First issue of the Arizona Citizen, 1870
The 138-year-old Tucson Citizen, AmericaArizona’s oldest newspaper, will print its last edition tomorrow, even as a prospective buyer howls in protest. The paper will continue online with what is being called a “modified” edition focused on commentary and opinion, but without news or sports coverage the newspaper is effectively dead
Founded in 1870 as the Arizona Citizen, the daily has gone through a painful downsizing process, culminating in a bizarre series of late rescue attempts. Owner Gannett Co. announced in January that it was putting the Citizen up for sale and would shut down the paper in March if no buyer was found.
In February, the Justice Department said it was investigating the Gannett sale due to allegations that the company would not give up its interest in a joint operating agreement (JOA) it has with Lee Enterprises, publisher of the Arizona Daily Star. JOAs are legally sanctioned duopolies that enable partners to share profits and back office operations while maintaining competing editorial voices. Without the JOA, the Citizen is effectively a money pit.
On March 16, just five days before the scheduled shutdown,we posted our first RIP for the newspaper, but the next day Gannett announced that two “very interested buyers” had emerged. In fact, the Citizen had at least five suitors during its final months, but none wanted to pay Gannett’s price. Meanwhile, the Justice Department confirmed today that it has closed its investigation into the sale and will let the Citizen shut down.
The howls of protest are from Stephen Hadland, CEO of Santa Monica Media Corp., who says he still wants to buy the Citizen and who claims Gannett refuses to budge on price. The Citizen reported in March that Santa Monica Media is a “blank check company” that exists solely to perform mergers and acquisitions. Hadland has asked the Arizona attorney general for a temporary restraining to prevent Gannett from closing the Citizen. With no further interference from the Justice Department, however, it appears that the closure is a done deal.
In a final strange twist, a Gannett implied that the stub of a website being kept in operation may be nothing more than a sop to the Justice Department to let the deal go through. Gannett revealed almost no details about the plans for the online operation and refused to say how long it will keep the site in operation.
The Citizen employs 60 people, most of whom will lose their jobs, although some may be retained to staff the Web operation.
Update 5/16/09: Arizona Attorney General Terry Goddard filed a complaint in U.S. District Court in Tucson late Friday to block the closure of the Citizen. A temporary restraining order is being filed. The move appears to have been initiated by Santa Monica Media Corp., which says it bid a fair price for the paper but Gannett refused to negotiate. As of 10:30 a.m. MST on Saturday, if was still unclear if Saturday’s issue would be the last.
If the new owners of the San Diego Union-Tribune are planning to reinvent the news operation, they made a surprising choice in appointing Ed Moss (right), a 32-year newspaper veteran, to lead the charge. Moss was most recently president and CEO of the Los Angeles Newspaper Group and publisher of the Daily News of Los Angeles, as well as eight other titles. He’s is known for his ability to focus on local communities, so it could be that owner Platinum Equity is taking “hyper-local” to heart.
“I’m all about local, local, local – local news, local advertising,” Moss told the U-T. “That’s our niche. The way to differentiate ourselves is to be as local across the company as we can.”
Moss is an advertising guy. He’s been a publisher at papers in California, Ohio, Michigan and Louisiana and also held several advertising sales positions. He told the U-T that there is an unlocked opportunity in sales to local advertisers and that he would move aggressively to capture that business.
“I like to move very, very quickly,” he said. “And I like to build a culture that believes you have to move quickly.”The piece quotes past colleagues saying Moss is a nice guy, a visionary and a great leader. One of his prior bosses is David Black, who’s advising Platinum on the U-T’‘s makeover.
If the past is any clue to the future, then the New York newspaper strike of 1962-63 may offer a glimpse of what a nation without daily newspapers would look like. Slate’s Jack Shafer has a wonderful account of what a news-starved city did when the strike crippled all of its newspapers for nearly four months.
In short: it improvised. Non-unionized dailies in the boroughs saw circulation explode. The Philadelphia Inquirer imported thousands of daily copies. Radio and TV stations began reporting real news instead of just parroting what the dailies said. The Village Voice exploded out of anonymity to become the flagship of alternative weeklies. Tom Wolfe sought freelance income by writing an article for Esquire that would launch his book-writing career. Shafer cites example after example of what a population that had been accustomed to consuming 5.7 million newspapers a day did when it suddenly had none. They made do. And the world went on.
