Once fierce rivals, the Minneapolis Star Tribune and the St. Paul Pioneer Press soon will be printed under the same roof.
In a consolidation move that's becoming increasingly common in the newspaper industry, the Star Tribune will begin printing the Pioneer Press early next year, the companies announced Wednesday.
Both newspapers will maintain their editorial independence. But the challenging economics of today's publishing world has led the Pioneer Press to outsource its printing needs to its crosstown competitor.
Star Tribune CEO Mike Klingensmith said the agreement with Digital First Media, parent company of the Pioneer Press, is a significant expansion of the Star Tribune's commercial business and an important new revenue source. The arrangement helps the Star Tribune's bottom line "without compromising the schedules, journalistic integrity, or quality" of the company.
"The whole idea is to get less dependent on print advertising revenue that has not been growing and get more revenue that can grow," Klingensmith said in an interview.
For the Pioneer Press, the move will reduce production costs without hindering its ability to produce a daily print edition. Digital First Media also intends to sell the press facility in St. Paul.
About 160 Pioneer Press employees — 120 full-time equivalent jobs — are expected to lose their jobs. The Star Tribune anticipates some job growth at its printing plant as a result of the Pioneer Press contract, but it was too early to say how many jobs would be added, Klingensmith said.
Guy Gilmore, publisher of the Pioneer Press, said the state's oldest daily newspaper "remains fully committed to the communities we serve and will continue to deliver the relevant news and advertising information our customers demand."
"There is an industrywide effort to sell newspaper production facilities and consolidate production operations in a manner that better suits our needs," Gilmore added.
Earlier this month, the Dallas Morning News announced that it would start printing editions of the Fort Worth Star-Telegram next year. Similar joint printing agreements are in place in Portland, Ore., Los Angeles and Chicago.
Ken Doctor, a newspaper industry analyst whose website is called Newsonomics, said some newspaper publishers must decide whether to be in the printing business. If they don't, then it makes sense to outsource the printing of their newspaper.
"If you own a press, you want to use it as a profit center and make money, not as a cost center," Doctor said.
The Star Tribune printing facility has plenty of capacity to publish both newspapers, although production schedules could be tight on big advertising days like Thanksgiving, Klingensmith said.
Sunday print circulation at the Star Tribune is nearly 461,000; the printed Sunday circulation for the Pioneer Press is 235,200. Total Sunday circulation for the two newspapers, including digital readership, is 583,000 and 283,000 respectively as of Sept. 30, according to the Alliance for Audited Media.
Custom printing contracts are moneymakers for newspapers, Doctor said, estimating that publishers can add 8 to 10 percent in incremental revenue with outside printing and distribution contracts.
"Newspapers have a revenue category called 'other,' and that 'other' category is becoming very important with declining revenue in advertising," he said.
The Star Tribune already provides distribution services to the New York Times, USA Today, the Wall Street Journal and single copies of the Pioneer Press in the west-metro area.
Under the five-year agreement, the Pioneer Press will be printed at Star Tribune's Heritage facility in north Minneapolis. The transition will start in mid-January with completion by the end of February.
The irony that the Pioneer Press would be sending its pages and its stories to the same plant where the Star Tribune is printed is not lost on longtime observers of the Twin Cities journalism community.
"Everyone is looking for efficiencies. You swallow your pride and you do what you have to do," said J. Keith Moyer, former publisher of the Star Tribune who now is a senior fellow at the University of Minnesota School of Journalism and Mass Communications. "The venom has kind of waned and economic conditions make it a lot easier to be cooperating with one another."