Now it’s A.H. Belo’s turn. The Dallas-based publisher plans to cut $50 million in expenses over the next eight months by cutting staff at the Providence Journal, the Dallas Morning News and the Riverside, Calif., Press Enterprise. Belo said its hopes to reduce its workforce by about 500 people, or 14%, through voluntary severance packages, although layoffs are a possibility. Unlike some publishers, it’s targeting the cuts by property. The ProJo, for example, will offer buyouts to about a third of 700-person workforce but won’t accept more than 54 takers. Belo is also looking at selling some real estate it owns in downtown Providence and Dallas to boost the bottom line. Like many publishers, its dividend costs have skyrocketed and the company acknowledged that it may have to cut current $1/year dividend, which amounts to nearly 17% of the stock price.

The Morning News will lose about 10% of its 390 full-time newsroom staffers. It will also reduce frequency of Quick, a free newspaper for young adults, from five times a week to weekly. It’s continuing with plans to launch Briefing, a new free title for nonsubscribers who want a “quick-read” newspaper.

Belo has suffered more than most newspaper publishers in the last year. While its peers are mostly still profitable, Belo suffered a $3.2 million loss in the most recent quarter. As we’ve noted recently, losses can lead to a dangerous death spiral in which cuts lead to subscriber and advertiser flight, which leads to more layoffs.

The layoffs at the Providence Journal are particularly disheartening. The paper is under constant pressure from its neighbor Boston Globe to the north, but is generally acknowledged to have done an oustanding job of localizing its coverage and retaining reader loyaty. While the ProJo is getting off easy compared to the hits that many other papers around the country have seen, it’s clearly not impervious to industry trends.

BusinessWeek Gives ‘Em Zell

BusinessWeek visits Sam Zell in his plush Chicago office and comes to the conclusion that Zell’s $8.5 billion purchase of Tribune Co. is “one of the most disastrous the media world has ever seen.” Zell doesn’t mince words in the interview: “If current trends in advertising are permanent, we have a really serious problem.”

This profile is the best we’ve seen in the months since Tribune’s fortunes began to deteriorate. It notes Zell’s open disdain for the newspaper business as well as his distaste for baseball, which is a paradox since Zell owns one of the most storied franchises in the game. The piece also outlines clearly the financial sleight-of-hand that enabled Zell to acquire Tribune with just $315 million of his personal fortune. “When we first undertook this project, we viewed Tribune as 60 ways to get lucky,” he says. Zell doesn’t have to grow the business in order to reap a huge profit, the piece says. He just has to keep it afloat.

Which is a challenge in itself. The story quotes analysts as predicting that Tribune could default on its debt obligations as soon as December. Zell has put a number of innovative new practices into place, including consolidating some newspaper and broadcast operations in Florida and Chicago. However, the free-fall in newspaper advertising may just be too great. Meanwhile, Zell’s trash-talking about newspapers isn’t helping employee morale. “If you have a lemonade stand, you don’t try to sell the lemonade by saying it’s terrible,” says ex-LA Times reporter Myron Levin.

Things Get Stranger in Paradise

The State of Hawaii has stepped into the dispute between the Honolulu Advertiser and the 54 employees, many of them union members, the paper laid off earlier this month. The Newspaper Guild has problems with how the layoffs were handled, maintaining that seniority guidelines weren’t followed. Meanwhile, the union has printed up 100,000 cards that readers can send in to cancel their subscriptions in event of a strike. The thinking is that it’s better to take down the Advertiser and cause a whole lot more people to lose their jobs than to have 54 employees treated unfairly.

Mark Potts sums up and points to analyses by Alan Mutter, Ken Doctor and Mike Simonton suggesting even worse news ahead for the newspaper industry. Revenues continue to fall faster than cost cuts can make up the difference, suggesting that ongoing cuts are likely for the forseeable future. Potts suggests the unthinkable, which we joined him in predicting two years ago: “We’re going to lose a big newspaper (several, actually). And it’s going to happen sooner than anybody thinks.”

One of Potts’ sources is Alan Mutter,  whose number crunching constantly turns up interesting insights about the state of the business. Mutter says newspaper companies are still turning in blue-chip profit margins. That’s good, right? Not if your business is collapsing. It means that newspaper companies are hacking away at the product in order to sustain profits. One wonders why. It’s not as if anyone is buying newspaper stocks. When businesses are forced to reinvent themselves, it usually means swallowing the bitter pill of accepting losses while the old business is discarded and a new one developed.

By propping up their profits, newspaper companies are only setting themselves up for a harder fall. Troubled companies can choose to either invest in product development and try to build new businesses or manage their cash cows down into the ground. Mutter’s analysis suggests that publishing executives have already made that choice. That’s with the possible exception of Sam Zell, whose  deep costs cuts at least appear to have a strategy behind them.

