Two numbers stood out in Friday’s shocking news that the New York Times Co. was threatening to shut down the Boston Globe: $85 million and 450. The first number is the amount of money the Globe is expected to lose this year without union concessions. The second is the number of employees at the paper who have lifetime-employment contracts. All of those people should be very nervous right now.

The Times Co., which is groaning under $1.1 billion in debt, wants the unions to give up $20 million in concessions or face closure of the 137-year-old Globe, which has dominated the news business in Boston for more than 30 years. Given the size of the projected loss this year, $20 million seems like a modest amount. This would indicate that the Times Co. threat is merely posturing, as Alan Mutter argues. But ultimatums appear to be working in San Francisco, where the union just voted 10-1 to give the Chronicle broad authority to lay off employees without regards to seniority as well as to cut vacation time and extend working hours. The Chronicle and the Globe have similar audience characteristics.

The brass ring for Times negotiators has to be the 450 Globe employees who work under lifetime job guarantees. We knew such guarantees existed, but we hadn’t seen a count of the number of employees who have them until this past Friday; they comprise nearly a third of the unionized workforce. It’s hard to imagine any company handing out promises of that kind, but the Globe did that in 1993, when the economy was emerging from recession and businesses were being conservative about guaranteeing anything. Such management hubris testifies to the dominance the Globe enjoyed at the time over the Boston market, where its only competition is the working-class Herald and a string of suburban dailies.

We live in Globe country and can testify to the paper’s reach in the affluent suburbs. Drive through a quiet subdivision on any Sunday morning and the Globe is the paper you see in the driveways of the $700,000 homes. However, the tech-savvy Boston audience is also more open than most to online alternatives, which is perhaps one reason Boston.com is the sixth largest newspaper website while the Globe reported a circulation decline of more than 10% last November on top of an 8.3% decline six months earlier.

If the 450 employees each cost $100,000 on a fully loaded basis, that’s $45 million in annual costs over which management effectively has no control. We don’t have to comment on the lack of motivation that guaranteed employment must instill in a heavily unionized environment. If we were Times Co. management, though, we’d probably aim the first few blows of the ax directly at that soft middle.

The Globe covers its own news with reaction from community members ranging from fry cooks to U.S. Senators.

College student Adam Sell, who has interned at the Globe for two years, sent us a link to a Flickr photostream he created of the closing of the Globe‘s NorthWest bureau 10 days ago.

Miscellany

Two central Pennsylvania newspapers that have published separately with a single weekly combined edition will join forces on a permanent basis at the end of June. The Intelligencer Journal and Lancaster New Era will be published Monday through Saturday mornings with combined news and features operations but separate editorial pages.  The merger will result in the reduction of 60 full-time and 40 part-time positions, or about 20% of the workforce. Management said the combined circulation of 229,500 has been growing but that the economics of the publishing industry demands changes.

Publishers who are struggling with solutions to the revenue problem, none of them very appetizing, might want to look to Europe for inspiration. The big German publisher Axel Springer just reported record profits and is looking to expand overseas, possibly into the US.  Norway’s VG Nett charges citizens for access to its news through a cable TV subscription fee. And a group of papers in Belgium joined forces to force Google to remove their content from its search results. All in all, some papers in Europe are doing just fine, thanks to tight government partnerships and creative approaches to revenue

The Detroit Media Partnership, which publishes the Detroit Free Press and the Detroit News, has closed a deal with Plastic Logic to distribute the Plastic Logic Reader under purchase or lease to subscribers of the Detroit dailies as an alternative to paper delivery.  The reader is the size of an 8.5 x 11-in. pad of paper, weighs less than many print magazines and sports a touch-screen interface.

With the Minneapolis Star Tribune in bankruptcy, employees have started a grass-roots effort to save the paper. A group has launched a Facebook group (1,280 members, but only one discussion post since Jan. 17), a website (inactive as of this morning) and plans to hand out paper hats and scorecards at the Twins’ home opener. It’s probably going to take more than that.

If you like Chicago Sun-Times columnist Richard Roeper, you probably won’t after reading this egotistical, self-indulgent monument to himself. If this is how newspaper columnists regard their own celebrity, it’s no surprise readers are turning elsewhere. But there are a couple of good anecdotes that illustrate how divorced these scribes are from their readers.

Google CEO Eric Schmidt will keynote the Newspaper Association of America national convention in San Diego this week. Schmidt, who is often considered the great Satan by newspaper publishers, has nevertheless been a vocal proponent of the need to help the industry.  It should be an interesting encounter. Schmidt is scheduled to speak on Tuesday at 10 a.m. PDT. You can listen to his remarks live. NAA will offer a moderated “Cover it Live” discussion on its PressimeNow! blog, where visitors can pose questions, share their thoughts and get live reactions from attendees.

The Sun-Times Media Group is considering ending publication of some of its suburban newspapers as it struggles to emerge from its recently declared bankruptcy.

A.H. Belo Corp., owner of the Dallas Morning News and three other daily newspapers, will cut employee salaries next month and suspend a retirement supplement to pension plan participants next year. Cuts will range from 2.5% to 15%, depending on an employee’s salary. The company’s CEO will also take a 20% cut in pay.

Last month we told you about St. Louis Post-Dispatch editor Christopher Ave’s use of song to lament the layoffs of newspaper copy editors. Now, 26-year old Berkeley musician named Jonathan Mann has joined forces with the staff of the East Bay Express to come up with a solution to newspapers’ business problems. You have to wait to the end to hear it, but the three minutes are time well spent.

