Final Earnings Reports Trickle In

The Ontario-based publisher of the Toronto Star and dozens of community weeklies reported a $3.5 million loss on a 3.4% decline in revenue. A big factor in the swing from last year’s $15.7 million same-quarter profit was a $21 million restructuring charge associated with the elimination of 160 jobs at the flagship. Less than a month ago, news reports were marveling at the resilience of the Canadian newspaper market, but that optimism seems to have all but disappeared. The Globe and Mail says executives from other Canadian publishers like CanWest Global and Astral Media are also seeing rough times ahead.

American Community Newspapers (ACN), which publishes three dailies and 100 mostly free non-dailies, lost $4.5 million in the first quarter on an 11.7% revenue decline. It blamed the 44 papers in its Minneapolis/St. Paul cluster. More ominous was its statement that “for the second quarter of fiscal 2008 ACN does not expect to be in compliance with financial ratio covenants contained in its credit agreements.” In other words, it’s hoping creditors will be feeling generous, which isn’t too likely given the ugly state of the market since the Bear Stearns implosion.

Journal Register Co. will stop acting like a public company, even though it’ll still be publicly held. Beaten, bedraggled and delisted, the publisher of 21 dailies and 300 community papers said the cost of filing SEC reports and publishing shareholder communications just wasn’t worth it, in light of its stock being priced below that of a gumball. You’ll still be able to buy the stock on the Pink Sheets market, but you might just want to use the Pink Sheets to dispose of that wad of gum. Journal Register has applied for the necessary SEC exemptions.

Layoff Log

Fresh on the heels of a whopping 8.5% loss in daily circulation, the Atlanta Journal-Constitution said it’s cutting 62 positions and cutting back its distribution area from 74 to 49 counties. As recently as two years ago, the paper was distributed to 200 counties in five states.

Craig Smith says the Santa Barbara News-Press has laid off 16 people and names some names. He quotes a memo from the publishers saying that the Teamsters Union, which represents newsroom employees, has been doing things like calling people and urging them to cancel their subscriptions. One wonders how union members could think this would be constructive activity in the current environment. There’s no mention of total employment at the paper.

Where Will All the Dollars Go?

Respected market analyst Henry Blodgett speculates on Silicon Valley Insider about where $42 billion in newspaper advertising revenue will go. Describing a scenario that’s been outlined on this blog many times, he envisions a future in which circulation declines eventually reverse economies of scale and send newsapers into a tailspin. He adds that the green movement will pile on with its general distaste for anything on paper. Blodgett sees newspapers and their associated websites capturing maybe a third of those ad dollars, most of which will go online elsewhere. A spirited debate ensues in the comments section.

Department of Unintended Consequences

Washington City Paper analyzes the newspaper classified advertising business and finds that it is actually surprisingly healthy in the Beltway area. But the reason is that foreclosure notices have replaced “for sale” advertising as the engine of growth in the deflating real estate market . “On March 13, the Washington Post’s classifieds section totaled 22 pages, approximately 14 of which were devoted to what are technically known as ‘trustee’s sales,'” the website reports. This revenue is a legacy subsidy from area municipalities, which require foreclosure notices to be listed in local newspapers at several hundred dollars a pop. Which proves you can always find a silver lining.

As the story of Wall Street Journal Managing Editor Marcus Brauchli’s abrupt resignation last week continues to unfold, media critics are piling on with withering commentary about the Journal’s toothless “Special Committee” on editorial independence. At a time when commentators should be training their guns on Murdoch, they’re focusing instead on the group that’s supposed to protect the paper’s editorial integrity from Murdoch.
Jack Shafer’s column in Slate is snarky commentary at its best. Shafer says the committed was publicly humiliated by Murdoch, and isn’t it curious that no one has resigned in protest?

“The denutted Dow Jones Special Committee issued its wimpy statement yesterday…What they meant to say was, ‘We’re each paid $100,000 annually, a lot of money for very little work, so if Rupert wants to drive by and hose us down with a swift, hard piss again, just make sure the checks clear.'”

“Denutted?” Brilliant.

