The pending purchase of the San Diego Union-Tribune by a private equity firm opens an interesting new chapter in the newspaper industry’s history. Not much is known about Platinum Equity other than the company has completed more than 100 acquisitions in the last 15 years and one of its partners is a successful newspaper owner. For a company that has spent $27.5 billion on acquisitions, it’s website is almost defiantly sparse, as if to reinforce that it doesn’t have to tell anybody anything it doesn’t want to.

Based on our experience with similar takeovers in the past, here’s a short FAQ of what we think you can expect. Also be sure to check out Alan Mutter’s analysis for the views of a professional investor.

What’s a private equity firm?

It’s basically a group of rich people who pool their money and invest in companies that they think are undervalued. They bring their expertise to bear to quickly grow the value of the assets they acquire and then sell them, hopefully at a substantial profit. There are a lot of private equity companies out there, but you don’t hear much about them because they prefer to work in the background and they’re largely unregulated.

Why did this one buy the Union-Tribune?

For starters, it probably got a great price. Private equity firms look to unlock asset value and Platinum Equity must believe that it can quickly make changes that will substantially increase the value of the paper. What those changes are is still unknown.  Because private equity firms don’t have to tap into the lending market to any great degree, they are among the few institutions that are capitalized to make big purchases right now. That’s another reason we can presume they got a great price.

Platinum Equity would not have bought the Union-Tribune unless the partners believed that the business was undervalued.  That’s another indication that perhaps the market has hit bottom.  The big question is what changes the partners believe they have to make to increase the value of the asset.  That’s going to be the really interesting question

So what’s going to happen now?

In the short term, not much.  The new owners will spend the next couple of months on paperwork to get the deal done. However, things are likely to happen pretty quickly after that.

The partners in these private equity firms are usually decisive, no-nonsense people who don’t fear making tough decisions.  It’s likely there will be downsizing and probably a lot of it since the new owners don’t have the sentimental attachments of the current owners.  One thing is for sure: the new owners will treat the Union-Tribune as a business and probably a short-term business at that.  Professional investment firms rarely work on timelines of more than three to five years.  If they haven’t sold the business and doubled their money by that time, the deal is considered a failure

Is this good for the Union-Tribune? 

It probably is. Platinum Equity spokesman Louis Samson said the right things in endorsing the value of the Union-Tribune brand: “We will bring a strong operational focus that helps ensure the Union-Tribune not only survives in this market, but thrives.”  This is good news, because professional investors are as likely carve up and destroy a company as readily as they can build one.  It appears that the new owners are focused on stabilizing and supporting the brand, but that doesn’t mean they will avoid hard decisions.   It should be noted, by the way, that the company’s press release about the acquisition makes no reference to continuing the Union-Tribune s as a newspaper

Is this good for the newspaper industry?

Yes, because it is one sign that the market has become attractive again. With the exception of a few small papers in Connecticut, nobody has bought a major newspaper in over a year.  The fact that someone finally did buy one may open the door for other investors to come forward. 

Platinum Equity’s moves  certainly will be closely watched.   It will also be interesting to see how a professional investment firm treats its new asset.  While Platinum Equity has some experience in the market in the person of partner David Black, it is not a professional publisher.  The partners will be looking at the Union-Tribune as an asset and trying to maximize the value of the asset.  In other words, their minds won’t be clouded by assumptions of what a newspaper should be.  It will be just a business to them.  Since the problems in the newspaper industry are fundamentally business problems, it will be interesting to watch what a professional management firm does to solve them.

What would you do if you were an employee of the Union-Tribune right now?

I’d think hard about how to justify my value to the organization, not in terms of my length of service or number of awards but rather relative to the company’s bottom line.  When business managers with no newspaper background took over at Tribune Co., they started measuring journalist productivity by column inches of copy.  The new owners at the Union-Tribune probably aren’t that dense, but they will almost certainly take a financial analyst’s approach to managing the operation.  Employees who can’t demonstrate why they are critical to the business will be most at risk, as will those who carry  the highest salaries.

Many visitors to this website also frequent Reflections of a Newsosaur, a blog written by Alan Mutter, who is “perhaps the only CEO in Silicon Valley who knows how to set type one letter at a time.”

Mutter was a reporter and editor at major metro dailies for 20 years before transitioning to a successful career as a technology CEO in Silicon Valley. His blog combines an executive’s financial acumen with a journalist’s inquisitiveness. Newsosaur offers insight on the media industry’s financial condition that you just can’t get anywhere else. Not surprisingly, it is one of the top 10,000 blogs worldwide, according to Technorati.

Mutter particularly enjoys challenging conventional wisdom with mathematical fact. Early this week he poked holes in the recent excitement over micropayments by creating a likely revenue scenario. Using The New York Times as a subject, he concluded that micropayments would bring in less than $4 million a year, or enough to pay about 2% of its staff.  For small papers, they would amount to beer money. Pundits have come to rely on Mutter for reality checks like that.