Editor & Publisher looks at the list of solutions being proposed to the newspaper industry’s troubles and adds a new one into the mix: the Low-Profit Limited Liability Company, or L3C. An L3C “is a corporation that qualifies as a charity under IRS rules but runs as a for-profit business,” Mark Fitzgerald explains, and it’s gathering momentum as a rescue strategy among various chapters of the Newspaper Guild.

That’s right: The Newspaper Guild may get into the business of running newspapers, if only to save its membership from annihilation. An L3C is allowed to take investments from charities and nonprofits because it has a “social benefit.” This new kind of nonprofit is now permitted in several states and the Guild “is lobbying for federal legislation – expected to be introduced later this spring – that would explicitly include newspapers among businesses that have a ‘social benefit.'”  

Apparently, the thinking is that a lot of newspapers are going to come on the market selling at pennies on the dollar this year and this new tax structure would allow owners to spread out ownership among a great many entities, including businesses like printing press makers and auto dealers who have a vested interest in maintaining the business. Foundations would also be able to treat their donations as investments that could earn a return.

Another school of thought is to tear down antitrust rules that prevent newspapers from cooperating on fixing prices, E&P says. This could be a solution to the “content wants to be free” problem: If newspaper owners can legally collude to set prices and licensing fees for their content, then they can conceivably reverse the tide and charge for their product.

One thread is clear throughout the feature, though: No one is seriously arguing that newspapers should be publicly supported like National Public Radio. The consensus among owners and even Guild officials is that these businesses must stand on their own.

BTW, this story was just put online on April 1 after first appearing in E&P‘s print edition in March.

Sun-Times Parent is Bankrupt

Sun-Times Media Group, Inc. (STMG), which operates 59 newspapers and websites, including the Chicago Sun-Times, filed for bankruptcy on Tuesday. The company has been under severe financial and competitive pressure and was weakened by a fraud scandal that landed two previous executives in jail. Chairman and interim CEO Jeremy Halbreich said the company is looking at possible asset sales and new investments, and that it has sufficient resources to work through the bankruptcy process.

The Toronto Globe and Mail looks deeper into STMG’s financial situation and the ripple effect of the 2007 fraud convictions. Last year, the company lost $344-million on revenue of $324-million, as advertising revenue fell 18 per cent in the fourth quarter and is expected to drop 30 per cent in 2009. What’s more, STMG is contractually obligated to pay the former executives’ legal costs, which total $118 million so far. To top it all off, it may face a $510 million tax obligation as a consequence of illegal deductions those executives took.

Dour Pew Report Nevertheless Offers Hope

“This is the sixth edition of our annual report on the State of the News Media in the United States. It is also the bleakest,” reads the introduction to The Project for Excellence in Journalism’s annual State of the News Media report. It certainly delivers on that promise. We haven’t read all 180,000 words, nor are we likely to, but you can start with the executive summary if you want to dive in yourself.

The media overall had a terrible year in 2008 with the newspaper and magazine segments being hit the hardest and the cable TV industry providing the single bright spot. Cable networks actually increased their newsroom investments by an average of 7% during the year, with CNN adding bureaus in 10 cities. This modest growth wasn’t nearly enough to make up for the huge cost cuts in other media, though. By the end of 2008, all three TV networks had pulled their embedded reporters from Iraq. Newspaper circulations continued to decline; Sunday readership is off 17% since 2001.

The biggest disaster was in news magazines, with only one in four Americans reporting they’ve read one the day before. Time, which invented the genre, may be the only one left pretty soon, the report says.

Public trust in media dropped, but historical data shows that this trend is erratic. Interestingly, a vast majority of Americans (70%) believe the media favored Barack Obama in the most recent election. Even a majority of Democrats believe that.

Newspapers are in “free fall,” the report concludes, although “We still do not subscribe to the theory that the death of the industry is imminent. The industry over all in 2008 remained profitable,” turned in revenues of $38 billion and employed 45,000 professionals gathering and editing the news. There is reason to believe that traditional walls between online and print are falling and that newspapers are figuring out how to monetize targeted audience segments. They also appear to be much more open to working with aggregators and partners.

Still, the long-term outlook continues to be dim because of the economy, debt pressure and the unwillingness of investors to spend money in mature markets. The value that papers provide, though, is only increasing in importance. “In what traditionalists tend to dismiss as a cacophony of talking heads, celebrity infotainment, opinion-driven blogosphere exchanges and information overload, the integrity and sense-making of professionally done news should be more valuable than ever.”

The report also has an interesting section analyzing the practices and credibility of citizen media. It features an update of an earlier report that audited 64 citizen news sites. The new research should provide some comfort to established news organizations because it finds that, in general, they do a better job of incorporating citizen voices into their coverage than pure grassroots citizen operations. In particular, legacy news organizations are better at giving citizens a voice in published content and making it easy for readers to download and share information. In fact, the only area in which mainstream media’s citizen journalism ventures failed to outshine the grassroots sites was in linking to competitors’ content.

Finally, the report includes profiles of several new media ventures, ranging from NewHavenIndependent.org to MinnPost.com to GlobalPost.com.

Miscellany

The San Francisco Chronicle‘s buyout offer has 120 takers, which is more than was expected. As a result, the involuntary layoff total won’t be as high as many had feared. The newspaper management has been working with the union to restructure its contract. Even with the buyout, remaining employees will still see pay cuts and longer hours.

The Livingston County (Mich.) Daily Press & Argus has announced a “significant but unspecified number of layoffs” in its 95-employee workforce. Management would only say that the number was more than 10 and included Managing Editor Maria Stuart.