Shafer makes no effort to hide his contempt for Murdoch, but he gives the man his due: Murdoch owns the Journal and he’s entitled to do what he wants. The half million a year the owner pays the Special Committee is basically hush money and his recent actions have only demonstrated how little respect he has for the group.

Dean Starkman writes in Columbia Journalism Review that the saga is “getting awfully close to clown-car territory.” He calls out the committee for admitting that it was powerless to prevent Brauchli’s resignation. “It’s stunning to think that a 7,000-word agreement, crafted by some of the most expensive lawyers in the world, does not even contemplate the possibility that an editor might resign.” Of the committee’s admitted surprise at Brauchli’s departure, he adds, “The committee, remember, includes three crack newshounds, supposedly. Woof woof.”

Someone on the committee – most likely Chairman Thomas Bray – should resign in protest. The fact that no one has done so only makes the group look worse. The media’s increasing focus on the committee members’ lavish compensation is making this supposedly noble effort look more and more like a boondoggle for self-indulgent former journalists.

Gawker has more dirt on the internal politicking at the journalism world’s biggest ongoing soap opera. If you’re into that kind of thing.

Murdoch Moves in on Newsday

Murdoch has a clear path to buy Newsday, says the paper itself, even though threats of an FCC penalty loom. Technically, the Newsday purchase would endanger Murdoch’s licenses for his two regional TV stations, WNYW and WWOR. However, any action by the FCC would probably be tied up in court for years, during which time Murdoch could act with impunity and wait for turnover at the FCC and in Congress to change the regulatory scene.

Maybe we’re missing something, but all this talk of Murdoch’s waiting strategy seems to overlook one essential point: the man is 77 years old. Unless Murdoch has discovered a fountain of youth, his “long term” is probably eight to 10 years at most. Whatever legacy he intends to leave in the U.S. media market will have to be played out by then or handed over to a clone. None seems to be standing by.

Newspaper Stocks May be a Bargain

Max Zeledon makes a wordy case for why Gannett, News Corp. and New York Times Co. are three newspaper stocks to buy. He has confidence in the industry’s ability to survive, pointing out that newspapers adapted to the coming of TV, radio and cable and emerged stronger for the experience. Zeledon says his three picks are fundamentally sound companies with diversified holdings and the opportunity to gain share as the industry emerges from its troubles. They appear to be the best of the bunch. However, we’d argue with the comparison of the Internet to radio or cable TV. Neither of those technologies devalued newspapers’ core product the way online competition does.

Edward R. Murrow Rolls Over

The New York Times says CBS is talking with CNN about outsourcing some of its reporting operations to the cable network. The talks are apparently a consequence of the abysmal ratings for CBS’s news programs, which are mired in last place despite the $15 million the network is paying Katie Couric each year to drag the ratings even lower. CBS reportedly laid off 160 employees in 13 cities early last month.

And Finally…

If you aren’t using Twitter, you should be. It’s the most disruptive online technology since YouTube, despite its seeming simplicity, and its technology will change journalism. Last month it saved a man from an Egyptian prison. The guy is a UC Berkeley grad student and he was arrested and imprisoned without charges for photographing a demonstration, TechCrunch reports. He twittered “Arrested” to his 48 followers, who acted quickly to spring him.

The oddmakers are still placing their bets on Rupert Murdoch to emerge from the Big Apple newspaper scrum clutching Newsday, but he apparently won’t get it without a fight. Newsday itself reports that Cablevision is ready to hike its bid above $600 million, meaning that Messrs. Murdoch and Mortimer Zuckerman will probably have to raise their bids as well. Cablevision’s controlling Dolan family apparently feel that Long Island is home turf, and may even join in a joint offer with New York Observer owner Jared Kushner to keep Murdoch’s hands off the paper. Meanwhile, Murdoch has hired former U.S. Senator Alfonse D’Amato to grease the skids with local elected officials, who still have the power to nix the deal.