Knack for Numbers

His financial analyses are his signature item. Mutter sounded the alarm about the newspaper industry’s growing debt load more than four years ago, and he has methodically documented the damaging role that debt has played in limiting the industry’s options. His Default-O-Matic documents the financial viability of major players, giving early warning of who’s likely to be next off the cliff.

A complete financial restructuring of the industry is likely, Mutter says. Debt has painted publishers into a corner and many will have no choice but to walk away from their obligations and let the banks and investors sort it out. It’s not that the core business model is so bad, he says. It’s that their financials stink.

Having reader Newsosaur for a couple of years, we thought it would be interesting to find out more about the person behind it. So we called up Alan Mutter and spent an hour on the phone with him. Our complete, lightly edited interview is below for you to stream or download.

Show Notes

Download the interview (right-click and save)

Stream the interview:[audio:Alan_Mutter_NDW_Interview.mp3]

Gatehouse Media and The New York Times Co. have settled an inane lawsuit over Boston.com’s use of RSS feeds and story fragments from Gatehouse publications. You can read the muddled settlement term here (courtesy of Jeff Jarvis) and a very good analysis by Mark Potts here. It’s a good thing this suit didn’t go to court because it would have distracted both litigants – not to mention a few dozen journalism bloggers – from more important issues.

The conventional wisdom is that Gatehouse shot itself in the foot in this case by suing to end a practice that was driving traffic to its own websites from a much more visible competitor. In our opinion, Gatehouse had a legitimate gripe, but its mistake was paying lawyers to deal with a problem that could have been easily – and more beneficially – solved with technology. Basically, Gatehouse missed the opportunity to turn lemons into lemonade.

Instead of issuing a cease-and-desist, Gatehouse could have simply intercepted any traffic referred from a Boston.com URL and redirected it to a landing page. That page could have been used for anything Gatehouse wanted, such as a subscription promotion or even a redirect to the home page of the publication being linked to. Any 12-year-old can program a Web server to do this. So it’s perplexing why Gatehouse would want to bring in expensive and clueless attorneys to craft a solution that is so convoluted that no one will even pay attention to it two years from now.

Gatehouse actually had legitimate concerns about Boston.com’s use of its headlines and story summaries. The Boston Globe, which is Boston.com’s parent, was arguably compensating for its own cutbacks in suburban coverage by harvesting the work of a competitor. The problem is that challenging that practice legally is like trying to boil the ocean. Linking and summarizing are so intrinsic to the Web that legal action would be unenforceable and horribly expensive.

Had the suit actually gone to trial, everyone from the ACLU to the Electronic Frontier Foundation would have weighed in with an opinion and Gatehouse would have spent millions of dollars it doesn’t have to fight a battle that is probably costing its newspapers at most a few thousand dollars a year in lost revenue. It’s good that the Times Co. decided to just cave and settle. The agreement does no real harm to Boston.com and gives a few Gatehouse executives satisfaction. The only people who win are – ugh – the lawyers.

There’ll Always Be a France

People who think the U.S. government should subsidize newspapers might want to keep an eye on what’s happening in France, where the government has stepped up its financial support of the beleaguered newspaper industry. The French government already subsidizes newspapers to the tune of $360 million a year and now it will throw another $260 million in the annual kitty in the form of increased government ad spending and an unusual promotion that will give every 18-year-old a free newspaper subscription, presumably until he or she is no longer 18.

Keep in mind that France is about as much like the US as Mars is like the Earth. The French economy is highly regulated and the 35-hour work week is almost a state religion. The difference in perspective is well represented by this quote from President Nicolas Sarkozy: “It is the state’s primary responsibility to respond to an emergency, and there is an emergency caused by the impact of the collapse of advertising revenue.” Nevertheless, it’ll be interesting to see if government subsidies have any uplifting effect whatsoever on the French newspaper business, which appears to be in even worse shape than ours. We’re not betting on it.

Miscellany

Martin Langeveld has a terrific post at the Nieman Journalism Lab about why newspapers should get into social networking. Unfortunately, only about 10% of newspaper websites are doing anything in this area, according to one study. That’s puzzling, since newspapers can connect with their audiences geographically, which is something very few Web properties can do.  We’ve wondered why sites like Going.com exist when newspapers are naturals to provide these location-based linkup services. Langeveld suggests that publishers are still having trouble shifting from the role of oracle to that of facilitator. The idea of enabling conversations instead of dominating them is still foreign. He’s probably right. See his post for an impressive list of links to resources that help explain how social media can help build community.