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Is The New York Times worth just $750 million? That’s its actual value, according to an analysis by a BusinessWeek intern.  Jay Yarow walks us through the math and then quotes an  analyst saying, “”Valuations have fallen to unprecedented levels that have no relationship to reality.” True, but no one is stepping up to the plate yet, suggesting that Wall Street  still believes we’re nowhere near the bottom. In the meantime, the Times‘ investment in its new Manhattan headquarters building is reportedly worth $750, which means that for that price you could buy the paper and get the building for free. Or vice versa.

And Finally

It used to take a team of writers and designers to create a newspaper spoof. Now it just takes Roy Rivenburg. The writer has dreamed up Not the Los Angeles Times,  a very funny takeoff in the finest tradition of the Onion and a raft of newspaper parodies that came out in the 70s and 80s (our favorite was Off The Wall Street Journal). Selected headlines:

• State sells San Diego to erase budget deficit
• Wal-Mart unveils $29 defibrillato
• Galleria escalator stalls, dozens of riders trapped

The site is only one page deep, but clicking on the links provides further amusement.

The newspaper industry needs to make radical changes, but neither the management nor the culture in a typical newsroom is conducive to much change at all, according to an organizational behavior specialist.

Mark Glaser interviews Vickey Williams, director of the Digital Workforce Initiative in the Media Management Center at Northwestern University and author of All Eyes Forward, a report about the challenges in changing newsroom culture.

Bottom line: Williams believes most newsrooms are still forcing young journalists into the mold that existed 20 years ago: a top-down structure in which decisions are made at the top and underlings are expected to execute them without question. Characterizing many newsrooms as “aggressive-defensive workplaces,” she finds structural impediments to the adoption of digital tools, suspicion of online media and organizational resistance to any ideas that don’t come from the top.

What’s most troubling about this behavior is that it’s sending young journalists for the doors, Williams says. They don’t believe their ideas are getting a fair hearing and they don’t want to work for organizations that are so insular.

Glaser has a transcipt of his interview with Williams. A few quotes:

• “Resistance [to change] is going down. I am not at all convinced that we know how to replace that with something constructive. So in short, we don’t fight it as hard and as loudly” the fact that we have to change” but we don’t know what to do instead.”
• “Journalists need to get more business savvy” and they will get more business savvy one way or the other. If they become a victim of the cutbacks, then they will be looking at making their own living and be worried about income and attracting advertisers to their website. So getting more business savvy is only a plus.”
• “We asked people what they thought about the data [showing that young people wanted to leave], and the veterans even wanted to argue down that the data was correct. And if it was correct and young people were leaving, it was because they were wimps, and good riddance.”
• On creating a change-oriented culture: “For years, we have been an industry with our panels and task forces and we’ve generated lots of reports that have gathered dust on the corners of bosses’ desks, and people don’t have the energy for that anymore.”
• “I agree with Jeff Jarvis that it would be a very good gamble to allow Millennials to start up companies or products. But I can’t think of a single media company where that would be allowed to happen on a broad scale.”

Williams’ conclusions are sobering. There’s a lot of talk about change and what newspapers need to do to save themselves these days .There are many great ideas for reinvention, although there is no avoiding a lot of pain in the process. Ideas are just one part of the picture, though. There needs to be a culture in place that’s willing to accept change. Newspapers don’t have a lot going for them in this area.

Newspapers have done business more or less the same way for about 150 years.Few industries on earth can say that. The newspaper business has been historically stable, profitable and predictable. It’s boring, but it makes a lot of money. In the 1970s and 80s, some titles enjoyed renewal rates of 90%. In addition, consolidation during the last 50 years has left most cities with only one or two newspapers. Monopolies and duopolies usually suck at innovation. When was the last time your electric company did something clever?

Williams is right that newsroom culture rewards obedience. After all, you need structure and process to produce a fresh product every 24 hours. The hierarchical organization of most newsrooms is appropriate for what they’ve been asked to do for many years. Now you’ve got a situation in which authority needs to be openly questioned. Do you suppose a 30-year veteran city editor is going to cozy up to that idea? Cultures don’t change until people change, and organizations that are run by old guys who have worked their way up through the ranks are the least change-oriented of all.

This is why it’s so hard to be optimistic about the future of newspapers. Ideas can’t flourish without a nurturing culture. Newspapers exist in a culture that is so change-averse that adding color to the front page is considered a breakthrough. When your value is defined by process rather than agility, it’s tough to suddenly be agile.

Maybe I’m being too cynical. Please share your views. Is there a way for this industry to reinvent itself without blowing itself up first?

