City Pages sale splits it away from Backpage sex-ad website

Twin Cities alternative weekly City Pages is being sold in a move that will divorce it from the controversial sex ads on its sister website Backpage.com.

The deal essentially splits their parent company, Village Voice Media (VVM), into two parts. A group of its executives is buying out City Pages and 12 other weeklies owned by VVM. Backpage will become an independent entity operated by the company's founders. Terms of the deal were not disclosed.

The weeklies became a target of public protest and advertiser pressure for their relationship to Backpage, the nation's largest advertising forum for sex services. After police in Minnesota and elsewhere linked it to underage sex trafficking, the Minneapolis and St. Paul city councils and the Hennepin and Ramsey county attorneys asked Backpage to halt the ads.

Reached by phone Monday, VVM president Scott Tobias, who will become chief executive of the newspaper chain, declined to say that the Backpage backlash was the primary impetus for the split, but said "all the noise around it has been a distraction."

City Pages and the other weeklies would no longer run Backpage ads, he said. VVM founders Mike Lacey and Jim Larkin, who retain control of the classified-ad site, are not investors in the new company, he added, so Backpage money will not be an indirect revenue source for the weeklies.

Longtime City Pages advertiser Kim Bartmann, who owns several restaurants, including Bryant-Lake Bowl, said she had "pulled a couple of ads" over the Backpage issue.

"Unless this an elaborate ruse to take a break but put those ads back in later, we have no reason to endanger a long media relationship we really value," she said. "I'm sure everyone will be paying close attention."

Backpage has been a lucrative part of VVM's business, bringing in more than $28 million in the past year. While City Pages will still accept sex ads, Tobias said, adult classifieds make up a "small, almost negligible" share of revenue.

Media analyst Ken Doctor said that, assuming City Pages was doing at least average business with the low-cost, high-profit Backpage, it would take a significant financial hit.

Given the dwindling profits of print media, "a loss of $2 to $3 million is a significant amount of money," Doctor said. "Backpage profits were subsidizing the journalism. ... Either the owners are going to take less profit or they're going to make cutbacks."

He said the company's future depends in part on its ability to increase mobile-ad growth by developing smart-phone apps -- city guides, for example -- for which weeklies are already well-positioned.

The new owner

Started in 1979 as a music-oriented tabloid called Sweet Potato, City Pages was locally owned until the owner of New York's venerable Village Voice purchased it in 1997. Eight years later, Lacey and Larkin created the nation's largest alt-weekly chain when their Phoenix-based New Times operation acquired the Voice properties.

Ownership of the Minneapolis paper now shifts to Denver, home of Tobias' new Voice Media Group. Tobias, publisher of the VVM-owned Denver weekly Westword, where he got his start as a salesman in 1993, said he and his partners have wanted to form the company for some time and began making plans nine months ago.

Tobias called City Pages "one of our top properties," praising its recognition in the community and its early expansion to digital ad sales and content. Asked whether any downsizing was planned, he said "absolutely not." The publication has laid off two of its five full-time writers since last November.

He also said there were no plans to take the weeklies online-only. "Though we will continue to focus on our digital product, our customers want print," he said, noting the weeklies' low return rate of 3 percent (the number of copies remaining on newsstands, overall nationally).

Other publications in the deal include the LA Weekly, SF Weekly and OC Weekly in California, the Seattle Weekly, New Times in Phoenix, Miami and Broward, Fla., the Houston Press, the Dallas Observer and Riverfront Times in St. Louis.

Kristin Tillotson • 612-673-7046