Earnings Drumbeat Continues, but With Fewer Surprises

Gannett’s quarterly earnings continued the pattern established by the New York Times Co. and Media General last week, but at least they weren’t surprising. Earnings were down 9% on an 8% drop in revenue. The industry-wide slump in classified ad revenue pulled down the numbers, with real estate and recruitment ad sales both down more than 24%. Gannett continues to benefit from having USA Today, which saw actual growth in the entertainment, financial and advocacy (whatever that is) categories. However, total ad pages at the national newspaper were still off 14%.

There was nothing from Lee Enterprises or JH Belo to lift investors’ spirits. Lee hit a 52-week low after reporting a quarterly loss while Belo’s new pure-play newspaper company said its results would disappoint. Both got slammed on Wall Street. However, investors rewarded NYT Co. and Media General for making progress in their shareholder battles.

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Tacoda founder Dave Morgan writes in Media Post that a lot of big media companies are going to collapse, victims of declining revenues and high fixed costs. We agree, and we said as much nearly two years ago. Morgan sees opportunity in decline. The collapse of many metro newspapers will create a vacuum for distribution channels that can deliver sponsorship messages to local communities. He speculates on those opportunities.

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The Associated Press is doing its part to throw them a lifeline, however. It’s cutting its fees in response to protests from newspapers. The move will save members about $14 million in total, or more than double the savings of the original AP proposal. Attendees at the recent American Society of Newspaper Editors convention were reportedly still grousing about the charges, though.

Would Founding Fathers Have Defended Behavioral Targeting?

The Newspaper Association of America has weighed in on the Federal Trade Commission’s debate about privacy standards over behavioral targeting, taking the unusual stance that this is a First Amendment issue. According to the group, publishers should not be infringer in any way from delivering ads, even if that means collecting information about people’s onliine activities that could potentially reveal their identities. Apparently the NAA feels that since the Constitution doesn’t guarantee a right to privacy but does guarantee a right to free speech, behavioral tracking is legally protected.

The Changing Ad World

Louis Hau writes in Forbes about the increasing chuminess between editors and ad sales people. This is a new fact of life, he suggests. Newspaper ad sales people haven’t historically been oriented toward developing new lines of business, so they need all the help they can get. Editors need to cooperate on business opportunities in order to keep their jobs. This new reality challenges the traditional church-state separation of mainstream journalism, but we’d better get used to it because this is the way media is evolving.

Ohio Papers Try Sharing

A group of Ohio newspapers has gotten together to share stories and even reporting assignments in a novel response to the cost-cutting pressure that all newspapers are feeling. The Cleveland Plain Dealer, Columbus Dispatch, Toledo Blade, Cincinnati Enquirer and Akron Beacon Journal now post all their daily stories on a private website where editors can pick whatever they want and publish it in their own pages. The idea goes against reporters’ natural competitive spirit, but it’s probably delivering better news to the readers. The outlets are even teaming on some joint reporting projects. So instead of having five different papers covering the same state house story, they’re actually spreading around their resources and minimizing duplication of effort.

Debating Old vs. New Media

The New York Times’s Sunday blockbuster story about the Pentagon’s secret media manipulation campaign is generating some understandable chest-thumping by newspaper editors. Crosscut Seattle comments that a story like that took shoe leather, not laptops, and praises its local journals for being willing to go to court to get access to secret documents. No blogger is going to go that extra step, says editor Chuck Taylor.

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CBS has launched a citizen journalism website where people can upload news by cell phone, Editors Weblog reports. What will be really cool is when news organizations don’t relegate citizen journalism to an online ghetto and actually start integrating readers’ comments with staff reports on their main sites. This short article points to a couple of examples of that.

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Glenn Frankel, Hearst Professional in Residence at Stanford University and former Washington Post reporter, writes Romenesko a tongue-in-cheek commentary on Slate columnist Jack Shafer’s recent counter-intuitive sermon in praise of buyouts. Frankel comments on a recent visit to the SJ Merc: “The spaciousness and the blessed silence reminded me of the peace and tranquility I found in abandoned villages in Kurdistan in 1991 after the Iraqi army had passed through during its own special buy-out program.”