Miscellany

• Perhaps the savior will be cell phones. The New York Times reports that Verve wireless has signed up 4,000 papers and 140 publishers to deliver news via its wireless service. Research says 40 million people use their phones to go online, and Verve’s service can push news alerts, local stories and geotargeted advertising at those customers, most of whom are probably driving at the time. The CEO of Verve is a former Pulitzer Prize-winning reporter, by the way.
• The Santa Fe New Mexican is cutting 16.5 jobs, or about 7% of its workforce. Ten of those lost jobs are in the newsroom. The biggest culprit is real estate advertising, which has all but disappeared.
• E.W. Scripps may write down the value of its newspaper and local broadcast holdings in the third quarter, the CEO said on the company’s earnings call. Scripps carved out the troubled businesses into their own company earlier this year so they wouldn’t drag on the more lucrative TV and online businesses.
• Speaking of Scripps, columnist Jay Ambrose scolds readers for not appreciating all the great things newspapers deliver. “Perhaps the Internet and innovative editors will come up with ways to preserve the distinguishing value of newspapers,” he writes. “It would help if more citizens understood this value themselves.” Good going, Jay. Blame those customers.

It’s the fourth week after the end of the quarter and you know what that means: earnings time. Quit now if you have a weak stomach. Here’s something fun to read instead. Otherwise, onward:

• McClatchy profits fell 50% on a 15.6% decline in revenue.  CEO Gary Pruitt highlighted gains in online advertising but said he doesn’t expect overall ad revenues to recover any time soon. The company expects to cut staff by 10% over the next year. Pruitt boasted that McClatchy realized two years ago that online advertising isn’t just an upsell to print advertising and that Web-only ads now make up 50% of the online business. We wonder why it took until 2006 for this stroke of brilliance to occur.
• The news was a little better at Lee Enterprises, which reported only a 10% drop in  print revenue.  More troubling, though, was that online revenue was off 9%. Although the decline in online business appears to be unique to Lee for the moment, other publishers have recently reported that online sales growth is slowing. Most forecasters still predict the overall online ad market to grow in the 20% to 25% range this year, so anything below that is lagging.
• Bringing up the rear, E.W. Scripps reported similar results: profits down 47.5% on a 13% revenue decline. The company set its broadcast and online division free three weeks ago so it wouldn’t be dragged down by the implosion of the newspaper business.

The continuing profit slide, along with a bleak outlook for the future, may force some big publishers to cut dividends, says The Wall Street Journal. This would be no trivial decision, since  some of the biggest companies are owned by families that depend on the dividends for income. But  publishers may have no choice. If there are no profits, there can be no dividends, and falling stock prices have made existing payouts an onerous burden.

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The San Diego Union-Tribune is for sale. Owner Copley press is “exploring strategic options” and we know what that means. The Union-Tribune hit the wall before most other major metro dailies, announcing a big layoff in January on the heels of nearly a 20% drop in circulation. the paper is the only asset Copley has. However, it’s a very big newspaper, the 21st largest in the US by circulation. The parent company claims its products reach almost 60% of area residents each week. But we suppose big doesn’t count for much these days. There’s speculation that A.H. Belo may find the Union-Tribune attractive and pick it up for pennies on the dollar if it can combine operations with another San Diego-area property it owns.

Miscellany

Writing in Editor & Publisher, Steve Outing issues a call for newspapers to start integrating user-submitted content into their products. Inviting reader comments isn’t enough, he says. Online coverage should include relevant photos, advice, observations and comments from interested and interesting parties. And we’re not talking Wikipedia here; editors need to separate the good stuff from the junk, but they still have to publish the junk somewhere in order to get get people to participate (TG for the “more…” link). The reason more newsrooms don’t do this already is that they’re culturally biased against involving non-journalists in the journalistic process, Outing says. But get over it; if you don’t interact with your readers, you’ll just isolate yourself. E&P, by the way, doesn’t allow reader comments on its site.

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Two views on Tribune Co. CEO Sam Zell: The maniacal Tell Zell blog is now hawking anti-Sam merchandise like the adorable, hate-spewing bear at left. You can even buy a 50-pack of “Zell  Hell” bumper stickers for only $97 and  you know the holidays aren’t that far away.  However, Recovering Journalist Mark Potts plays spoilsport. He derides the constant Zell-bashing within Tribune Co. as childish and counter-productive, particularly since the owner is actually trying to innovate as fast as he can. We have to admit he’s right, although we might pick up one of the teddy bears, anyway.

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In a folksy editorial laced with jabs at the Bush administration, the editor of the Reno News & Review announces that his paper is going to do its part to save the planet by putting the staff on a four-day, 10-hour work week. It’s also folding its Theatre section as a stand-alone, but that probably won’ t have much of a carbon footprint. We wonder if readers could care less about the staff’s work hours.