The Staunton (Va.) Daily News Leader will cut eight full-time employees and 15 part-timers from a workforce of unspecified size. Just one day earlier, the paper said it would outsource its printing operations to the Harrisonburg Daily News-Record. Laid-off employees include “press operators, mailroom workers and other employees charged with the production side of printing the paper every day.”

If you’re in Eugene, Oregon this afternoon, you can stop by the university at 4 p.m. and hear Boston Globe editor Martin Baron talk about the challenges facing newspapers, presumably including his own. The Globe laid off another 50 people last week.

The Houston Chronicle joins the long string of newspapers that assert their commitment to “strong watchdog journalism” while covering news of their own troubles with e.e. cummings-like simplicity. The newspaper devotes just 208 words to news that it is laying off 12% of its staff, or nearly 200 people. That’s about one word per victim. In fact, the Chronicle doesn’t even mention a body count. You have to read The Wall Street Journal account to find that number. Even the AP devotes more space to the story than the Chronicle.

We have to wonder if this is some kind of Enron hangover. Are Houston media so tired of covering bad news that they just pass along the press release without comment or question? To be fair, the Chronicle does invite reader comments on a blog and posts a single response to the many questions people submit about who exactly was let go. Still, one response from one ombudsman to news of the loss of 90 newsroom employees hardly satisfies the public’s right to know. Nor will that information be passed along to the paper’s 448,271 print readers. How do we know there are 448,271 print readers? We read the AP story. That information wasn’t in the Chronicle.

We don’t know what went on inside the walls of the newspaper yesterday, but an entry on Houston Press Blogs makes it sound positively eerie. Without citing sources, Steve Olafson reports that no upper managers were laid off but the only two women on the editorial board were. So going forward, the editorial charter of the leading newspaper serving the great and diverse city of Houston will be directed by five white guys. The paper now has practically no suburban news coverage and it laid off the reporter who’s covered NASA since the 1986 Challenger disaster.

Olafson’s most damning anecdote: “Chronicle Vice-President and Editor Jeff Cohen never came out of his office to address the staff during the day-long process of buttonholing employees to deliver the bad news. Instead, he issued a memo.”

Boston Globe Battles Rival Herald for Irrelevance

How long will the Boston Globe be around? Bloomberg says layoffs will be needed to meet the goal of a 12% newsroom staff reduction. But it’s more than that. The Globe has become an anchor around the neck of New York Times Co., which paid $1.1 billion for it and its Worcester, Mass. sister paper in 1993. Circulation and revenue losses at the Globe have far outstripped those of the Times and the only bright spot in the business is the Boston.com website. Barclay’s recently valued the Globe at just $20 million, or more than 98% less than what the Times paid for it. And it’s clear that resistance to change is a powerful force in the newsroom. We attended a meeting of the Social Media Club in Cambridge, Mass. this week at which a young Globe reporter talked about the news staff’s focus on scooping the rival Boston Herald, a newspaper that has fallen so far that a lot of people outside of downtown Boston don’t even know it’s still around. The Globe‘s issues aren’t beating the Herald, but rather staying relevant to readers who could care less about either of them.

Publisher Fights Back at Newspaper Critics

Remember Time magazine’s list of the 10 Most Endangered Newspapers in America from earlier this month?  It’s a load of hooey, says Randy Siegel, president of Parade Publications in a biting commentary in Editor & Publisher. Siegel assumes that most people didn’t notice the byline on the list, which was not a Time reporter but rather Douglas McIntyre. He’s an editor at 24/7 Wall St., a website whose parent also runs a site called Volume Spike Investor, which recommends stocks that are undergoing extreme short-term volume fluctuations. “It’s a sad day when Time magazine…runs an unsubstantiated article on its website, without a single disclaimer, from Wall Street speculators who make their living peddling tips to…day-traders,” writes Siegel, who is co-founder of the Newspaper Project, a booster site for mainstream media.

Siegel doesn’t stop there when naming names.  His next target is Jeff Jarvis, the ubiquitous blogger who has long been a vocal critic of the conventional media.  Siegel credits Jarvis for being smart, but wishes the NYU professor and consultant would disclose more openly his advisory activities on behalf of companies that benefit from the destruction of the institutions he criticizes. Siegel also has some harsh words for CNN.com, which he says has covered the newspaper industry’s troubles with surprising zeal. CNN “probably would like nothing better than to see newspapers and newspaper websites fail, so their biggest competitors for audience and ad revenue would go by the wayside,” he speculates.

Miscellany

The Christian Science Monitor wraps up its 100-year run as a daily newspaper this weekend. Going forward, the thoughtful but lightly circulated journal will focus its efforts online, choosing to rely on journalism rather than video and infographics, according to editor John Yemma. He tells Media News International that the Monitor “intends to increase its page view five-fold by 2013, end its reliance on a Christian Science Church subsidy that now provides 40 percent to 50 percent of its revenues, and achieve financial sustainability by 2015.”The monitor was the first major newspaper to largely abandon the print market in favor of the Web and we wish it well.

We haven’t read any criticism of the hare-brained Newspaper Revitalization Act that’s briefer and more biting than that by Tim Windsor on the Nieman blogs. “I am immediately suspicious of any effort that has as its starting point that newspapers are precious things to be preserved, forever, like some kind of ubiquitous, everlasting Williamsburg of media,” he writes. “The worst thing that could happen would be for newspaper companies to find the means to suddenly become comfortable again.” We couldn’t have said it better and have nothing to add.

Allvoices, the community journalism project that we covered here last July, has added a feature to its website to rate the credibility of contributors. The feature is intended to address the widespread criticism that community journalism has weak quality control. The credibility meter evaluates both the content of a report and the reputation of the author on an ongoing basis as stories move through the Allvoices systems. Criteria include community ratings of the author and content, duplication with other stories and level of supporting content in mainstream media.