We wish we could end the week on a happy note, but as we noted on Monday, it’s earnings season. Unfortunately, the news couldn’t be much worse. If troubles at the New York Times and Media General are any indication, the rest of the year could be ugly.

New York Times Co. Troubles Deepen

The New York Times Co. swung to a small loss in the first quarter from a $24 million profit a year ago. In a conference call, the CEO didn’t indicate that things were going to get better any time soon. The more worrisome trend may be that online growth is now slowing.

As a result, it looks like the Times newspaper will have to resort to some layoffs to achieve its goal of a 100-position reduction in workforce. Not enough people have taken the buyout offer. The deadline is next Tuesday and the layoffs, if they happen, will be the first in the paper’s 167-year history.
The media’s focus on the 100 job cuts at the Old Gray Lady may obscure the bigger view of the NYT Co. crisis. Media Post points out that the company has cut over 2,000 jobs – about 18% of the total staff – since 2003. The reason for the low response to the recent buyout offer is that the job market is so bleak for ex-journalists, the article suggests.

It offers this cheery quote from analyst Ken Doctor: “Clearly, the decline in revenues is deepening. At this point, there really is no bottom.” As layoffs continue, in future he predicts “a lot of newspapers hiring part-timers, stringers and bloggers–but no more full-time, $50,000-a-year jobs.”

Media General Hammered by Florida Exposure

The news was even worse at Media General, which is heavily dependent to the recession-laden Florida market. The quarterly loss of $20.3 million is more than three times last year’s loss. But check out the declines in these ad categories:

• Newspaper ad revenue off 19.1%
• Interactive media revenue down 3.3% (this is the future, remember)
• Classified ad revenue off 28%
• National ad revenue down 21%

It’s not surprising that Media General just offered buyouts to half the employees in its Florida Communications Group. The terms are generous, ranging up to 39 weeks of pay. Media General didn’t say how many jobs it hopes to eliminate with the offer, but it did say that layoffs are possible.

And the Bad News Spreads

More talk of layoffs, closings and cost reductions. Here’s the rundown:

• The Los Angeles Times Pressmens 20-Year Club has the scoop on Advance Publications’ plan to shut down one of its two production facilities. Advance Publications publishes the Newark Star-Ledger. The two plants employ more than 600 people, though it’s not clear how many jobs would be cut. A decision is expected within the next few weeks.
• Times are hard, indeed, in the New York-Philadelphia corridor. The AP reports that the owner of Philadelphia’s two largest daily newspapers told a judge last week that unraveling its pension mess could lead to more layoffs. One of the two pensions the company merged is underfunded and the costs of bringing it up to snuff were unanticipated. In January, Philadelphia Media Holdings LLC said it had to cut costs by 10% or its viability would be in doubt.
• The Toronto Star will cut 160 jobs, or a little less than 3% of its total workforce. The Canadian Journalism Project points out that this is disconcerting in light of the recent reports that the Canadian newspaper industry is faring much better than its U.S. counterpart.
• The Raleigh News & Observer just told its staff that layoffs may be needed to cope with the business downturn. The paper employs 206 editorial staff.
• The suburban Chicago Daily Herald laid off an unspecified number of employees throughout the company. Classified ad revenues are off as much as 45% year-over-year.
• And finally, further evidence that Sam Zell’s Tribune Co. empire may be unraveling. Revenues continue to fall faster than expected, and now Zell is talking about selling off “newspapers and other properties.” Could that mean that titles other than Newsday may go on the block? One recent report said the LA Times may be in play.

But wait, there’s even more: The source of many of the industry’s problems is doing just fine. Blogger Roy Greenslade notes that Craigslist.org has quietly expanded its global footprint by 120 cities, bringing the total to 570. Craigslist may be the single biggest financial competitor the newspaper industry has. Here is the devastatingly brief, haiku-like announcement from Craig Newmark.

Finally, Philip Stone comments on the empty halls at the once-great Nexpo newspaper equipment trade show. It used to be that Nexpo was so big that only a few convention centers in the country could accommodate it, he says. But at this year’s event, you could have rolled a bowling ball down the expo floor and not disturbed anyone.

Go bowling this weekend. We can use a break.