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When all else fails, eat. To celebrate its 30th anniversary, The Cheesecake Factory chain of restaurants will sell every slice of cheesecake at the 1978 price of $1.50 on July 30. We know where you can find us that day.

The New York Times Co. shows signs of managing through the crisis, although its regional properties continue to drag down overall performance. The company’s earnings fell by almost 50% in the quarter just reported, but when you factor out the cost of layoffs and buyouts, profits were off only about 12%, from 29 to 26 cents per share. That beat analyst expectations. Circulation revenues were up as the company implemented a price increase at its flagship. The company’s regional holdings continue to drag on performance. Combined revenues at The New York Times and the International Herald Tribune were off 9.5%, which is better than recent industry averages. But the New England Media Group, which includes the Boston Globe, fell 15.1%. The Times continues to look like it can survive and even thrive in the post-metro-daily world because of the power of its brand. The Globe is a different matter, though.

And credit the Times for originality on this one. The paper has linked its web site with popular business networking destination LinkedIn.com. Beginning this week, LinkedIn members who read an article in the business or technology section of NYTimes.com will see a box pointing them to five stories selected for them on the basis of their LinkedIn profiles. There will also be ads, of course. This kind of profiling is a squishy area for Internet companies, which constantly walk the line between delivering value and treading on privacy. The advantage for the Times is that it’s trusted brand is less likely to incur outrage than some dot-com start

Zell on a Skewer

Brooklyn College professor Eric Alterman, who penned a best article so far this year about the newspaper industry’s travails, brings his sardonic wit to a short piece in the ultra-liberal political journal The Nation, which we somehow managed to overlook until today. Summing up the desperate cuts, price increases and rationalizations that we and others have been documenting for months, Alterman ultimately turns his canons on everybody’s favorite whipping post: Tribune Co. CEO Sam Zell.

Admittedly, making fun of Tribune’s “chief innovation officer,” Lee Abrams, is a little bit like beating up your grandmother. But Alterman can’t resist. Noting, among other things, that Abrams was surprised to learn that reports datelined “Baghdad” are actually written by reporters in Baghdad, he concludes, “The more one listens to the men and women at the top of the industry, the more it becomes obvious that the survival of the newspaper is going to have to come from somewhere else.” Unfortunately, Altman concludes that he has no great ideas for saving daily newspapers. He’s just quite certain that the people charged with doing it currently aren’t up to the task.

Miscellany

Tribune Co. executives are trying to reassure shell-shocked staffers that the worst may be over. In an interview on the company’s intranet on Tuesday, Zell and COO Randy Michaels said the company’s recent job cuts were intended to be swift and deep in order to avoid the “death by 1,000 cuts” scenario that is afflicting many of their competitors. Zell wouldn’t predict an end to the earnings free-fall, nor would he be held accountable for earlier promises that he wouldn’t cut his way to profitability. Michaels outlined some aggressive initiatives at member papers aimed at attracting new business.

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Erica Smith, whose Paper Cuts Google Maps mashup vividly documents the industry’s slashing and burning, says Tribune Co.’s Florida properties have been keeping mum on recent job cuts. The Orlando Sentinel eliminated 16 jobs a week ago but didn’t fess up till Friday, she says. She also cites, as we did earlier this week, the Ft. Lauderdale Sun-Sentinel‘s self-demeaning decision to hide news of its own layoffs because of the editor’s concern that the news will get “butchered in the media.”

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A group of Chicago Tribune staffers has published a list of their 50 favorite consumer magazines. While predictable candidates like Rolling Stone and The New Yorker are there, the list has some unexpected delights, including Modern Drunkard and Firehouse, which is, believe it or not, for people who love to chase fire engines. If only these print-biased editors had thought to hyperlink some of the titles they recommend. Incredible.

The Minneapolis Star Tribune may be the first victim of default. Finance and Commerce says Avista Capital Partners, which acquired the paper last year, now wants out of the deal. The trouble is that no one wants to put up any money. Investors are paying only 53 cents on the dollar for a share of the current note, which is well below the Wall Street average of 90 cents. The ultimate buyer could be a distressed-debt hedge fund, which will move quickly to slash costs. It’s hard to believe that McClatchy paid $1.2 billion for the Star Trib in 1998. We’d estimate that investment is worth about $200 million now.

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More coverage of the Pew Research study released this week: Marshall Kirkpatrick wonders if location-aware mobile devices like the iPhone 3G could be the nail in the coffin.  If the salvation of newspapers is local, then how do you compete against a device that delivers local news right where you’re standing? Kirpatrick says he’s an unabashed newspaper fan, but the dailies have got to figure out a way to stop killing trees in order to dump paper on his doorstep that then goes right into the recycling bin.

