The Hindustan Times writes about a fledgling business in the booming Indian outsourcing economy: editorial services. The paper looks at Mindworks Global Media and Express KCS, two small companies that gained an early toehold in outsourced advertising production and that are now moving to the editorial side. Mindworks has tripled its staff to 100 in the last year, while Express KCS has grown an incredible 20-fold to 400 people in that time.

The COO of Express KCS is quoted saying the company is in talks with “seven or eight” interested papers. The editors are usually Indian journalists who are trained in the nuances of American editing. Most are young and they work dirt cheap compared to their US counterparts. The firm runs shifts around the clock. Poynter Institute’s Rick Edmonds is quoted estimating that “a copy editor at a medium-sized American newspaper makes between $30,000 to $60,000 per year, compared to between $4,800 and $14,480 at Express KCS.”

Is this the future of journalism? It’s unlikely that anyone will figure out how to cover a city council meeting from Bangalone any time soon. For office functions like copy editing, though, the economics of offshore outsourcing look pretty compelling. Although there’s evidence that quality can be a problem, the trend looks unstoppable. Forrester Research estimates that 3.3 million U.S. jobs and $136 billion in wages could migrate offshore by 2015. Indian firms have a lot of incentive to improve the quality of their services. The lousy quality of English taught in US public schools doesn’t help keep jobs on shore.

There’s lots more information online

Must Be a Slow News Week

• The weeks surrounding Independence Day in the US are notoriously bereft of news, which leads to very long stories about topics that don’t seem to deserve very long stories. This is true even in the shrinking age of the newspaper.
• Crain’s Detroit Business speculates about the future of the Detroit News, which is the weaker of the Motor City’s two dailies. The News and the Free Press coexist under a joint operating agreement that makes ownership of the News by MediaNews Group a no-lose proposition. It could become a loser for JOA partner Gannet, though, particularly as business deteriorates. In the end, nothing is likely to happen soon, Crain’s says, leading one to wonder why it needed a 1,200-word story to come to that conclusion.
• The Maryland Daily Record devotes nearly 800 words to the news that the Baltimore Sun will cut its business section. This has become standard operating procedure for newspapers that are cutting back, since the business section generates little advertising and its the most vulnerable part of the paper to online competition. Papers have devoted less space to announcing layoffs of 10% of their staff.
• The managing editor of the Bristol Herald Courier kicks in 700 words about the decision to make the paper one inch narrower and cut back a little on wire copy. Otherwise, no biggie.
• Meanwhile, all’s well and good with the UK tabloids, thank goodness.

And Finally…

• If you want a really different and refreshing perspective on the role of newspapers in people’s lives, read what fans of the syndicated column The Amish Cook have to say.  It will humble you.
• We love Dave Barry, so we thought we’d remind you of one of his best columns: “25 Things I Have Learned in 50 Years.”

Mark Potts counts the ads in his Sunday paper and finds just 14 pages of them in 102 pages of news. And the previous week’s pre-holiday issue wasn’t much better. What happens when papers start following Sam Zell’s lead and tightening ad/edit ratios to 50:50, he asks?

Good question. It’s one that the Zellenistas have conveniently overlooked in their campaign to clamp down on spending. The more you squeeze ad/edit ratios, the smaller the paper gets and the more questionable the value proposition becomes for Mr. and Mrs. Commuter who are deciding whether to pay $1 for a product that has almost nothing in it or pick up a copy of Metro for free. Or, for that matter, just get their news on their Blackberry.

The risks of cutting the news hole and the news staff is that the value of the product becomes more questionable. Readership declines, which leads to advertiser flight, which makes issues even smaller. It’s called a death spiral, and Sam Zell and his associates are boldly leading the industry into the vortex.

Speaking of spirals, Muckety has an interesting insight on the skyrocketing cost of dividends for major newspaper companies. As their stock prices sink, the cost of these quarterly payouts is going out of sight. Gatehouse is currently obligated to pay 32% of its stock value as a dividend, for example, which would be a crushing burden for most companies. If the company does what is probably has to do and eliminates the dividend, it makes its stock less appealing to the widow-and-orphan investors who have traditionally bought reliable newspaper shares. When they sell, share prices go down, which means that dividend yields go up, which makes for more financial misery. And so on and so on… (via Fading to Black).