When Journal Register Co. bagged out of Connecticut earlier this month, one layoff victim decided to do something. Melissa Marinan, who sold advertising for JRC’s Imprint chain for 18 years, raised money from her dad and started her own local weekly called The Valley Press. She even recruited the former editor of the Imprint newspapers and hired a full-time reporter. Marinan will take care of selling advertising. The first issue of the free paper hits residents’ mailboxes on Feb. 5.

Reed Business Information is cutting about 7% of its workforce. The company publishes Variety and Publishers Weekly magazines, among others.

Thank you, Tim Windsor. The respect is mutual.

And Finally…

Nigeria’s Vanguard newspaper reported matter-of-factly that police in Lagos implicated a goat (left, although not the actual goat in custody)  in an attempted auto theft, saying that one of the thieves transformed himself into the animal in an attempt to avoid arrest. The thief was apprehended nonetheless, and now will either have to change back to a person or a spend the rest of his life in the, um, pen. If you don’t believe us, this story has been carried on hundreds of news sites. Oops, Gatehouse, there are those headlines and summaries again.

We sorted through our 147 entries of 2008 to come up with the stories that surprised us, delighted us or made us shake our heads in disbelief. We’ll present them as a series of posts over the next few days in hopes that you’ll find them to be as memorable as we did. Happy New Year!

Management Ineptitude

The Cleveland Plain Dealer wrote a case history for the how not to handle a layoff. Staff were told not to come in to work until after 9:30 a.m. on Dec. 2. Laid-off employees were notified by phone. Those who didn’t get a call were expected to promptly come to the office. Management then arranged for laid-off employees to clean out their desks on a Saturday morning and to enter the building from the back where they wouldn’t attract the attention.

In March, Tribune Co. CEO Sam Zell was caught on video telling one of his reporter employees, “F**k you.” He muttered the comment under his breath at the end of a response to an Orlando Sentinel’s reporter’s pointed question about how newspapers can thrive by giving readers what they want when all readers want is stories about puppy dogs.

The Chinese Daily News had to pay $5.2 million for allegedly forcing reporters to file five stories a day and to rush between news conferences and interviews. Ad quotas were unreasonably high and production workers were forced to labor nonstop. Reporters testified that they had to work six days a week, 12 hours a day, but weren’t able to complain because of pressure and the culture of intimidation.

Several publishers chose Valentine’s Day to announce major layoffs.

The Denver alternative weekly Westword reported that staff members of the Longmont, Colo. Times-Call newspaper were invited to the publisher’s holiday party – as parking valets. Staffers reportedly earned what they got for their day jobs, only they spent their time parking the cars of rich people in attendance.

Los Angeles Times publisher David Hiller hatched a plan to move the paper’s monthly magazine completely under the control of the advertising department without telling the newspaper’s editor. Hiller reportedly hired a new editor and planned to replace the magazine’s entire nine-person editorial staff without telling anyone on the editorial side. Hiller resigned a few weeks later.

In June, Tribune Co. launched a campaign to measure journalist productivity by the number of column inches of copy they produced. Noting that Los Angeles Times reporters turn out about one-sixth as many column inches as their counterparts in Hartford or Baltimore, Tribune COO Randy Michaels issued a warning to writers and editors. “When you get into the individuals, you find out that you can eliminate a fair number of people while eliminating not very much content,” he said.

Slate’s Jack Shafer analyzed the 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 found that that the anonymous quotes were either obvious, self-serving or contributed nothing to the story.

Killing the Host

The Newspaper Guild in Honolulu printed up 100,000 cards for readers can send in to cancel their subscriptions in event of a strike. The thinking was that it was better to take down the Advertiser and cause a whole lot more people to lose their jobs than to have 54 employees treated unfairly.

The union at the Los Angeles Times mounted a campaign to drive out of existence the dwindling number of businesses that advertised in the paper because it said the Times wouldn’t negotiate in good faith.

Oh-Oh

A Google search bot triggered a 75% plunge in shares of United Airlines over the weekend when it assigned a Sept. 6, 2008 date to a six-year-old story about United Airlines’ bankruptcy filing.

Editors at the Wine Spectator bestowed a coveted Award of Excellence on a non-existent restaurant. The prank was dreamed up by Robin Goldstein, who concocted a fake website with recipes from an Italian cookbook and a reserve wine list “largely chosen from among some of the lowest-scoring Italian wines in Wine Spectator over the past few decades.”

The Tampa Bay Tribune quickly backtracked on a series of design changes as some 300 readers canceled subscriptions and more than 3,000 called or wrote e-mails of protest. “Turns out, we had really disrupted the way people communicate with each other in the morning,” said executive editor Janet Coats.

The San Francisco Examiner caught a delivery man for the Palo Alto Daily Post apparently stealing copies of the Examiner as he delivered his own newspaper. When confronted and asked to open his trunk, the man had more than 1,000 copies of the rival newspaper stashed there.