Fortune’s Devin Leonard has an insightful analysis of the financial machinations behind the Muroch-Zuckerman dogfight. He says Murdoch’s proposal to Tribune Co. owner Sam Zell isn’t an outright buy but a joint venture between Tribune and News Corp. Such a deal would save the famously tax-averse Zell a lot of money in capital gains taxes while shoring up the money-losing New York Post. Of course, Murdoch would still have to get the deal past the FCC, but his track record there has been pretty good. Meanwhile, Zuckerman probably sees a Newsday-Post combination as a death knell for his Daily News, a fact that may force him to raise his offer.

Over at The Wall Street Journal, the special committee to oversee editorial independence issued a protest against the way former WJS managing editor Marcus Brauchli’s resignation was handled last week. The committee says it was informed after the fact in a manner that was inconsistent with the letter and spirit of its agreement with Murdoch. It plans to play an active and vigorous role in hiring a successor, said a statement by the five-member committee, whose formal authority is unclear. Chairman Thomas Bray hastened to note that he has no intention of stepping down from the committee, which isn’t surprising, considering that members are paid $100,000 a year for their work.

Retired LA Times veteran Ken Reich shares his plain-talk view of the difference between Tribune and News Corp., casting his vote for Murdoch. “He invests in his newspapers. He builds them up, rather than tears them down,” Reich writes. He then goes on a tirade against the situation at the LA Times, particularly the “squalid duet [sic]” of publisher David Hiller and editor Russ Stanton. The editor “likes to write memos, and each one is dumber than the one before. He is a lackey to Hiller,” says Reich, who is probably not seeking freelance work from his former employer. Thanks to the LA Times Pressmens Club blog for the link. But guys, you’ve got some serious spyware issues.

Pearlstein Cautions Against Too Much Hyper-locality

Pulitzer Prize-winning business columnist Steve Pearlstein of the Washington Post advises putting the brakes on the rush to hyper-local journalism. In a speech to the Society of American Business Editors and Writers annual conference, he said that readers value business coverage and that news of markets and investments shouldn’t be overshadowed by what’s happening down the street.

Pearstein’s message was a little too late for the St. Petersburg Times, which is continuing an industry trend by merging its stand-alone business section into the rest of the paper. There’ll be a full page of business news, but stocks are going away, to be replaced by summary market data.

A Peek at the Future

Editors Weblog has two interesting short items today:

• The Norwegian press is integrating computer programmers into its news staff because editors believe that databases and online mashups are becoming a critical part of the reporting process. Norway’s public broadcasting flagship’s latest project is Politikerdatabasen, “a database that currently contains information on all members of parliament in Norway and will expand to include information on the country’s 11,000 local politicians in May.” The editor in charge says that all reporters should learn programming skills, to go along with the photography and video skills they’re now having to adopt.
• The site also tells how the U.K.’s Evening Leader is using Twitter to cover soccer matches. “The tweets, texted every few minutes by deputy editor Martin Wright, appeared both on a widget on the Leader website and on the paper’s Wrexham Twitter account.”

Monday was all about the Audit Bureau of Circulation report, and the news was as hideous as expected. Rather than repeat the numbers, we’ll point you to Editor & Publisher‘s overview story, the list of the largest 25 dailies, the largest 25 Sunday papers and the papers that actually grew circulation.

Big markets fared the worst. The Miami Herald, Atlanta Journal-Constitution and Dallas Morning News all reported sickening daily circulation declines of 8.5% or more. Some of the contraction is no doubt due to publishers’ efforts to rein in free and heavily discounted circulation, but the overall trend is clear: The top 10 metropolitan daily newspapers in the U.S. (note that this excludes the nationally cirulated USA Today and Wall Street Journal) collectively lost more than 235,000 daily readers. The Sunday numbers are even more staggering: more than 635,000 readers lost in the top 10 markets in just one year.

There were no clear patterns among the daily figures. On Sunday, it was a case of the bigger they were, the harder they fell. The five biggest markets averaged a 6.6% drop, while the 21^st through 25^th largest papers averaged a 4.2% decline. Patterns were harder to find in the daily numbers. There were a few bright spots: 12 dailies did manage to show gains. But their circulation averages about 100,000, while the 10 largest papers average north of 630,000. And they were all down.