New Models of Journalism

Steve Outing is a veteran journalist who gets it. Early this year, he stuck his neck out and wrote in Editor & Publisher about his decision to cancel his newspaper subscription. This drew howls of anger and derision from loyal E&P readers, but Outing was trying to make a point: If someone like me is lost to you, what does that say about the rest of your audience?

In this latest E&P epic, the loquacious Outing looks at new approaches to journalism emerging online. One of them is Examiner.com, a network of local websites in which professional journalists partner with citizens and local experts to blanket a topic. “Local” in this context is about topic rather than geography. The experiment forces the reporter to be a relationship manager as much as a writer. Fortunately, most good reporters do pretty well at managing relationships.

Outing also writes about geotagging, which is a growing standard to labeling information with geographic coordinates. Learn to do it, he says, because people will increasingly turn to services that deliver local information and your stuff won’t be included if you don’t tag it.

Outing makes an essential point: there is and always will be a need for professional journalists, but their role will evolve to encompass more of a managing editor role. Journalists will have to excel not only at reporting the news but also at managing the networks of resources that bring in information from other sources.

Miscellany

• In an act of, well, we’re not sure just what, the Miami Herald has hired back a laid-off reporter to blog about being unemployed. Don’t get excited, though. It’s only a one-month gig.
• Editors Weblog reports that three of the 10 most circulated newspapers in the US are now free. Note that circulation is difficult to measure when there are no paying subscribers. Metro International has had a hard time monetizing this model, but there’s no question the reader demand is growing. (via Fading to Black)
• Last week we wrote about a young intern at the Tampa Tribune who blogged about the editor-in-chief’s provocative remarks about making the newspaper secondary to the website. It turns out that intern Jessica DaSilva kicked up quite a storm, as the 160+ comments on her blog demonstrate. Out unscientific analysis has comments running about 3:1 in her favor, but some of the critics are their own worst enemies. Their petty sniping at her occasional spelling errors and random random personal attacks make them look shallow and vindictive. Someone hire this young lady.

Writing in The New York Times, Timothy Egan invokes the spirit of Thomas Jefferson in an impassioned plea for continuation of the status quo in the newspaper business. His argument is more eloquent than most, but it’s predicated on two shaky assumptions.

The first is that newspaper readership is higher today than ever. Egan calls this the great paradox, and it would be if the numbers existed in a vacuum. It’s true that newspapers’ total audience is growing, but the real question is relative to what? This blog gets a lot more readers online than it would if it were copied and distributed on street corners, but is that an inherent measure of value? The growth of the Web and the emergence of high-quality search engines are a tide that lifts all boats, but that doesn’t make the boats themselves any more valuable. You can turn around this logic: There are some 20 million active blogs today that didn’t exist five years ago. Facebook traffic drawfs that of all major newspapers combined. Does that make blogs and Facebook a more useful resource than The New York Times?

Fewer Jobs, But Not Fewer Journalists

The second assumption is that journalism jobs are going away and with them, professional journalism. Egan cites Huffington Post, a favorite mainstream media whipping post because it pays its contributors so little. We could be left with a national snark brigade, sniping at the remaining dailies in their pajamas, never rubbing shoulders with a cop, a defense attorney or a distressed family in a Red Cross shelter after a flood, he moans.

Well, he’s got one thing right: in the future there will be fewer salaried staff positions at big media institutions. But it’s stretch to say there will be fewer professional journalists.

Huffington Post lists 30 editors on its masthead. We can assume that some of those people are getting paid. While it’s true that staff jobs are declining, there is a model for the future of journalism careers. It’s called freelancing. Lots of professional journalists make a perfectly good living today writing for multiple clients. Some of those clients are businesses and others are media organizations. The corporate work generally pays better, and that supplements the more interesting pure journalism work. Many of the best journalists in the US long ago left their staff positions in order to go solo. Most freelancers I know prefer the flexibility and freedom that the lifestyle provides. And most magazines couldn’t survive without their services.

Lots of industries work this way. The accounting profession has a few mega-firms and thousands of individual practitioners. Doctors can choose to work for a medical group or hang out their own shingle. Many independent consultants provide specialized services that their clients can’t get from big organizations. These people make good livings without working a staff job. Freelancers create good journalism without working for media organizations.

