, frankly, expecting a 15-minute meeting,” Zaitz says. But Tokarski cut Zaitz a check that day.
The Salem Reporter launched on September 17 with three full-time reporters who cover local and state government, schools, business and nonprofits. Zaitz insisted that they be completely transparent that Tokarski was funding the effort, and that he play absolutely no role in the publication — editorial or otherwise.
“I made it very clear to him: The minute that the public smells that this could be an organ for you, the thing dies,” Zaitz says.
Readers pay a monthly subscription of $10 or $100 for a yearly subscription. The Salem area has a media market of 400,000, and Zaitz says he needs “only a fraction of that” to be successful.
He will not divulge current circulation numbers — nor will he share the amount Tokarski gave. “I’ve got one of the largest media companies on my front porch,” he says, speaking of Gannett, which owns the Statesman Journal.
But he says the publication is already “wildly ahead of schedule.”
Part of that early success is that his business model assumed there would be no paid subscribers within the first six months. He also did not build any advertising revenue. “I’ve been very, very conservative because I want this to succeed,” he says.
Zaitz never considered starting a print publication. “I had zero, zero interest. The costs would go up.” Without print, production and delivery costs, overhead costs are low and all the publication’s revenue can be reinvested in reporting the news.
He is unconcerned by competition —either by the Statesman Journal in Salem, the East Oregonian in Pendleton or The Argus Observer, the daily newspaper in Ontario. “I tell my staff, we’re going to operate like there is no other news organization here,” he says. “It can really cloud your news judgment.”
In the case of the Salem Reporter’s choices of news coverage, he points out the decline of the Statesman Journal’s circulation, which has fallen by two-thirds since its peak.
“What that tells you is that there are thousands and thousands and thousands of citizens who are not seeing that story in the Statesman. So do we make the judgment that we’re not going to report on a community event because a fraction of them may have already read it? No.”
He says he has no ambitions to build up a media chain. “I’d rather help these small dailies survive and thrive,” he says.
One market he is not interested in entering: Portland. The media market is too saturated, and, he says, “I’m supposed to be retired.”
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