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The Los Angeles Times is folding its book review section. The decision has drawn howls of protest from the book review editors themselves, who are encouraging their readers to howl with them. Book reviews are the most erudite features of major metro dailies and an important symbol of the intellectual value newspapers deliver. We guess that’s not a high priority to Tribune Co. management at the moment.

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Evening Post Publishing Co., owner of the Charleston Post and Courier, is offering buyouts to all of the paper’s 513 employees, looking to shed staff without resorting to layoffs. Employees can get the standard two weeks for every year of service. The Post and Courier is the oldest paper in South Carolina and once employed more than 700 people. (via The Digitel).

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 David Sullivan’s That’s the Press, Baby is always an engaging read, even when we don’t agree with him. He lets loose on some doomsayers this week with rapier wit. Sullivan’s blog is about newspapers, copy editing and department stores, three topics that frequently come up in the same sentence.

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The Sacramento Bee‘s ombudsman asks us to keep it all in perspective. Despite the nuclear winter that hovers over the US newspaper industry, global trends are up. Did you know that Turks spend 74 minutes a day with their broadsheets? Or that circulation is up 481% in Ukraine over the last five years? These and other nuggets are available in this entertaining column.

As editors and bloggers have combed through the “Changing Newsroom” study from the Pew Research Center’s Project for Excellence in Journalism over the last couple of days, they’ve increasingly focused on the study’s findings that editors are, on the whole, positive about the future.

“Newspaper editors optimistic despite downs” was UPI’s headline. Writing on Conde Nast, Jeff Bercovici focuses on all the good news in the study and observes that newspapers are “very sensibly shifting their resources away from areas where their efforts can easily be duplicated and into the sorts of coverage where they can best distinguish themselves from competitors in all media.”

How can crusty old news editors remain positive amid the drumbeat of dreadful news that’s afflicting the industry? We can only speculate, but that’s what blogs do.

For one thing, perhaps there aren’t as many crusty old news editors any more. Layoffs have washed out a lot of the old guard. Some of them now content themselves blogging about the good old days, although a few still run editorial departments. Mostly, though, the editors who are left are the fighters, and fighters tend to think positively.

There’s also a silver lining to any crisis: the opportunity to focus and rethink the business. In that spirit, the most remarkable section of the Pew study is the chapter about the future. Read it to see quotes from veteran editors who believe the downsizing has required them to become more resourceful, creative and open-minded. In the words of Miami Herald Managing Editor David Wilson, – Through all that- ™s happened over the last few years, the quality of our work is among the best I- ™ve seen- ”and I- ™ve been here 31 years.- 

The study also reports that editors are more involved than ever in trying to identify new revenue streams, even offering an investigative reporting project for sale on Amazon in one case. What’s more, editors don’t think this breach of the traditional ad/edit wall is such a terrible thing. Some are actually invigorated by the idea of becoming more involved in the success of the business.

“They are working hard, innovating, making changes,” says the report. “They may have fewer reporters and less space to work with, [but] they are certain that what they are producing today is better than what they produced a few years ago.”

We’ve noted before the importance of discarding assumptions. It’s hard to do, but it’s the essential first step toward envisioning the future. The inspiring message from the Pew research is that the editors who are working through the ritual destruction of their industry are discarding assumptions en masse and finding that there really are better ways to do their jobs.

Curmudgeons persist but, as Jeff Jarvis notes, they are being marginalized. Times of crisis are also times to rethink everything. That appears to be the bright spot in the industry right now.

Layoff Log

The Tribune Co.-owned Allentown Morning Call will cut 35 to 40 newsroom positions, according to a memo from the publisher posted on Tell Zell. The Morning Call did a small buyout in March, but this appears to be much more sweeping, amounting to more than a quarter of the news staff, according the blog.

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Also in stealth mode is the Ft. Lauderdale Sun-Sentinel, a Tribune Co. property which is cutting its 290-person news staff by 20% but choosing not to report it. Commenting on the paper’s decision not to tell its customers about significant changes to the product they pay for, Editor Earl Maucker comments, ironically, “It serves nobody’s interest to put it out ahead of time. As I’ve found, it gets butchered in the media.”

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There are bad times all over the Sunshine State. The Fort Myers News-Press is laying off 36 people, eliminating some unfilled positions and killing a weekly supplement targeted at Hispanic readers. We hope Publisher Carol Hudler is wrong in calling the region’s economic climate “the worst local economy since perhaps the crash of 1929.” In fact, the economy did pretty well in 1929. The worst years of the Great Depression were from 1933-1937.