A Cleansing Process

The Internet is in the process of cleaning inefficiency out of the media business. To demonstrate the waste of the current media model, search for coverage of any major news story on Google News. Chances are you’ll find more than 100 stories about the same topic, each reported by a different organization. Every day across the US, hundreds of reporters, editors, copy editors and layout artists duplicate each other’s efforts producing the same stories about the same topics. This duplication of effort was necessary when the only way to reach readers was on a printed page. It isn’t necessary any more.

Why are there over 100 journalists at every Presidential press conference, political convention, World Series game and Olympic event when five could report the facts equally well? Is it conceivable that a smaller number of national media organizations could do the work more efficiently by pooling resources for the big events and farming out the color stories and sidebars to a network of freelancers? Could journalists make a decent living selling these services? I think so.

The destruction of newspapers is creating pain and heartbreak for the people who are losing their jobs. Our heart goes out to them. But this process is part of a necessary cleansing process, one that will force many journalists to re-evaluate their strengths and seek new sources of income. This will ultimately bring efficiency to a market that is shedding a legacy of waste and duplicated effort. Read Chris Jennewein’s upbeat piece on SensibleTalk.com about why it’s a great time to be a journalist for inspiration.

An intern at the Tampa Tribune has posted excerpts from a remarkable speech by Editor in Chief Janet Coats to her newsroom the other day. The newspaper had just announced plans to cut its newsroom staff by about 10% or 21 people. Coats said some politically unpopular things. ““People need to stop looking at TBO.com as an add-on to the Tampa Tribune,” intern Jessica DaSilva quotes Coats as saying. “The truth is that The Tampa Tribune is an add-on to TBO.”

Coats went on to compare the newspaper industry to the music industry, which is in a death spiral of its own right now. Demand for music has never been higher, but the record industry is hemorrhaging because its business model is tied to a distribution system that is now irrelevant. Newspapers will enter a death spiral of their own if they don’t change their thinking, Coats said.

Janet Coats is one smart editor, and let’s hope her staff responds to her rallying cry: “It’s worth fighting for.” While they’re at it, find a full-time job for Jessica DaSilva, who turns in a nice piece of reporting here.

Latest Cutbacks May Not Go Far Enough

Alan Mutter has a fascinating analysis of newspaper industry layoffs. He counts up all the cuts announced this year, compares them to previous downturns and concludes that publishers are cutting back far too little. In previous slowdowns, Mutter demonstrates, publishers cut headcount roughly in line with ad declines. This time around, though, they’ve trimmed less aggressively. It could be that publishers’ decisions to cut expenses in 2005, when business was good, made them think they were ahead of the game, but they’re actually falling further and further behind as the ad business spirals downward.

This is depressing news, and it further supports the likelihood that a death spiral is beginning. Death spirals happen when revenues decline faster than expenses. Companies avoid tough decisions about cost cuts, figuring that things will get better and they want to retain their best people. When things don’t get better, they find themselves scrambling to shed workers as quickly as possible. They take a hatchet to their workforce, which scares employees and spooks investors. The best people leave and the remaining employees cower in a corner, getting little done and mostly speculating about the next round of cost cuts. This happens every time a big corporation goes off a cliff, and the same scenario is ominously forming in newspapers today.

In light of Mutter’s analysis, the Tribune Co.’s recent aggressive cost-cutting measures may be smart business. Yesterday’s 250-person layoff at the Los Angeles Times, for example, was more than 8% of the total workforce. Nevertheless, with revenues falling at a 14% clip in the first quarter, it still may not be enough. Which sucks.

• The Milwaukee Journal Sentinel will cut 130 people, or about 10% of its workforce. Management is hoping to use buyouts and attrition, but will resort to layoffs to meet the number. The Journal Sentinel just won a Pulitzer.

Getting on the Hyper-local Train…Or Not

The Santa Cruz Sentinel is the latest paper to joint the reader-generated content trend. But instead of celebrating the addition of community-contributed articles to the new “Perspectives” section, an editorial presumably written by EIC Don Miller under the dour headline of “More changes at the Sentinel” makes it clear that this was not a popular decision. “I try to keep all these changes in … perspective. Because change is what is happening,” says the writer. “And for newspapers, in whatever form they will be published and delivered, to survive, change is what we have to do.” Wow, that oughta rally the community! (via Editors Weblog)

Miscellany

A columnist for the Rocky Mountain News proposes a novel idea: shut down his newspaper. Or maybe close the Denver Post. Either/or. The current business model isn’t working, says David Milstead. Denver has a been a joint operating agreement town for eight years, but the uneasy alliance between owners E.W. Scripps and Media General hasn’t led to sustained profitability for either of Denver’s two papers. Perhaps the best course of action is to shutter the weaker paper and the weaker website. Milstead suggests that this could result in the News continuing in print while the Post serves Denver online.

