Archive for December, 2008

Saved by the net?

Posted in Future Employment on December 22, 2008 by sizzlingjboy

Only a few short months ago The LA Times was one of the newspapers on the short list of those expected to fail in the next year or so. Today, according to a report on Buzzmachine, it’s web revenue covers the entire editorial payroll.

Russ Stanton, editor of the LA Times, sent [an] email following up on questions I had confirming the much-discussed report below that its web revenue is now sufficient to meet its entire editorial payroll, Jarvis wrote today. “Given where we were five years ago,” he emailed, “I don’t think anyone thought that would ever happen. But that day is here.”

This transition hasn’t been painless. The Times has drastically reduced staff over the last few years. Likewise, meeting editorial payroll isn’t the end of the story (last I checked newspapers still need other departments, like advertising and IT). But it does hold out hope.

Any parts applicable to The Star-Ledger?

• The Times needed bankruptcy for this to work ($12 billion in debt made breaking even impossible for all Tribune papers). Reportedly, Newhouse isn’t carrying much debt, making The Ledger (theoretically) closer to the point where the economics would work.
• They fully committed to online and brought in the talent to help that flourish.

We have added some outstanding web talent over the past two years, including latimes.com editor Meredith Artley, blogging guru Tony Pierce and database specialist Ben Welsh, who is part of a new 10-person team of interactive and data experts supplementing our print report with terrific online material (more on that in a minute), according to Standton. And our printside reporting and editing staffs have embraced the future like never before.

• A training program for staff to help them embrace the future properly.

• Cooperation with the advertising staff to make the online enterprise a paying proposition.

• And finally, as one commenter on the original Buzz item suggests — BOLD LEADERSHIP.

Dave Martin wrote: Interesting post. The issue is larger than you suggest. Dr Gary Hamel proffered a profound thesis that seems applicable here, to wit: “What ultimately constrains the performance of your organization is not its operating model, nor its business model, but its management model.” Tribune and others in the dead tree trade have a leadership problem. Your “do your best link to the rest” and “reverse syndication” concepts are certainly interesting and they do merit consideration, however, both will require bold leadership.

Tags: , ,

Some good news for newspapers

Posted in Future Employment on December 17, 2008 by sizzlingjboy

No newspapers will declare bankruptcy in 2009. That’s just one prediction from Martin Langeveld of the News After Newspapers blog.

He has quite a few other predictions for 2009, including that the advertising decline now being experienced by newspapers will slow while their online ad sales perk up, circulation figures will stabilize and that many other papers will successfully follow the Detroit example of reducing the frequency of publication. He even expects that many hyper-local start-ups will expand from online only to print.

One provocative prediction was the partnering of Craigslist and (potentially) Ebay with newspapers as a way to drive readers to newspaper web sites.

Of course it isn’t all rosy. He expects that some major newspaper players will merge (Media News with Hearst is his top candidate) and that at least 25 newspapers will close outright.

All this might merely be of academic interest if the employment fate of thousands wasn’t hanging in the balance.

Tags:

The (Part of) Oregonian

Posted in Company news on December 17, 2008 by sizzlingjboy

Last week our sister paper on the west coast, The Oregonian, sent letters to subscribers in the second largest metro area of its state, Eugene. Those letters announced the cessation of daily distribution of the newspaper there.

Does this mean some Newhouse franchises will soon start attempting a Detroit Experiment? Does such a pull-back make economic sense? What do readers think?

On the first, we must wait and see. On the second, some news analysts have noted that since more than half of newspaper revenues typically come from their Sunday paper (which The Oregonian will continue to deliver to  the Eugene environs) such gambits could actually make a significant dent in costs without severely affecting income.

Reader opinion on the subject is not quite so positive. Here is what subscriber Betsy Boyd of Eugene had to say about it on her OregonLive blog.

Highlight:

The Oregonian has always tried to be a big vision newspaper, bold enough to claim the state’s name. How does The Oregonian survive this period of news format disequilibrium if it gives up on Oregon’s next largest metropolitan area after Portland? Does a name change come next?

The news hit me first like an unexpected loss in the night. But when the morning came (along with my newspapers), it felt more like a dear yet provoking and distinguished member of the community had just made an incomprehensible mistake, too strange and disastrous to overlook. The neighbors are talking. Some are angry. Everyone is aghast.

The lone comment is that The Oregonian wouldn’t be doing this unless it made good business sense. Whether that is true is just another thing on which we will have to wait and see.

Tags:

Where the Jboy been?

Posted in Rambling on December 9, 2008 by sizzlingjboy

I haven’t posted in awhile. Besides taking some time to pursue other projects — gotta eat after all — I decided to give Ledger management the time they requested to get done what they felt needed to be done. I didn’t want to be faulted for spilling beans, revealing secrets or simply whining while they tried to prepare for the future.