Which is what will happen when major metro dailies begin to close or scale back: Alternatives will rush in to fill the void. People will get their news elsewhere, and what they can’t get will be delivered by entrepreneurs who figure out a way to deliver it at a profit. Destruction is an ugly thing, but it’s usually a necessary precursor to reinvention. Shafer shrewdly notes, “The least reliable source for what the end of newspapers means is usually the newspaper men, who are too stuck in their roles to reimagine the world.” Once you shed assumptions, then possibilities open up.
With 39 more layoffs last week, the San Francisco Chronicle has brought its staff reduction total to 151 since March, or about where ownership said it had to be to achieve short-term equilibrium. The cost-cutting is unlikely to end there, though. According to the San Francisco Business Times, “the Chronicle will rely increasingly on freelancers and non-staff unpaid or poorly paid bloggers to fill the paper, in many cases using former staffers.” With so many laid-off journos on the street, what’s happening to the per-word rate you’ve been able to get? Comment below.
Online strategist Matt Maggard posts a lengthy proscription for change at the Los Angeles Times. He’s even redesigned the home page of the website for them. Maggard calls his essay “an open proposal. This includes a summary of value in the digital marketplace, how the Times can improve its product and how journalism should evolve its practices and business models to survive. I’m sending this around as an open proposal to help jump-start the discussion on what can be done to save the industry.” We didn’t find a lot of revolutionary thinking in the proposal, but its recommendations seem sound enough.
The state of Washington is shifting some of the burden of propping up a dying industry onto the taxpayers, approving a 40 percent cut in the state’s main business tax for publishers and printers. What’s next, rebates for the recording industry? The Seattle Times‘ 95-word news bite on the subject inspires more than 220 comments, indicating that the recession-plagued populace might feel just a wee bit strongly about this lobbyist-inspired giveback.
For newspaper publishers who whine that Google is an Internet parasite, Google spokesman Gabriel Stricker offers a brief tutorial in the workings of the robots.txt file, which enables publishers to easily block the company’s search spider whenever they want.
PriceWaterhouseCoopers has published a 56-page report called “Outlook for newspaper publishing in the digital age.” Our day job hasn’t permitted us to consume the entire document yet, but based upon this PWC summary, we probably won’t bother. The bottom line appears to be conventional wisdom that the print model is troubled, the future is in multiple media and the revenue mix has to shift away from a sole reliance on advertising. We suspect PriceWaterhouseCoopers will be more than happy to help publishers make the shift.
Ryan Pagelowis a reporter at the Lake County News-Sun in Waukegan, Ill. a contributor to Mad magazine (talk about a venerable print title) and a recipient of the Charles Schulz National College Cartoonist Award. He also pens a clever daily comic called Pressed, which he describes as “a behind-the-scenes look at a newsroom that’s trying to survive in an online world of tweeting blogospheres. It features a frazzled editor, reporters, a blogger and an assortment of politicians, weasels and snitches.” Check this out. It’s good.
The New York Times Co. and the largest labor union at the Boston Globe came to terms early this morning, agreeing to substantial pay cuts and modifications to controversial lifetime employment guarantee provisions that had previously blocked progress.
Details weren’t released, but negotiators emerged from 10 hours of talks at around 3 a.m. to say that a tentative deal had been re
ached that would achieve the $10 million in cuts the Globe had asked the Newspaper Guild to make. The union represents about 700 Globe employees, including newsroom staff. The proposed agreement will be submitted to Guild membership for approval on Thursday. Until then, the terms are secret.
Although it’s hard to speculate about just what concessions the union agreed to, the timing indicates that the union buckled under intense pressure. The NYT Co. made its “last best offer” on Tuesday to the Newspaper Guild: a huge 23% pay cut. The union’s most recent proposal was for concessions amounting to about a 5% pay cut, along with changes to benefits plans. The fact that the two sides bridged the gap so quickly and that the union agreed to modify the lifetime employment guarantees indicates that the NYT Co. had the upper hand in negotiations. The Guild had repeatedly called negotiations over the guarantees “a nonstarter.”