Advice for the Digitally Challenged

Steve Buttry uses a call for help from a digitally challenged newspaper editor to outline his prioirities for journalists who are struggling with online change. Among them: start liveblogging, hyperlink aggressively in your stories and learn to Twitter. He links to this Palm Beach Post liveblogged trial coverage as an example of where reporting could go. He also recommends journalists pick a couple of technologoy areas outside of their comfort zone and set out to master them – fast.  “Come down off the ledge. We have a lot to learn and it’s going to be fun,” he concludes. There’s no doubt about the first part of that statement, but we suspect that many ink-stained wretches may disagree with the second.

Hope in “Hyperlocal”

EMarketer has an interview with the CEO of hyper-local news services Topix.net. He sees big opportunity in local markets for everyone, including newspaper. EMarketer supports that view with the chart at left.

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A new entrant in the “hyperlocal” news market is OurTown, an aggregation of small websites run by local editors, who apparently will also sell ads and keep most of the local revenue. OurTown sites are intended to serve very concentrated audiences, with spheres of coverage limited to just a few miles.

Let’s Close With Some Good News

Starbucks, which has shunned advertising in general, not to mention newspaper advertising, is changing his tune.  The coffee retailer is launching a national promotion that uses newspapers as its centerpiece, according to Editor & Publisher. The full-page ads show a chalk outline of the familiar Starbucks paper cup, with the only text being a date: 04 08 08. The campaign is part of a broader Starbucks effort to get back to its roots, the result of criticism that its rapid growth has tarnished the comfortable ambiance that made it such an appealing place to hang out.

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Further indication that the woes afflicting U.S. newspapers haven’t yet spread north of the border. E&P says: “Total revenues for Canadian newspapers barely dipped in 2007, as accelerating online ad sales offset a dip in print, according to data released Thursday by the Canadian Newspaper Association…Print ad revenues that dipped 2.4% in 2007 were offset by online revenues growth of 29%.”

“How many newspapers do you read?” a reporter recently asked me. I told him I read dozens of newspapers, more than I’ve ever read in my life. That should be good news to the newspaper industry, but it’s actually a problem and here’s why.

I dropped my Boston Globe subscription four years ago after more than 25 years as a subscriber. Google Reader is now my daily newspaper. Into it stream dozens of feeds from trusted sources. Each morning I sort through a couple of hundred headlines and pick and choose the ones I want to read, bookmark or share with others.  These feeds include an assortment of blog posts, newspaper articles and even search results.  Google Reader makes no distinction by source.  The content is what dictates my reading habits.

This is the new reality of the wired consumer.  Although my reading habits are no doubt atypical, they’re an example of where news consumption is going. People increasingly use aggregators to deliver the news that interests them, regardless of its source.  Newspaper editors have a big problem with this.  They argue that filters shield readers from the most important stories of the day, the stories that the editors think they should read.

There is merit to this argument, although I seem to have no problem keeping up with the top stories of the day.  It’s true, however, that some people may choose to use aggregators to screen out the information that doesn’t interest them, even if it’s important.  That is their right, and in this new world, their choice.  We are in the very early stages of a new pattern of news consumption and no one knows how it will play out.  If newspapers are to survive, they must learn to adapt to it, as distasteful as it may seem.

Alan Mutter digs into this issue. He looks at recently published numbers on traffic to newspaper websites and sees a troubling trend: visitors are increasingly drive-by viewers. They stop to read one story and then move on. Mutter wonders whether advertisers will pay to reach these visitors, who have little brand loyalty. Quoting: “The decline in the average duration of sessions at newspaper web pages suggests that visitors are not utilizing the industry’s sites as primary destinations, but, rather, as places to episodically view individual articles highlighted by Google News, Drudge, Digg, blogs or any of the thousands of other places they might be.”

Jeff Jarvis elucidates this new model in a series of simple charts that demonstrate how news coverage is being driven by the needs of the reader rather than the publisher. He calls it the “Me-sphere.” It’s a place where the reader defines what he or she is interested in and then chooses what to consume from an assortment of information sources of his or her own choosing. in traditional media, the publication of a news story is an endpoint.  In the new media model, it is just the beginning.  See Wikipedia for an example of how news evolves over time.