The Chicago Sun-Times ran a contest for the best reader-submitted video opposing Sam Zell’s proposal to sell naming rights to the Chicago Cubs. The winner was a college student who interns at the rival Tribune. The Trib had some fun with winning its rival’s contest in this clip, which also includes the winning video.

We sorted through our 147 entries of 2008 to come up with the stories that surprised us, delighted us or made us shake our heads in disbelief. We’ll present them as a series of posts over the next few days in hopes that you’ll find them to be as memorable as we did. Happy New Year!

Management Ineptitude

The Cleveland Plain Dealer wrote a case history for the how not to handle a layoff. Staff were told not to come in to work until after 9:30 a.m. on Dec. 2. Laid-off employees were notified by phone. Those who didn’t get a call were expected to promptly come to the office. Management then arranged for laid-off employees to clean out their desks on a Saturday morning and to enter the building from the back where they wouldn’t attract the attention.

 
In March, Tribune Co. CEO Sam Zell was caught on video telling one of his reporter employees, “F**k you.” He muttered the comment under his breath at the end of a response to an Orlando Sentinel’s reporter’s pointed question about how newspapers can thrive by giving readers what they want when all readers want is stories about puppy dogs.
 

The Chinese Daily News had to pay $5.2 million for allegedly forcing reporters to file five stories a day and to rush between news conferences and interviews. Ad quotas were unreasonably high and production workers were forced to labor nonstop. Reporters testified that they had to work six days a week, 12 hours a day, but weren’t able to complain because of pressure and the culture of intimidation.

Several publishers chose Valentine’s Day to announce major layoffs.

The Denver alternative weekly Westword reported that staff members of the Longmont, Colo. Times-Call newspaper were invited to the publisher’s holiday party – as parking valets. Staffers reportedly earned what they got for their day jobs, only they spent their time parking the cars of rich people in attendance.

Los Angeles Times publisher David Hiller hatched a plan to move the paper’s monthly magazine completely under the control of the advertising department without telling the newspaper’s editor. Hiller reportedly hired a new editor and planned to replace the magazine’s entire nine-person editorial staff without telling anyone on the editorial side. Hiller resigned a few weeks later.

In June, Tribune Co. launched a campaign to measure journalist productivity by the number of column inches of copy they produced. Noting that Los Angeles Times reporters turn out about one-sixth as many column inches as their counterparts in Hartford or Baltimore, Tribune COO Randy Michaels issued a warning to writers and editors. “When you get into the individuals, you find out that you can eliminate a fair number of people while eliminating not very much content,” he said.

Slate’s Jack Shafer analyzed the 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 found that that the anonymous quotes were either obvious, self-serving or contributed nothing to the story.

Killing the Host

The Newspaper Guild in Honolulu printed up 100,000 cards for readers can send in to cancel their subscriptions in event of a strike. The thinking was that it was better to take down the Advertiser and cause a whole lot more people to lose their jobs than to have 54 employees treated unfairly.

The union at the Los Angeles Times mounted a campaign to drive out of existence the dwindling number of businesses that advertised in the paper because it said the Times wouldn’t negotiate in good faith.

Oh-Oh

A Google search bot triggered a 75% plunge in shares of United Airlines over the weekend when it assigned a Sept. 6, 2008 date to a six-year-old story about United Airlines’ bankruptcy filing.

Editors at the Wine Spectator bestowed a coveted Award of Excellence on a non-existent restaurant. The prank was dreamed up by Robin Goldstein, who concocted a fake website with recipes from an Italian cookbook and a reserve wine list “largely chosen from among some of the lowest-scoring Italian wines in Wine Spectator over the past few decades.”

The Tampa Bay Tribune quickly backtracked on a series of design changes as some 300 readers canceled subscriptions and more than 3,000 called or wrote e-mails of protest. “Turns out, we had really disrupted the way people communicate with each other in the morning,” said executive editor Janet Coats.

The San Francisco Examiner caught a delivery man for the Palo Alto Daily Post apparently stealing copies of the Examiner as he delivered his own newspaper. When confronted and asked to open his trunk, the man had more than 1,000 copies of the rival newspaper stashed there.

The Chicago Sun-Times ran a contest for the best reader-submitted video opposing Sam Zell’s proposal to sell naming rights to the Chicago Cubs. The winner was a college student who interns at the rival Tribune. The Trib had some fun with winning its rival’s contest in this clip, which also includes the winning video.

We really must get back to our day job at some point, but this is too damned interesting. We spent the early morning hours scouring our favorite blogs for reaction to yesterday’s blockbuster announcement in Detroit. There was plenty:

Mark Potts likes the Detroit model in concept, saying it could be a test bed for other innovative Gannett micro-destinations like MomsLikeMe and Metromix. But he stresses that the Detroit consortium needs to move with speed and agility to launch new services and not spend too much time fretting about how save print. “As of this week, Detroit may be the nation’s most interesting laboratory for online news,” he writes.

