David Eliot’s Testimony to the Wisconsin Assembly Committee on Rural Development and Mining

Full Transcript of David Eliot’s testimony to the Wisconsin Assembly Committee on Rural Development and Mining regarding AB 731 from Jan. 4, 2018. Read more about the bill and the hearing here>>

Thank you for this opportunity here. I really appreciate Mr. Kitchens putting this bill forward. You all do have a copy of my testimony, but after hearing what everybody’s talking about I’d like to go a little off script.

So I end with, this bill is a first step, and I think it starts a conversation, but this representative over here mentioned that he has a free publication that goes into everybody’s mailbox and there’s a paid bonafide circulation newspaper in the same area. The paper of record has to go to the paper with the bona fide circulation, and the free paper can’t even bid for those legals.


I’m coming out of a different model. People say that newspapers are dying, and you look at the Advocate and the Kewaunee Star and that’s their evidence. The publishers of those papers are killing the newspaper industry, and you’re subsidizing it.

What’s happened is, these papers that are owned by the conglomerate are taking the legals as income and printing the minimum amount of news possible to fit the requirements. And they’re stuffing it full of inserts. They’re increasing their price of subscriptions so that people will unsubscribe so then they can print less papers.

The way that it has set up is, bona fide circulation of 50 percent means they have to maintain that. Every time they lose a subscriber they have to cut their print run by two papers.

These are smart business people. They’re keeping their print runs to the minimum possible. Every time a subscriber comes off they reduce their print run by one, but if they do that they’re no longer fulfilling the requirement of 50 percent.

You’re talking about a conglomerate that runs everything – I’m not trying to mince words or make this about going after the corporation – but these guys are killing my industry. My model is the idea that everybody should get access to it because people want their information for free. That’s why more people are going to the internet. My paper is printed and delivered to mailboxes for free so more people read it so they don’t have to pay for it and they don’t have to leave their home to pick it up.

But i’m not allowed to sit at the table, even under this existing bill – and again I really appreciate this bill because it actually recognizes us as a legitimate news source, but it doesn’t allow me to be the legitimate news source.

I am in Baileys Harbor, by this bill I can go to my municipality and become the paper of record for Baileys Harbor because the competition that I have serves 19 municipalities. The only one they’re guaranteed is Sturgeon Bay. That’s where their mail permit is. They no longer have an office there. They no longer hold office hours there. They no longer have a local reporter working out of those offices because they don’t have anything.

I can’t go to the county and say, hey, I deliver to  8,000 mailboxes, and deliver another 6,000 papers for free. This is my distribution I would love to post your legal notices. I can’t compete.

Let’s talk about economics. Mr. Kitchens brought up the type getting smaller [in Gannett publications]. Well it could easily be a stipulation if there’s competition to say we will give you the legals if you increase your font size.

And if there’s competition, that would also suggest, as competition has demonstrated, that my rate would have to start competing with my competition’s rate. So the rates should go down as a result of competition.

The way this is set up is it’s not allowing a new model in to create competition to reinvigorate news and to get word out to your constituents.

As Mr. Kitchens points out people know about him in our area because we go to all the mailboxes. Because we actually try to build up a positive reputation of our news and try to talk to not just one political party but both so that we can get a bigger and bigger audience. Why not have government reward those kind of publications instead of not being allowed to consider giving those publications the legals.

So again I really appreciate the opportunity to be here and the opportunity that this conversation is started, but it needs to take another step.

Question:  In the sense of papers dying, aren’t you still competing for the limited advertisers willing to pay to put in because there’s less readership? Aren’t you still fighting for the less and less and less over time? Aren’t you only prolonging which paper potentially gets worse over time?

Eliot:  We’ve grown every year for the last 20 years. From my standpoint, we’re not dying because we reinvesting constantly. What you see from Gannett is divestment in editorial, in content and in their communities.

Newspapers traditionally have found a way to talk to as many people as possible, the Gannett model is trying to find a way to talk to some people and just do it enough that they can keep the bottom line going up.

Shoppers are continuing to grow. The publications that are just filled with ads that go in everybody’s mailbox. They’re still out there and they’re still growing. And they’re still a viable advertising opportunity because as internet use increased direct mail decreased.