This deal is going to hurt at the rank and file level. A $10 million cut spread across 700 employees amounts to about $15,000 per person. Assuming that the average Guild member makes about $100,000 a year in fully loaded compensation (wages and benefits), that nets out to a cut of about 15% per person. The union proposal had sought to concentrate those cuts in benefits programs paid to current and retired employees. Management, however, wanted to see wages slashed. Its message was clear: current and future employees of the Boston Globe shouldn’t expect to make nearly as much money as they have in the past.
Even with the $20 million in concessions the Globe‘s seven unions have made, there’s still a big gap in the math. The NYT Co. has said that the Globe is on track to lose $85 million this year, which means that the paper must cut another $65 million in expenses – or find a comparable amount in revenue – to break even. The gap between the necessary expense reductions and the relatively modest cuts agreed upon so far indicates that the Globe‘s problems are far from over.
As negotiations with the Boston Globe‘s unions continued past a midnight deadline, The New York Times Co. filed notice with the federal government today of its plans to shut down the paper in 60 days. Such notice is required under federal law, but the filing of a Worker Adjustment and Retraining Notification statement doesn’t require the Times Co. to go through with its threats. The Globe unions called the move a negotiating ploy. The Times Co. says it is ready to go ahead and file a binding plant-closing commitment with the state today.
Tense negotiations continued through the weekend, with the Guild saying its offer exceeds the goals set by the Times Co. and the Times Co. raising the stakes even further by admitting that it had made a $4 million accounting error that would require the union to dig even deeper for cuts. The Boston Herald quotes a union official alleging that most of that oversight is actually bad-faith bargaining. Whatever happens, union officials said, expect large layoffs at the Globe. No one seems to think the Times Co. intends to carry through on its threats to shutter the 137-year-old paper, but it’s virtually certain that whatever Globe survives this negotiation process will be far smaller and weaker than the one that has dominated New England for decades. We’ll keep an eye peeled today, but you’ll probably find out quicker from Romenesko.
They’re shaking up the traditional newspaper model in eastern Iowa. Mark Potts sums up a blueprint for reinvention by the designated change agent at the Cedar Rapids Gazette that outline a vision of the publisher as a center of information, commerce and community. It isn’t about publishing, Steve Buttry says. “We need to become the connection to everything people and businesses need to know and do to live and do business in Eastern Iowa.” He goes on to list the many ways in which the publisher can expand its franchise, from delivering up-to-the-minute Twitter feeds to enabling visitors to buy concert tickets directly from its event listings page.
The part that will rub traditionalists the wrong way is Buttry’s vision of a new approach to revenue in which journalists will be just as responsible for the financial well-being of the company as sales reps. The wall between advertising and editorial is considered no man’s land in most newspaper companies, but Potts praises Buttry for having the courage to envision an alternative. Publishers can position themselves as intermediaries between their audience and local merchants and extract a small fee for enabling transactions. There is nothing dirty about thinking about the financial health of one’s employer. In fact, this economy doesn’t permit the luxury of old silos. Read Potts’ synopsis of how one news organization is changing the way it perceives its business. Read the entire 38-page blueprint document here if you want details.
How bad is it in the upscale lifestyle magazine market? “Wired magazine posted a 57% drop in ad pages in the first quarter, while ad pages at fashion magazines W and Lucky were down more than 40% and 35%, respectively, for the quarter. Architectural Digest‘s ad pages were down 47%,” reports The Wall Street Journal in an article about Conde Nast’s decision to pull the plug on Portfolio magazine after only two years. The numbers make it clear why the decision was necessary: despite its paid circulation of nearly 450,000, Portfolio‘s ad pages were down 61% in the first quarter. The highly visible publication was launched with fanfare and an all-star lineup of journalists two years ago, entering the market dominated by Forbes and Fortune. However, luxury advertising has fallen off the table during the recession and Portfolio was still working off its startup costs. Advertising revenues would have to increase significantly in 2010 to support the business plan, and that just wasn’t going to happen. Some observers think the flight of luxury advertising from upscale magazines could be permanent.