Alan Mutter does a flash analysis and notes that daily circulation in the U.S. is at its lowest level since 1946. Considering that population has more than doubled since then, that adds up to a 50% decline in readership. Sadly, the demographic trends offer little relief. The post-war era was the beginning of a surge in population and in readership. But as we’ve noted repeatedly, today’s kids and young adults don’t read newspapers and aren’t likely to start. The readership pig in the newspaper python is the over-55 crowd, which isn’t desirable to advertisers and which won’t be much of a factor in 15 or 20 years.

Layoff log

The Orange County Register, whose 11.9% daily circulation decline was the largest among the top 25 dailies, will lay off 80 to 90 people, or about five percent of its workforce. This is the third round of layoffs in a year for Orange County Register Communications, which is the Register’s parent. That’s either a sign of poor management or a completely unpredictable market. The worst way to cut expenses is by dribs and drabs. It saps morale and spreads fear among the survivors.

The Raleigh News and Observer downplayed the news that it will offer buyouts to about a quarter of its staff. No more than 1% to 2% of the employees are expected to take the deal.

WSJ’s Mystery Man Demystified

The New York Times profiles Robert Thomson, the de factor editor of The Wall Street Journal in the wake of Marcus Brauchli’s abrupt resignation last week. The generous profile portrays Thomson as a talented journalist with loads of people skills. In previous assignments, his staff reportedly loved him. His reluctance to cut headcount would make him an unlikely choice to initiate mass layoffs at the Journal. He’s also got Rupert Murdoch’s ear.

One Reason Why the FT is Ascendant

Editors Weblog is running a series of interviews about the future of journalism, and the latest one is with Dan Bogler, Managing Editor of Robert Thomson’s old employer, the Financial Times. If you want to hear the perspective of an editor who gets it, read this interview. Bogler has no illusions about what’s happening to his industry. We’ve gone from zero videos on our website to over 100 per month in the last 18 months. That’s part of the continuum: it’s us doing the same thing in different distribution channels,” he says.

Asked if the golden age of investigative reporting is over, he responds matter-of-factly, “The idea that journalists have to do long-term, deep, undercover investigations where they reveal something months later – I don’t think it works like that anymore. [J]ournalists working under cover, developing sources and breaking big scandals is less likely; but revealing news that people don’t want out there, on a short term basis, uncovering a scandal and having it come to light, that’s more likely.”

Bogler betrays no defensiveness, resentment or belligerence. He’s adapting to change. With editors like this at the helm, its no wonder the FT is coming on so strong in the U.S. market.

And Finally…

Is he a blogger? A journalist? A marketer? James Arndorfer is all three. His BrewBlog frequently breaks news or casts new light upon happenings in the beer industry. But Arndorfer is a full-time employee of Miller Brewing, which openly supports BrewBlog. Rival Anheuser-Busch is a favorite target for negative news or snarky analysis, but Arndorfer says he isn’t afraid to tweak the nose of his employer. It’s all very new media-ish. Read the WSJ profile.

Ad Age this week discovers what NDW readers have known for a year: The major metro newspaper business is in deep trouble. Better late than never!

Quoting: “Ad Age is launching this series about the 1,437 dailies still working hard in the U.S. It’ll look at the thought leaders in the industry, their attempts to leave the past — and even formats — behind and their strategies for finding new business models. ”

One common complaint, of course, is that newspapers give away their content. Ad Age charges for its content after a few days of public viewing. Maybe there’s a business there

How successfully are newspapers making the jump to the Web? It depends on whom you believe. A lot of research is trying to make sense out of people’s online reading habits as they relate to newspaper brands, and the numbers are inconclusive.

The monthly Audit Bureau of Circulation figures are due today, and the news is not expected to be good. Editor & Publisher got the drop on the figures and says that for the six months ending in March, daily circ was off 3.5% and Sunday was down 4.5%. The ABC has started tracking online readership for the first time, but it’s too soon to compare numbers. E&P did cite research by Scarborough Research that showed that combined print/online reach of major dailies is slowly declining.