The Bakersfield Californian cut 12% of its staff and shook up its management ranks. The 26 positions that were eliminated include 14 in the newsroom and come on top of a 10% workforce cut in December. Management cited a 30% drop in year-over-year revenues as the culprit. The Californian, which has won some attention for its efforts to inspire reader contributions, is also establishing a high-level editorial job called vice president/content. Olivia Garcia, publisher of subsidiary Mercado Nuevo, assumes that role with Californian editor Mike Jenner reporting to her.

Gannett is telling employees to take another unpaid week off in the second quarter on top of the one they had to take off in the first quarter. The company is also temporarily cutting salaries of some high-paid employees.

And Finally…

Nineteen-year-old Dutch college student Marco Kuiper has assembled a collection of weird and wild photos from around the web going back to the middle of last year. He calls it “imagedump,” and the selections range from hysterical to disturbing to borderline obscene. They all have one thing in common: They’re fascinating to look at. Is this citizen journalism?  Who cares?  It’s funny as hell.

With this latest and deepest round of layoffs, the Atlanta Journal-Constitution will have cut the population of its newsroom by more than half since 2006.

The newspaper announced today that 30% of its editorial staff will be dismissed through a combination of voluntary buyouts and layoffs. Another 107 full- and part-time jobs will be eliminated because of a reduction in circulation. The move will trim the size of the news group to about 230, from a high of 500 people just three years ago. Distribution to seven outlying counties will be severed, reducing the AJC‘s reach to 20 metro Atlanta counties.

This is the third round of layoffs at the AJC, which can’t be accused of dribbling away staff.  In December, it eliminated 56 full-time and 100 part-time jobs in its circulation unit. Last July, it cut 189 jobs – including 85 in the newsroom – while also spending $30 million on new printing presses. In that move, the paper also discontinued all its regional editions, including the Gwinnett County regional, where its main printing press was located.

The new cutbacks will target people making the most money.  Most of the reductions “will be in production and management, allowing us to keep as many news reporters as possible,” AJC Editor Julia Wallace said.

And this isn’t the end. “Today’s announcements are the first in a series of initiatives we’ll announce over the next 90 days to reduce costs,” said Publisher Doug Franklin, who added that the goal is to regain profitability by 2010.

Remaining editorial staff will be reshuffled to plow more resources into the profitable Sunday edition.  The strategy hints at possible cuts in frequency, which has been a popular cost-saving move for an increasing number of papers in the last few months.

The Ann Arbor News, a newspaper that has served the Michigan city since 1835, will cease daily operations in July. The newspaper’s “business model is not sustainable,” said publisher Laurel Champion in a statement this morning. The paper will scale back to twice-weekly print frequency and move the bulk of its newsgathering operations online.

The news was apparently a surprise to the staffers who gathered in a first-floor conference room this morning. The staff “appeared dazed as they huddled in groups to discuss the news,” said a report on the newspaper’s website. “Ed Petykiewicz, editor of The News, looked visibly shaken as he paced the newsroom. Several times he could be seen removing his glasses to rub his eyes.” Petykiewicz had announced his retirement after 20 years with the paper last Friday.

Employees will be given the opportunity to apply for jobs at the online operation, but there will be an unspecified number of layoffs. Matt Kraner, formerly chief marketing officer of the Cleveland Plain Dealer, will be president and CEO of AnnArbor.com. Tony Dearing, former editor of the Flint Journal, will be chief content leader.

The Ann Arbor News claims a daily circulation of 46,657 and Sunday circulation of 58,413, according to the company’s media kit. The paper is owned by Advance Publications, Inc., which also own Condé Nast Publications, Parade Publications, Fairchild Publications, American City Business Journals, the Golf Digest Companies, and newspapers in more than 20 US cities.

You can read the publisher’s letter here.

Analysts are digging into the new owners of the San Diego Union-Tribune and trying to discern the investment firm’s intentions.

Tom Gores (San Diego U-T photo)

Sign-on San Diego fills in some of the information void surrounding Platinum Equity, the purchase of the site’s parent. Despite its low public profile, the company is actually the 19^th largest private employer in the US, according to a Forbes estimate. Its founder, Tom Gores (right), has been listed by Forbes as the 163rd-richest American, with a net worth of $2.5 billion. It raised $2.75 billion last year – which was quite a feat in this economy – for its investment activities. The U-T is the first newspaper the company has owned but it may not be the last. There have been media reports that the principals are also looking at the Austin American-Statesman. Most importantly for U-T employees, the story quotes Platinum principal Mark Barnhill saying Platinum isn’t in the game for a quick flip. “We don’t worry about exits,” Barnhill says. “We worry about getting in on the entry side and running businesses effectively.”

Ken Doctor isn’t so sure. In his view, the deal may be all about the real estate. Citing sources who say Platinum paid no more than $50 million for the U-T, whose value once exceeded a half billion dollars, Doctor says the value of the land alone could be north of $100 million. “We may have entered a new rocky period for newspaper companies,” he writes. “The real estate on which they sit determines their market value.” Doctor notes that the biggest buyout in the history of the industry – the acquisition of Tribune Co. in 2007 – was carried out by a real estate tycoon. And property is part of the value that investors are scrutinizing carefully in Miami and Maine.

Writing on Paid Content, Doctor observes that Platinum Equity specializes in high-tech companies, so what’s it doing with a newspaper? The strategic adviser the partners are bringing in – David Black – has done nothing of note with the Akron Beacon-Journal that he took over in 2006. “The Black ownership has been unremarkable,” Doctor writes. So what did Platinum buy? Property “That real estate under its building…may be a real motivator for the purchase,” he concludes.