Advertising Age, which ironically hides its stories behind a paid wall after a few days of public viewing, has an insightful piece by Matthew Creamer about this same trend. Creamer sees the future of news as aggregation and the business of news as selling ads against other people’s content. No one can own the content any more, so the new publishers will combine some form of dedicated reporting with clever integration of other stuff. Today’s newspapers could potentially lead this trend, but there a lot of cultural and political factors argue against it.  I agree with sources quoted in this story that the successful aggregators will emerge as new entrepreneurial entities because they don’t have the baggage of history. Nevertheless, there is still a chance for some newspapers to jump on this trend and reinvent themselves. Whether they do so is another matter.

 

 

The official newspaper of the American Society of Newspaper Editors Convention (which is actually a blog) (Update: There’s an on-site print version, too), was taken enough by Newspaper Death Watch to pose our predictions about the ultimate collapse of the U.S. major metro daily newspaper industry to several top executives. Editors and publishers from some of the most prominent newspaper companies in America dismissed our predictions as rubbish. We were pleased just to have their ear. You can read reporter Ben Leubsdorf’s story and our response here.

We were also pleased to be mentioned on Mayor Sam’s Sister City, a popular blog about Los Angeles politics. The mayor’s been gone for a decade, but this site carries on his feisty spirit.

Free daily BostonNOW abruptly closed, idling 52 full-time employees. According to a story in the final issue, the decision was driven by financial difficulties at the paper’s Icelandic parent. “[T]he tumult in foreign credit markets has forced a change in our original understanding and their focus now appears to be primarily upon their core retail holdings. North American media is not even a distant second,” the CEO said. The shutdown bucks a trend. Free dailies have been a growth market in the US and are enormously popular in Europe, where a greater percentage of the population uses public transportation. In fact, a new free daily called “b” just launched in Baltimore.

Grab Bag

Here are some interesting stories that have accumulated in our RSS readers but which we haven’t had the chance to publish over the last couple of weeks. They’re too good to overlook:

Author, professor and media expert Robert Picard posts an upbeat account of the state of traditional media industries on his blog. The way he sees it, media industries are changing and change is difficult to handle, but the need for robust mainstream media will exist for a long time, the economic picture isn’t nearly as dire as many people think and we all have reason to be optimistic.

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The Daytona News-Journal is for sale. The paper, which is owned by News-Journal Corp., was put on the block after News-Journal lost a court appeal and was ordered to either pay Cox Enterprises $129 million or sell the newspaper. News-Journal is in no position to raise that kind of cash these days, so the paper goes on eBay. Or wherever they sell newspapers these days.

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Alan Mutter sees a dark side to the Washington Post’s recent haul of a half-dozen Pulitzers: It’s one of the few newspapers that still has the resources to produce the kind of journalism that wins the prize. Quoting: “Sadly, only a shrinking handful of fortunate newspapers have a realistic hope of capturing the prize in the future.”

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Via Editors Weblog: San Jose Mercury News designer Martin Gee has posted a photo documentary of the effects of several rounds of layoffs and buyouts in his California newsroom. It’s a sad human story told in pictures in which very few humans are present.

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Illinois’ third largest daily is asking staffers to take off one unpaid day per month and is hinting at layoffs. The DailyHerald of suburban Chicago has been slammed by a 45% drop in help-wanted advertising, a 40% fall in real estate advertising and a 35% decline in ads associated with home improvement. Plus newsprint price increases are unwelcome.

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In an interview with Forbes, TV newsman Tom Brokaw says, “I was at MIT yesterday with the best and brightest. There were about 15 students in the room with me, and I asked how many of them read a newspaper on a daily basis. Two hands went up. Then I asked how many watched the evening news on a nightly basis. No hands went up. And then I asked how many spend a lot of time during the day going to their PDA or computer to find out what’s going on, and every hand went up.”

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It’s not a layoff, it’s an “accomplishment celebration!” At least that’s how the publisher of the Washington Times phrased it in a memo to his staff. John Solomon praised the staff for coming up with creative ideas to improve profitability but said it just wasn’t enough. Layoffs are coming, though he didn’t say how many.