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The beleaguered staffs at Maine’s Portland Press-Herald and Sunday Maine Telegram are bracing for the fourth set of layoffs in 12 months. The problem is that owner Seattle Times Co. can’t find a buyer for its Maine Newspaper Death Watch – º Edit – ” WordPressholdings, so it keeps cutting and cutting in an effort to prop up the finances. This layoff will take out 10% of the remaining 85 news staffers. Crosscut Seattle has exhaustive background. There’s also a depressing blog devoted to this situation.

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Laid-off newspaper employees and their colleagues are increasingly taking to the street to publicize their plight. Baltimore Sun employees staged a rally last week, complete with 100 empty chairs to symbolize lost jobs. Alan Mutter asks if this is really an appropriate response, or if the protests might actually backfire and cause subscriber flight. What do you think? Is all the publicity about the death of newspapers actually worsening the industry’s decline? Maybe they’re on to something at the Sun-Sentinel.

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Tell Zell reprints some of the farewell memos that went out last Friday as laid-of LA Times staffers packed their bags. Journalists write some of their best stuff at times like these.

And Finally

Our WordPress template chokes when we try to embed video, so we’ll have to settle for a link. If you want to understand the macroeconomic and demographic shifts that are disrupting this and so many other industries, spend eight minutes watching this video. You will be riveted.

It’s the dog days of summer, so even unsurprising research is good enough to draw lots of attention. This time the subject is a new Pew Research study that finds – “ surprise! – that newspapers are getting smaller, more local and more focused.

The New York Times chooses to focus on the obvious in its coverage. – “Almost two-thirds of American newspapers publish less foreign news than they did just three years ago, nearly as many print less national news, and despite new demands on newsrooms like blogs and video, most of them have smaller news staffs,” reads its lead.

We were actually more intrigued by Editor & Publisher‘s take, which zooms in on the paradox of staff cuts: – Editors by big numbers think their papers are actually improving their coverage, even as they lament that their staffs have lost their most veteran journalists in waves of buyouts and layoffs,-  reads the nut graph. E&P also pulls out other nuggets like the fact that copy editor positions are being cut more than any other and that editors feel conflicted about the move to the Web. Quoting from the research: “A plurality of editors (48%), for instance, say they are conflicted by the tradeoffs between the speed, depth and interactivity of the web and what those benefits are costing in terms of accuracy and journalistic standards.”

The study does highlight the angst that’s being caused by an epic platform shift and the departure of many veteran journalists. The good news is that more than half the editors say the quality of their product has improved over the last three years. The unsettling news: – Only 5% of those responding to the survey said they were very confident of their ability to predict what their newsrooms would look like five years from now.- 

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Perhaps the gloom that pervades the industry is misplaced. Media Mark Research & Intelligence (MRI) reports that total readship is up in the top 100 markets. A survey commisioned by the Newspaper National Network (NNN) found a 2.1% increase in audience size to 80.6 million between spring 2007 and spring 2008. However, media outlets were somewhat ambiguous in their interpretation of the results. Editor & Publisher interprets the data as indicating that print readership is up
while MediaPost refers to unduplicated audience, which includes online readers. Both outlets cite newspapers’ recent clampdowns on free bonus circ as improving audience quality.If the research (which isn’t mentioned on either sponsor’s site, as far as we could tell) is about online audience, then the results aren’t that encouraging. Most newspapers have been reporting increases of 10% or more in online audience, which about mirrors the growth of the Internet overall. If the numbers refer to print readership, then they are indeed surprising, given that the Audit Bureau of Control has reported a steady downward trend in that area. Perhaps more details will emerge when the NNN actually says something about the research.

Layoff Log

The Atlanta Journal-Constitution is spending $30 million on new printing presses and cutting its staff by 8%. The loss of 189 jobs includes 85 newsroom employees and 104 people in the advertising group. The paper is also discontinuing all its regional editions, including the Gwinnett County regional, where its main printing press is located. In an open letter, the publisher explains that the AJC drives 80,000 miles a day to deliver its product and that spiraling fuel costs have hit hard. The paper has also had to absorb a 35% increase in the cost of newsprint.

In light of all those factors, the decision to invest so heavily in new presses seems a bit bizarre. We’re sure there are good business reasons, but if all the growth is online, why invest in a print product that already has a near-monopoly position in its market? We suspect there are nearly 200 soon-to-be-ex-employees of the AJC who are asking the same thing right now.

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More than 3,500 newspaper jobs have vanished this summer, according to Media Post. You’ve read about most of them here, but the media publisher’s roll-up demonstrates how widespread and entrenched the industry’s problems are.

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An already tense labor-management standoff at the Honolulu Advertiser wasn’t helped by last week’s announcement that the paper must cut 54 positions, or about 10% of its workforce, for the same reasons everybody else is laying off. It took all of one day for the union to authorize a strike. Workers said they had no idea the layoffs were coming and that the Advertiser claims to be profitable.

