The other day I had a meeting with the ad sales representatives who help create the deals that monetize all this editorial content I am responsible for every week — the stuff that keeps us in business. It was the sort of meeting that you would imagine most publishing companies have once a year or so, at the very least. It was a chance for the editorial people to spell out their mission to the people who need to sell it to the public.
It all went pretty much as you might have expected — identifying some concerns on the ad side that the editorial folks never realized, sharing some of the strategies the editors have for squeezing late-breaking news, or last-minute ads, into the paper. The only unusual thing was its timing: it was the first such meeting the sales reps for U.S. 1 had had with their editor in probably 20 years.
The fact that it was happening now can be attributed solely to the merger U.S. 1 undertook last June 1 with Community News Service.
We wrote about the specifics of the merger in the June 20 issue of the paper: “The owners of Community News Service in Lawrenceville and U.S. 1 Publishing Co. in Princeton have merged to create a single company publishing 10 community newspapers with a combined circulation of more than 160,000 copies in Mercer County and central New Jersey. The combined company publishes on average more than 520 pages per month.
“Jamie Griswold and Tom Valeri, co-publishers of Community News Service, and Richard K. Rein, founding editor and publisher of U.S. 1, share ownership of the new company, Community News Service LLC. Rein will serve as editorial director of the new company, and will continue as editor of the weekly U.S. 1 Newspaper and the bi-weekly West Windsor-Plainsboro News. Griswold and Valeri will be co-publishers of the combined company, which also includes eight monthly papers serving Hamilton, Ewing, Trenton, Lawrence, Robbinsville, Hopewell, Princeton, and Bordentown.”
For the past six months or so, Griswold, Valeri, and I have kept a pretty low profile, trying to mesh lots of moving parts into one cohesive new entity. It’s been an eye-opening process, and I am now a merger maniac, seeing merger possibilities in all sorts of business settings.
For example: On December 12 U.S. 1 ran a cover story on the toy store at the Princeton Shopping Center that had been placed on the market by its longtime owner, John Sherman. I sensed that Sherman, like me, was approaching the traditional retirement age and was weary of continuing the daily grind of running a business. But he wasn’t ready to move into a rest home; in fact, he was looking forward to taking up his longstanding hobby — painting — as a fulltime pursuit. To that end he was willing to sell his store for a relative song.
Another course of action occurred to me: Why not consider merging with an art gallery? Even if the two stores were physically separated, it seems to me that one computer system, one bookkeeper, and one personnel manager could be used to run both. A worker calls out sick at the toy store the weekend before Christmas and perhaps one of the staff at the art gallery could help out. Sherman might find it invigorating to spend some of his “floor time” at an art gallery instead of the toy store.
And then (since it’s always easy to manage someone else’s business) I began to think of growth opportunities. Add children’s art supplies to the inventory of the toy store. In the art section promote the upcoming exhibit of children’s art at the art gallery. When a customer tells you that their child’s art was not selected for the art exhibit, you suggest they take some lessons at the gallery. And maybe a parent-child art class can be offered. Synergy is a word that is bound to be used.
Clearly the merger idea is on the minds of more than just me and my new partners at Community News Service. As this annual Survival Guide issue of U.S. 1 suggests, mergers have spread throughout our business community. This issue, I thought, might be the opportunity to share some of the initial observations and lessons I have gained from the merger process:
Celebrate Your Differences. When my prospective new partners asked to see my most recent profit-and-loss statements for U.S. 1, I gave them a strange look. The only records I had in 27-some years of being in business were personal income tax returns. How did I know whether or not the operation was profitable during the course of the year? I looked at my bank balance and noted whether it was up or down since the last time I looked.
On the other hand, I tossed a few editorial ideas onto the table that got similar looks of wonderment.
It’s a good thing. They are business guys (though each with their own distinct specialty). I am an editorial guy. We have a lot of ways to complement each other, only a little bit of overlap.
Don’t Let the Lawyers Kill It. If you are buying, selling, or merging a business, sooner or later you are going to need a lawyer. Your lawyer may want to work as hard as he can to promote your interests; their lawyer will work equally hard to promote theirs. But in a merger both parties need to look out for the common good.
As my lawyer said, we could write the world’s tightest business contract, and there would still be nothing to protect me if the other guys turned out to be jerks (or vice versa, I should probably say).
Don’t Let Deadlines Ruin It. In any business deal there is always a temptation to get something done by a particular deadline. Get it in before December 31 and we will be able to take advantage of (or avoid) this or that.
Maybe because my prospective new partners and I faced very real deadlines every week and every month, we set goals for our progress, but quickly adjusted them as we needed to.
Keep It Simple. Early on in our merger process we realized that we were merging a sole proprietorship (me, trading as U.S. 1 Publishing Company) with a limited liability partnership (Community News Service LLC). We could have dissolved both entities (with all those attendant costs) and then recreated a new one (with possibly even more attendant costs). Or we could do what we did — rewrite the partnership agreement to include me and then have the newly expanded Community News “acquire” U.S. 1. It took about 20 minutes.
Explain it to your employees, and keep explaining it. I have heard that when the two real estate agencies merged, the Henderson and Callaway agents were all informed of the merger in one moment of surprise. I think Valeri, Griswold, and I would agree with the need to work out the merger agreement in relative isolation.
Once done, however, the need to communicate the deal and its consequences has to be a high priority. And as the merger’s consequences reverberate through the operation, the discussions need to continue. The meeting described at the beginning of this column followed hours of time devoted to translating U.S. 1’s units of ad measurement into those of Community News, figuring out ways of sharing ad production files from all 10 publications, and establishing a unified billing system.
But even after all that, I discovered, the U.S. 1 weekly production cycle was timed in a way to foul up at least one day a week in which the sales reps should be out meeting with customers. We on the editorial side of U.S. 1 need to discuss how to fix that. Time for another meeting — an element of business I am beginning to appreciate.
Emphasize synchronization before synergy. In my newly merged environment, it doesn’t take too long before my editorial instincts lead me into a fantasyland of new editorial enterprises, in print and beyond. But I keep thinking of a phrase uttered at one of our early morning coffee klatches in the planning stages of this partnership: “First do no harm.”
Appreciate Your New Partners. For the sole proprietor turned partner, the bad news is that you can’t do it all by yourself anymore. The good news is you don’t have to do it all by yourself anymore.
On the Friday after Hurricane Sandy struck our office at 12 Roszel Road was still without power. Meanwhile I was dealing with no power at home, as well as a 60-foot tree that had fallen behind my rental property, knocking the chimney over, crushing the air conditioner, and rendering the furnace and hot water heat unusable. I felt pretty much defeated, but my partners were not. They went to search for a generator so that at least a few computers could run at the office.
Amazingly they found one, at some distant store in Pennsylvania. They drove back and met me at the office. More amazingly, as we discussed where to place the generator outside the office, we suddenly noticed lights coming back on in the office. Some people might call it a miracle; others would consider it a happy coincidence. I think it’s a good omen.