If you want to see heartening examples of the innovative things newspapers are doing, subscribe to Editor & Publisher’s Best of the Web feed.

And Finally…

If the industry’s troubles have got you in a bad mood and you want to blog off some steam, change the routine a bit. Find an insult that’s  more offensive that the usual F-bomb and use language that won’t make a bad impression on the 4-year-old is in the back seat. Brush up on your scurrilous vernacular with the Shakespeare insult kit. Take it from the Bard himself and don’t be a qualling hedge-born moldwarp.

Veteran journalist Ken Reich, a 39-year employee of the Los Angeles Times, died in his sleep last night. He posted his final entry on Take Back the Times just hours before he died. Reich retired from the Times four years ago and almost immediately began blogging. His blog was notable for its fine writing, its insight into the inner workings of the paper and its withering criticism of Tribune Co. management. Reich was a friend to executives and pressmen alike and his voice of loyal opposition will be missed.

His daughter, Kathy, is asking visitors to Take Back the Times to share their memories and condolences.

(photo by FullDisclosure.net)

The Baltimore Sun Media Group announced this morning that it will lay off 100 people out of its 1,400-person staff, with a disproportionate percentage of the cuts coming from the newsroom. The unit, which owns the Baltimore Sun and several community newspapers, told the Newspaper Guild that 55 to 60 jobs would be cut on the Sun‘s editorial staff, or about 20% of total newsroom employment. The paper will offer buyouts through July 18 and then use layoffs to meet its total job reduction goal.

The Hartfort Courant will cut 57 newsroom jobs, or nearly a quarter of its total editorial staff, along with a corresponding reduction in news pages. At its peak in 1994, the Courant employed 400 journalists. With the most recent cuts, that number falls to 175.

The focus on the editorial department is interesting in light of recent criticism by Tribune Co. executives of journalist productivity. CEO Sam Zell and COO Randy Michaels made it clear in a call with investors early this month that writers and editors would increasingly be measured by the quantity of their output. They said that most papers in the Tribune portfolio would lose pages and staff in the coming months and outlined plans for a series of redesigns that kicked off with a new look for the Orlando Sentinel this week.

Tribune Co. stands alone in its focus on cutting editorial staff. Most publishers have tried to limit newsroom layoffs out of concern about harming the quality of the product. Tribune Co. executives appear to have no such reservations. Zell and Co. are making a big bet that cuts in quality won’t significantly damage circulation, which is the key to advertising revenue. In a quote on Courant.com, Journalism Professor Rich Hanley of Quinnipiac University said of the shrinking Courant, “People could look at it and say, ‘This is nothing but a shopper on steroids.”

Here’s the memo from Sun Publisher Tim Ryan to employees:

The two key factors that will sustain our company for the future are customer satisfaction and financial stability. Achieving both goals is challenging in the very best of market conditions. In the face of today’s tough economy, adapting to consumer trends while maintaining our fiscal strength is proving to be even more difficult – yet even more critical.

Our long-term strategy of going on offense and creating growth opportunities will continue to get us closer to our goals. Already this year, we generated incremental Sun circulation gains, launched a new, free daily publication, b, which is the first of its kind in the market and, through our “explore” websites, delivered highly-localized news and information for the region’s consumers.

In spite of these early, significant wins, we struggled to achieve our performance goals. So, while we will stay on the offense, we are altering our game plan. In order to align ourselves more closely with our customers, we are retooling our business model, which will include enhancements to our newspaper. In August, 2008, The Sun redesign will debut, giving readers more of what they want – a more concise newspaper with more local news, personally relevant and useful content, consumer information, watchdog coverage, more graphics and better navigation.

By adjusting our business model and redesigning our core publication, we expect to stimulate readership growth and improve our financial performance. Regrettably, our new course also requires us to reduce our workforce by about 100 positions across BSMG. These actions are necessary for us to remain competitive and win in the future, and will enable us to create new targeted print and interactive media for the marketplace that satisfy both consumers and advertisers.

