Who wants to buy a newspaper?

At the Huffington Post, Jay Rosen has a suggestion for Knight Ridder’s sale: Entice local buyers.

I have to disagree with Jay — or at least get tougher than he does — on a few key points:

First, buying a paper as it stands today is a no-win deal. Newspapers are not growth businesses. Though profitable, they are shrinking businesses. So any owner who comes in will be forced to make no end of tough decisions: cutting back staff, including newsrooms, and shifting the business from the formerly high-margin and monopoly print world to the lower-margin and highly competitive online world. Those decisions will be costly, bringing severence and possibly shutdown liabilities, as well as considerable unpopularity.

So I would challenge the business and editorial management and staffs of these newspapers to come up with their own tough and specific strategic plans so they can sell their future, not their past, to prospective buyers:

Yes, they should plan their own cutbacks everywhere in the operation, including the newsroom.

They should find the efficiencies that will allow them to increase the value of their products: Do we really need another movie critic? Do we really need to send our own guy to another damned golf tournament? Can we save money on the commodity news that takes up so much resource?

They should create their own strategies for partnering with the public to grow in coverage and local advertising.

The plans should be harshly realistic about revenue and margins five and 10 years out.

Then they should turn around and create a plan for investment in online and other media and in what makes their franchises uniquely valued: reporting.

In the end, they need to present a plan that shows how they will have a business that is not dependent on paper but instead uses any and all media available to serve and inform the community.

And they should get Knight Ridder to do all the tough stuff before a new buyer arrives, setting in motion and paying for layoffs, retraining, and retooling, so together they can sell a business that has a real strategy and higher value for shareholders, for employees, for the new owners, and for the community.

Second, Jay says that oftentimes, the would-be angels who want to rescue local papers are the worst possible buyers (see: the late Abe Hirshfeld at the NY Post; see also: Robert Maxwell, for whom I ended up working, at the New York Daily News). You don’t want someone who buys purely on ego, for eventually, bankruptcy trumps fame.

To guard against the loons and larceny, Jay suggests that the paper’s editor have veto power over a buyer. I disagree. Editors may pick people who’ll promise to increase the size of print newsrooms — that is, to do the fiscally irresponsible but editorially attractive. Editors are easy to seduce. They are fiscally horny. This has to be about creating a viable longterm business, or it just won’t work. So give the larger management team a veto or find a way to convene a vote of the staff.

Third, this will work only if the staff sees the alternate as dire: folding or continued life under a Scrooge regime at Knight Ridder or under a private equity buyer. So KR has to put forward a realistic vision of the future of newspapers — one that will scare the entire industry. That won’t make them popular in the business but it will let them look at themselves in the mirror a few years hence. KR also must open its books to make the exact financial picture for newspapers crystal clear.

Fourth, I would by no means limit this to local buyers and certainly not to industry buyers. Hell, I’ve moved lots of times and ended up loving the places where I landed. Just because I happen to live in a given town, that doesn’t mean I know more or care more than the guy in the next town. That is a wishful fiction of newspapering: that local is a virtue. Quite to the contrary, the fresher and perhaps farther the blood imported, the better. So why not see Craig buy Miami or or The Guardian Philadelphia or Yahoo San Jose? What this industry needs most is new perspectives, not just local perspectives.

Fifth, I would do the very unPC thing among the antimedia crowd and urge Congress, the FCC, and the Justice Department to grant exemptions from crossownership and even antitrust rules so that other dinosaur media businesses in these towns — TV, radio, online, and suburban papers — could figure out ways to merge and break down the barriers the built between media. That would build truly local news operations that are better prepared to deal with a future. If you don’t like national conglomerates buying local media, then at least allow local conglomerates a fighting chance. I am out there telling media companies that they have to break free of the shackles of their medium — that newspapers must stop thinking of themselves in terms of their paper, broadcast in terms of their broadcast towers — and yet that is how we are regulating media: forcing newspaper companies to own just newspapers, not broadcast, as each industry shudders against the fierce wind of the internet. Keep in mind why Knight Ridder is being forced to sell: because it became just a newspaper company in a new world where the medium doesn’t matter.

