Newspaper editors purged MBAs from management years ago

Newspapers have not been blessed with the best and the brightest managers. Why? The executive editors sabotage real management and have purged MBAs from their ranks. Kill off the competition.

This is from the WSJ Deal Journal column, a Q&A with Mr. Knee, a highly respected  investment consultant

DJ: What would be your advice to newspaper owners?
Knee: You have seen people outsource everything from printing to editorial and indeed, any kind of journalism where your scale in the local community does not provide you with an advantage should be gotten elsewhere. If you find out how many people the large papers sent to the national conventions, you would wonder whether that’s economically justified. You have to focus on your competitive advantage, which is local. When the smoke clears, the local newspaper, which may not be the sexiest part of the newspaper industry but is overwhelmingly the largest and most profitable part of the industry, will be a smaller and more-focused enterprise whose activities will be directed to those areas where their local presence gives them competitive advantage and they will continue to generate as a result better profits than the supersexy businesses in the media industry asking for government or nonprofit help like movies and music.

The newspaper industry has not been blessed with the best managers, and generations of monopoly profits do dull the senses. On the journalism side, I think many managers would rather have avoided a fight with journalists than actually force them to think harder about what their readers want, rather than what they want their readers to want. In the economic environment we’re in, newspapers can’t afford to do every six-part investigative series they could have done before.

Meanwhile, the rank and file newspaper reporters who were busy covering their beats, don’t make much compared to the executive editors. 

Moma don’t let you’re kids grow up to be newspaper reporters. Have them study business, engineering, law or sales, even bar tending would earn them a better living. The executive editors who scratched their way to the top make big bucks for a while, until the host dies from bad management anyway. 

Ever wonder what kind of money the nation’s top newspapers pay their best journalsits? The top rung of the latter is set by the Newspaper Guild. Once you’ve lasted five or six years after about four years at a small daily and tuition of at least $20,000 a year at a respected J-school, this is it.

New York Times pays the most, $1,675.28 a week after two years. But that’s where it stays fixed until the next Guild negotiations. Of course, New York City has the highest cost of living expenses in the U.S.

Reuters pays $1,587.93 a week after six years.

The San Francisco Chronicle pays $1202.24 a week for six years of journalist experience. I know that is top for the Guild scale, but many of the hard workers, who put in more than 38 hours a week get additional pay above scale.

Consumer Reports takes the No. 1 position with $1,80410 a week scale after four years of experience. The union-biased “non-profit” magazine pays more that the New York Times or San Francisco Chronicle for their pro-union advertorial reports on products.

Can new online newspapers chage for its content? Jeff Jarvis of the LA Times says “No!” And he explains himself very well:


How’s that for a direct answer? Every rule has its exceptions — this one only a few: The Wall Street Journal (paid by expense accounts), Consumer Reports (which serves reviews, not news), iTunes (we may play a unique performance over and over, but I don’t read even my articles more than once) and porn (which is suffering the same problem newspapers are thanks to free competition from, uh, amateurs). But the rule of the new, post-scarcity economy is clear: Charging for news online is dangerous folly. Why? Let me count the reasons if not the dollars:

Once news is known, that knowledge is a commodity and it doesn’t matter who first reported it. There’s no fencing off information, especially today, when the conversation that spreads it moves at the speed of links.

There will be no limit to competitors. Readers, like water, will follow the path of least inconvenience. It’s impossible to compete against free. Have papers learned nothing from Craigslist?

In the old-content economy, one could make much money selling many copies of a product. In today’s link economy online, we need only one copy, and it is the links to it that give it value. So rather than complaining that Google should pay them for aggregating their headlines, news organizations should be grateful that Google does not charge for the links it gives and the readers it sends. Indeed, we should be spending our effort figuring out how to get more links to original reporting to support it.

Putting your content behind a wall cuts it off from the conversation and robs it of influence. Just ask New York Times columnists how much they disliked the pay wall the paper finally demolished.

Not all newspapers are going bankrupt. Many, in small monopoly markets are among the most profitable businesses in America with profit margins much higher than oil companies, Apple, EBay, Cisco, Sprint, AT&T, Google or Microsoft.  Gannett has the lion’s share of these markets. And also the highest ratio of MBAs in the media business. 

Major city newspapers will go nonprofit to keep influence

Major cities such as San Francisco, Washington D.C., LA, Chicago, New York, Houston and Philadelphia may convert the serviving newspapers into nonprofits to keep their political and philanthropic status. 

The San Francisco Chronicle will be the first to test the entity. 

San Francisco investment banker Warren Hellman and other prominent SF  lawyers and investors made an informal proposal  last week to Hearst, owners of the San Francisco Chronicle about helping the troubled daily paper become a nonprofit, San Francisco attorney Bill Coblentz told the SF Business Times.

Hellman and Coblentz discussed the idea, then Coblentz conveyed it to former San Francisco Examiner editor and publisher William R. Hearst III, who is a Hearst Corp. director and an affiliated partner with Kleiner Perkins Caufield & Byers. William is one of the working Hearsts who lives in the Bay Area and keeps touch with The Chronicle on a daily basis. It’s unofficially the Hearst flagship, though in money making ability, their Houston Chronicle is by far the financial headquarters. 

“What happened after that, I don’t know,” said Coblentz, who is out of town.

The proposal would be for a nonprofit corporation “to take over the Chronicle,” with Hearst Corp. continuing to provide some philanthropic support, Coblentz said. Details remain sketchy. It’s unclear if the proposal is being seriously considered.

 

Editorial-wise they are already PBS in print, aren’t they? 

 

More Layoffs at the Denver Post

Updated Feb 26:

Note to “journalists:”  Your socialist views promoted Obama and the Democrat Party take over of Colorado. Businesses small and large are the enemy of Democrats. They were your advertisers. Does Big Brother spend advertising in your newspaper?

The Denver Post announced the layoffs of six newsroom managers Wednesday as part of a cost-cutting effort. Big deal, you think? After hundreds have been “let go” over the past two years? Yes. It is big for them.

Dismissed, effective Friday, were Gary Clark, managing editor of news; Mark Cardwell, managing editor of online news; Erik Strom, assistant managing editor of technology; Ingrid Muller, creative director; Cynthia Pasquale, assistant city editor; and Stephen Keating, online special- projects editor. Keating will continue to work on a project for Post owner MediaNews Group.

The layoffs come as dozens of newspapers across the country are cutting staffs and budgets to deal with steep declines in advertising and circulation.

“These departures were forced by budget cuts I have to make,” Post editor Greg Moore said in a memo to staffers. “I think you all know the financial challenges facing this industry and this newspaper.”

MediaNews Group is negotiating with union-covered Post employees for $2 million in wage and benefit concessions.

Rocky Mountain News owner E.W. Scripps has put that newspaper up for sale, and may close it, because of mounting financial losses.

Scripps imposed companywide pay and benefit cuts Wednesday at its newspapers and television stations, although the Rocky Mountain News reported that the cuts will not apply to the News.

The reductions, announced in an e-mail from Scripps chief executive Rich Boehne, were reported in several Scripps newspapers. Scripps declined to publicly release what it described as an “internal employee memo.”

I wrote about Times Mirror pulling the plug on The Denver Post, Dallas Times-Herald, and Houston Post, some 13 years ago, next they sold the family jewels, the rest of Times Mirror to the Tribune Co., and we all know about Zell’s offer to take the company private.

This is what is in store for all the former Times Mirror papers:

Layoffs, cuts to the bone.

Memo from Denver Post editor Greg Moore

To The Staff:

On Monday, April 23, in the auditorium on the first floor, we will have two very important staff meetings. I don’t think there is any secret that our newspaper and others have been facing some challenging times.

Even though just a year ago we went through buyouts in an effort to reduce costs, the financial situation facing the paper and the Denver Newspaper Agency requires additional measures be taken. At meetings at 11 a.m. and again at 4 p.m., we will explain details of another round of buyouts in an effort to cut expenses without having to do layoffs. These buyouts will be offered to Guild and exempt employees. I really hope we are able to achieve the savings we need and every effort has been made to construct an offer that will help us get there. The meetings will give us a chance to share details of the offers with you and answer questions. I know this is tough and introduces more anxiety in already difficult times. But we will get through it.

See you then,

Greg

While the Chandlers live like royalty in California.

 

Singleton should be praised for saving the Denver Post. It very easily could have been the Post shutting down today instead of the weird, tabloid Rocky Mountain News.

McClatchy about to be kicked off the New York Stock Exchange as stock falls below $1 dollar.

The elegant McClatchy stock certificates for Class A stock are worth more than the stock itself. *

 

This report is directly from a McClatchy press release. The McClatchy Company today (Feb. 5) reported a net loss from continuing operations in the fourth quarter of 2008 of $20.4 million, or 25 cents per share.

McClatchy also announced that it was notified by the New York Stock Exchange  that it is not in compliance with the NYSE’s continued listing standards. The NYSE’s notice dated February 4, 2009 indicated that on February 2, 2009, the company’s average share price over the previous 30 trading days was $0.98, which is below the NYSE’s quantitative listing standards.