It’s going to get worse, says MarketWatch’s John Friedman. In a short video clip, he says the business publishing market is over-populated and under-advertised. Every business magazine, even the most venerable titles, is vulnerable in an ad downturn like this one.
The Capital Times of Madison, Wisc. Writes about the astonishing surge in journalism school enrollments. “According to an annual enrollment survey done by the University of Georgia, there were 199,711 undergraduates enrolled nationwide in journalism and mass communication schools in
2007 — a jump of 41.6 percent from 1997,” reporter Todd Finkelmeyer writes. “Meanwhile, a recent article on Forbes.com noted that journalism schools at Columbia University, the University of Maryland and Stanford University saw significant spikes in applications this past fall — 30 percent, 25 percent and 20 percent, respectively.”
The story goes on to quote several bright-eyed J-school students who aren’t at all worried about the 15,000 or so journalism jobs that have disappeared over the last 18 months. They believe that a market for quality reporting will always exist and hope that by the time they graduate, the jobs will be there. Professors are quoted saying that journalism teaches critical thinking, an essential skill that can serve a young person well in any profession. It appears that the University of Wisconsin at Madison is ahead of the curve, having revamped its journalism program nearly a decade ago to accommodate multiple media. Ironically, the Capital Times itself exited the print business more than a year ago and has been publishing solely online since then.
The Baltimore Sun laid off 30% of its newsroom last week with the cuts hitting disproportionately hard on senior editorial staff. About one third of those laid off were editors and managers, Editor & Publisher reports. They included both top editorial page editors. Newspaper Guild officials said the moves appeared to be part of a realignment of the news operation toward “multi-platform content,” whatever that is. A reduction of that size could presage a reduction in print frequency along the lines of what the two Detroit dailies are doing. The Sun has the handicap of competing against the Washington Post and other smaller dailies just to the south.
Canada’s National Post will suspend Monday publication during the summer in a cost-cutting move. No layoffs are planned.
The Reading (Pa.) Eagle laid off 52 people, or about 12% of its workforce.
The company that publishes the Vancouver (Wash.) Columbian has filed for Chapter 11 bankruptcy protection, but the issues apparently revolve around real estate investments and not business losses at the newspaper. The Columbian will continue to publish during reorganization.
Billionaire investor Warren Buffett reads five newspapers every day, but he wouldn’t buy one at any price. “They have the possibility of going to unending losses…I don’t see anything on the horizon that causes that erosion to end,” says Bullett, who owns the Buffalo News and a piece of the Washington Post Company. He doesn’t intend to sell those ownership stakes, but he isn’t expanding them, either.
The New York Times has two stories that illustrate the severity of the industry’s crisis. It tells of Todd Smith, a reporter for the Suburban Journals chain of newspapers owned by Lee Enterprises, who was shot while on the job last year. That’s a pretty big sacrifice to make for one’s employers, so “On April 15 of this year, when Mr. Smith was called to a meeting at the Suburban Journals…he wondered if the staff had won an award for coverage of the massacre. Instead, he learned that he and several others were being laid off,” Richard Perez-Pena writes. The story also tells of Paul Giblin, a reporter for the East Vallely Tribune whose work won a Pulitzer Prize two weeks ago. Giblin was laid off last year and now works at a startup online news organization.
The New York Times Co. is sticking by its May 1 deadline to gain $20 million in cost-saving concessions from Boston Globe unions or shutter the paper. That doesn’t mean the Globe would close next Friday, but owners would make the decision then. Expect this one to go down to the last minute.
The Boston Globe has a story explaining its much-maligned lifetime job guarantees. The deals negotiated 15 years ago have become a hot potato as Times Co. has threatened to close the Globe unless $20 million can be cut from the expense line. The story has some interesting background on how guarantees grew out of management’s successful efforts to seize control from the unions more than 30 years ago.
Guarantees are almost unique to the newspaper industry, having first been negotiated in the 1960s when automation was threatening to put compositors and pressmen out of work. Publishers figured they could offer lifetime employment to people whose jobs were threatened and still make more money because the productivity benefits of automation were so great.
Another interesting motivation was the effect of automation on strikes. “The US newspaper industry averaged 30 to 40 strikes a year in the 1960s,” the Globe says, quoting industry analyst John Morton. “Now, they are rare. The last major newspaper strike occurred in Seattle in 2000.”