Being profitable, of course, is not a guarantee against layoffs, especially when parent Gannett Corp. just announced a 36% drop in earnings. Advertiser management is actually pressing the issue by proposing that the union be abolished so that it can have the flexibility assign reporters to take photos, for example. The union says no. In an age when competitive websites leverage content contributed by local citizens for little or no money, it makes sense to send both a reporter and a photographer to cover a story at union scale. This is a business model that the Advertiser can ride comfortably into oblivion.

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The Gleaner of Henderson, KY, will eliminate nine pressroom positions and four other unspecified jobs as it moves printing to the Evansville Courier & Press. The item didn’t say how many people work at the paper.

Miscellany

The owner of Pacific Coast Business Times, a weekly business journal in Southern California, says business is great. The closure of business sections in some big dailies has helped, says Henry Dubroff. Business weeklies have lower costs and just as much credibility as the dailies they’re challenging he says. If you read between the lines of this piece, though, you’ll also see that business weeklies are more attuned to playing nicely with the businesses they cover: – The culture of a business journal is more like a small business than a traditional newspaper,” Dubroff says. “Other departments are close at hand, not on another floor. A mix of high standards and cooperation are keys to success.-  Translation: business journals are more likely to write nicely about the companies they cover.

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The editor and publisher of American Thinker, Thomas Lifson, writes somewhat mockingly about the decline of The New York Times under publisher Pinch Sulzberger. Repeatedly referring to the publisher by his preppy nickname, Lifson ticks off a list of questionable business judgments at the Old Gray Lady, including the decision to increase the dividend while the stock was tanking and the Ochs/Sulzberger family’s refusal to consider selling the operation. Noting Rupert Murdoch’s designs on the Times, Lifson references recent reports that Murdoch and Daily News publisher Mortimer Zuckerman are discussing ways to combine some operations in order to reduce costs. – With the financial muscle to cut prices and steal advertisers away from the Times national and metropolitan editions, Murdoch can force the Times to cut its own prices for the advertisers and readers who remain with it, further pressuring circulation revenue and readership,-  he says. In other words, a death spiral.

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The Asheville, NC Citizen-Times has started making reporters punch a time clock. Actually, it’s a thumbprint reader, and you have to punch in and out even if you’re going down the block to the bank. With that kind of management penny-pinching, it’s unlikely that C-T reporters are going to be burning the midnight oil on a big story any time soon.

And Finally…

Conspiracy theory? Tell Zell reveals internal communications from Tribune Co.’s IT organization telling how computer systems are being centralized at the company, making it possible for a reporter at the Baltimore Sun, for example, to file a story directly to the LA Times. Previously, the systems couldn’t talk to each other. Does this mean it will soon be possible for the Tribune papers to pool resources and send, say, four reporters to witness the same Presidential press conference instead of eight? If so, then we take back the mean things we’ve been saying about Sam Zell. Maybe the guy really does have a vision.

If you’re looking to brighten up your day, don’t bother reading Mark Potts’ latest blog entry. Riffing on a financial analysis by Alan Mutter, Potts speculates about what could happen to newspaper companies as the biggest titles enter penny-stock territory. It isn’t pretty.\

The scenarios are similar to those we’ve suggested before. At some point, newspaper companies become too cheap for investors to ignore and the vultures move in. The lucky companies will get picked up by buyers who have a vision and an interest in sustaining local journalism (help us, Rupert!). The unlucky ones will become the property of someone whose agenda is solely profit and asset value.

Most investors who would buy in under those circumstances are not Mudochs and Zells; they are speculators and gamblers. They’ll be looking for an opportunity to flip their holdings for a quick profit and they won’t particularly care how they reach their goal. In the worst case, Potts sees print editions being axed entirely and newspapers stripped down to delivery routes and printing presses for the sake of distributing advertising circulars. Impossible? Digital Equipment Corp. went from the second largest computer maker to a rounding error on H-P’s balance sheet in five years.

A more positive scenario is a new ownership that cuts costs deeply and tries to reinvent the organizations around the value of their brands. Neither option is very appealing to the employees of these organizations, however. Let’s hope there are still some publishing entrepreneurs out there who see newspapers has having more value than just the sum of their assets.

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Stockholders of E.W. Scripps Co. can’t be too pleased today after Standard & Poors downgraded the company’s debt rating five full notches from “A” investment grade to “BB+” junk bond status. The good news is that Scripps Network Interactive, which was split off from the newspaper-heavy E.W. Scripps just two weeks ago, got an “overweight” rating from J.P. Morgan, which set a 12-month price target of $55, about 35% above the current share price.