The NYSE listed companies must maintain an average closing price of any listed security above $1 per share for any consecutive thirty trading-day period. McClatchy plans to notify the NYSE of its intent to cure this deficiency and has six months from the date of the NYSE notice to cure the non-compliance. The company’s Class A common stock will continue to be listed on the NYSE during this interim period, subject to compliance with other NYSE listing requirements and the NYSE’s right to reevaluate continued listing standards. In reality, the stock is now considered a “penny stock” and things had better shape up in the next six months. 

There was no report on what McClatchy was doing about its carbon footprint and efforts to slow climate change. 

Revenues in the fourth quarter of 2008 were $470.9 million, down 17.9% from revenues from continuing operations of $573.4 million in the fourth quarter of 2007. Advertising revenues were $388.3 million, down 20.7% from 2007, and circulation revenues were $67.0 million, up 1.4%. Online advertising revenues grew 10.3% in the fourth quarter of 2008 and were 10.9% of total advertising revenues compared to 7.8% of total advertising revenues in the fourth quarter of 2007.

Using cash from operations and proceeds from asset sales, the company repaid $30 million of debt in the quarter and $433 million for all of 2008. Debt at the end of the fiscal year was $2.038 billion, down from $2.471 billion at the end of 2007.

Restructuring plan to calm banks and other investors

McClatchy noted in a press release that the duration and depth of the economic recession have taken a severe toll on its advertising revenues. Given the unprecedented deterioration in revenues and with no visibility of an improving economy, the company is continuing to reduce expenses. McClatchy announced that it is developing a plan to reduce costs by an additional $100 million to $110 million, or approximately seven percent of 2008 cash expenses, over the next 12 months beginning later in the first quarter of 2009.

Details of the plan have not yet been finalized. In addition, the company will freeze its pension plans and temporarily suspend the company match to its 401(k) plans, effective March 31, 2009. The company will extend a salary freeze for senior executives in 2009 that was implemented in 2007. The company previously announced that it had implemented a company-wide salary freeze from September 2008 through September 2009. Gary Pruitt, McClatchy’s chairman and chief executive officer, also has declined any bonus for 2008 and 2009. In addition, other senior executives will not receive bonuses for 2008.

 

The loss from continuing operations for the entire year of 2007 was $2.73 billion, or $33.26 per share, including the effect of the non-cash impairment charges taken in 2007. Adjusted earnings from continuing operations(1) were $110.9 million, or $1.35 per share, in fiscal 2007 after considering the non-cash impairment charges and adjustments for certain discrete tax items. The company’s total net loss, including the results of discontinued operations, was $2.74 billion, or $33.37 per share.

 

Management’s Comments

Commenting on McClatchy’s results, Pruitt said, “2008 was a difficult and disappointing year. We faced troubled economic times and structural changes in our business.

 

“But the economy remains mired in recession and our industry is still in a period of transition. The advertising environment continues to be weak and we expect print advertising revenues to continue to be down. While we do not have final advertising revenue results for January, we know that the month was slower than the fourth quarter. We don’t have any better sense than other market observers as to how long the current recession will last and we do not yet have visibility of revenue trends.

“We must respond with both continued rigor in driving our revenue results as well as permanently reducing our cost structure. At McClatchy we are quickly becoming a hybrid print and online news and information company.

“Evidence of our cost reduction efforts can be found in our results. Excluding severance and other benefit charges related to our previously announced restructuring plans, cash expenses were down 14.4% in the fourth quarter and were down 11.5% in all of 2008.

“This necessary transition to a more efficient company is especially painful in a horrible economy and we have had to make some very difficult decisions to keep the company safe,” Pruitt said. “Even so, we are determined to treat our employees well and secure their retirement as best we can. So while we have announced that we are freezing our pension plans and will temporarily suspend 401(k) matching contributions as of March 31, we will continue to offer competitive benefits for our employees. We expect to offer a new 401(k) plan later this year that will include both a matching contribution (once reinstated), plus a supplemental contribution that is tied to cash flow performance. I recognize the sacrifices our employees are making to help us get though this difficult time and I appreciate their loyalty to McClatchy. I am confident that the McClatchy team is up to this challenge and we will see brighter days when the economy finally turns.”

Pat Talamantes, McClatchy’s chief financial officer, said, “Our new cost initiatives, combined with our 2008 efforts, are designed to save approximately $300 million annually before severance costs. Approximately $60 million of savings has been realized in 2008, and $44.7 million of severance costs associated with these programs has been expensed in 2008 and largely paid.”

“Despite the downturn in advertising revenues, we still continue to generate significant cash and are using it to repay debt,” Talamantes said. “Our debt at year end is $2.038 billion, down $433 million from the end of 2007. Based on our trailing 12 months of cash flow, our leverage ratio is currently 5.1 times cash flow and our interest coverage ratio is 2.8 times cash flow as defined by our bank agreement — well within the allowable covenant thresholds. We have $159 million in availability under our bank credit lines, and have no significant debt maturities until June 2011. We believe that we can work through this difficult environment, and we expect to make further progress in paying down debt in 2009.”

Other Matters

McClatchy also announced that it was notified by the New York Stock Exchange (the “NYSE”) that it is not in compliance with the NYSE’s continued listing standards. The NYSE’s notice dated February 4, 2009 indicated that on February 2, 2009, the company’s average share price over the previous 30 trading days was $0.98, which is below the NYSE’s quantitative listing standards. Such standards require NYSE listed companies to maintain an average closing price of any listed security above $1.00 per share for any consecutive thirty trading-day period. McClatchy plans to notify the NYSE of its intent to cure this deficiency and has six months from the date of the NYSE notice to cure the non-compliance. The company’s Class A common stock will continue to be listed on the NYSE during this interim period, subject to compliance with other NYSE listing requirements and the NYSE’s right to reevaluate continued listing standards.

Consistent with the growing industry practice, McClatchy will discontinue issuing monthly revenue and statistical reports after this release. McClatchy is among the last newspaper companies to report advertising results monthly, and without comparable industry information, management does not believe monthly revenues are as useful to investors. The company will continue to provide revenue trends and other statistical information on a quarterly basis with its earnings releases.

*Class B stock is the stock held by the family, so that has voting rights and much more value when the assets are finally sold. It’s the same model used by the New York Times.

Will terrorists strike again? Why is the U.S. pouring 20,000 troops into cities? There must be some ‘chatter’

UPDATE:

The Washington Post reports that the Pentagon has issued the marching orders to mobilize 20,000 millitary troops to secure unspecified cities within the U.S.

Homeland Securtiy issued warnings of a terror attack on New York City’s mass transit system from Nov. 28 through the holidays (Thanksgiving, Christmas and Hanukkah) the mainstream media doesn’t even have the intellectual honesty to report which holidays. Commuters and vacationing shoppers are supposed to be uneasy and many may even put off their trips to buy gifts. This, as we watch to bloodbath from Nov. 26-28, in Mumbi, India where the death toll has reached 200 from a group of 10 terrorists.

Who did it? We know the terrorists hate Jews. That narrows it down. 

What do the learders of Iran, Palistine and Syria have to say about the bombings? 

A Brooklyn rabbi and his wife were found among the dead in a series of terrorist attacks in India that have claimed more than 150 lives. In response to the attacks, the NYPD beefed up patrols around large hotels and Jewish centers, including the Lubavitcher headquarters, said NYPD spokesman Paul Browne.

The department already was on alert because of a warning earlier this week of a possible al-Qaida plot to strike the city’s rail systems over the holidays.

“The threat is serious, the threat is significant, and it is plausible,” said Congressman Peter King, R-Long Island, a member of the House Homeland Security Committee.

Rabbi Gavriel Noach Holtzberg and his wife, Rivka, who ran the Chabad-Lubavitch local headquarters in Mumbai were killed during a hostage standoff at the center, said Rabbi Zalman Shmotkin, a spokesman for the movement. 

On Wednesday, federal authorities warned New York police of an unsubstantiated (but reliable) report that al-Qaida operatives discussed an attack on New York’s subway system or rail lines like Amtrak and the Long Island Rail Road.

A spokesman for Mayor Michael Bloomberg said he had no plans to comment. (Keep shopping sheelple). 

NYPD spokesman Paul Browne said additional resources were being deployed in the mass transit system in an “abundance of caution,” a common response when police receive new information about a threat.

The Metropolitan Transportation Authority, which runs the city’s 468 stations and 6,480 subway cars, released a statement saying there was “no reason to be alarmed.”

The terrorists have been weakend from eight years of George W. Bush as Commander and Chief. 

We can be thankful for that time.

Newspapers send thousands to ‘cover’ the Democrat National Convention

This is called journalism? Thousands of newspaper reporters are in Denver to “cover” the party and coronation of the Obama/Biden ticket.

In fact, 15,000 “journalists” are flocking around the DNC convention. For the Republican convention? Not so much.

Did you know that several of the Democrat delegates are reporters and publishers?

Here is one. I’m not kidding. His name is Thomas Martinet.