Incidentally, Ken Doctor has an interview with Michelle Nicolosi, who’s the editor in charge of turning SeattlePI.com into a true Web publisher. She’s trying to boost the idea of aggregation and local focus, but Doctor points out that links to direct competitors are pretty thin in the first week. The collection of 150 reader blogs is impressive, though.

Power in the Mid-Market

The Deal Journal blog at WSJ.com has an intriguing interview with Jonathan Knee, an investment banker who specializes in the media industry and who advised on the U-T buy. He has some intriguing insights that go well beyond the “industry is dying” conventional wisdom. Working from the premise that “within the pantheon of media sectors, the newspaper business is actually still one of the better ones,” Knee argues that the bloated cost structures that newspapers developed during times of plenty actually make them good candidates to endure the cost cuts they’re having to make right now, simply because there’s so much excess to cut. Furthermore, he argues, mid-market dailies are actually in a great position to harvest their monopoly positions and remain profitable for some time to come.

The secret: outsource whatever isn’t necessary to serve your local community. Then serve that local community very well. Don’t try to be bigger than what you are. Those boring local markets will “continue to generate…better profits than the supersexy businesses in the media industry asking for government or nonprofit help like movies and music.” Considering that small-market dailies have been considered the most at-risk properties in the business, Knee’s counter-intuitive views are worth reading.

Happy Birthday to Us

Today is Newspaper Death Watch’s second birthday (you can read our modest first entry here) and it’s been quite a ride. We started out by documenting the downsizing that was just beginning to occur in the business two years ago but quickly found ourselves engaged in more interesting issues like the future of news. Since 3/23/07 we’ve logged 382 entries and 528 comments, many from journalists who are being caught up in the cost-cutting. Last week we averaged over 2,000 daily page views and Technorati has us in the top 12,000 blogs worldwide. We’ve been profiled in Spain’s largest newspaper, interviewed on NPR,  traded views with Guardian Angels founder Curtis Sliwa on talk radio, and sourced on local TV in Sacramento.  We were also just interviewed by CNN.com for an upcoming feature on the transformation in the newspaper industry.

Two years ago, we published a book called The New Influencers that argued that the ability of individuals to publish to a global audience would disrupt the economics of media and transform our institutions. Since then, we’ve been living that idea.

Layoff Log

• Collateral damage: the Denver Newspaper Agency, which handled business operations for both the Post and the Rocky Mountain News, will idle 200 people as a result of the Rocky‘s closure. The news account says that’s 17% of the agency’s 850-person staff, but our calculator says it’s really 23%. The jobs aren’t needed any more without a paper to support.
• I turns out he Buffalo News won’t be laying off “dozens of employees” as ws feared a week ago. A deal with the Newspaper Guild succeeds in achieving targeted cuts of $2.9 million through a combination of wage reductions and givebacks. Still, nine people will lose their jobs.
• The Orange County Register had six rounds of layoffs last year and is promising more soon. No details on how many jobs will be lost.
• The Dayton Daily News cut 10 sales staff.
• The Skagit (Wash.) Valley Herald has laid off four people, including the editor-in-chief.
• The News-Gazette of central Illinois has been publishing both morning and afternoon editions on weekdays, but beginning June 1, it will publish ditch the afternoon edition. Elimination of an entire issue will save 1% in operating costs. Huh?

And Finally…

What would you do if your newspaper closed? Consider a career in local government. The New York Times profiles Michael Hanke, a veteran newspaperman from Canton, Ohio, who lovingly covered his hometown for more than 35 years before being laid off in a cost-cutting move two years ago. It could have been a sad story, but there’s a happy twist: Hanke is now a county administrator, where he works side-by-side with some of the people he used to criticize in his newspaper columns. And they’re tickled pink to work with him. It turns out that reporters are naturally inquisitive, resourceful and knowledgeable. “We got a real bargain when we hired Mike Hanke,” says Jane Vignos, the board president who selected him from among 70 candidates.

The week started depressingly with the demise of the Seattle Post-Intelligencer and then brightened with the emergence of a rescue plan for the San Diego Union-Tribune. We’d like to close it out with an inspiring view of the future by Steven Berlin Johnson, founder of the hyperlocal community site, outside.in.

Speaking at the South by Southwest conference last week, Johnson delivered one of the most cogent and optimistic perspectives on the future of journalism that we’ve ever read. His essay builds upon Clay Shirky’s excellent discussion last week of why revolutions are messy but necessary. Johnson does it by pointing to two of the most mature information ecosystems of the online world – technology and politics – and contrasting the state of media today to that of 20 years ago.

There is no comparison. As an Apple Mac fan from the early days, Johnson used to wait at the local newsstand for each issue of Macworld magazine to arrive. In the late 1980s, “It might have taken months for details from a John Sculley keynote to make to the College Hill Bookstore; now the lag is seconds, with dozens of people liveblogging every passing phrase from a Jobs speech. There are 8,000-word dissections of each new release of OS X at Ars Technica, written with attention to detail and technical sophistication that far exceeds anything a traditional newspaper would ever attempt.” Even Macworld, which used to dispense news only once a month, “published twenty-six different articles on Apple-related topics yesterday.”

24X7 Politics

The political sphere is also booming with information. Barack Obama’s controversial race speech in Philadelphia was seen in its entirety by 8 million people online. In 1992, “It would have been reduced to a minute-long soundbite on the evening news. CNN probably would have aired it live, which might have meant that 500,000 people caught it.” Not only was the entire presidential campaign live-blogged, but it was covered by a swarm of interested Web publishers who dissected every event and issue. And by the way, Web users all had access to a bounty of information directly from both candidates. Two decades ago, such details were hard to get and they were mostly summarized and passed through the filter of the local newspaper.