Wednesday a large number of those who have taken the buyout will depart. Some departments — biz for example — already need to put on a few pounds to reach skeleton status, yet they are about to lose more.

Rumor has it that we are also about to be graced with our marching orders for the new year. That and some recent newspaper-industry news made the time seem right to have another say.

Abandon ship?

Posted in Company news on December 9, 2008 by sizzlingjboy

Over the weekend Star-Ledger part-timer Lee Roberts stirred a little ruckus when he passed on an assessment regarding the future of the newspaper industry. The issue wasn’t so much what Lee brought to everyone’s attention, rather it was how he did it. The editorial-all email he dispatched had as subject line: “You should have taken the buyout.”

One responder faulted him for being negative and another for not being sensitive to others. Both seemed to believe that the news from the bond-rating firm Fitch Ratings wasn’t surprising. “I think we’re all very aware of what’s going on in our industry,” was one quote.

Just to make sure we are all aware of what is going in our industry, here is the highlight from that Dec. 3, 2008 rating report: “Fitch believes more newspapers and newspaper groups will default, be shut down and be liquidated in 2009 and several cities could go without a daily print newspaper by 2010.”

Fitch also listed the debt rating for two newspaper groups — McClatchy and Tribune — at junk status because of the likelihood of default. Less than a week after that assessment Tribune company filed for bankruptcy. McClatchy renegotiated it’s billion-plus dollar debt load earlier this year but still may not be able to maintain payments.

However, what is striking these two chains is neither unique or isolated. What’s more, it significantly pre-dated the economic collapse of September. Even before Sam Zell finalized the deal for Tribune, less than a year ago, questions were being raised as to whether the company could service the $13 billion debt (required to finance the purchase) given a steepening decline of advertising revenue and circulation.

But more to the point, what does any of this have to do with us at The Ledger.

First the good news:

• The paper is privately held; there are no shareholders demanding an increase in the value of their stock. (There may, however, be some Newhouse family members concerned about the size of their dividends.)
• While little is known about the Newhouse empire (it’s privately held, so doesn’t have to file annual info with the SEC) it is assumed it carries little debt load.
• The Newhouse family has never demanded the level of profit that has led companies like Gannett and Tribune to gut entire newspapers. Even if you don’t believe what has been said about the financial situation at The Ledger, it seems clear that for some time it has not approached the margins considered SOP by other newspaper companies.

What’s the bad news?

• The relationship between the newspaper and its online entity would have to improve to become dysfunctional. At the moment one could argue they aren’t even working toward the same goals.
• Other than survival it isn’t clear what goals there are for the newspaper or the internet entity. No long-term plan has been mentioned (expectations of a return to profitability are not a plan, they may not even be a realistic goal in this economic climate) and no interim steps have been provided that would guide toward those uncertain goals.
• As the newspaper advertising market continues to collapse The Ledger and NJ.com still lack the infrastructure to efficiently sell ads online or locally should any interested buyers be found. Worse than not recruiting new advertisers, the newspaper and NJ.com may have to turn them away.
• Speaking of NJ.com, Nielsen online reports continue to indicate slippage both in numbers of unique visitors and time of visit. From Oct. ’07 to Oct. ’08, the average time spent per person at our web site fell from nearly 12 minutes to less than 3. Only two of the other top-30 news sites reported such a precipitous decline. Some (NY Times, Houston Chronicle, Politico, Village Voice) reported major gains. Rumors of changes at Advance Internet continue to be just rumors. Given the Soviet-era mindset in Jersey City, changes to address such obvious failings could begin in 2013.
• Editorial management at the newspaper hasn’t finished planning for the future even though it is already here. Meetings continue about how the editorial department will function as departure-day for the last of the buyout-ees looms.
• Instead of using the smaller staff to focus on largest audiences or the newspaper’s core strengths, editorial leaders seem intent on trying to keep the newspaper just as it is (with maybe fewer pages and a couple of cosmetic changes). Rather than reorganize, the newspaper seems to have simply reduced staff.

Does that mean The Ledger is doomed and we should all have jumped ship? No.

Many people love newspapers. Lots think they are necessary (they supply a significant portion of the internet’s best content and may be critical to a functioning democracy). What’s more, privately owned newspapers (like The Ledger) seem a better bet for the future. Publicly held newspapers are much more interested in profit than journalism and much less likely to even want to survive if massive profits are gone forever.

But, if you will pardon my extension of a metaphor, The Ledger is leaking badly and listing to stern. The hand on the helm seems far from certain how to navigate through a screaming gale that is about to become a class 5 hurricane. The time for rearranging deck chairs and waiting to see which way the wind blows is long past. All that may be left is to batten hatches and pump for your lives.

Besides, the lifeboats are already away.

Tags: , , ,