Steve Outing is more pessimistic. While he applauds the reduction in home-delivery frequency, he thinks charging for the Monday, Tuesday, Wednesday and Saturday editions is a bad idea and that the “digital replica” of the print editions is badder. He’s also disappointed there wasn’t more vision outlined around a mobile strategy. And he thinks the whole plan will be tweaked pretty quickly as reality sets in. He’s probably right.

Poynter Media Business Analyst Rick Edmonds has an exceptionally cogent and impartial analysis of Detroit Media’s chances of success. He notes that daily newspapers typically derive as much as half their ad revenue from Sunday editions and then spread the costs across the rest of the week. The gamble in Detroit is that reader flight precipitated by these changes won’t cancel out the cost-saving benefits.

Newspaper executives have been talking about this idea for five years, but no one has done anything with it because of the much-feared-but-never-tested theory that you don’t mess with the daily news habit. Now Detroit has no choice, and if they can pull it off, they’ll set a course for the entire industry. Edmonds likes their chances. And he adds, perceptively, “An upside is that if readers and advertisers mostly accept the change, that could pave the way to a full flip to online-only several years hence.”

Speaking of the daily news habit, Mark Potts leaves no question about where he stands. “Oh, puh-leeze,” he writes in response to an unnamed Gannett executive’s paean to the virtues of dailiness. “That thinking…is proof that newspapers are still living a fantasy that their products are the centers of their customers’ news and information universe…

It’s simply not that reducing home delivery will drive readers to other sources of news: They’re already there! They’ve been making the switch for years, relying more on the Web…”

BTW, The Detroit Free Press live-blogged the press conference. And you can watch all 42 minutes of it here.

And finally, why aren’t there any female newspaper pundits? Suggestions are welcome.

Miscellany

Canada’s largest newspaper publisher is cutting 10% of its workforce. Sun Media will eliminate 600 positions and restructure its operations in western Canada, Ontario and Quebec. The reasons are all the usual ones everyone else cites. As Mark Hamilton has pointed out, Canada has about one-tenth the population of the US, which should give you an idea of how big this cutback really is.

Veteran newspaper publisher Martin Langeveld has several predictions for 2009. On the whole, he sees newspapers’ prospects improving after a dreadful start. Among his more notable forecasts:

• No other newspaper companies will file for bankruptcy.
• Some major dailies will switch their Sunday package fully to Saturday and drop Sunday publication entirely.
• At least 25 daily newspapers will close outright
• A reporter without an active blog will start to be seen as a dinosaur.

And this one that we didn’t get at all. Please to enlighten:

• Some innovative new approaches to journalism will emanate from Cedar Rapids, Iowa.

From the AP: “The American Society of Newspaper Editors scheduled an April vote in Chicago to become simply the American Society of News Editors. Under the proposed changes, which require membership approval, editors of news Web sites also would be permitted to join, as would leaders of journalism programs.” Jeff Jarvis chuckles.

The Portland Oregonian will stop delivering to homes, stores or news boxes in the Eugene-Springfield area, which is the second largest metro region in the state. So it’s not really the Oregonian so much any more, is it?

The daily weekly Bristol Press in Connecticut will fold in mid-January if a buyer can’t be found. Owner Journal-Register Co. is shopping it and 11 other central Connecticut weeklies. The company shuttered three Philadelphia-area weeklies last week.

Did you know that the Washington Post‘s newsstand price has more than doubled in the last year? It’s true.

“What’s your favorite 21^st-century newspaper innovation?” asks Slate’s Jack Shafer at the tail end of a rather dour essay on the industry’s lack of innovation. His candidates: “The incredibly clever and useful” New York Times Reader, the Times‘ Open API program, the Big Picture at the Boston Globe and Adrian Holovay’s EveryBlock.com. Send him your nominations slate.pressbox@gmail.com.

And Finally

Mark Hamilton pointed us to this cool mashup of the most e-mailed stories from newspapers around the English-speaking world. MostEmailedNews.com is one of those forehead-slappingly simple ideas that you wish you had thought of. It’s the work of a Brooklynite who calls himself Tim Brennan. It consists of only two pages at this point, but who knows where Mr. Brennan will take it. Check it out and give him some link love.

Michael Rosenblum

Here are a couple of interesting ideas about the future of journalism that we thought were worth reading/viewing.

The Online Journalism Blog has clips of video visionary Mark Rosenblum addressing the Society of Editors conference this week. Rosenblum ditched a top job at CBS to go out on his own and demonstrated that a single journalist with a video camera and a Macintosh can duplicate the work of an entire television video team at a tiny fraction of the cost. He has spent the last six years helping organizations like the BBC and the Voice of America reinvent themselves as foundries of video journalism.

