This week's odor comes from the joint press release issued by The Met, which ceased operations last week, and the ah, well, the us, the Observer. It says the following: "...The Met, a local weekly arts and entertainment publication, announced its final issue. The Met's owners had been evaluating a number of strategic alternatives for the paper, and felt the best option...was to discontinue publishing. The assets of The Met are being transferred to Dallas Observer."
Seems straightforward enough. One problem: It ain't true. Well, it's true, but it's not the whole story. Like when the chief executive officer of New Times, Jim Larkin, tells the Association of Alternative Newsweeklies, "We bought some racks. It's not that big of a deal." True, not the whole truth. When Bob Bennett, owner of The Met, tells Buzz, "We shut The Met down. It's true that we shut it down." True, but there's more to it. Yes, according to the paperwork for the deal, The Met decided to shut its doors. But according to several involved sources--including this week's author of Buzz, who used to edit the damned thing and was at one time a part-owner--it ain't that simple.
The Met, which launched in April 1994 with eight full-time employees, had grown from a 32-page A&E paper to a 60-page paper. It was, as many people have noted, not a direct threat to the larger Observer--which last week published a 432-page paper. But it was a pest financially. There's no doubt that New Times would rather be rid of it than have it around.
Enter Bennett, the lead guy of about a dozen Met investors, the fourth ownership group in the paper's history. Bennett and the other investors were essentially venture capitalists, and for the past year they'd been looking for a buyer for The Met so they could realize a profit on their investment. According to some Met sources, the owners should have felt no immediate pressure to sell, because the paper was no longer losing money. Nevertheless, several sources say that Bennett approached New Times with a deal: Pay us enough, and we shutter the thing.
New Times took it. "We were prepared to compete with these guys until hell froze over," says New Times Executive Editor Mike Lacey. "They were the ones squealing about shutting it down."
But did New Times just buy the assets? Not really. For those "assets"--about $50,000 to $100,000 worth of equipment--New Times paid about $2 million, according to three sources. In other words, the company paid enough to buy the paper--about one times annual revenue, the standard asking price for a weekly newspaper in a competitive market. It's a semantics game not unlike The Dallas Morning News played when it "purchased the assets" of the Dallas Times Herald, a transaction that was ripped by this paper, among others. (Observer Publisher Lee Newquist declined to comment on the financial details of the deal.)
How can we be sure Bennett and the investors got their cash, if no one is saying on the record that it was an outright purchase? Because Bennett says he's happy with the check he cashed. "Unfortunately, what was best for the shareholders was worst for the community and the staff," he says. "But we had a fiduciary obligation to the shareholders, and we look at it as a success. The investors got a good return on our investment."
But if The Met were really going to close its own doors, why would New Times pay them to do so? Shouldn't the company have said, screw you, and let the paper die without shelling out any cash?
Not so, says Lacey, who adds that he has no knowledge of the amount paid. ("And I wouldn't tell you if I did.") He says it made sense for New Times to pay "because The Met could have bled on for months. Certainly, it's a better situation for us the way it is." He also doubts the contention that the paper was on its way toward profitability. "If it was making money, there would have been other people interested in buying it," he says.
There is one additional local company that has been keeping an eye on The Met's bottom line for years now, a company that will be happy to see its investment returned: The Dallas Morning News. In 1995, the paper entered into a well-publicized "operating agreement" with The Met, one that supposedly only involved advertising trade and a printing arrangement. What was never disclosed, though, is that the Morning News also gave The Met a $300,000 loan to continue publishing. The loan was always a point of contention for future Met ownership groups, because the News refused to forgive it. The loan had been partially paid back over the years, though, and now, with the profits from Bennett and company's "assets sale," it will be fully paid off.
Look for Eric Celeste's ode to The Met in next week's Filler column.