It’s all rehearsed, fluffed up press conferences, electronic press releases and speeches read off teleprompters on unity and “toned down” socialism with a mix of religion and race thrown in. And the press laps it up. Of course, more than 90 percent vote exclusively for Democrats. This is amazing considering they have no problem picking up stories from wire services for most of their other news.

Meanwhile, back at the dilapidated newspapers, they continue to cut jobs to try and slow the red ink. How could they afford to send reporters to Denver? I wonder how many of the schmucks are on their own dime. It’s like their visit to Mecca every four years. The reporters are among old friends who still believe they have power.

Is there ever a report of the fall off in the number of reporters at the Republican convention? How about questions on how many houses John Kerry owned? Or a question on Obama’s life in Chicago and Hawaii while his brother lives on a dollar a month in shack in Africa?

This report is one of the best I’ve seen on the state of newspapers. It comes from digitaldeliverance.com.

Ignorance isn’t bliss to the dying. Witness the pathos of American daily newspaper companies. Most have finally begun to realize that the deterioration of their businesses isn’t cyclical but grave. Yet few, if any, understand why. Almost all grasp for the reasons.

Some attribute their grave condition to advertisers suddenly switching huge portions of spending from print to online – an excuse that ignores more than 30 years of declines in those newspapers’ printed editions’ circulations and readerships. Some others attribute their deterioration to not having transplanted their content into online quickly enough -an excuse that ignores not only the dozen years they’ve spent transplanting it but how their online editions are now read even less frequently and less thoroughly than their printed editions.

Most of the print newspaper experts who diagnose these companies’ condition still prescribe stale nostrums such as more consumer focus groups, subscription price incentives, more stylish typography, or shorter stories. Meanwhile, most of the experts who diagnose these companies’ Web sites prescribe balms and accessories such as giving blogs to reporters, adding video, or having the readers themselves report the stories. American daily newspaper companies have long been too financially impatient to submit themselves to anything but ostensibly quick cures and they’ve even longer been too conceptually myopic to perceive the real reasons for their declines.

I’ll declare the real reasons. There are but two and neither has anything to do with multimedia, ‘convergence’, blogs, ‘Web 2.0’, ‘citizen journalism,’ or any ancillary topics you may have heard presented at New Media conferences this millennium.

Nor is either of the real reasons advertisers’ abandonment of printed newspapers. Their abandonment is a symptom, not the reason for the decline. To understand the real reasons why the American daily newspaper industry is dying, first understand why more and more Americans are no longer reading daily papers and how their abandonment of newspapers has been wrought by changes in their own media economics. Also comprehend why the epicenter of the newspaper industry’s problems in post-Industrial countries is America and exactly how grave the situation is there.

The Fate of American Daily Newspapers
More than half of the 1,439 daily newspapers in the United States won’t exist in print, e-paper, or Web site formats by the end of next decade. They will go out of business. The few national dailies — namely USA Today, The New York Times, and The Wall Street Journal — will have diminished but continuing existences via the Web and e-paper, but not in print. The first dailies to expire will be the regional dailies, which have already begun to implode. Those plus a very many smaller dailies, most of whose circulations are steadily evaporating, will decline to levels at which they will no longer be economically viable to publish daily. Further layoffs of staffs by those newspapers’ companies cannot avoid this fate – not so long as daily circulations and readerships continually and increasingly decline. (Layoffs are becoming little more than the remedy of bleeding that was used in attempts to cure ill patients during the 18th Century and cannot restore the industry’s health.)

‘Hyperlocal’ news startup companies, whose services will be delivered not on newsprint but online, might replace many small dailies, but not most, and certainly not before the printed products’ demise. The deaths of large numbers of daily newspapers in the U.S. won’t cause a new Dark Age but will certainly cause a ‘Gray Age’ for American journalism during the next decade. Much local and regional news won’t see the light of publication. (America alone won’t suffer this calamity. Many other post-Industrial countries’ newspaper industries will suffer or, at best, skirt a version of this disaster.)

Is the Situation Really That Bad? Yes. Look at the numbers.

Last year, the most authoritative newsletter covering the American newspaper industry intentionally went out of business. The Morton-Groves Newspaper Newsletter, in a front page editorial entitled ‘Passing the Inflection Point,’ co-publisher Miles Grove, the former chief economist of the Newspaper Association of America, politely stated:

“The market momentum guiding the future of newspapers is especially brutal in the larger markets. Many have already passed the point of opportunity as it is too late for newspapers that have not successfully adopted marketing practices needed to support the core product and integrate with alternative distribution channels …For those who have not made the transition, technology and market factors may be too strong to enable success.”

Last month, Goldman Sachs equity analyst Peter Appert put it more bluntly in a Reuters in a story about the dwindling number of equity analysts who still covering the deterioration of this $40 billion industry:

“If I covered only the newspaper industry, first of all I would have been fired a long time ago; secondly, I would have had to kill myself.”

Among the largest American newspaper companies, the losses of equity have been titanic. On the August day in when I write this, stock in the Journal Register Companyis trading for less than four pennies per share, down from $3.25 a year ago, a loss of 99 percent. Any of the buildings housing any of its 22 daily newspapers is worth more than the company’s current stock market capitalization (currently $1.4 million). Journal Register reports that it has $77 million in assets, $719 million in liabilities, and lost $102 million last year. Standard & Poor’s, which downgraded its rating of Journal Register’s stock to junk, has now withdrawn any rating of it. Meanwhile, stock in Gatehouse Media, which publishes 97 dailies, is trading at 57 pennies per share, down from $22.00 two years ago, a 97 percent loss. That company faces delisting by the New York Stock Exchange and the equity research firm Morningstar this week declared its stock to be essentially worthless, valuing the fair price as zero.

Meanwhile, stock in the McClatchy Company, which publishers 30 dailies, has dropped from $74.30 three years ago to $3.78, a 95 percent loss. Stock in Lee Enterprises, which publishes 51 dailies, has dropped from $48.57 to $3.83, a 92 percent loss during the past four years. Media General, which publishes 25 dailies, has seen its stock price drop 83 percent in the past four years. Stock of The New York Times Company, which publishes 17 dailies, has dropped 75 percent during the past six years, from $51.50 to $12.98. Stock in Gannett Company, which publishes 85 dailies, has dropped 65 percent, from $90.14 to $17.40, during the past four years. Despite these results, Morningstar still calls newspapers, “the market’s most overvalued stocks,” according to the newspaper industry trade journal, Editor & Publisher.

The American newspaper industry’s losses of advertising revenues have been so well reported elsewhere that I see no need to outline those here. Likewise the industry’s losses of weekday and Sunday circulations, except that the industry maintains the façade that its overall circulation losses during the past three decades have been relatively minor. Weekday overall circulation was 62 million in 1970, dropped to 55.8 million at the turn of the century, and is approximately 53 million today. An overall loss of 9 million or 14.5% isn’t paltry but doesn’t seem that bad in the span of 38 years.

However, those absolute numbers fail to account for population growth during that time. The American population was 203 million in 1970 and 304 million today. Had the American daily newspaper industry at least kept pace with population growth, its weekday circulation should be 93 million today, not 53 million. The industry’s weekday penetration proportionate to population dropped from 30.5 percent 1970s to 17.4 percent to today, a relative decline of 43 percent.

To combat news of these declines, the industry has stretching its yardstick of readership plus begun conflating daily print circulation and monthlyonline usage. Its readership estimates vary from 2.3 people to 2.5 people per printed copy, numbers which, if true, would also mean that the majority of people who read a daily newspaper don’t themselves purchase it. More likely, the industry is stretching readership to mean the number of people who might live in a household where at least one person happened to buy or subscribe to a newspaper. But the other 1.3 to 1.5 people haven’t necessarily read it.

An independent survey released this month by the Pew Research Center for the People & the Press reported that 46 percent of Americans a newspaper ‘regularly‘, down from 52 percent two years ago and as high as of 71 percent in 1992. Moreover, only 34 percent say they read a newspaper ‘yesterday‘, down from 40 percent two years ago.

Meanwhile, the industry has begun combining its Web sites’ total number of monthly users and its printed editions’ daily circulation totals – even though the average monthly unique user of the average American daily newspaper Web site use the site on only four to seven days per month. The resulting muddle of daily and monthly vastly overstates the number of people who use a newspaper daily, whether in print or online.

Despite those financial, advertising, circulation, and readership declines, an article of faith among newspaper companies has become that the cure lay online. The most widely prescribed remedies are multimedia (also called ‘convergence’) and interactivity (mainly in forms of ‘Web 2.0’ and ‘citizen journalism’). The companies hope that adding those attributes to what their newspapers have always done will reverse their industry’s fate.

Yet adding multimedia, convergence, interactivity, Web 2.0, and ‘citizen journalism’ to what their newspapers have always done aren’t cures but merely balms and accessories. No matter how well intentioned those New Media prescriptions are, no matter how much more animated or responsive multimedia and interactivity can make daily newspapers, adding those will prove to be little more than analgesics.