We’ve all see our mailboxes get lighter and lighter. You put a shopper back in and people actually read it now because they’re not inundated, they’re not getting spam in their mailbox they’re getting it online. A newspaper in the mailbox is different.

I think the other part here is – you ask is your newspaper continuing to decline. Well, maybe, but that’s my battle. All i’m asking for in this is that we be able to be considered the newspaper of record. That’s the most important thing to me.

To me, owning a newspaper is about service to the community. It’s about establishing integrity and it’s about following through for your community and telling their stories. I do that, the community tells me i’m doing that, our representative comes before you and says I’m doing that, but my own county seat can’t designate me as the paper of record that keeps the history for our community.

Instead our history is being defined by a publication that’s reprinting stories from Green Bay.

Question: Do you see free paper as being the future of print potentially?

Eliot:  Potentially. Here’s another piece of the puzzle. The Wisconsin Newspaper Association, which represents a number of newspapers, only allows bona fide paid circulation of 50 percent plus one to be voting members of their organization. So I choose not to be a member of that organization because the only benefit I have is I can win awards if I pay them money. That doesn’t make sense to me. I would join if I can vote, and then I could come here and say I participated in a vote and I lost. They’re the ones behind the bonafide paid circulation in here.

In other words, I’ve been competing in my own bubble. I can’t speak for the industry as a whole. I can’t say that free publications are going to be better than paid circulation that that’s the next step.

I believe that investment in product is what makes people read things. The New York Times and the Washington Post in the last quarter have seen an upticks. Why, because they’ve all the sudden said we’re going to invest in telling stories. We’re going to do actual reporting and pay for investigative reporting so people have fresh information to read that they didn’t have before.

That model is coming back a little bit through reinvestment.

What you see throughout the state of Wisconsin is Gannett cuts out every person and staff member and makes their paper less local which means people don’t want to read it or pay for it.

My father in-law lives in Appleton. The Post-Crescent is the paper there. He’s a sports guy. They cut the sports. And they used to do it the day after it happened and they moved it to Sunday and if you want it you’re going to have to subscribe.  Of course people are going to unsubscribe they’ve taken the money out of the paper and there’s nothing to read anymore.

I think it takes reinvestment. You have to take a little profit from the shareholders and reinvest in your own product.

Question:  What do you need to see in this bill where you think it would be advantageous from your side?

Eliot:  [Eliminating] the bonafide paid circulation of 50 percent. I don’t have a paid circulation. I have people who pay for subscriptions. Door County is a fun spot to visit, I encourage you all to come.

I have people from Florida or California that pay for subscriptions, but it’s not 50 percent. So I can’t qualify under that criteria to sit in front of the Sturgeon Bay City Council or in front of our county government and say I would like to be considered for paper of record. Because the Door County Advocate holds a postal permit in Sturgeon Bay.

Question: So this boxes you out in just certain markets not overall?

Eliot: Correct. I serve 19 municipalities. We reside in Baileys Harbor. Because that’s where we hold our permit and there’s no bonafide paid circulation paper that holds a mailing permit in that community,, I can go to baileys harbor and qualify.

I can go to Baileys Harbor, but I can’t qualify in Sturgeon Bay. I could go to those other 17 municipalities and become their paper of record if they so choose to. However, I can never be the county paper of record and I can never be the city paper of record, the largest population base I can’t tough.

You’re really only being boxed out in one?

Correct, but understand we’re a population of 28,000 and over 50 percent reside in that one municipality.

I appreciate the bill as a first step. It allows me to do some of it, but I can’t do all of it.

Understand, I’m not looking for a bill to do that for me. I’m looking for an opportunity to sit side by side with my competitor and place a bid. And actually drive his costs down. If the county wants to keep considering it, drive the costs down and make it cheaper for government.

We’re just looking to become equal. Instead of the definition being relied on that paid circulation piece, I believe it should rely on percentage of editorial that’s unique editorial that’s content created for that community that makes up at least 25 percent, although I’d push that number even higher, and I’d like to see that number that actually read that paper in that community go up.

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