Any idiot can operate a video camera, Rosenblum says in colorful and often off-color language. You don’t need news trucks or production teams or half-million-dollar editing consoles. Give reporters a videocam and a Mac, train them how to use the technology and send them out to find stories. They can even work out of their homes. It’s that drop-dead simple. “You are not in the newspaper business,” he says. “You are in the business of going into your communities, finding stories, processing them and delivering them back to your clients and charging advertisers for those eyeballs.”

Rosenblum urges editors to embrace new technologies instead of worrying about how to monetize them first. We’re not going back to the way things were, so move ahead with confidence. Transform your newsrooms into multimedia centers and decentralize your organization. “You are magnets for talent,” he tells the editors. So do something with it. “You will not survive unless you have the courage to embrace this new technology and go for it all,” he concludes. There are three videos. We found the first to be most illuminating.

Maegan Carberry files a report from the Web 2.0 Summit for Editor & Publisher, scolding the newspaper industry for not leading change and enabling conversation between their readers. “What is a journalist if not someone who hopes to enable others with the information they need to solve the problems of our time? To connect individual citizens with their communities? Shouldn’t newspapers be the ones championing this enterprise?” she writes.

Carberry tells of election night coverage that combined Twitter, Digg and Current TV to enable viewers to effectively control the information they were consuming. Too many mainstream media reporters still regard these tools as something they use to enhance their work, she says. What they don’t realize is that the tools  are central to the experience that media companies need to give their constituents. She also has a nice list of interesting Twitter pundits to follow.

Miscellany

Canadian correspondent Mark Hamilton rounds up the latest financial news from media companies north of the border. It isn’t pretty. Another Canadian, National Post‘s Jonathan Key, outlines the three print models that will survive the newspaper collapse. Okay, we won’t keep you in suspense. They are: business media (The Economist), premium upscale media (The New Yorker) and hyper-local media (your community newspaper).

Steve Outing quotes a missive he received from a retired management consultant whose observations should be relevant to the industry honchos gathered behind closed doors in Reston tomorrow: “Newspapers are cutting staff and in so doing, totally curbing their capability to produce a quality product and thereby even have a chance to survive. The result is an ever deepening and ever tightening death spiral.”

The Charlotte Greensboro News & Record has offered all its employees a buyout in an effort to reduce its staff by 8 to 10%, according to a haiku-like story on the paper’s website.

The Associated Press is launching two youth-oriented mobile websites via Virgin Mobile. AP Entertainment and CUBI (“Can You Believe It?”) will offer the “latest film, TV, and music news,” and “off-the-beaten-path news from around the world,” respectively.

Last week, I spent a day speaking to two college classes about the changing media industry. Both groups consisted of juniors and seniors, nearly all of them majoring in public relations. These people should be heavy consumers of information, and they are. When I asked the roughly 45 students how many of them read a newspaper online every day, nearly ever hand went up. But when I asked how many subscribe to a newspaper, only a single student raised a hand.

Oh, they read newspapers. They read Metro, the local entertainment weekly, the college daily and even the major metro dailies on occasion. The difference is that they don’t subscribe. They consume information when it’s convenient to them, and so much information is being pushed at them all the time that they have plenty of choices about what to read. The concept of paying to subscribe to something is foreign to these people in their early 20s. Why pay for what you can get for free?

Some publishers may be adapting to this new reality and paring back their paid subscriptions accordingly. Back in April, the Audit Bureau of Control changed its rules to enable publishers to declare as paid circulation copies that they sold for as little as a penny. At the time, some people predicted the beginning of a new circulation war. But the opposite has apparently happened. The Wall Street Journal reports that the current trend at big papers is to manage circulation intelligently, focusing on hitting the highest-quality readers at the best time of day. The story cites the Atlanta Journal-Constitution and the Arizona Republic as two papers that have cut circulation to the applause of advertisers, who didn’t see much value in distributing to readers who live so far away that they would never be candidates to come in to their stores. And publishers do see growth potential in circulation of Sunday issues, which arrive when people are most receptive to reading them.

Involuntary declines, continue, though. The two New York tabloids continue to post ongoing readership losses, in part because of price increases announced earlier this year to offset the rising cost of newsprint. Fortunately, newsprint prices are stabilizing now, in large part due to decreases in demand brought about by the slowing global economy.

Pressure to Go Private

Many years ago, for reasons that are unknown to us, major newspaper publishers began reporting monthly, rather than quarterly earnings results. Today, that practice has become a millstone around the industry’s neck, casting a public spotlight on the industry’s woes with painful frequency.

While reporting on the latest round of earnings declines, James Erik Abels of Forbes begins to ponder the once-imponderable: maybe it’s time to think about the end of the newspaper industry. The business model isn’t viable any more, Abels says, and the recession will hit hard at its base of local advertisers. The piece suggests that the pressure of earnings comparisons is only making matters worse by publicizing the industry’s problems. That’s one reason some equity managers are encouraging owners like the Sulzbergers to take their companies private: it enables them to restructure outside of the glare of publicity.