The absences of multimedia or interactivity aren’t why the circulations and readerships of American daily newspapers have been declining in relation to both population and households for more than three decades. Half of American newspapers’ declines in weekday circulation and readership relative to population occurred before the Internet opened to the public in late 1991, prior to popular awareness of interactivity or multimedia. Although Americans nowadays expect all media to have multimedia and interactive attributes, the absence of those attributes clearly aren’t the major causes of the deterioration of the newspaper industry nor will adding those reverse those declines.

So, what are the two reasons why the American daily newspaper industry’s is dying?

The major one is simply that American newspaper companies have violated a specific part of the Principle of Supply & Demand when consumers’ supply of news and information radically changed in the past 15 to 30 years. The other and more reasons why American newspapers are dying is because of how far too many of them have deviated from their local roots).

The major reason alone is a mortal wound for the industry, but the minor reason exacerbated it due to a corollary effect of newspapers’ violation of a Principle of Supply & Demand.

The editor-managed newspapers are a prime example of sad bastards.

A look at the mind set of newspaper columnists and journalists as security boxes their belongings

By Mick Gregory

After the spring break/Easter holiday retail promotions, newspapers have a long, low period of advertising drop off, followed closely by subscription and single-copy sales declines. That’s when the next big wave of head-count cuts usually hits. It’s as predictable as a 2-hour commute in So Cal. The newsrooms don’t see it coming any better than hogs at a Bakersfield slaughter house. I take that back, hogs do get the picture about five minutes before the drill.

UPDATE:
(CAN YOU IMAGINE? WRITERS COMING UP WITH THEIR OWN HEADLINES?)

Word out of the Los Angeles Daily Journal newsroom is that the legal paper lopped off its copy desk last night — the whole thing. I’ve heard it from a few sources, one of whom emails that deadlines will be pushed earlier in the day, writers are being asked to suggest their own headlines and line editors will back read each other’s edited copy. The editor staffing was already thin, with recent departures not replaced. Emails one staffer:

Honestly, how do you put out a paper without a copy desk? We’re all very shell-shocked. The lay-offs included a veteran copy-editor who had been at the paper for 15 years, and who was completly unaware she was on the chopping block. We’re all scrambling around, trying to figure out how we’re going to keep doing our jobs without copy editors. — Kevin Roderick of the LA Observer

TIP TO PUBLISHERS: TRY USING WEB-BASED CONTENT MANAGEMENT SOFTWARE AND HAVE COPY EDITORS IN PUNE, INDIA DO THE EDITING FOR 20 PERCENT OF THE EXPENSE. THOUGH, GIVE YOUR WRITERS A CHANCE. ALL THEY NEED IS ABOUT A WEEK OF PRACTICE.

Here are the latest cuts:
The Seattle Times –175 to 200.
The Dizzy Dean Singleton cuts in California — bottomless.

Here is some open grieving from what was once a real fluff position, sports columnist in Southern California. Free food in the press box, jokes about the sports stars, great seats for all the best games, somebody had to do it. Well, not any more.

I have a suggestion for your exit interview, say “Pull my finger!”
And blow one a burrito/beer fart that they will remember.


‘We’re Eliminating the Position of Sports Columnist’
It took me, oh, about three seconds to process the meaning of the call from the newsroom secretary.

“Steve wants to see you in Louise’s office.”

Steve would be Steve Lambert, editor of The Sun/Bulletin/Titanic. And Louise is Louise Kopitch, head of personnel for the same foundering entities.

These days, your editor wants to see you (in tandem with the HR boss) for one reason only. And it’s not to congratulate you on being named Employee of the Year.

It was about noon, and I was in the new, north San Bernardino offices of The Sun to do my weekly IE-oriented notes column. I was going to lead with several paragraphs on Don Markham, the mad genius of Inland Empire prep football who, at age 68, is attempting to put a maraschino cherry atop his “mad genius” credentials by starting up an intercollegiate sports program (and, more importantly, to him, a football team) at something called American Sports University (current enrollment, about 30). A school planned and created by a Korean mad-genius businessman who either is about to fill a niche in academe or lose a boatload of money.

As it turns out, American Sports University is located in downtown San Bernardino in the very same collection of buildings occupied until October of 2006 by The Sun. The same buildings I reported to for my first day of work, Aug. 16, 1976, and then spent the next three decades of my working life. Later, I found that meaningful.

When the phone rang, my colleague, Michelle Gardner, had been talking to me about Cal State San Bernardino basketball, the aspect of her beat that most interests her. As usual, she was highly animated and barely paused for breath as I took the call, said, “OK,” and hung up. Michelle resumed describing the permutations of the CCAA basketball tournament and what it meant for the Division II NCAA playoffs. She was just getting warmed up. I basically had to walk away from her to answer the summons. Michelle does love her beats, and I admire her for that.

I may have laughed aloud as I went down the stairs. Certainly, I smiled. It seemed so silly. “They come for me at a random time and a random day. A Thursday. At lunch. Huh.”

I walked down the hall, looking for the personnel department offices. All the doors were closed, so I had to glance through the glass to find one occupied. I noticed a guy sitting across the walkway, a guy whom I once had worked with on a daily basis, when he was in the plate room and I would run downstairs to build the agate page. Mark Quarles. I remember wondering if he knew what I was doing down there, Thursday afternoon, and whether he might actually call out to me. Or whether it’s politically dangerous to acknowledge a Dead Man Walking.

I pushed open the door to Kopitch’s office, was invited in, and there was Lambert, looking smaller and thinner than I recalled him. Not that I had seen him often the past year, between my doing so many L.A.-oriented columns and him doing whatever it was he does. Corporate stuff, meetings off site, whatever.

I said, brightly, “I’ve been trying to think of a scenario in which this meeting is a good thing.”

Lambert said something like, “It’s not a good thing.”

I sat on the other side of Kopitch’s desk. As did Lambert, but he was turned slightly toward me and was about six feet away. Maybe that’s the way you do these things? On the same side of the desk but a bit removed? I remember a managing editor, name of Mike Whitehead, telling me, 20-odd years ago, that you never fire someone in your own office because if they insist on talking/complaining you can’t get up and leave. It’s your own office, see? So you fire people somewhere else.

Anyway, Lambert had a bit of a preamble. Something we hate to do, forced on us by economic realities, sorry … “but we’re eliminating the position of sports columnist for the Inland group.” I remember that fairly clearly, and I recall thinking “hmm, they leave it to me to grasp that I am not just a columnist but “sports columnist for the Inland group,” a title I’d never heard, let alone used. There was a flicker of “what if I were really dim, or contentious, and made him say it more directly? Like, “you’re fired.”

Lambert may have said he was sorry another time or two. How often he said it doesn’t matter because I don’t believe he meant it in the least. He could have said it 20 times or not at all and it wouldn’t have mattered. The guy hasn’t liked me since, oh, 2004, and I bet whacking me was the easiest call for him, of the 11 Sun newsroom people he fired that day. Dump a big salary (by Singleton standards) and a guy you don’t like at the same time? Easy. Fun, actually.
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Journalists are the ‘professionals’ at analyzing corporate, political, religious, social and political issues, with ‘expert’ opinion, yet they don’t understand their own industry

Mick Gregory

2008 is turning out to be the worst of times for newspaper business. Even with the drawn-out Democrat primary election, those ads are not enough to pay for the executive editors at each of the top tier papers.

The News is out. At the San Jose Mercury News, a good 2nd tier paper, reporters were instructed to wait at home on the morning of March 7. If they don’t get a phone call by 10 a.m. telling them that they’ve lost their jobs, they should head to work. This is good risk management. You don’t want any of these far left losers going postal at the office. Their security badges or smart cards will be deactivated. Take note, risk managers at small papers, these are the steps you have to take when trimming the waste at your operation.
Update: That all went down a couple of weeks ago, but like Hillary’s super delegates, the jury is still out.

This is wave two for the Merc, the other was in 1999, window dressing KR did before they dumped it on McClatchy and the “fire sale” specialists, Singleton’s group.

What’s happening in San Jose is happening
all over the nation at a slower rate. RIFs, meaning reduction in force are initiatives at newspapers to trim their biggest expense. in California it is especially harsh because of the deep crash of the real estate bubble. Regular readers of my blog saw that coming. But that’s not all. What other industry does California have besides real estate, film, vegetables and tourism? Along with real estate, advertising in related categories such as home furnishings, hardware and even big-box electronics has been slowing to a trickle.

Last month, the Los Angeles Daily News said bye-bye to 25 more editors and reporters, paring its newsroom to 100 people from nearly twice that many a few years ago. Editor Ron Kaye kept his job, but he gave the news department a tearful address to his staff.

Employees at The LA Times had a few weeks to respond to a voluntary buyout offer aimed at eliminating 100 to 150 jobs. If not enough people volunteer, layoffs will make up the balance. The answer is in. Enough buyouts this time

If Zell’s point is that the real money is in local news, the recent experience of the Daily News, the Orange County Register and the regional dailies ringing the Bay Area — all more locally oriented than The Times — has been a discouraging counter example. Their inability to keep ad revenue from falling at double-digit percentages year over year has led to staff reductions that further hobble local news coverage.