“When comparing 20 papers, only two — The Atlanta Journal Constitution and The Oregonian in Portland — increased their integrated market reach year-over-year,” the story says. A Scarborough exec verifies, “Print [readership] is in a steady decline, and online readership is growing but the declines in print are not being offset by the increases in online readership.

The good news is that display advertising on newspaper websites is booming, according to a Media Post analysis. The bad news is that online classified advertising isn’t. That combination is leading to slowing growth in newspapers’ digital revenues.

But wait, there’s more good news. A Newspaper Association of America report, based on research commissioned by Google, finds that 30% of Internet-using newspaper readers went online to research a product they saw in a newspaper. It adds that 70% of those readers then made a purchase. The fact that the research was sponsored by Google will no doubt help make it appear more credible.

Notes

• Reports from several sources say The New York Times will announce its first-ever editorial layoffs this week after fewer people took the paper’s buyout offer than management had hoped. Speculation is that 30 people will lose their jobs. Expect massive news coverage of this relatively small workforce reduction, mainly for its symbolic importance.
• Speaking of the Times, the paper has a eulogy for the Capital Times, a Wisconsin afternoon institution that closed its print edition last week. The shutdown was announced in February. The Times piece has some interesting tidbits on the former popularity of afternoon dailies, which are declining faster than their morning counterparts. Afternoon papers have been hit particularly hard by online competition.
• PBS’s Idealab has “Ten Things Journalists Should Know About Surviving In a High-Tech Industry,” including “Jobs are temporary. Friends are forever” and “Nobody has the right qualifications.” This list is right on the money. Journalists considering the shift to online media organizations need to understand that the jobs aren’t lifetime guarantees. You’re on your own, but you can learn a tremendous amount and prosper more than you would as a Guild lifer .

Will New York City soon have two New York Times? That hasn’t happened yet, but the trend appears to be in that direction. The Project for Excellence in Journalism analyzed The Wall Street Journal’s editorial profile in the four months before and the three months after Rupert Murdoch’s takeover. It found that business coverage is down sharply in favor of political and international stories. While the Journal still runs far more business news than the Times, the papers appear to be headed toward a similar content model.

The tricky part for the Journal will be figuring out how to sustain its strength (and brand equity) in business coverage and not look too much like the Times. Meanwhile, you have to believe that the Financial Times is salivating at the prospect of moving in on the Journal’s traditional market.

Newsosaur Alan Mutter believes that Murdoch’s strategy in New York is focused on the Daily News, not the Times. He runs some numbers on what would happen if Murdoch controlled both Newsday and the New York Post and concludes that Mortimer Zuckerman’s Daily News would be painted into a corner. One Newsday asset that many reports have overlooked is AM New York, a free daily with 314,000 circulation. The Newsday-Post combo would dominate the profitable Sunday market while AM New York would squeeze the Daily News’ weekday business. When you add up all the Murdoch strategies, you can see New York eventually becoming a two-publisher town, with one publisher holding three of the four titles. 

This may answer some recent questions raised on Wall Street about just what Murdoch is trying to accomplish. Put all the pieces together and the answer appears quite clear.

Perhaps this prospect is injecting some jackrabbit juice into the U.S. Senate, which looks set to strengthen the ban on cross-media ownership in large markets.

On a completely unrelated note, Slate’s Jack Shafer calls out Murdoch for what Shafer says is habitual lying about his 1993 decision to dump the BBC from his Star satellite TV system. The short piece is of mainly historical interest, although it does manage to use the term “genocidal tyrant” as anchor text. If you query Google on that term, you get a page full of Murdoch references.

Other News

• The Boston Globe avoided layoffs as 23 employees accepted buyout offers. We just don’t know who they are, and the Globe intends to keep it that way. Romenesko has the memo.
• A day after Wall Street pushed stocks of three newspapers to historic lows, the issues bounced back big on Thursday. Some bloggers are calling the stocks a bargain at current levels and fears appear to be easing about the credit crunch, which should lift spirits at debt-laden newspaper companies.
• Nielsen posted comparisons of view time spent on various newspaper sites in March, 2008 versus a year earlier. Editor & Publisher noted that only 11 of the top 30 sites reported increases. What struck us was that the Minneapolis Star Tribune and Houston Chronicle websites get almost as much reader time as NYTimes.com and significantly more than WSJ.com. What are they doing right?