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The American Journalism Review posts an opinion by a newspaper consultant and former reporter who points out the futility of current cost-cutting efforts. “Can newspapers really expect to recapture what they have lost with less circulation, a thinner newspaper offering fewer services to readers, with editorial products undermined in breadth and depth by layoffs and space constrictions? I think not,” says John Morton, echoing similar comments by the late, great Molly Ivins. Morton notes that in the past, newspapers have been able to recover from downsizing initiatives because they had so little competition, but that just isn’t the case any more.

Better Make That A Double; It’s Earnings Time

Today’s lead factoid: The American Society of Newspaper Editors (ASNE) says the number of U.S. newsroom journalists shrank to its lowest level since 1984 after total cutbacks of 2,900 in 2007. Update: Newsosaur Alan Mutter says this survey is a load of hooey.

In this week’s news, earnings season is upon us, and investors will be watching nervously as Media General and the New York Times Co. kick off what is likely to be a gruesome round of financial reports. Reuters says Media General revenue could fall 10.6% and lose money. The revenue slide at the times is expected to be a more modest 3.5%.

The news from Journal Register Co. could be worse than that. The floundering chain is being delisted by the New York Stock Exchange this week, which is hardly surprising given that its stock is off more than 99%. The company has hired an investment banker to explore it options. What a rapid fall from grace. Your obedient editor actually owned a few shares of this catastrophe two years ago when one of the leading money magazines called it a sleeper. Today, it looks like sleep of a permanent variety is a more likely possibility.

Alan Mutter writes that JRC was actually a model of expense management under the reign of CEO Robert Jelenic, but the disasterous acquisition of a chain of newspapers in the Detroit area saddled the company with a debt burden that may now pull it under. Some of Mutter’s stories about Jelenic’s obsession with expense reduction are amusing. What’s not amusing is the outlook: with debt at seven times trailing operating earnings and a business rooted in declining markets, it looks unlikely that JRC can successfully pull out of this tailspin.

Rate of Decline Quickens In Seattle

How bad is the newspaper business in Seattle? Despite owning a legally sanctioned near-monopoly, the Seattle Times and Seattle Post-Intelligencer have seen revenues drop more than 25% since 2000. What’s potentially worse is that online revenues are shrinking, too. No doubt the 2000 figures were bolstered by recruitment advertising revenue during the tech stock bubble, but the current year-to-year declines are outstripping industry averages. The fact that the company has made two major belt-tightening moves in just four months indicates that the shrinkage of its business is racing ahead of its own forecasts.

Crosscut Seattle publisher David Brewster has some ideas for rejuvenating the struggling Times. He advises the company to start delivering more products to people’s doorsteps, create an advertising network to sell locally on behalf of national advertisers and find a big partner, among other things.

Good And Bad News In The Numbers

This chart from eMarketer illustrates painfully the obscuring effect of percentages. Online ad sales at U.S. newspapers were up almost 19% in 2007, while print sales were down 9.4%. But the online revenue increase amounts to just $500 million, compared to a $4.4 billion drop in print sales. That means that print contracted eight times as fast as online expanded last year. This trend is ominous. In 2006, the falloff in print sales was only 1.3 times the growth in online sales.

There’s good news, though. Newspapers are doing pretty well in local advertising markets, according to Borrell Associates. Quoting from Media Post: “The survey of 3,000 local Web publishers found that newspaper sites garnered 26.9% of total local online advertising dollars, and also forecast big increases in spending for online video in particular in 2008. Overall, in 2007 newspaper Web sites netted over $2 billion in local online advertising. Thus, according to Borrell, they dwarfed online Yellow Pages sites…” The researcher says the secret is that newspapers are learning to sell better to local advertisers.

And finally…

Los Angeles Daily News Editor Ron Kaye quit 23 years after joining the paper and one month after being forced to lay off nearly 20% of his newsroom staff. “All good things in life come to an end sooner or later, even my love affair with the Daily News,” he wrote. with characteristic bluntness. Noted the E&P writeup: “During his tenure at the Daily News, Kaye became the public face of the newspaper, and his bombastic personality and scathing criticism of Los Angeles City Hall shaped the editorial pages of the paper.”