The LA Times reductions will bring the newsroom head count to below 850. At its peak about a decade ago, the newsroom had more than 1,200 employees.

The Chicago Sun-Times stock price falls to $1. It’s now a penny stock.

Shares of Sun-Times Media Group Inc. stopped trading on the New York Stock Exchange on Friday after hitting a red flag, a rule that halts transactions when a stock falls below $1.05. The stock will soon be kicked out of the exchange. The smell of death is in the air of their rented offices.

Trading halted on the floor of the NYSE when the stock opened at $1, down 11 cents from Thursday’s close.

I predicted six months ago that the Chicago Sun-Times would be the next large metro daily to shutter its doors. They sold the roof over their heads just to pay the bills and pay for the penthouse for Mr. Black (who will be living in much more spartan quarters in a federal pen).

But what will happen to all the professional journos? Maybe there will be a few openings at the Hoffman Hearld? Chicken dinner news, obits, high school sports…

The Star Tribune bankrupt

By Mick Gregory

We are observing the death throws of a star on its way to becoming a white dwarf. Gasses spewing, used matter is shredded and  thrown out. The size of the once bright, powerful force rapidly shrinks as it collapses on itself. These are the telltale signs of a dying star.

The Star Tribune, once among the Midwest’s largest newspapers, was purchased by the Sacramento-based McClatchy media company in 1998. The “executive editors”  paid $1.2 billion for it from a family who wanted out of the business.

In less than 10 years, the rapid growth of Google, Drudgereport, Craigslist, E-Bay, FaceBook and WordPress lured away much of the newspaper audience and built new readers/users that were not newspaper-friendly. So the advertising found new rising stars.

Last year, Avista, a New York-based private equity group, purchased the dying Star Tribune for less than half of what McClatchy paid only eight years earlier.

Since Avista’s purchase, the star has been shedding  reporters, editors, photographers, advertising sales staff and designers through two rounds of buyouts and the elimination of open positions. That was just a show for creditors.

Now, in January of 2008, the Star-Tribune filed for Chapter 11 bankruptcy. 

The Star Tribune’s long-term business slump has continued, with revenue declining by about 25 percent, from $400 million in 2000 to $300 million last year, according to a Star Tribune story in July. While major expenses such as newsprint and transportation  increased.  Even those adult newspaper carriers throwning papers out of the window of their pickups, need to be paid.

Several weeks ago, Avista announced that it was writing down the value of its $100 million equity investment in the Star Tribune to $25 million. That’s $75 million wiped out in one year. The Star shed more than $1.15 billion in value over nine years. The new owners are getting pennies on the dollar trying to restructure their debt.

The only candidates for buying into debt-ridden newspapers now are hedge funds, especially those that make a specialty of distressed debt investments, according to several industry observers. It’s called a loan-to-own strategy, they calculate that the owners like Avista will default on their new loans and the fund becomes the new owner for pennies on the dollar. What’s left may be some downtown real estate and a false store-front Web site. This is the white dwarf stage. And there are hundreds more flickering, spewing gas and spitting out  used up matter.

Journalists think of corporate PR types as ‘sinners.’ It’s wrong to work in free enterprise?

Newspaper journaists look down their noses at PR professionals who want to come back to the fold. Did you know they were so elitist? What kind of information are J-school students being fed?

By Mick Gregory

More rosey advice from the newspaper “recruiter” Joe Grimm.

Getting Back to Journalism from PR?
Q. Since graduating from college in 2006, I have been working as a public relations coordinator and have been very successful at the small agency I am at. However, I find myself wanting to jump back into journalism, which I majored in, in the next couple years.

Mick Gregory’s advice — Are you OK? Taking all your meds? So you graduated way back in 2006. That was only a year ago. You have to stick it out a little longer than that. I think you had better look into the salary level of journalists at mid-sized newspapers. For recent college grads you are looking at $35,000 a year — at the top of scale. On the other hand, who’s hiring?

I know there are a lot of journalists in the region who are moving from the field into PR, but I was wondering how successful public relations professionals going into broadcast or print have been. With so many newspapers or television stations asking for clippings or a tape of previous broadcast work, I find myself feeling discouraged and settling into a pigeonhole that I may not want to be inside in the next few years.

What do you think? What steps should I be taking to make the career leap down the line?

Clipped Wings
Here’s Grimm’s advice: (Note, no mention of money)
A. This will not be easy.

You need to have recent clips to compete with others. You will run into a lot of questions about why you went into public relations and whether you will follow journalistic principles.

The only thing you can do about those questions is develop some good answers that essentially show you’ve turned your back on public relations. Editors like recovering sinners — not that you are, but they might treat you like one.

Read all about it: Journalists urge their readers to drop subscriptions and advertisers to boycott the paper they work for

Mick Gregory

Imagine at your office, if the managers were encouraging customers to stop using your company, and they posed for pictures, putting up a banner over a highway that stated “Quit buying from my (X) company!”

Ms. Wendy McCaw is the publisher of Santa Barbara News-Press (which she over-paid the New York Times for four years ago). If you have been following this saga in the mainstream media, i.e. the LA Times, SF Chronicle or NY Times, you would think she is somehow trying to destroy her own property in just trying to manage it. But of course that is just one side of the story pushed out by the “objective journalists” who believe that the newspaper is some kind of government/taxpayer supported public service that they can use to smear the middle class and the Hollywood personalities who live in the area.

Below is the full version of Ms. McCaw’s commentary. You will get a good look at what journalists really do behind the scenes at your daily newspapers.

Earlier, the Times published in its print edition another commentary by Mr. Cannon attacking the News-Press. The Times refused to publish Mrs. McCaw’s response to Mr. Cannon’s accusations in its print edition. Times editors finally put it on the Times Web site, but only after the News-Press published the commentary along with a note about that newspaper’s initial refusal.

Dear Mr. Cannon,
The world has passed you by. Young people today no longer wear watches, no longer read newspapers, no longer watch TV news. They communicate by text messaging and in MY SPACE. They distrust the mainstream media, in large part because they distrust the decrepit ideas asserted by the old generation who claim to be “experts” such as yourself. You exemplify the basis for this distrust with your reference to “various inquiries” allegedly finding that we committed some journalistic sin.

This is the essence of irresponsible journalism and at the core of your deserved loss of reputation. Instead of relying on purposely uninformed bloggers and the biased “journalists” they support who are attempting to insert the Teamsters Union into Santa Barbara’s mainstream newspaper for supposed facts, why not roll up your sleeves and do some real investigative work? I challenge you to state a single legitimate agency “inquiry” that has found we violated a journalistic standard. None exists. It is simply more evidence why certain journalists today have committed a grave disservice to the public they claim to serve.

For decades, reporters who had no ownership interest in the product they produced were allowed to say whatever they wanted. They ran the newspapers even though they didn’t own the newspapers, with no heed paid to the bottom line. While these journalists claimed as “theirs” the newspapers by which they merely were employed, they acted in total disregard for whether the paper was profitable enough to ensure it would survive into the next year, much less the onslaught of the cataclysm of the Internet. The end result is that countless newspapers today face massive declines in circulation if not outright collapse. The L.A. Times is laying off hundreds as is the San Francisco Chronicle. Circulation is down all over the country. The time has come for the owners of these papers to step in and see to it that they are run in a proper business fashion.

The journalists, such as you, Mr. Cannon, who had nothing at stake but still exercised dominion and control for so many years over business entities they never owned, turned out to be the worst of stewards of the public’s need for a long-term journalistic presence.
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Now is time for all good stockholders to cut off the gravy train to the pockets of the New York Times playboys.

Shareholder Advisory Firm ISS Recommends Withholding Vote on New York Times Co. Board of Directors

Mick Gregory

A big time shareholder advisory firm, Institutional Shareholder Services, (ISS) is campaigning to investors to withhold their votes for four directors at The New York Times Co. as a way to push for corporate governance changes. The New York Times Co. is one of a very few using an outdated “robber baron” stock scheme.

The ISS report published this week, joins forces with a longtime shareholder, a Morgan Stanley investment fund, to roll back the dual-class share structure which allows the Sulzberger family to maintain dictatorial control of the company with only a minor share of the stock.

ISS analysts recommend separating the chairman and publisher roles, which are both currently held by Arthur Sulzberger Jr., “Pinchy,” as well as establishing key committees on the board that would be made up solely of directors elected by holders of the company’s publicly traded Class A shares.

The Class B shares, which are controlled by the Sulzberger family, have the right to elect nine of the company’s 13 directors. This is an blatantly undemocratic set up.

“Shareholders are left with few avenues through which to voice their opinion other than by withholding from Class A directors,” ISS said in its report. “While we do not advocate removal of the Class A directors, we believe that a strong message to effect change is necessary.”

The Times said in a public relations statement it was “disappointed” that the ISS had recommended a withhold vote for the four directors elected by Class A shareholders.