Transition Timeframe

The workforce reduction will include a combination of closing open positions, attrition, and voluntary and involuntary separation plans according to this timeline:

• Friday, June 27 – Voluntary separation packets will be available to all employees (availability to Guild-represented employees is being negotiated with the Guild). Volunteers will have two weeks, through Friday, July 11, to apply.
• Friday, July 11 – Thursday, July 17 – Volunteers will be notified whether their applications were accepted or not; decisions on involuntary separations will be made based upon voluntary results.
• Â Friday, July 18– Employees who are part of the involuntary separation plan will be notified. Voluntary and involuntary separations will occur in early August.

Human Resources, your leadership and plan documentation will provide further detail of plan terms, including compensation, savings/retirement funds and medical benefits. While Tribune does not have a formal severance policy, the formula that the company is using to determine benefits payable to employees affected by the current workforce reductions is more generous than any formula that the company may use after 2008.

Moving Forward

It is extremely difficult for all of us to lose colleagues and friends. However, while we cannot control the current economy, we can control what action we take to create a stronger future. We are, by far, Baltimore’s media leader, and through ongoing innovation to introduce new and exciting media for our marketplace, we will maintain our competitive position.

The leadership team and I will continue to keep you informed throughout this transition. Thank you for your patience, continuing contributions and commitment to our company

Tim

Another Boston Massacre is in the works, with the Herald and Globe both planning cost cuts. The Herald is taking the worst of the blows, announcing that it will lay off between 130 and 160 press operators, electricians and other production workers this summer and outsource its printing to presses in two towns, one of which is nearly 90 miles from its headquarters. The current presses are creaking with age and the paper has been exploring alternatives for some time, including possibly contracting with the rival Globe for printing (that didn’t happen).

Herald Publisher Patrick Purcell made a daring bid for expansion in 2001 with the purchase of the suburban newspaper chain Community Newspapers Co., but he sold the business five years later. The Herald is the perennial also-ran to the Globe in Boston and the loss of so many staffers is a major blow. The move to a printing press in faraway Chicopee also can’t help the paper’s ability to provide timely scores to the sports-crazed Boston fans. Neither of the accounts in the Herald or the Globe mentioned the size of the Herald’s total employee base.

The Globe’s news was less dire: it has asked the unions to agree to a 10% wage cut and is threatening to consolidate printing plans, a move that would strike the unionized workers hardest. The union is pissed, but there may be little they can do. The economic climate doesn’t leave them much negotiating room. The Globe has already been through two rounds of layoffs in the last three years.

Orange County Register Tests Offshoring

The Orange County Register will steal a page from the high tech and customer support industries and outsource some copy-editing to India on a trial basis. The one-month experiment is the first of its kind that we’re aware of, although some newspapers have reportedly toyed with covering routine local government meetings remotely in recent months. Officials at Orange County Register Communications made every effort to characterize the project as experimental and non-threatening to US-based employees, but that’s what tech executives said a decade ago when their industry was first considering offshore outsourcing. Forrester Research now estimates that 450,000 tech jobs a year will migrate overseas by 2012.

There’s no reason for the Register not to do this. Most educated Indians already speak English better than most educated Americans, and minor cultural nuances can be dealt with by domestic editors. What surprised us about this deal is that the Register limited it to one month. It will be impossible to assess success in that short a time, so our guess is that the Register either isn’t serious about the idea deal or that, more likely, its management is trying to minimize the negative public relations impact. In our opinion, it’s a bold approach that could quickly be imitated by many others.

Miscellany:

• When news leaked last week that the Orlando Sentinel was planning a major design overhaul as part of a campaign to change the look and feel of many of the papers in the Tribune Co. portfolio, the Death Watch suggested that readers would care less. Our skepticism has apparently been borne out, as Alan Mutter reports. Less than .05% of Sentinel readers voiced an opinion over the redesign. While eight people felt strongly enough to cancel their subscriptions, the 126 comments voiced in the first couple of days amount to a drop in the bucket. All told, the change is much ado about nothing.
• Palm Beach Newspapers Inc., owner of The Palm Beach Post, the Palm Beach Daily News, the Florida Pennysaver and La Palma, will cut 300 workers from its 1,350-person payroll. The company said it hopes to achieve the reductions through attrition and buyouts instead of layoffs. However, the likelihood of reducing staff by 22% through those means is low. “We are the last major Florida newspaper to implement staff reductions,” the publisher told the Post. However, the percentage of cuts is by far the largest of any nearby paper.
• The newspaper industry has always been able to take some consolation in the fact that (presumably older) C-level executives would continue to prefer newspapers to online alternatives. However, a new study by a Forbes and Gartner finds the opposite. The research determined that the percentage of senior executives who choose the Internet over newspapers as their primary source of business information has increased 37% in the last four years, while preference for newspapers and dropped by the same amount. Quoting from the Editor & Publisher account: “Before starting the work day, C-level executives prefer to access the Web rather than read the newspaper. The number of C-level executives who prefer the Internet first thing in the morning has increased 22% since 2004, while those who prefer to read the newspaper first thing in the morning has declined 11% over the same time period. C-level executives consume media on the Web more than any other medium.”
• Lost in the shuffle of McClatchy’s dramatic cost-cutting moves last week was the news that the Clovis Independent, a weekly serving the Fresno, CA region, would be closed after 103 years. Weeklies tend to rate little attention from big publishers or the media, but they are often tightly woven into the culture of their communities, especially after a century of operation.
• Danny Sanchez reminds us that newspapers are good for more than just reading. You can use them to remove odors from wet tennis shoes, for example. We never knew that!

Here’s the redesigned home page of the Orlando Sentinel. This will apparently serve as a model for redesigns of several other Tribune Co. properties. What do you think? Ping us in the comments area below.

Tribune Co.’s Chief Innovation Officer Lee Abrams has already weighed in and HE LOVES IT! The Wall Street Journal explains the background of the ambitious company-wide effort and says the South Florida Sun-Sentinel and the Baltimore Sun are next on the redesign list, followed by the Chicago Tribune. Whether a visual makeover can repair the problems all these papers are suffering in their core markets is a matter of speculation, but there’s no doubt Zell & Co. are trying some new tactics.

A Modest Proposal for Miami

Could Miami become a one-newspaper town? Alan Mutter thinks so, and he puts forth a persuasive argument for restructuring the Herald and the Sun-Sentinel under a joint operating agreement (JOA). JOAs were a 1970s gift from the government to the newspaper industry that enabled competing newspapers to consolidate operations and do business as a legal duopoly. For the last 30 years, it’s been a license to print money. Today, it may be a lifeline to publishers whose only alternative is closure. Unfortunately, JOAs have also historically been a license for publishers to become fat and complacent as competition is removed from the landscape. They’re one of the reasons the industry is in so much trouble today.

Editors Debate Newspaper Survival

A group of Chicago journalists got together last week to discuss the topic of “Will Newspapers Survive?” The panelists were all working reporters and editors who are realistic about the future and their attitudes were strikingly sanguine, as reported by Chicago Reader. Tom McNamee, editorial page editor of the Chicago Sun-Times, offered the most dispassionate perspective: “We may not all be making fortunes. Our 30 percent profit days are over. We may not survive. But you know what — that’s our problem. Not to say that the world’s in crisis because newspapers may not survive in the form that we recognize now.” Other panelists blamed the business side for not innovating quickly enough. The editors are psyched to change, they said, but the sales and management suits are too stuck on their historic profit margins. (via Editors Weblog )

Miscellany

• Washington Post Executive Editor Leonard Downier, who led the newsroom to 25 Pulitzer Prizes, will step down after 17 years in the position and 44 years with the newspaper. Downie, 66, said new blood is needed to accommodate rapid changes in the business. “So much further change now needs to take place at the newspaper and Web site, and someone else should be tackling that,” he said. He is a true class act.
• The Georgetown (Kentucky) News-Graphic will switch from afternoon to morning delivery, saying that the cost benefits are compelling in this day of stratospheric gas prices. Publisher Mike Scogin notes “In the outer parts of the county…carriers sometimes travel several miles to deliver just a couple of newspapers.” (via Fade to Black )
• As the Daytona Beach News-Journal waits to be sold, its publisher talks straight to the staff. Gone are 99 positions and a whole slew of tasks are being transferred to other departments or outsourced entirely. Bureaus will close, stock tables will be cut and business sections will be consolidated. It all adds up to one big morale hemorrhage, but the News-Journal publisher’s message is realistic: “Despite the unavoidable disruptions and distractions this week, we still have jobs to do, and it is in everybody’s best interest that we do them professionally and well.”
• If your newspaper is considering a 10% staff cut, be glad you aren’t in Taiwan. The China Times will lay off almost half its staff due to the weak economy.
• It seems like you could spend all day just reading gossip and analysis blog (like this one) about the newspaper industry. Danny Sanchez has gone and assembled a pretty fine directory of them.