Romenesko treats us to t-shirts given out at a recent Hartford Courant awards event.

All News Must Stand On Its Own

Encyclopedia Britannica kicks off a “Newspapers & the Net Forum” with an excerpt from Nick Carr’s new book, The Big Switch: Rewiring the World, From Edison to Google.He states what publishers have known for some time: the shift from print to online delivery changes the product entirely. No longer can high-margin classified ads support expensive investigative reporting. In today’s world, every item of content is an island and must stand on its own merit. Advertisers want contextual adjacency. This creates pressure to publish stories about high-definition TVs instead of stories about Iraq.

Among the more than two dozen comments is one that notes “I have a copy of Newsweek with a cover story entitled, if I am recalling correctly, “Are Newspapers Dead?” The magazine is from around 1965. So this debate has been going on a long time.” True, but this is the first time those predictions really appear to be coming true.

The Forum goes on all week with some other provocative topics that I promise to get around to reading. Here’s the index page.

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Rethinking the Value of News

Tom Abate thinks newspaper publishers could learn a few things from the airline industry. In other words, figure out how to charge different prices for the same product. As he sees it, the background notes that a reporter collects, which would never be of interest to a mainstream newspaper audience, could be a gold mine to businesses that specialized in that area. Use a blog to publish those notes and attract those special-interest readers and then sell ads to businesses that will pay top dollar to reach those people.

Abate laments all the attention being paid to Fark.com, a snarky linklog with a juvenile sense of humor. Newspapers shouldn’t be trying to out-Fark Fark, he says (although, if you look at Fark, it sends a lot of traffic to newspaper websites), but should focus on attracting the highly engaged readers who appreciate depth and context. There’s sensible thinking behind his comments, although the airline industry isn’t exactly the gold standard of business models and the devil would be in the details.

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Abate would probably find a soul mate in Ted Gup, a journalism professor at Case Western. Writing in the Chronicle of Higher Education, he laments his students’ appalling ignorance of basic current events.

Quoting:”Nearly half of a recent class could not name a single country that bordered Israel. In an introductory journalism class, 11 of 18 students could not name what country Kabul was in, although we have been at war there for half a decade. Last fall only one in 21 students could name the U.S. secretary of defense. Given a list of four countries — China, Cuba, India, and Japan — not one of those same 21 students could identify India and Japan as democracies. Their grasp of history was little better. The question of when the Civil War was fought invited an array of responses — half a dozen were off by a decade or more. Some students thought that Islam was the principal religion of South America, that Roe v. Wade was about slavery, that 50 justices sit on the U.S. Supreme Court, that the atom bomb was dropped on Hiroshima in 1975. You get the picture, and it isn’t pretty.”

In his view, we’re raising a generation of kids who are so distracted and self-absorbed that they’ve tuned out the rest of the world. And part of the problem is that the don’t read newspapers or watch serious television.

Confidence in the Future

The publisher of the LA Times says the company is getting it together. In a memo to employees published on Los Angeles Times Pressmens 20 Year Club, David Hiller talks of adding 400 new regional advertising accounts, expanding Spanish language products and topping 100 million page views online the last two months running. There’s a new organization, new management and a commitment to build a vision and financial model that is sustainable for the long term. He also mentions in passing that there will only be merit raises this year and that they’ll be three months late. The Pressmen tap dance on that news. More to come during an April 30 town meeting.

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Meanwhile, the Albany Times Union believes in the future of print. The company’s about to spend $55 million to enlarge its headquarters and install a new printing press that will print color on all pages. The additional 70,000 sq. ft. faciliity is also intended to position the Times Union as a printer for other publications in the region.

Silver Linings in Pink Slips

Slate’s Jack Shafer sees some goodness in the latest wave of buyouts: a chance to bring new blood into the organization. The boomers who sit atop the editorial pyramids at all the big publications are too invested in the way things have always been done, he says. Get some whippernsappers in there for whom experimentation is a way of life.

Quoting: “‘There goes our institutional memory,’ somebody usually laments whenever a graybeard leaves a news organization. The speaker is usually another graybeard who, if pressed, couldn’t tell you what is so vital about the institutional memory wheeling out the door.”