The Times’ annual meeting is scheduled for April 24. So watch for more positioning in the next two weeks.

Last year the Morgan Stanley fund and two other large shareholders withheld their vote for Class A directors, resulting in a 30 percent withhold rate. The votes are largely symbolic and are intended to signal shareholder dissatisfaction.

ISS also said that neither Sulzberger nor other managers are accountable to the company’s public shareholders “in any meaningful way.”

This is a democratic crisis. How long can the wealthy Sulzberger famiy (pronounced Sal-bur-jay among the inner-circle) soak the majority of their stockholders?

Editors and wealthy favorite sons with little to no management skills are responsible for the end of their industry

By Mick Gregory

It finally happened, for the past several months the Tribune Co. has had to put their once mighty chain up for bid. Rather than try and develop their Web/print empire and manage the media company, they gave in to the Chandler family’s need to sell out. The Chandlers have been behind the wave of shuttered big city newspapers across the nation for the past 20 years, including: The Dallas Times Herald, Houston Post, and the terminal Denver Post and Baltimore Sun. Now, with real estate flipper, Sam Zell taking the Tribune Co. private, the future of the LA Times is ashen.

Instead of innovative media management, the editor-centric and rich, spoiled relatives of the former publishers sell the assets like the decedents of 19th century railroad barons.

Tribune was particularly egregious. This company never did anything Web-wise, with management endlessly thinking that its stock was undervalued. It was clearly overvalued, and now the upside is totally capped. The little amount that Sam Zell is putting up to take this company private shows how little these companies are really worth.

All of these companies seem to be run, frankly, by jokers or dreamers who had no idea how to deploy capital. The only explanation I can think of is that they were run by people who are up from the newspaper side or are heirs to the founders and had no idea what they were doing financially. Dow Jones (DJ – commentary – Cramer’s Take – Rating) was like that for years, and it is finally being run in an intelligent financial way. Probably too late, though.

These are diminishing assets. They don’t need to exist. Younger people rarely read them. And the companies acted like they would always be in demand and were simply misunderstood by Wall Street. Nope, Wall Street got it the whole time, except a couple of hedge and mutual funds that are trapped and trying to get managements to do something to bring out value.

The result? The Philadelphia Inquirer gets wrecked. The Times boosts the dividend well beyond its means. And now the Tribune sets the stage for a massive downsizing, massive firings and the inclusion of tons of Associated Press copy.
—Larry Cramer of TheStreet.

—————–
The Denver Post and JOA partner with the Rocky Mountain News, filed the joint agency’s financial statements with the Securities and Exchange Commission on Monday.

They show total revenue at the agency dropped 5.3 percent in 2006 to $409 million, compared with $431.7 million in 2005. Revenue was essentially flat from 2004 to 2005.

Advertising revenue dropped 7.1 percent from 2005 to 2006’s $339.5 million.

Net income fell from $71.1 million in 2004 to $47.2 million in 2005 and $18.5 million in 2006.
More layoffs are just around the corner.

Business writers should follow the Chandlers’ investments after they receive the windfall from the Zell buyout. That would be “impact journalism.”

Today’s Journalists Face a Bleak Future

Mick Gregory

Benevolent liberals should set up non-profit “newspaper journalist rescue” organizations like groups do for greyhounds. Today’s newspaper reporters are finding they are used up at age 40 and are shoved out the door to be replaced by 24-year-olds fresh out of J-schools with no family to support or mortgage to pay. The gray haired, chubby newsroom members after 20 years of chasing deadlines, find that they are no longer “cutting edge.” Some might even be moderate, a few are actually closet Republians. They can’t attract the right demographics.

The new, spirited reporters are on a mission to spread the liberal gospel and punish “the suits and the pukes.” The fact of the matter is that many of today’s journalists are C+ students who despise math, business, and engineering. A large percentage don’t even graduate with a four-year degree.

Here is a glimpse of the kind of “professionals” who make up the newsrooms in 2007.

From his long-time status after three years in newspaper design, 27-year-old Luke Trautwein barely hesitates when asked if he would advise young people to join today’s newspapers.

“No,” he says firmly. “I’ve been in the newspaper business for three years, and I’ve only seen the negatives. Papers being sold and bought, and sold and bought, and people not knowing if they would have a job. I don’t know if there ever were the glory days, but I haven’t seen them. It seems like I can see it ending, and you wouldn’t want to tell people to get into that.”

“I love it. Any job where you can ride your bike to work and come in and joke around and high five and wear what you want to wear, and they respect you for who you are, and they need you for who you are.

“The people are so different and you get them all together and work harmoniously–most of the time–to put out something good every day. That’s very cool.”

Caught in the obvious contradiction, Trautwein grins.

“It doesn’t make sense,” he concedes, “but I love what I do.”

“There’s not a day that goes by that I don’t think about this stuff,” says Binyamin Appelbaum, 28, a business writer at the paper for almost three years. “You’d have to be crazy not to wonder whether this industry will be around to employ me for a long time.”

Aggravating that uncertainty was last year’s sale of Knight Ridder (which had owned the Observer since 1955) to McClatchy and the months of suspense preceding the deal. Reporter Emily S. Achenbaum, 28, says the period was “the first time I thought, ‘Wow, I’m part of a dying industry.'”

“I came here to work for a company that doesn’t exist anymore,” transportation reporter Richard Rubin, 28, who joined the paper in 2001, told me in January. “I’ve got 39 years until Social Security checks start coming in. Is Social Security going to be there in 39 years? Will the newspaper industry be there in 39 years? I’ve started to think about it that way, and it is daunting.”

For a new hire, “It would be hard to walk in here today and say, ‘Aha, I’ve made it. I can be an employee here for the next 45 years.'”

Not long after our interview, Rubin left the Observer to cover tax policy for Congressional Quarterly.

Especially discouraging is the generational flight from newspapers by their peers. Daily readership for people aged 25 to 34 plunged from 77 percent in 1970 to 35 percent last year, according to Newspaper Association of America figures. A study last year by the Pew Research Center for the People & the Press found that just 22 percent of those under 30 had read a print newspaper the previous day.

“Out of all my friends, single or married, about my age, one of them gets the paper, and he only gets it on weekends,” says reporter Deborah Hirsch, 24, who covers adjacent York County, South Carolina. “Everybody thinks it’s cool to know a reporter, but when it comes to do they really care or are they reading on a daily basis, the answer is no.”

While several still swear by ink-on-paper, most of those I interviewed prefer to read the paper online. Several admitted neglecting or not even subscribing to the paper version. “I subscribe,” says clerk-reporter Emily Benton, 24, “but I’ll be honest. They pile up outside my door on weekdays.”

At 24, higher education reporter April Bethea knows she is fortunate to work at a paper of the Observer’s standing. But she already is nervous about her future.

“You’re writing things, and people aren’t reading,” Bethea says. “I’m vain. I want people to read what I write. I don’t know if I will retire as a journalist, I guess because there have been so many changes at the paper in the last two years. I will never stop wanting to be a storyteller, but I feel I may get burned out by all the changes.”

“I’m a news junkie. The passion would be there whether or not anyone was reading the paper,” Mr. Isaguirre says. “But it is disheartening sometimes to look at the state of the industry.

“People my age look at things a little differently. There is not a lot of job security. We have grown up in an era where we have seen repeated cases of people who spend 15 or 20 or 25 years at a company and have the rug pulled out from under them. It’s changed how we look at our careers. We have less of a strong connection with our companies than previous generations had.”

Observer Editor Rick Thames, 52, readily acknowledges the agitation among young staffers. “They have a right to be impatient with us,” he says. “Our industry is slow to change, and it still doesn’t understand itself. There is so much off track that it must be frustrating to be in their shoes and wonder if we are ever going to see straight.”

“The newspaper delivered to my door isn’t that much different from the newspaper that was delivered to my parents’ door when I was 5 years old,” says reporter Deborah Hirsch.

“It’s very rare to find a story that appeals to young people on 1A or a section front,” says general assignment reporter Dànica Coto, 29. “You have to think as a young person and say how stories are going to affect them. It’s not just saying the mayor announces a light rail project. You have to think: I see young people riding the trolley every day. How will this affect them? Will they be able to sleep later or get to different jobs or what? You don’t have to do the whole story from their perspective, but you have to think about it.”

Repeatedly, young staff members called for more surprise. “People my age tend to react to buzz,” says Emily Benton. “Most single adults are not going to read a schools story as the second lead every day. Give them something that has a national reach, but also has a hip reach.”

Leslie Wilkinson, 29, agrees. “We need to surprise people, take more risks, print some things that shock people out there on the front page,” says Wilkinson, a design team leader and one of the Observer’s youngest supervisors. “Do some things that make your parents or grandparents cluck.”

More urgency, says 27-year-old Alisha Hord, a former copy editor and designer who is now an online sports producer: “My parents waited for the paper at 6 a.m. If we want to know, we go online at 2 a.m. or 4 a.m. or 4 p.m. We’re constantly connected. We want iPods, we want podcasting, we want slide shows, we want alternative story forms. My generation isn’t going to sit down and read a 60-inch story every day.”