Johnson asserts that the transformation that has already taken place in technology and political news will spread into other domains as well. While praising The New York Times, he notes that a big paper can’t be all things to all people. “Every week in my [Brooklyn] neighborhood there are easily twenty stories that I would be interested in reading: a mugging three blocks from my house; a new deli opening; a house sale; the baseball team at my kid’s school winning a big game. The New York Times can’t cover those things in a print paper not because of some journalistic failing on their part, but rather because the economics are all wrong.”

Johnson says he gets that local news from blogs like Brownstoner, which is one of nearly 2,000 blogs focused on Brooklyn.

Future in Aggregation

Is there a future for professional news organizations in all this? Absolutely, Johnson asserts. “If they embrace this role as an authoritative guide to the entire ecosystem of news, if they stop paying for content that the web is already generating on its own, I suspect in the long run they will be as sustainable and as vital as they have ever been. The implied motto of every paper in the country should be: all the news that’s fit to link.” And this will open the door for new organizations to step in with the international coverage that is unquestionably threatened as traditional newspapers decline.

Johnson’s use of the mature new-media markets of technology and politics is an innovative approach to envisioning a future for professional news gathering, one in which aggregation and interpretation trump original reporting. With millions of enthusiasts now providing front-lines coverage, the new role of professional journalists will be to organize and make sense of it all. This doesn’t make them any less important than they are today. They’ll just deliver a different kind of value.

Layoff Log

In the meantime, though, the transformation takes its toll:

• The Minneapolis Star Tribune, already languishing in bankruptcy, is laboriously negotiation cost cuts with its unions in an effort to save $20 million in annual expenses. Its 116-employee pressmen’s union just approved contract revisions that will result in wage reductions, 24 layoffs and reduced staffing on the presses. Next up are negotiations with delivery and newsroom unions.
• The Memphis Commercial Appeal is cutting 19 newsroom jobs. No word on whether additional reductions are hitting other departments.
• McClatchy papers continue to cut jobs, working toward a corporate goal of 1,600 reductions, but McClatchy Watch says it isn’t going to happen. “Unless it plans to shut down a couple of its papers, McClatchy will not come anywhere near laying off 1,600 employees,” the site says, and it has title-by-title numbers to prove it. However, commenters don’t entirely agree. A lively debate over the blog’s estimates ensues, along with a side argument over stylistic issues, which seems to crop up frequently when journalists disagree. Meanwhile, the site reports on recent layoffs: 47 in Anchorage, 20 in Columbus, 14 in Lexington and 10 in Modesto. The Idaho Statesman is also laying off 25 people and imposing salary cuts.
• Three staffers are gone at the Las Cruces Sun-News. One of them is “the typist who transcribes calls to Sound Off!” We hope that’s not a full-time job.
• Morris Communications has managed to avoid layoffs so far, but it’s is cutting staff salaries 5% to 10% at all its properties, including the Amarillo Globe-News.

And Finally…

In times of trouble, people now have a new way to commiserate and cooperate: Facebook. A new group called Newspaper Escape Plan has been hatched to enable laid-off journalists to pull together and share job-hunting tips and gossip about the business. You can go there to learn about services like Publish2, which is a social bookmarking service for journalists.  Follow it on Twitter.

The AP posted this sobering photo of discarded newspaper racks languishing in a San Francisco junkyard.

Representatives from a Who’s Who of major newspapers will gather on Saturday for a daylong event in Washington focused on finding new revenue solutions to the newspaper crisis.

Calling itself Revenue Two Point Zero, the group says it’s fed up with all the talk and  is going to focus on solutions.  “We reject the belief that media companies should pursue models based on pay-for-content plans or philanthropy,” the group’s manifesto says.  “Instead, we believe the best hope for media companies to make money is the old-fashioned way — by earning it from advertising.”

The group has several examples of how it hopes to do this, including mobile advertising, better classifieds and a stronger appeal to small businesses.  About 20 representatives of major publications will be there, and the Society for News Design has joined the parade. A post on the society’s blog asks people to volunteer criticism, comments and inspiration in the spirit that “everyone in the industry agrees that radical changes needed.”  You can follow the action via tweets from Logan Molen, VP of Interactive Media at the Bakersfield Californian. He’s at rev2oh.

New Ideas

Speaking of Bakersfield, the Californian is the lead in a BusinessWeek story about how newspapers are trying to develop new revenue streams.  In an industry where nearly everyone is sinking, the Californian is actually growing.  One of the secrets is Baktopia.com, an online social network aimed at young people that publishes the best of the Web in print.  “Advertisers pay full rate,” says the company’s digital products manager.

The story further talks about the Californian‘s launch of Printcasting.com, a Web venture that lets anybody create a digital magazine.  The best stuff is turned into a print publication supported by advertising. Money in print? It’s true.

The rest of the BusinessWeek article mainly covers companies and technologies we’ve written about here before, including blog aggregator Outside.in, micro-payments start up Kachingle and community content provider Helium.  Almost no one quoted in the article is actually making much money with these ventures, but at least they’re thinking differently. That counts for a lot these days.

Seattle Times Still In Deep Weeds

You’d think the closure of its largest rival would be a boost to the Seattle Times, but Seattle’s other paper is still struggling to make ends meet. That news comes from Doug Henderson, an economist with the Joint Council of Teamsters No. 28, who was allowed to have a look at the paper’s financial data available as part of the owner’s request to slash 12% of its workforce. Henderson said that despite having already laid off 25% of its employees, the Times‘ “financial status is still serious” and it “needs to consider either selling off some operations or shutter some. However, with the economic climate being in utter chaos, the opportunity to sell any type of operation is very slim.”