And Finally…

The editors of the Washington Post have recently been quoted as saying that the paper could do with fewer copy editors. The Post‘s Gene Weingarten has some fun with that idea. Thanks for reminding us that the wizards of grammar and spelling do play a vital role. (via Mark Hamilton)

Could Rupert Murdoch save the US newspaper industry? He may have his chance sooner than anyone imagined because things are worse than anyone predicted

The New York Times sums up the industry’s recent gruesome financial news and speculates that continued losses are “raising serious questions about the survival of some papers and the solvency of their parent companies.” Richard Perez-Pena’s piece says that 14% revenue declines in May against already weak 2007 numbers were worse than anyone expected and no one knows where the bottom is. While analysts agree that the bleeding has to stop sometime, they have no idea how bad things will get before that time arrives. With debt defaults looming, the most likely scenario is that weak players will consolidate with stronger ones.

If consolidation is the trend, then who will be the consolidators? Looking at the current sorry lineup of candidates, News Corp. looks like the only logical winner. If Rupert Murdoch plays his cards right, he could end up sitting on top of a much bigger empire than anyone envisioned when he made his daring bid for The Wall Street Journal less than a year ago.

Murdoch and his COO, Peter Chernin, were at the Cannes International Advertising Festival last week and were asked about the industry downturn. “We are going to plough right ahead and hopefully increase our share of the market wherever we can,” Murdoch said. Chernin added that it was “time to take market share if weaker competitors go away.”

That time may be soon. There is widespread anticipation that either Tribune Co., McClatchy and/or Philadelphia Media Holdings will default on loan covenants this year, which would immediately put them in play. Journal Register and Sun-Times Media Group are on life support. These companies collectively represent scores of US newspapers that could conceivably be bought for pennies on the dollar within the next year.

And who better to buy them that News Corp.? The company has a diversified media business with strength in its Fox television holdings and MySpace social network. Murdoch is confounding his critics by messing with the inviolate Wall Street Journal editorial model and actually gaining market share against The New York Times, which must be freaking out right now. Sure, Murodch walked away from the bidding for Newsday, but perhaps he’s simply waiting for a much bigger opportunity: the chance to own a publishing empire that includes Chicago, Los Angeles and much of the southeastern US. With Tribune and McClatchy, he’d have that. For a few dollars more, he could add Journal Register’s extensive midwesern holdings and the Philadelphia Inquirer.

With that kind of throw weight, Murdoch could do some interesting things to leverage economies of scale. And those properties could do a lot worse than to have Rupert as the boss. When you consider the alternative scenarios of bankers or professional investors taking over businesses they know nothing about, then the prospect of ownership by a savvy and successful media tycoon looks pretty palatable. As controversial as Murdoch’s tactics sometimes are, the man has a remarkable track record and a vision for the future of media. He is also one of the few publishers in the world who is investing in newspapers right now. Over the next 12 months, Murdoch could have an unprecedented opportunity to turn his vision into action on a much larger scale.

What do you think? Please weigh in with your comments.

Continuing fallout from McClatchy’s 1,400-person layoff last week: PaidContent.org’s Joseph Weisenthal remarks on all the attention to CEO Gary Pruitt’s pay, noting that you have to offer a competitive salary to get a good executive these days. He’s right. Tempers also flared at the Raleigh News & Observer over an executive’s decision to stay at a $210-per-night hotel on a recent visit to the paper just before the layoffs. The Raleigh Chronicle has the dirt, including links to executive blog postings on the topic. The Chronicle also claims that, in blaming the Internet for the company’s fortunates, McClatchy execs failed to note the impact of a strong alternative publishing market on the N&O‘s business. Editor & Publisher‘s Mark Fitzgerald analyzes McClatchy’s $4 billion debt, which seemed worth taking on at the time but which, in retrospect, was horribly timed. Still, McClatchy may be better positioned than most publishers to survive the industry’s collapse, he concludes. Analysts say it’s one of the better managed companies in the business.