At the same time, some worry about leaping from change to change. Stan Choe, 30, worked at the Observer from age 23 till 29, then joined the Associated Press in New York as a business writer. He remembers the paper fondly but felt concern about what he saw as an unsettled mission. “There was a new buzzword every month,” Choe recalls. “We have to put more audio on the Web. We have to write shorter. We have to write more features. We have to put in what it means to you. You felt like we must not be achieving what we wanted if we were switching every month.”

Since I visited the Observer, Benton has left for a job outside the newspaper business, editing for a weekly music marketing magazine, although she plans to continue a blog aimed at young readers. “The doom and gloom of working for a newspaper doesn’t really make people want to stick around,” she says.

Hirsch will keep fighting. “I knew I was coming into a ‘dying industry’ when I started this,” she says. “But I don’t think it’s really dying. People will always need information. I will have a job. It may be different, but I will have a job.”

Excerpts from Carl Sessions Stepp, AJR’s senior editor

Yes, you will have a job. But will you have a life?

New tip: It’s grandma Nancy Pelosi’s birthday. Guess how old she is? Is she 67, 68, or 69? How much has she spent on facelifts?

Why won’t you read about her birthday party in your daily newspaper?

Big Cash Bonuses for Executives — Not oil companies — Newspapers

By Mick Gregory

How much do the top management of today’s media empires make? We only seem to see reports of the CEOs of a few global oil companies. What about the newspaper business? A product that is not a necessity in today’s multi-media age. Let’s look at the McClatchy gang.

These bonuses for McClatchy Newspaper executives are in addition to their annual salaries. Not a bad take for walking around in suits discussing global warming and the chances of Hillary/Obama winning in ’08. This is in sleepy Sacramento, with a nick name of “Sack-o-tomatoes” because it is smack in the middle of central California’s farm belt and you see semi-trucks by the score stacked high with small red potatoes that look a lot like tomatoes.

You can see the demographics in their Sunday best, as they make the trip to town. You know, starched white shirt, cowboy hat and boots on Pa, Ma has highlights and a long cowgirl skirt. The kids look like gang bangers. Old Town Sac has maintained wood sidewalks for that “Old West” look.

This is where the McClatchy Bee newspaper empire holds court. Bee is a very old-timey name for a newspaper, isn’t it? Kind of cute. “Busy bees.” Who knew this clan would end up gobbling up Knight Ridder, then pay for half the purchase by selling off the prestigious Philadelphia Inquirer/Daily News and the San Jose Mercury News right off the bat?

In an industry that is losing revenue every year and piling on expenses, while it cuts its staff and puts more and more operations offshore, to Pune, India, isn’t it funny that they reward this type of executive management?
How about offshoring management? With today’s Skype, Web conferencing, and Business Service Software, the real number crunchers in India could streamline operations in months.

Here is the president of McClatchy, Gary Pruitt from two years ago.

Base Pay $950,000

Bonus $1,100,000

Restricted Stock $0

LTIP Payouts $108,600

Present Value of Option Grants $342,194

Other Annual Compensation $0

All Other Compensation $19,171

Total Compensation $2,519,965

Stock Option Exercises and Cumulative Balances

Shares Aquired on Exercise (#) 0

Value Realized for Options Exercised $0

Remaining Exercisable (vested) Options (#) 301,250

Remaining Unexercisable (non-vested) Options (#) 268,750

Value of Remaining Exercisable Options $9,616,656

Value of Remaining Unexercisable Options $3,204,843

Data for fiscal year ended in 2004

The following executive officers received the cash bonuses shown below:

Name and Title Amount of Annual Cash Bonus
Patrick J. Talamantes, Chief Financial Officer $170,000
Bob Weil, Vice President, Operations $200,000
Frank Whittaker, Vice President, Operations $220,000
Howard Weaver, Vice President, News $129,000

—SEC report 2006.

These figures are just “‘at-a-boy” bonuses. Just triple the figures and see how much the suits made out.
Here is what they received two years ago:

Frank R.J. Whittaker
Vice President Operations $1,277,252

Robert Weil
Vice President Operations $1,257,148

Patrick Talamantes
Vice President Finance and Chief Financial Officer $1,003,908

Howard Weaver
Vice President News $726,720

Let’s look at McClatchy stock (MNI) on the NYS exchange. The past 12 months high – $56.12, The past 12 months low – $36.95

Today’s price — $36.91. Whoopsie! If that price holds or drops this afternoon, it’s new low. After all that wheelin’ and dealin’. Well, time for another board meeting, and editorial executive summit, Palm Springs?

The Progressives are Fanning the Flames of Global Warming Fear

By Mick Gregory

There are skeptics about global warming among scientists who are experts on weather and climate. If you heard both arguments, you might not be so willing to go along with those who are pushing to impose more taxes, sacrifice jobs and the middle class standard of living to the latest cause, created by politicians and the media.

Why aren’t your major daily newspapers publishing both sides? Because they already took sides? That’s what I’m thinking.

The New Republic’s editor, Mick Crowley tries his best to discredit Michael Crichton’s “State of Fear.”

The uber-progressive, Crowley slammed one of the most well-educated authors of the past 50 years. Michael Crichton graduated summa cum laude from Harvard College, received his MD from Harvard Medical School, and was a postdoctoral fellow at the Salk Institute for Biological Studies, researching public policy with Jacob Bronowski. He has taught courses in anthropology at Cambridge University and writing at MIT. Crichton’s 2004 bestseller, State of Fear, acknowledged the world was growing warmer, but challenged extreme anthropogenic warming scenarios. He predicted future warming at 0.8 degrees C.

Crichton’s first bestseller, “The Andromeda Strain,” was published while he was still a medical student. He later worked full time on film and writing. Now one of the most popular writers in the world, his books have been translated into thirty-six languages, and thirteen have been made into films.

“It’s all like a Stalinist show trial. The senators all get up and make their statements and leave. No one listens. At one point in State of Fear, a sympathetic character observes that a Senate hearing is an “unquestionably manipulative” means of raising public awareness.

When I read this biased review, I knew I had to buy “State of Fear.” It has kick-started me to look deeper into to
the mass media and Progressive Democrat global warming scare. It must be “for the children.”

Mick Crowley — a neo-Stalinist, is a senior editor at The New Republic, the U.S. version of Pravada.
If he hates “State of Fear,” you know it is a must-read.

New York Times Empire Crumbling — Road Trip! Publisher Meets and Greets at Davos, Switzerland!

By Mick Gregory

“I don’t know if we will be printing in five years, and you know what, I don’t care,” said Pinchy Suzberger, New York Times publisher.

You know what Pinchy? Most of us don’t care either!


sulzberger_jr_nyt03.jpg

Profits at the Times have been declining for going on five years, and the Times company’s market capitalization has been crumbling faster.

The Times wrote down the value of its New England Media Group—which includes The Boston Globe—by $814 million, resulting in the shocking quarterly drop announced last week. Oopsie!

Yet, as they hold “town hall” meetings with their working stiffs at the Boston Globe, the editors made room to hire Dean Baquet and hand him the Washington DC throne. Baquet, you may recall, is the executive editor who refused to make any more cuts at the LA Times which has a 950 person newsroom.

But Mr. Baquet, you just joined a paper that has cut some 150 journalists in the past year? No problems with that, eh?

Thursday, February 08, 2007

Janet Robinson’s pep talk: first impression

Word is, the Times Co. president/CEO faced a very tough crowd at Morrissey Boulevard today. Here’s what Media Log has heard so far:
It was a very hostile meeting. I would say most of the hostility came from the classified ad people who’re being outsourced to India. This woman–her name doesn’t matter–got up and said, she’s been there 37 years, she loves the company, and basically, how can you do this? The paper’s been cut back; we’re kicked out; is this corporate greed or what?

So Janet Robinson right off the bat had to handle this highly indignant, well-spoken classified ad person.

(Note: classified sales people are subhuman in the eyes of the far superior editorial department, so the surprisingly well spoken woman doesn’t get a name).

And she just kept on talking about how they’d had to make very difficult decisions, they wouldn’t be doing them if it wasn’t necessary. That was basically the theme: in order to save the village, we have to destroy it.

The people really kept at her about the outsourcing–that was really the main theme. Dan Totten [the Globe union head] said it was appalling and disgusting, and when did they make the decision–because let’s face it, we just agreed to this contract, and right after that they announced this outsourcing. Was that bad-faith bargaining? And [Robinson] never really gave an answer. She said [the outsourcing] had been under consideration for at least a year, but they didn’t make the final decision until the terrible results of the final quarter were known. They didn’t have a choice.

Somebody said, why do you still want us as part of [the Times Co.] portfolio? And she went on about, you’re a beacon of great journalism, people want to buy you and I admire their taste, but you’re a very important part of the company.
—thephoenix.com

Morgan Stanley, has set out on a campaign that could cost Sulzberger control over the paper. The New York Times is one of a unique few that have a two-tiered stock plan. The family holds a fraction of the stock, but they are voting stocks, the majority of the stockholders do not have a vote on decisions of the company. They ivory tower “executive editors” at the Times have been making horrible business decisions. And Morgan Stanley has been communicating the reasons why.