Anonymous Sources Alive and Well

Slate’s Jack Shafer has an interesting approach to analyzing the continuing use of anonymous sources by major newspapers. He created a few Google Alerts to look for words like “anonymity” and then looked at the stories to see if the secrecy was warranted. In most cases, he finds that that the anonymous quotes are  either obvious, self-serving or contribute nothing to the story. Shafer ranks the value of the quote on a 0-5 scale and maps the whole thing out on a Google spreadsheet. The result is a good argument for better editorial oversight at the Times, the Post and other big dailies.

In most cases, Shafer finds that anonymity is unnecessary on the part of the reporter, the source or both. In some cases, the anonymity is baffling or silly, such as anonymous sources speculating about things that any rational person would speculate about. The columnist reasons that this is an example of reporters citing a source for the sake of showing people that they talked to someone. Of course, the quote and the source could be made up, so it doesn’t really matter.

There’s no overarching point to the exercise other than to demonstrate how generously these “anonymice” are still used in the most respected publications in the US just five years after the Jayson Blair scandal called attention to the problems of that practice . Shafer notes that the paper reporters love to hate – USA Today – prohibits anonymous sourcing.

Miscellany

• The Bay Area Newspaper Group – East Bay, which has been the target of union organizing activity recently, laid off 29 people at the Contra Costa Times on Friday, saying the decision had nothing to do with union-organizing activites at paper. Laid-off employees disagree and plan to challenge the move.
• David Paulin comments cynically on a recent American Journalism Review piece about journalism schools sending their students on overseas reporting assginments. He notes that at a time when news organizations are cutting back sharply on foreign correspondents, students eagerly spend thousands of dollars to go to remote and even dangerous places to file stories in the hope that they might possibly get picked up by a major newspaper without compensation. We guess it’s not exploitative when those being exploited volunteer for the opportunity.
• We suppose we must reluctantly acknowledge one of the silliest publicity stunts in recent memory. That would be the Durham, NC reporter-turned-lawyer who is suing the Raleigh News & Observer for breaching his contract as a subscriber by laying off 70 people and cutting back on news pages. The lawyer says he’s not interested in the money and is trying to issue a wake-up call to the industry. The N&O‘s executive editor says the lawyer should pay the newspaper more for the great value he’s getting. We are amazed at the volume of coverage this dumb story has generated. And we suppose we are also now part of the problem.
• The Death Watch apparently stirred things up at the LA Times pressroom, which has banned employee tours, apparently out of safety concerns. As one of the last civilians who snuck in before the new rules went into place, we want to thank Edward Padgett and tell his supervisor that we were never in any danger.

 

To no one’s great surprise, Los Angeles Times Publisher David Hiller (left) resigned today. The clock had been ticking on the embattled executive since an embarrassing incident a little more than a month ago when it was revealed that Hiller was planning to turn the paper’s weekly magazine into an advertorial without consulting Editor Russ Stanton. When the subterfuge became public, it was Stanton who set the record straight in a clear public snub of his boss.

The LA Times pulls no punches in documenting its own dirty laundry.  “The paper has experienced the steepest drop in cash flow of any in the Tribune chain of 11 daily newspapers,” writes staffer Michael Hiltzik. “Hiller also acquired a reputation among Tribune brass as an indecisive leader…the Times has been without an advertising manager since February, for example.”

The timing couldn’t have been worse for staff morale, coming as the paper begins cutting 250 jobs. Hiller is the third publisher in eight years, and he’s overseen a revolving door of editors who have left under unpleasant circumstances. The news also comes just one day after Chicago Tribune editor Ann Marie Lipinski announced that she would leave the paper after more than seven years at the helm.

What’s really going on here? A changing of the guard that isn’t unusual at companies that have been sold during troubled times. After a year on the job, CEO Sam Zell has decided that the only way to right the Tribune Co. ship is through severe cutbacks. Executives who don’t get with the program are going to be quickly shown the door. During the reign of Zell, anyone with bottom-line responsibility who doesn’t move quickly will be moved aside. Publishers at other Tribune Co. properties should see the handwriting on the wall. It’s all about revenue right now, which is appropriate when the noose of huge interest payments is staring you in the face.

A tumultuous as these events are, they’re actually a positive sign for Tribune leadership. A company in such deep trouble needs a strategy. It’s almost inconsequential whether it’s a good strategy or a popular one. Simply getting people pulling in the same direction is an improvement. Say what you will about Rupert Murdoch, you can’t deny that he has acted quickly and decisively to shoot dissenters and bring in his own team to implement a new strategy for The Wall Street Journal. As a result, the paper is generally acknowledged to be making rapid progress in its campaign to challenge The New York Times. Zell’s biggest mistake so far may have been to let things deteriorate so much before taking action. Now he’s getting something done.