Of course, what seemed like a good deal at the time has become an anchor around some publishers’ necks as guarantees have limited their flexibility to manage expenses. In a similar move, the steel industry negotiated generous pension and health care benefits with its unions in the 1960s and 70s. Thirty years later, companies found themselves spending twice as much to pay retired employees as they paying productive workers.
New York Times Co. Chairman Arthur Sulzberger vowed to stay the course during a shareholder meeting earlier this week. He defended the Times Co.’s commitment to editorial quality and the validity of the advertising model, yet he hinted that other options were on the table. “”We continue to take a fresh, hard and deep look at various subscription, purchase and micropayment models,” he said.
Sulzberger may want to consider the experience of INDenver Times, a startup staffed mostly by members of the failed Rocky Mountain News. We told you about them on Monday, including their plans for an ambitious paid subscription model that includes “direct, real time conversations with our editors and writers…from 10 am to 5 pm every weekday.” Well, not so fast. INDenver Times just announced that it didn’t meet the 50,000-subscriber threshold it needed to pursue its novel business model and so won’t be going ahead with paid subscriptions. The announcement was murky on whether INDenver Times will go ahead at all. Various spokespeople talked around the importance of journalism but didn’t say whether that would include an ongoing commitment to this venture.
The Wall Street Journal carried this front-page banner headline week: “Computer Spies Breach Fighter-Jet Project.” The Journal doesn’t run many banner headlines, so this must be a big deal, right? Actually, apparently not. As Slate’s Jack Shafer explains, the breach in question poses no significant threat to the F-35 Lightning II fighter jet program. It amounts to theft of a maintenance manual. “The Chinese now know how many miles the F-35 can fly before its timing belt must be replaced, its oil changed, and its tires rotated,” he explains. Shafer also documents the putdowns from by Journal rivals Washington Post and New York Times, which both gave the story barely passing mention in their own pages. He also points to a recent piece in The Nation, intriguingly titled “Has the ‘Journal’ Lost Its Soul?” However, The Nation‘s servers appear to be down this morning, no doubt the victim of a Chinese hacker attack.
We’ll be watching with one sleepy eye next week as Sen. John F. Kerry holds hearings in Washington on the financial problems facing the newspaper industry. The fact that there is no support at any level of government for a bailout of the industry doesn’t faze Kerry, who appears to be more interested in appeasing the editors at the Boston Globe who have endorsed him for many years.
Also next week, we’ll be speaking in San Francisco on the topic of “World Without Media: What Will Fill The Void?” along with online journalism and social media expert JD Lasica at the New Communications Forum. This general session presentation begins Tuesday at 4:00. Click on the logo at left for a discount. Get an even bigger discount by registering with code SNCR New Communications Forum is one of the best social media events of the year. whoIts organizer, the nonprofit Society For New Communications Research has assembled a faculty of leading new-media thinkers who reserve some of their best stuff for the biannual conferences. Take a look at the agenda and see what we mean.
We’ll also be leading a panel on Wednesday on the topic of “Media in Transition: The Future of News in a Democratized World” at the co-located Inbound Marketing Summit. The three panelists are all newspaper industry veterans who have successfully made the jump to the digital world: Dean Takahashi of VentureBeat, Tom Foremski of Silicon Valley Watcher and Ken Doctor of Outsell. Click the image at right and use code VIPS50 to get half off the conference fee.
Nicholas Carr points us to a site maintained by one Timothy McSweeney, which is one of the funniest – and by that we mean “most droll” – online outposts we’ve encountered in some time – and by that we mean days. Check out the syllabus for an “Internet-Age Writing” class. A snippet:
“Students will acquire the tools needed to make their tweets glimmer with a complete lack of forethought, their Facebook updates ring with self-importance, and their blog entries shimmer with literary pithiness. All without the restraints of writing in complete sentences. w00t! w00t!”
And also: “Students will work to make their blogging more vivid using the fundamentals of the craft, such as imagery, foreshadowing, symbolism, and viral paparazzi photos of celebrity nip slips.”
Of course, we're on...
...and all these other places.
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