The details are by AFX International Focus — The New York Times has refused to list on its proxy a proposal from a Morgan Stanley investment fund that called for putting the company’s two-class share structure to a vote.

That system, which has existed since before the company went public in 1969, cements control of the company with the Ochs-Sulzberger family. The company says the control is necessary to protect the editorial integrity of the newspaper.

The Morgan Stanley fund had proposed the measure in November after expressing dissatisfaction with the company’s share price and what it called a lack of accountability to public shareholders.

Catherine Mathis, a spokeswoman for the Times, said the Times rejected the proposal last month, with the blessing of the Securities and Exchange Commission, after determining that the issues being raised in the proposal couldn’t be voted on by holders of the company’s publicly traded stock.

Those shares, which are called Class A stock, have limited voting rights, such as electing 30 percent of the company’s directors, the approval of certain acquisitions and other matters, she said. The more powerful voting rights belong to the Class B shares, which are almost entirely controlled by the Sulzbergers.

The company rejected the proposal last December, Mathis said, but the news became public late Tuesday in a regulatory filing made by Morgan Stanley Investment Management.

And Mr. Sulzberger had to get away. He jumped on a jet to the World Economic Forum at Davos, Switzerland. Remember, that’s where Senator John Kerry called the USA a pariah to the civilized world?

Then they fit in some skiing at one of the ritziest resorts in the world.

What began as a casual chat ended in a fascinating glimpse into Sulzberger’s world, and how he sees the future of the news business.

By Eytan Avriel of Haaretz.com

Given the constant erosion of the printed press, do you see the New York Times still being printed in five years?

“I really don’t know whether we’ll be printing the Times in five years, and you know what? I don’t care either,” he says.

Sulzberger is focusing on how to best manage the transition from print to Internet.

“The Internet is a wonderful place to be, and we’re leading there,” he points out.

The Times, in fact, has doubled its online readership to 1.5 million a day to go along with its 1.1 million subscribers for the print edition.

Sulzberger says the New York Times is on a journey that will conclude the day the company decides to stop printing the paper. That will mark the end of the transition. It’s a long journey, and there will be bumps on the road, says the man at the driving wheel, but he doesn’t see a black void ahead.

Asked if local papers have a future, Sulzberger points out that the New York Times is not a local paper, but rather a national one based in New York that enjoys more readers from outside, than within, the city.

Classifieds have long been a major source of income to the press, but the business is moving to the Internet.

Sulzberger agrees, but what papers lose, Web sites gain. Media groups can develop their online advertising business, he explains. Also, because Internet advertising doesn’t involve paper, ink and distribution, companies can earn the same amount of money even if it receives less advertising revenue.

Really? What about the costs of development and computerization?

“These costs aren’t anywhere near what print costs,” Sulzberger says. “The last time we made a major investment in print, it cost no less than $1 billion. Site development costs don’t grow to that magnitude.”

The New York Times recently merged its print and online news desks. Did it go smoothly, or were there ruffled feathers? Which team is leading the way today?

“You know what a newspaper’s news desk is like? It’s like the emergency room at a hospital, or an office in the military. Both organizations are very goal-oriented, and both are very hard to change,” Sulzberger says.

Once change begins, it happens quickly, so the transition was difficult, he says. “But once the journalists grasped the concept, they flipped and embraced it, and supported the move.” That included veteran managers, too.

How are you preparing for changes to the paper that are dictated by the Internet?

“We live in the Internet world. We have, for example, five people working in a special development unit whose only job is to initiate and develop things related to the electronic world – Internet, cellular, whatever comes.

The average age of readers of the New York Times print edition is 42, Sulzberger says, and that hasn’t changed in 10 years. The average age of readers of its Internet edition is 37, which shows that the group is also managing to recruit young readers for both the printed version and Web site.

Also, the Times signed a deal with Microsoft to distribute the paper through a software program called Times Reader, Sulzberger says. The software enables users to conveniently read the paper on screens, mainly laptops. “I very much believe that the experience of reading a paper can be transfered to these new devices.”

Will it be free?

No, Sulzberger says. If you want to read the New York Times online, you will have to pay.

In the age of bloggers, what is the future of online newspapers and the profession in general? There are millions of bloggers out there, and if the Times forgets who and what they are, it will lose the war, and rightly so, according to Sulzberger. “We are curators, curators of news. People don’t click onto the New York Times to read blogs. They want reliable news that they can trust,” he says.

“We aren’t ignoring what’s happening. We understand that the newspaper is not the focal point of city life as it was 10 years ago.

“Once upon a time, people had to read the paper to find out what was going on in theater. Today there are hundreds of forums and sites with that information,” he says. “But the paper can integrate material from bloggers and external writers. We need to be part of that community and to have dialogue with the online world.”

And while on community, the scandal about Jayson Blair, the reporter caught plagiarizing and fabricating, hurt the brand, not the business, he says. Blair was forced to quit in May 2003.

You’re one of the few papers that continues to print on broadsheet, which people consider to be too big and clumsy. Until when?

“Until when? The New York Times has no intention of changing that,” Sulzberger promises. At any rate, transitioning from broadsheet to tabloid would be prohibitively expensive, he says.

If you own any of those secondary NY Times stocks, I think it’s time to sell.

Gannett Knows How to Cut Expenses

by Mick Gregory

Two Gannett papers — the Honolulu Advertiser and the Indianapolis Star — are combining their business staff with their metro staff and putting both under one editor.

“This is exactly the kind of action toward business desks that I feared when many papers like the Star announced at the beginning of last year that they were cutting stock listings from their business section,” writes Chris Roush. “If it’s easy to cut the business section once, then it’s easy to cut there again.”

That’s called managing a business. A publisher I worked with once said, “There are two ways to skin a cat.” Either profits rise, or expenses have to be cut. It’s Managerial Economics 101.

What other business has managers for every four or five people?

Well, maybe banks. But where else?

Meanwhile, blogs thrive with very few in head-count and surging readership.
Guess where investors are putting their money?

Newspapers killing Scripps profit picture

Mick Gregory

When did newspapers make 20 percent profits?

The Scripps Co. owner of several newspapers and the popular HGTV channel, sent out a press release to stock analysts stating it is “talking about options” for its newspaper division, which is dragging down the company’s stock price.

“We’ve reached no conclusions, it’s fair to say,” Chief Financial Officer Joseph NeCastro said at an investor conference late Tuesday. “But we do believe that there probably is some value to be created in looking at a structural alternative there . . . maybe some form of separating the newspapers out.”

Scripps has built its cable-networks business, which includes HGTV and the Food Network, into the company’s leading profit generator. It’s now entering e-commerce with acquisitions of Web sites Shopzilla and uSwitch.

Scripps’ newspapers are slow-growth or no-growth. In the first nine months of 2006, the Scripps Networks division, which includes its cable business, posted a 17.8 percent gain in revenue. Meanwhile, its Interactive Media division, aided by the uSwitch acquisition, grew 408 percent.

Newspapers, which account for less than 30 percent of the company’s revenue, saw sales drop by 0.1 percent in the same time period.

Compared to broadcast television, “Newspapers seem to be much more troubled, and it’s hard to call a bottom there,” NeCastro said. “I think up until this last year probably it wasn’t that clear. I think we collectively feel like there is some damage.”

The newspaper industry is in a death ride. The Knight Ridder chain sold itself last year after investor pressure, and the Tribune Co., which paid more than 8 billion dollars for Times Mirror, is now being pressured to break up its newspapers, especially by the Chandler family, (former owners of Times Mirror), to boost its stock.

Scripps’ comments cheered Wall Street, with analysts from Merrill Lynch and Goldman Sachs publishing positive analyses Wednesday. Scripps stock hit a 52-week high, closing up 3.8 percent to $51.92.

“We were positively surprised by the company’s comments, which indicate that management has given more serious consideration to this possibility than we had previously thought,” Goldman Sachs analyst Peter Appert said. “Elimination of the newspaper unit would meaningfully enhance the company’s growth prospects and likely translate into a higher valuation for the shares.”

Scripps has daily and community newspapers in 18 markets, including Denver; Memphis and Knoxville, Tenn.; and south Florida. Scripps is a 50-50 partner with MediaNews Group, the owner of the Denver Post, in the Denver Newspaper Agency.

Scripps executives did not say an investment banker has been hired to assist in the deliberations. But NeCastro said the company’s board has spent “a fair amount of time” discussing options.
One possibility is a spinoff, in which Scripps shareholders would receive shares in a new, “pure play” newspaper company. Investors could then choose to sell the newspaper company shares and stick with the higher-growth, new-economy Scripps — or vice-versa.
“We believe (Scripps) could spin out its non-newspaper businesses, could sell most of its papers, or likely pursue many other scenarios,” Merrill Lynch analyst Lauren Fine said.

— David Milstead, Rocky Mountain News