Buyouts can mean rebirth for those taking the buyout, too, Shafer says. Longtime Washington Post political reporter Thomas B. Edsall is now at Huffington Post, where he says seeing his work appear without the meddling of a dozen editors is a rebirth.

And Finally

Leave it to Canada to buck the North American trend. Newspapers are actually doing pretty well up there, says Editors Weblog: “Total 2007 revenues, including online operations, slipped only 0.8%, with print advertising decreasing 2.4%. In contrast, online revenue grew 29% over 2006. Newspaper circulation as well took a very minor fall in 2007, decreasing 1.2% after a 3.8% rise the previous year.”

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A Racepoint Group blogger saw some value in my opinions and interviewed me about the future of newspapers. The fellow is a regular NDW reader, which makes the whole thing rather incestuous. Or perhaps circular. In any case, I blather.

Tribune Co. Faces Default Threat

Reuters digs into Tribune Co.’s finances and decides that they’re pretty grim. Unless the current ad revenue trend turns around, Tribune could default on nearly $4 billion in debt and interest payments due at the end of 2009. That could force the company into receivership and asset sales. However, CEO Sam Zell is going to have to sell assets to cover debt payments, anyway. Reuters says Tribune’s previous management grossly underestimated the 2007/2008 revenue picture, which raises the question of whether Zell would have a legal case that he was sold a bill of goods.

Best quote in the story is from Zell, who recently joked to an audience that going from real estate to newspapers was like “going from leprosy to cancer.” He sure knows how to motivate the troops. Meanwhile a Lehman Brothers Analyst is reducing guidance on McClatchy’s earnings, saying it also faces a risk of default.

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LA Observed has assembled some of the parting e-mails sent by laid-off staffers at the LA Times. Several take shots at TribCo owner Sam Zell. “You want people to ‘Talk to Sam’ but not to ‘Talkback to Sam,'” says one.

But Journal Register May Go First

Looks like the Journal Register could be the first big newspaper company to go bankrupt. Editor & Publisher quotes the New York Times as saying that the company may be unable to service its $625 million debt load on revenues that were $90 million last year and that could fall to $70 million this year. This creates the nightmare prospect of JPMorgan Chase and Deutsche Bank owning a newspaper company, which has never happened before in this traditionally predictable and stable business. It’s also hard to imagine who would buy the assets for something more than pennies on the dollar. Sam Zell, perhaps?

Some Newspapers Doing Just Fine, Thank You

The media buzz over the tailspin of major metro dailies obscures the fact that there are newspapers that are actually growing. New America Media notes that the ethic press is benefiting from the tide of immigration and actually creating jobs where the dailies are laying off. Daily newspapers in Korean, Chinese and Spanish are seeing healthy circulation growth, although they struggle with the same advertiser reticence as their English-language counterparts.

Dallas Publisher Urges Focus on Future

James Moroney, publisher and CEO of Dallas Morning News, told the 9th International Online Journalism Symposium what newspapers must do to survive. “If you are in the newspaper business, you are in the business of managing decline. If you are in the news and information business, then you have a healthy future,” he said. His organization has a strategy built all around hyper-local. No numbers cited.

TV Layoffs Hit Most Visible Journalists

Brittney Gilbert, who blogs for KPIX in San Francisco, writes about the layoffs of 14 people at the station, including two reporters who have five Emmys between them. She also notes that she, who looks to be about 27, was spared. This is the form that layoffs usually take, unfortunately. The most seasoned, highest paid staffers are the first to go. And who’s going to hire them?

Vermont Publisher Leaves for No Apparent Reason

The publisher of the Brattleboro Reformer is leaving after only two years. He says he likes Brattleboro and he isn’t leaving for any particular reason. No one seems to question why he would quit so early in his tenure. It’s all very Brattleboro.

Circulation is hardest hit, with 45 positions cut. Newsroom is second big loser with 30 laid off and 19 positions frozen. Suburban bureaus to be closed. Pacific Northwest Newspaper Guild Blog has the ugly details.

Update: E&P says cuts will total 200, taking into account reductions and frozen open positions. Publisher’s memo says 191. It’s a lot, in any case.