Newspaper brands have considerable value, which is one reason some private investors are lining up to buy them, Abels says. Relaunched with smaller staffs and more nimble businesses, newspapers would have a leg up on online startups because of their reader loyalty. It’s just that the process of getting to that smaller staffing model is to difficult to manage in public view.

Superblogger Robert Scoble has a proscription for the newspaper industry: experiment a lot and do it quickly. Scoble thinks every reporter should have a camera phone that’s capable of taking high-quality video images and should be able to broadcast events in real-time just like television does. He also says people who think quality journalism is dead should look at TalkingPointsMemo, Pro Publica and Topix, which are building profitable businesses based upon good reporting. He also says keep an eye on Spot.us, a startup that will fund journalism based upon the stuff people want to read.

Layoff Log

• Having recently extracted major union concessions by threatening to go out of business, The Newark Star-Ledger rewarded its staff by eliminating 40% of their jobs. Most of the reductions will be achieved through buy-outs, though, and management had told the unions back in August that it needed substantial cuts to keep the paper viable. Huffington Post says the actual newsroom losses will be closer to 45% of the 334 editorial employees. The magnitude of the cutback is impressive eye-popping at a time when most newspapers are still trimming around the edges. However, the publisher said it believes the Star-Ledger can return to profitability when the changes are complete.
• Speaking of trimming around the edges, A.H. Belo is doing everything it can short of layoffs to tighten the belt. The suffering publisher announced it will freeze salaries, reduce employee retirement contributions, suspend its dividend, trim capital spending and lower the fees it pays to its board of directors. The company also renegotiated its deal with creditors. “It’s probably not going to get better until 2010, if then,” says industry analyst John Morton., a newspaper industry analyst in Maryland.
• As LA Observed predicted last week, the Los Angeles Times laid off 75 journalists, or about 10% of newsroom staff. That comes on top of 150 job cuts in the newsroom this past summer. The site has the dour memo from Editor Russ Stanton.
• Randy Turner is the latest blogger to point out the contradiction of newspapers reporting everyone else’s layoffs but burying their own. He cites the Joplin Globe, a Missouri paper that he says laid off 15 staffers last week but has said nothing about it since. And he provides a laundry list of layoffs at other local businesses that the Globe has covered in recent months.

John Yemma

The Christian Science Monitor marks its 100th anniversary this fall, and the publisher is celebrating by re-emphasizing its commitment to thoughtful journalism. The Monitor has long been a maverick of the American newspaper field. It’s based in Boston, but that’s almost irrelevant to its role as an international observer. In the tradition of The Wall Street Journal and The Economist, the Monitor sees itself as a newspaper of record for citizens of the global community, but without the financial bias. The Monitor provides sober analysis of world events for an educated audience. Its 100 writers and editors emphasize explanation over immediacy. This approach is sometimes at odds with a market that increasingly values form over substance, but it is a badly needed service in a world of decimated reporting staffs and shrinking bureaus.

The nonprofit Monitor enjoys a healthy subsidy from the Church of Christ, Scientist, but the goal is to make it financially self-sustaining by leveraging new-media tools and targeted advertising. In July, the Monitor recruited Boston Globe veteran John Yemma as its new editor. Yemma clearly understands the dynamics of the changing newspaper field. Although a veteran of print, he spent his last three years at the Globe overseeing the newspaper’s multimedia operations and campaigning to pull its ink-stained editors into the online world. A soft-spoken and thoughtful man, he sat down with Newspaper Death Watch to discuss the realities of the new reader-driven world and how he hopes the Monitor can serve as a model for other publishers.

The one-hour interview is available as an audio file by clicking on the link below. The following time-stamped show notes direct you to important points in the conversation. Time stamps appear on the left with corresponding comments on the right.

[audio:http://www.newspaperdeathwatch.com/audio/Yemma.mp3]
Listen to the interview (1:00)

[audio:http://www.newspaperdeathwatch.com/audio/Yemma.mp3]

At Poynter Online, Jon Greenberg writes of the remarkable impact of a letter written by longtime Wasilla, Alaska resident Anne Kilkenny about her former neighbor and current Republican vice presidential nominee, Sarah Palin.

The letter (you can find it here, along with several hundred comments) lays out in plain language Palin’s record as mayor of Wasilla and governor of Alaska. Kilkenny is quite open about her distaste for Palin (who was known as “Sarah Barracuda” in high school), but also takes pains to point out Palin’s intelligence, ambition and political savvy. Most important is that the letter is factually detailed. Kilkenny, who calls herself “just a housewife,” assembled details about Palin’s administration from years of attending city council meetings and reading local newspapers. She even disclaims facts of which she is unsure. It’s not the work of a professional reporter, but it’s just as good in its own way.