The news should come as no surprise to surveyors of the Seattle scene. The Times‘ financial position is so perilous that many people were surprised when it was the Post-Intelligencer that  pulled the plug. The Blethen family, which owns the Times, has been unable to sell a money-losing chain of newspapers in Maine. Less than three months ago, Senior Vice President Alayne Fardella admitted that the company’s situation is “dire,” and added that “It has been and continues to be a long and difficult fight for our survival.”

Miscellany

News & Observer Publishing Co. said it will lay off 27 people in the Raleigh News & Observer newsroom, reduce wages and implement unpaid furloughs as part of an overall reduction of  11 percent of its work force, or 78 people. Management added that the N&O will also “increase cooperation with the Charlotte [Observer] newspaper and will speed its transition to a narrower format to save on production costs.” Both the Raleigh and Charlotte papers are owned by McClatchy. The local ABC affiliate has a news story about the N&O’s problems bluntly titled “N&O struggles to survive.”  Says reporter Larry Stogner: “No one wants to talk about when the ax will fall again – and on whose neck.” Managing Editor John Drescher says a subscription model to the paper’s website is under consideration.

Former Flint Journal reporter Jim Smith said last week that publishers at the Flint Journal, Bay City Times and Saginaw News were are expected to call together their staffs this week to announce:

• They’ll reduce the publishing schedule to three days a week: Tuesday, Thursday and Sunday;
• They won’t honor a “lifetime” employment pledge of parent companies Newhouse Newspapers and Booth Newspapers;
• An unspecified number of layoffs;
• Reduced pay and benefits for remaining employees;
• Consolidation of printing and copy desk functions and content-sharing among the three titles.

No word yet on whether Smith is right.

And Finally…

We don’t know who’s behind Criggo.com – the owner’s name is disguised and the site is registered to a fax number in Los Angeles – but we hope he or she never stops tending the site. Even as classified advertising has shriveled, newspaper ads continue to deliver a seemingly unending stream of entertaining and bizarre humor. Very often, what’s funny isn’t the double entendres or typos; it’s in the fascinating stories that must underly these truncated missives to the world. Aren’t you just dying to know what’s going on behind closed doors at the house that placed this ad?

Clay Shirky takes us back 500 years to reflect on the revolution that’s going on right now. Everyone who wonders “What will become of journalism when newspapers are gone?” should read this superbly voiced essay by the author of Here Comes Everybody. The piece has racked up 225 comments and trackbacks just over the weekend, and there will be many more.

To sum up Shirky’s case:  The game is over for newspapers. Nothing can save the business, so it’s pointless to try. We’re in the middle of a revolution and revolutions are uncomfortable things because “The old stuff gets broken faster than the new stuff is put in its place.”

His distant mirror is 16^th century Europe, when the printing press was beginning to lift the world out of the Dark Ages. As translations of the Bible into languages other than English began to threaten the church-dominated world order, everyone frantically searched for assurance that the old institutions would be preserved. This applied even to disrupters like Martin Luther,  who insisted he wasn’t creating a schism in the church even as he was inventing Protestantism.

“And so it is today,” says Shirky, fast-forwarding. “When someone demands to know how we are going to replace newspapers, they are really demanding to be told that we are not living through a revolution…They are demanding to be lied to.”

Revolutions are messy things because old institutions have to be destroyed before new ones are put in place. We’re witnessing the destruction now but we have no idea what will grow out of the rubble. And that’s scary.  “The list of models that are obviously working today, like Consumer Reports and NPR, like ProPublica and WikiLeaks, can’t be expanded to cover any general case, but then nothing is going to cover the general case,” Shirky writes. The only certainty is that the newcomers will be more specialized, distributed and democratized than the old, vertically integrated institutions.

We won’t say Clay Shirky puts our minds at ease, but he at least points out that we have come this way before and that everything turned out pretty well in the long run. All we have at this point is faith and optimism.  The sooner we can turn our attention from salvaging the unsalvageable to inventing the future, the sooner we can get on with the rebuilding.

Eugene (Ore.) Register-Guard columnist Bob Welch should read Shirky’s essay. So should Mark Willes, former publisher of the Los Angeles Times and now head of Deseret Management Corp., who’s quoted in this Salt Lake Tribune story remarking “[I]f we’re going  to have all the things I think are central to having a civilized society and a successful society, [newspapers] must grow.”

Union Grants Broad Concessions to San Francisco Chronicle Management

Their collective backs against the wall, members of the Northern California Media Workers Guild voted 10-1 to give the San Francisco Chronicle broad authority to lay off employees without regards to seniority as well as to cut vacation time and extend working hours. The union, which represents 483 employees at the Chron, had little choice. Owner Hearst Corp. has threatened to close the entire operation without major concessions. Even so, Hearst is still likely to lay off 150 Guild workers.

Union members took consolation in the fact that that figure is one-third less than the 225 jobs Hearst originally threatened to eliminate. The Guild was also able to secure a decent severance package for laid-off employees. However, members will pay more for health benefits, lose 25% of their vacation and work longer hours. The Mercury News story notes that Hearst had threatened to make “most” of the 225 threatened job cuts in the Chron‘s 260-person newsroom. This seems incredible, since a cutback of that magnitude would leave less than 200 reporters covering the entire Bay Area. That may still be the case after the anticipated layoffs happen. Hearst is also eliminating 100 unionized pressroom jobs after it outsources printing to a Canadian contractor in June.