Meanwhile, McClatchy editors and columnists weighed in on what comes next. Dave Zeeck at the Tacoma News quotes Mark Twain reasoning that there’ll always be jobs for reporters. Sacramento Bee Editor Melanie Sill is defiant. She points out all the good work the paper is still doing and says the loss of seven editors will just force everyone to be a little more innovative. Meanwhile, Miami Herald ombudsman Edward Schumacher-Matos takes the novel approach of asking readers to tell him what choices they think the paper should make. And Bob Ray Sanders of the Fort Worth Star Telegram compares the whole thing to a funeral in a dour, backward-looking essay.

And in Non-McClatchy News…

Add Hearst Corp. to the list of publishers struggling with the shifting winds of the industry. The publisher of 15 dailies and more than 200 magazines lost its CEO of 15 years last week over an apparent policy dispute with the board. Hearst has managed to make some smart bets online over the last decade, buying it a degree of insulation from the industry’s troubles, but with its San Francisco Chronicle serving as the poster child for newspaper collapse, it perhaps can’t change strategy quickly enough. Poynter’s Rick Edmonds speculates about what’s been going on in the Hearst board room and remarks upon Hearst’s unusual management trust, which expires upon the death of the last family member who was living at the time of William Randolph’s death in 1951.

By the way, where’s Belo Corp. in all the recent layoff activity? Jeff Siegel notes that last week’s bloodbath at the Fort Worth Star-Telegram should be putting pressure on the Dallas Morning News to cut back, but owner Belo has been strangely silent. So the stock market is speaking, knocking Belo shares about 6% lower last week. If the Star-Telegram can cut a sixth of its editorial staff with impunity, can the Morning News afford not to notice?

Forecasts of the impending death of the Sun-Times Media Group are greatly exaggerated, at least according to company executives. The struggling company, which has been saddled by the misdeeds of former executives, has $120 million in the bank and is ready for the worst, top managers told shareholders last week. In fact, CEO Cyrus Freidheim actually believes newspapers will rebound when the economy does in a year or two. His optimism is striking in light of the company’s recent announcement that it is “exploring strategic alternatives,” which is a euphemism for finding a buyer.

Tribune Exec’s Memos Invite Staff Derision

When chief scientists from Google speak, the technology media hang on their every word. Contrast that to Tribune Co., whose executives increasingly look like the village idiots of the newspaper world. The company’s chief innovation officer, Lee Abrams, is fond of sending memos about how the industry can reinvent itself. They’re a rambling brain dump from someone whose lack of insight is almost painful to read. Now parodies are springing up, and P.J. Gladnick excerpts a few from the Poynter discussion forums. Read one of Abrams’ original works on LA Observed before looking at the knock-offs. This is some great satirical writing which is unfortunately being shared amongst only a few insiders. Steve Outing comments that Abrams probably disenfranchised his audience at the outset by admitting that he had “NO idea that reporters were around the globe reporting the news.” Outing titles his blog post bluntly: “Are we watching a Tribune train wreck in progress?”

Layoff Log

• The Eugene Register-Guard will cut its work force by 30 employees, or 12 percent of its 260-person full-time workforce. The paper will try to achieve the reductions through a combination of buyouts and unfilled vacancies, although the publisher wouldn’t rule out layoffs.
• The Cleveland Plain Dealer isn’t laying off – yet. Although two news outlets have reported that dozens of jobs have been cut, Publisher Terrance Egger issued a denial, saying the reports are “100% not accurate.” However, the debate may be a matter of semantics. “Given the current economic conditions and trends, we cannot maintain the current expense base and stay viable,” Egger told Editor & Publisher. A local alternative reporter wrote on his blog last week that executives have told staff that they plan “to cut 35 pages a week from its news pages and 20 percent of its workforce.” The paper employs 304 newsroom staffers.

Miscellany

Miami Herald columnist Leonard Pitts shows why the people who run newspapers now are not the ones who will reinvent the industry. In a column that is striking in its lack of insight into the troubles facing his own industry, Pitts announces that he’s changed his thinking and now believes that maybe online should come first, that newspaper websites should be the principal online destination for local residents and that people should pay for that service. This was conventional industry wisdom circa 2001. Then Pitts notes that he’s come to this view reluctantly and mainly because he’s afraid of losing his job. Unfortunately, folks like Leonard will lose their jobs anyway because they’re being dragged kicking and screaming into the future. Cynical attempts at defining a solution only make them look more clueless. And solutions like those he proposes are what got the industry in trouble in the first place.