Greenberg sees big potential in citizen reporters like Anne Kilkenny and wonders why publishers don’t do more with them. “Non-journalists can be invaluable when they use their own eyes and ears to report what they see — but they rarely deliver on that promise. Why? In my experience, most citizens worry that they are not up to the task of producing objective journalism. Worse still, they believe that if they are going to throw their words into the public arena, they must be an advocate for something.” Greenberg goes on to recommend that news organizations Adapt their culture and processes to leverage citizen journalist contributions.

Some veteran journalists might turn up their noses at Kilkenny’s 2,500-word essay. It is subjective and judgmental in some cases, and the writer has probably edited facts to make a point. It is, however, also very enlightening because it comes from someone who has lived and worked with the candidate for years. The language is homespun simple. Kilkenny, who hasn’t had a day of journalism training, turns in a pretty good piece of journalism. That’s because she has a perspective that no journalist could duplicate, even with hundreds of interviews.

Strangely, the Kilkenny e-mail has received relatively little mainstream media attention. Some of the media has questioned her facts and biases. Those are legitimate questions, but not a good reason to ignore the value of what Kilkenny has to say. Perhaps the fact that the writer is “just a housewife” disqualifies her from being taken seriously in the eyes of journalism pros. Yet it seems to us that there’s an opportunity for news organizations to embrace these citizen activists and to apply professional journalistic techniques to vet their work and surround it with context. Anne Kilkenny doesn’t make journalism irrelevant; she actually makes it richer. Judging by the number of comments on the Mudlfats blog, this citizen has touched a nerve. Isn’t that the essence of what good journalism tries to accomplish?

If You Send Them Away, They Will Come

How counterintuitive is this? Scott Karp analyzes Nielsen’s top 30 news sites for May and June according to how often visitors visit and how long they stay. The breakaway winner is Drudge Report, a site that does almost nothing but link to other sites. Drudge had more than double the sessions-per-person of any other news site in May and nearly four times the performance of the highest-rated newspaper site. Drudge’s audience also spent an average of nearly an hour on the site in June. The newspaper site that came closest was The New York Times at 29 minutes.

What’s the lesson? Outbound links are a good strategy. Sites that aggregate and contextualize content from around the Internet gain search engine visibility, link love from others and attention from readers who value their efficiency. This isn’t say to say original reporting isn’t important. News executives often snub Drudge and others like it as parasites on their original work. But at an estimated 500 million monthly page views and 1.75 million daily viewers, this parasite appears to have gained a following. Could your news organization learn from this success without sacrificing your mandate?

The Future of the Times

Reader Arthur Piccolo has been perturbed by The New York Times’ recent decision to combine sections, as well as other cost-cutting initiatives at the paper of record. He offers his perspective on what the Times will look like in 2015. Here’s a summary. You can download the PDF here.

• All print articles will be shortened versions of on-line content, with each ending with an Internet address and other online pointers.
• Staff will be dispersed to their homes and field; headquarters staff will be condensed to a small core of editors and production people.
• The organization will have relationships with lots of domain experts who will contribute insight regularly on pressing topics. There will be a large stringer network.
• Virtually every story on-line will contain rich audio and/or video elements.
• “Community correspondents” will feed regional and local information to the website. Subscribers will have the ability to localize their version of the Times.
• The Times will produce branded on-line versions underwritten by large corporations and even countries.
• The print edition will be kept alive for branding but not for profits.
• The Times will seek to become a broadcast business to rival the top TV and radio networks.

Most of these predictions are pretty safe. This is the direction visionary newspapers are already taking. We’re not so sure about the branded editions sponsored by corporations, though.

Layoff Log

• The Akron Beacon Journal has given the Newspaper Guild notice of its intention to lay off 11 people, including five reporters, three copy editors, a photographer, an artist and a clerk.
• The Northern Michigan Review will cut 11 jobs at newspapers in Petoskey, Gaylord and Charlevoix, as well its PhoneGuide. “Our future forecast remains optimistic,” the president and publisher said.
• The Daytona Beach News-Journal announced a second round of layoffs, cutting 41 jobs on top of 99 eliminated three months ago. The paper’s parent company, which employs more than 600 people, is for sale, but there have been no takers. “The company’s financial performance has taken a dramatic turn for the worse over the past few months,” said Jim Hopson, News-Journal chief executive manager.
• The Los Angeles Timeslaid off 50 people in its IT organization but didn’t bother to tell anyone outside the company about it. At least that’s what pressman Edward Padgett says. A redesign of the paper is coming, and Padgett says there is speculation that the California section will be consolidated into the main news section and Business will be merged into Sports. That could result in the elimination of the second shift production on some days, which would probably mean more layoffs.