How to Save the Classified Advertising Business

Christopher Ryan and Steve Outing propose some head-slappingly simple ideas in their “Classifieds Manifesto.” So why aren’t more newspaper companies following them?

Newspapers can still have important and profitable classified advertising businesses, the authors say, but first they have to stop thinking about classifieds as agate type on a page. Craigslist has won that battle, so newspapers have to change the rules of the game.

Why not open a used-car lot for your auto clients? Or create a division that helps realtors sell homes? And while you’re at it, reinvent the way you present information. Craigslist is butt-ugly, man. Use tables and icons and easily navigable ways to get readers to the stuff they want to buy. And while you’re at it, get a video camera out to those properties that realtors are trying to sell and give them a hand.

There are a bunch of other smart and simple ideas in this essay. Send the URL to the head of your classified advertising group.

Miscellany

Mark Potts totes up the market capitalizations of the publicly held newspaper companies in the US and comes to a striking conclusion: Their combined value is just $1.3 billion, or a little more than what The New York Times Co. paid for the Boston Globe alone ($1.1 billion ) in 1993. This same group of companies was worth over $7 billion just six months ago. And speaking of the Globe, Potts says Barclays recently valued the paper at just $20 million.

McClatchy Watch is reporting that the Kansas City Star could announce a layoff early this week that’s larger than the newspaper’s last three layoffs combined. This rumor is a little confusing, however, since the Star announced plans to cut 15% of its workforce just last week.

Owners of the Minneapolis Star Tribune and its pressmen’s union have reached agreement on a set of union concessions involving layoffs, wage cuts, health care premium increases and staffing reductions. No details were released pending a vote by members on the agreement this week.

McClatchy Watch is reporting that the Kansas City Star could announce a layoff early this week that’s larger than the newspaper’s last three layoffs combined. This rumor is a little confusing, however, since the Star announced plans to cut 15% of its workforce just last week.

The business media is in self-flagellation mode and with good reason. Editors are beginning to pick up the pieces and wonder how they managed to miss the biggest economic story of the last 50 years. Liberal commentators are having a field day.

Did the media blow it in failing to predict the financial crisis? Eric Alterman sums up a variety of perspectives and suggests that the real problem with US financial journalism is that at some point journalists stopped treating their audience as consumers and started treating them as investors.

Insiderism, the cult of personality and a lopsided emphasis on stock market performance created an oversimplified view of the financial world that led readers to believe that that super executives could defy gravity. The result was business sections running flattering profiles of people like Countrywide Financial’s Angelo Mozilo (right) even as those executives were driving their companies into the ground.

Alterman quotes a report from the UK’s POLISMedia: “If journalists see themselves mainly or merely as serving the market or investors, they may be less effective in their watchdog role…. Ultimately, do journalists have a broader professional duty to ensure that corporate malpractice comes to light, or is their role merely to provide whatever their readers want?”

He also points to an even more damning account in Mother Jones by former Wall Street Journal reporter Dean Starkman and bluntly titled “How Could 9,000 Business Reporters Blow It?”  Starkman was a member of the financial press corps that transformed itself from loyal opposition to chummy insider as the bubble grew. “I rode in black cars, lunched at all the places you read about, and more than once flew across the country to report a 1,200-word story,” he writes.

Reporters and the subjects of their reports both benefited from the Wall Street boom, creating little incentive for either side to end the party. The result was a rash of glowing coverage of larger-than-life executives and very little investigation into what they were executing. Starkman (left) pays homage to “The Reckoning,” a 1990 Wall Street Journal account of the devastating human toll of a corporate leveraged buyout. “It is safe to say that that piece, which tied the Safeway LBO to workers’ suicides, heart attacks, and more, would never be proposed, let alone published, today,” he writes.

He’s also blunt in attacking the formulaic executive profiles that conferred a god-like aura on corporate executives while paying scant attention to the underlying rot in their businesses. “Personality profiles, critical as they may be, are comfortably within the narrowing business-press discourse. Plus they’re a lot easier, and less risky, than investigations-and it’s that part of business journalism that has been allowed to wither,” Starkman writes, quoting Fortune‘s Katie Brenner.

Ultimately, insiderism ruins objectivity. “Increasingly, business coverage has addressed its audience as investors rather than citizens, a subtle but powerful shift in perspective that has led to some curious choices,” Starkman writes, citing as an example the Journal‘s claim that borrower fraud was a big part of the subprime financial mess when no such evidence existed.

Much attention is being focused on the damaging impact of layoffs on newspapers’ watchdog role. Reading these two pieces, one gets the sense that in the case of the financial press at least, the watchdogs were inside snuggled comfortably at the feet of their masters.

Layoff Log

Three dozen employees of the Buffalo News have accepted a generous buyout offer of a minimum $60,000 cash payment, but that’s still not enough. The Berkshire Hathaway-owned newspaper may need to cut another 21 jobs. That would be about 6.5% of the company’s 900-person workforce.

The Wichita Eagle is one of McClatchy’s top-performing newspapers, so it only has to lay off 5% of its workforce.

The Fargo-Morehead (N.D.) Forum is eliminating 25 more full-time jobs on top of the 21 it cut last month. Altogether, that amounts to 19% of its 240-person workforce. The neighboring Grand Forks Herald is cutting eight jobs and will end publication of an advertorial supplement.

The Toledo Newspaper Guild is pleading with management of the Toledo Blade not to lay off as many as 60 more people. The newspaper laid off 23 people in December, mostly in the newsroom. The new cuts could amount to as much as 14% of its remaining 425-person workforce.