The New Communications Forum conference brings together some of the leading thinkers in social media for three days of discussion about where media and marketing are heading. Increasingly, journalists are in the audience and on the agenda. This year, the Forum devoted one of its five tracks to the changing face of journalism.

There are some young, smart and visionary young journalists in the crowd. They understand that the world is changing and they’re not only prepared but eager to lead the charge. Talking to them gives you confidence in the future of journalism.

But they all cite the same problem: editors don’t see the need for change. “We’re still explaining to editors why reporters need to blog,” said one San Jose Mercury News journalist. “They’re very focused on the print publication which, after all, generates most of the revenue.”

Print is, indeed, the cash engine at newspapers, but it’s generating less and less green while the future of the business is clearly online. While many newspapers have made efforts to integrate their print and Web operations, the commitment is half-hearted, journalists said. “The print staff still sees the online reporters as second-class citizens,” said one online editor.

As positive as these young journalists are about the future of their profession, one gets the sense that they’re frustrated and restless. They’re trying to effect change from within but running up against too many roadblocks. It seems unlikely that many of them will stay with their current employers for long. “I’m here trying to drink up as much as I can to improve my own skills,” said an editor at an east coast daily. “If I need to go out on my own at some point, I want to be ready.”

McClatchy Earnings are Worst of a Bad Lot

McClatchy reported some of the worst results of any newspaper publisher for the first quarter, with revenues sagging 13.8%. The company was particularly hard-hit in California and Florida, which accounted for 56% of the chain’s revenue decline. Among the eye-popping numbers: classified revenue was down 25.7%, led by real estate advertising (down 35.8%), help-wanted ads (off 33.4%), and automotive business (down 16.1%). As reported earlier, McClatchy CEO Gary Pruitt sees no bottom to the downturn.

Wall Street is hammering newspaper stocks. On an up day for the Dow, three newspaper issues hit all-time lows.

Even Free Papers Feel the Pinch

Metro International SA, which publishes more than 100 free daily newspapers in 23 countries, saw revenue decline 6.1% in the first quarter. The publisher is feeling the same ad pinch as its subscription-driven peers. “The U.S. market is probably the worst it has been since the 1930s for media companies,” Metro Chief Executive Per Mikael Jensen told The Wall Street Journal. Metro plans to cut about 20% of its U.S. staff and is reviewing its New York, Boston and Philadelphia properties for possible sale.

WSJ Airs Dirty Laundry of ME Ouster

Outgoing Wall Street Journal managing editor Marcus Brauchli was under careful scrutiny from the beginning by News Corp. management, which wanted to see rapid change at the paper and which was frustrated from the beginning at Brauchli’s reticence to expand the Journal’s scope, shorten stories and write punchier headlines, according to a piece in Wednesday’s Journal. The paper airs its dirty laundry in a nearly 2,000-word article that details how Brauchli was kept out of the loop on changes in production and design and yet was seemingly unaware of long-brewing plans to replace him.

Brauchli was given his walking papers in a meeting about two weeks ago, although the story says Brauchli offered little resistance. He’ll stay on as a consultant. The Journal’s committee on editorial independence is supposed to approve the choice of a successor, but the rapid pace of turnover at the paper would indicate that Rupert Murdoch won’t look favorably upon too much opposition.

Members of the Bancroft family, who opposed the Journal’s sale to Murdoch, say they’re not surprised by the turn of events. “This is why I was not in favor of selling the paper to that man,” said Jane Cox MacElree, who controlled 15 percent of the family’s Dow Jones shares. “Words mean nothing to him, unless they’re his.”

