The Newspaper industry can’t stop the bleeding. McClatchy lost more than 38 percent of its market value even after they absorbed Knight Ridder. McClatchy sold the Star Tribune at a 58 percent loss from it’s purchase price eight years ago.
By Mick Gregory
The McClatchy newspaper chain may be remembered in the same light as Mrs. O’ Leary’s cow. You may know the “story,” her cow was blamed for kicking over a lamp that started the Great Chicago Fire. McClatchy’s leveraged buyout of Knight Ridder and the spin-off of large, award-winning (union-heavy) newspapers started the Great Newspaper Fire Sale of 2006. And it has raged out of control.
Maybe journalists will start to gain some humility along with a dose of reality and economics 101. Especially at the papers McClatchy dumped i.e., the Philadelphia Inquirer, Daily News and now the Star Tribune. Where have all their union dues gone? I’m guessing that most went to multi-millionaire Democrat politicians.
The Associated Press reports this afternoon that the Inquirer began a round of layoffs today. Several reporters at the Inquirer said they were told Tuesday morning that their jobs were being eliminated, according to AP. The employees said that they were told to meet with personnel officials on Wednesday to discuss details of their severance pay and health benefits.
“The specific number of layoffs is still unclear because some Inquirer employees have already taken other jobs since word of the impending layoffs was announced in November,” the AP reports.
“As we all know, layoff notices are expected next week and could come as early as Tuesday (Jan. 2, today), so I am sending this memo in advance to inform you of some basics,” the e-mail from Ferrick said. “This FAQ is intended for those who may receive layoff notices.”
They tried to avoid more layoffs following last year’s 80-person job cut at the Inquirer. My thinking is the union wants enough dues paying members so the Guild/CWA bosses can still rub elbows with John Edwards, Obmama and Hillary.
Philly shouldn’t take in personally, the entire newspaper industry is in death spiral.
Alan Mutter of the non-profit Poynter Institute said the shares of publicly held publishing stocks in the last two years lost nearly $13.5 billion in value. “Growing investor pressure has terrorized and dangerously defocused the executives of publicly held [newspaper] companies,” he says. “Instead of navigating their businesses through the most difficult environment they will ever know, the executives have been forced to spend disproportionate amounts of their time on investor relations, financial engineering and ill-considered expense cuts that could imperil the long-term health of their franchises.”
Alan Mutter of the non-profit Pointer Institute says the shares of publicly held publishing stocks in the last two years lost nearly $13.5 billion in value. “Growing investor pressure has terrorized and dangerously defocused the executives of publicly held [newspaper] companies,” he says. “Instead of navigating their businesses through the most difficult environment they will ever know, the executives have been forced to spend disproportionate amounts of their time on investor relations…”
What? Newspaper CEOs have actually started to care what investors thought?
Thanks for the tip Vitmo!
Wow. I read about McClatchy selling the Star Tribune in Minneapolis at a 58 percent loss over 8 years, and blogged about it at http://leeaase.wordpress.com/2007/01/02/newspaper-half-price-sale/. Looks like this is pretty widespread and typical for the industry.
Your inaccurate beginning is the reason why newspapers are still around. A real editor would never let an urban legend, particularly one that has been proven to be a myth and not a fact, go uncorrected. Have you ever been to the top of the Sears Tower and looked at the historical display on the great Chicago fire, or are you just going by memory? Citizen journalism is great – it’s a revolution – but it’s difficult to sustain, day after day, and be done so professionally. And most bloggers are merely commenting on news with occasional reporting on their own. As for profits, many companies would kill if they were as in the black as many newspapers are. The problem is, in my opinion, large newspapers should abandon the chain concept and go at it independently, because reporters and editors are content-generators but also loss leaders — and in business, the latter model isn’t as prized as the former, which is sad.
I was born in Chicago, we learned the legend of Mrs. O’ Leary’s cow in kindergarden. The legend began with bad mainstream media reporting back then in the 1890s. Even as the fire raged, Mrs. O’Leary and her bovine companion were being blamed for causing the fire that destroyed the heart of Chicago. This theory appears to have had its origin in the October 9 issue of the Chicago Evening Journal, which reported that “the fire broke out on the corner of DeKoven and Twelfth streets, at about 9 o’clock on Sunday evening, being caused by a cow kicking over a lamp in a stable in which a woman was milking.”
Citizen journalists are telling a much more detailed and accurate account of the greedy McClatchy executives’ destruction of Knight Ridder and the Great Fire Sale of Newspapers in 2006 and 2007.
Joe Blow, you are right that Mrs. O’ Leary’s cow may be a fable, started by a sloppy newspaper reporter. And it is not fair to compare McClatchy’s firestorm of fire sales and cuts at newspapers. Because, McClatchy story is happening right now. It’s not a myth.
And mainstream media will not cover what has happened to the newspaper industry the past two years, especially the horrible fall of Knight Ridder newspapers under McClatchy management.