And Finally…

• Philip Stone thinks the unthinkable: editorial and advertising departments should work more closely together. It’s been done before, he says. The two operations team up on an idea with sales appeal and then go their separate ways to fulfill the mission. Purists will had this idea, Stone writes, but “editorial must now surely understand its very jobs depend on how well advertising does its job. And any help editorial can give to advertising to bring the bucks in should be par for the course.”
• Two environmentalists disrupted a speech by New York Times columnist Thomas Friedman. One ran on stage and heaved a pie at the writer. Friedman tried to duck the flying confection, but it caught him in the face and torso. No one was injured and the woman and her accomplice were arrested.

Further evidence that media brand equity is dying. Accenture’s Global Broadcast Consumer Survey finds that “Consumers are growing increasingly disenchanted with their overall television experience, but are remaining loyal to their favorite programs.” The trend is most pronounced among the under-35 crowd.

Reports Say Newsday Goes to Murdoch; Rivals Disagree

Tuesday must have been a busy day for media tycoon Rupert Murdoch, who concluded a handshake deal with Tribune Co. to buy Newsday while also removing the top editor of another area property: The Wall Street Journal. Newsday said its price would be $580 million, which would just about cover Tribune’s impending debt obligation. Murdoch has already contacted the county executives of two Long Island counties to confirm that he’d be spending more time there. He told one of them that he hopes to conclude the deal in two weeks.

News of the Newsday sale was first reported on Monday, and dribs and drabs of information filtered in yesterday. Editor & Publisher says the deal isn’t done yet. Rivals thought they had until next week to submit a bid and plan to do just that. E&P also notes that Murdoch’s ownership of three newspapers (he also has the Daily News) and two TV stations in New York could raise regulatory concerns. It sounds like the fat lady has yet to sing on this deal.

More Tumult at the WSJ

Meanwhile, the managing editor of The Wall Street Journal resigned after less than a year on the job. The announcement made it clear that this was a Murdoch bag job. Marcus Brauchli had appeared in public less than two weeks earlier acting like a good company man, and the official statement said only that he was leaving to become a consultant. In his letter to the staff, which the Journal published, Brauchli said, “Now that the ownership transition has taken place, I have come to believe the new owners should have a managing editor of their choosing.” That can’t have lifted the already low morale on the staff.

E&P was all over this story, too, noting that Brauchli was respected as a guardian of editorial independence and wondering what role the newspaper’s editorial independence committee would have in choosing a successor. Given the success Murdoch has had in effecting momentous change at the Journal in such a short time, it’s likely that the owner will get his way.

Times Management Caves

The prospect of being cornered by Murdoch must have the Sulzbergers nervous. Under pressure by two large investors, the Times ownership added representatives of those funds to its board and expanded the total board size to an unwieldy 15 members. Chairman Arthur Sulzberger also dismissed talk of a possible sale of the company, which is what chairmen usually say just before they sell the company. Michael Bloomberg is rumored to be interested.

Sulzberger also outlined a four-part turnaround strategy for Times Co. including cost cuts of $230 million this year, the sale of some divisions and expansion of its online advertising programs with Google and Yahoo.

Latest Earnings Reports Dribble In

News that Journal Communications’ first-quarter profit dropped 91% would usually have some brokers on the ledge, but in this case the previous year’s numbers were boosted by an extraordinary gain. The actual revenue decline was about 9%, on par with recent results posted by other publishers. The industry-wide trend is clear. Year-over-year declines are running at about 10%. In an otherwise upbeat note to staff, McClatchy CEO Gary Pruitt confirmed that the double-digit percentage declines are a fact of life adds, “At this point we simply can’t tell when this decline will end.”

Short takes

• The Chicago Sun-Times is on track to turn a profit by the end of the year, according to a memo prepared for potential buyers of parent firm Sun-Times Media Group. The company has been victimized by industry trends and past wrongdoings by two former executives. BusinessWeek recently speculated that it may not last a year.
• The Fort Worth Star-Telegram laid off 15 employees, including eight in the newsroom. The layoffs were apparently a surprise.
• Five full-time employees and four part-timers will be laid off at Maine’s Kennebec Journal and Morning Sentinel. Both papers are up for sale by its Seattle-based owner.