: Note: I just posted this on Huffington — my maiden voyage there. And, no, I didn’t do this to further piss off the OSM crowd. Jay started the discussion there so I chose to add to it there. And the fact that I can is rather, well, open-source of them, wouldn’t you say?

  • On the surface, to me it seems like the newspaper business is salvageable. They need to stop offending people, promptly and sincerely correct their mistakes (Krugman, Geraldo, etc, the list is too long), and add some fresh “diverse” perspectives.

    Now this is never going to happen without some serious housecleaning. And it may fail entirely if the new “perspectives” drive away as many current readers as those they entice to return.

    On one point that Jeff made I concur completely.

    “Do we really need to send our own guy to another damned golf tournament?”

    These newspaper sports articles are a waste of space and time. Columnists travel to every game and event and it doesn’t behoove their writing one bit. The Boston Globe sends Bob Ryan to all these golf majors and he pens some of his weakest, most irrelevant dribble. He says nothing that isn’t 10 times better reported on ESPN and the Golf Channel.

    Multiply this by all the reporters out there chasing stories that really are no more than a mouse click away. This travel has a cost in reporting quality and in real money.

    The New York Times will not break down its travel and expense budgets for Wall Street analysts. The annual number is in the tens of millions of dollars (I think).

    Apparently “listening to the customer”, admitting mistakes (Bush), and corporate transparency only apply to everyone else.

  • Jorge

    I like the idea of some of the media ( newspapers ) being sold to small time locals. I am very critical of all papers that don’t print the truth or leave out the truth. I cancled our local 2 years or so ago. Left me unsatisfied. Day old news can seem very fresh in the hands of a skilled journalist or editor. Ijust want the facts. No, I just love the facts.

  • Jorge


    Every day I am thankful for you and other Blogs . You and others like Arianna care about what we think and let us express it even though it may not be newsworthy.

    Much happy blogging to you.

  • Perhaps it is time to look into a worker owned business model again. Sell each paper to its own staff (at least in part).

    In spite of the airline’s disaster with worker ownership there have been many successful cases throughout history. By owning their own papers the staff would have the experience and motivation to make the correct business choices as well as an incentive to innovate.

    One of the problems with newspapers is that they are now parts of “media” companies which answer to Wall Street. Staff ownership would return them to focussing on the news instead of appeasing distant bosses.

    I just finished reading “The Nothern Light” by AJ Cronin which deals with the conflict between a family owned local newspaper and an invading corporate newspaper chain in England in the 1950’s. So the issue of local control is nothing new.

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  • Joe Deegan

    If the Guardian bought the Philadelphia Inquirer the editorial policy wouldn’t change. I have e-mailed Chris Satullo, the editorial page editor ,and he says everyone on his staff is liberal but they think they are fair to the conservative point of view!! I suggested he might want a conservative right in the room to tip them off when they are off-base. No Response. I would like to see The New York Post buy the paper. That would make a difference.

  • It feels like you’re handing out water wings on the deck of the titanic. What’s the point of preserving brands?

    As a new media startup it would seem smart to wait a couple of years until the big guys aren’t so big before trying to compete. We mammals wisely didn’t crawl out of our holes and flourish until the dinosaurs were dead.

  • richard mcenroe

    I thought it was salt water triumphed Robert Maxwell…

  • Fire Woodward

    Please note: If you agree with the following email and feel strongly that Woodward’s actions warrant an immediate termination from the washington post as well as agree with the general state of the media, please sign your name at the bottom of the email under the signed section, and forward to as many people as possible and include in the CC field the following emails at the washington post:

    [email protected], [email protected], [email protected], [email protected], [email protected], [email protected]

    Let your voice be heard, this is an action that you can take to voice your dissatisfaction and frustration.

    From Deep Throat to Cohort:
    The Devolution of the American media

    The last straw has just descended. The continued debasing of “journalism” has hit a nadir; a profession which is an integral part of our constitution, our way of life, the very fabric of the American ideal has finally disintegrated. We are left with a press toothless, courage less, and faithless in the pursuit of truth. Bob Woodward, the iconic reporter, has devolved into a willing accomplice of the ruling elite. This truly is a sad day for journalism; a sadder day yet for America.

    What was revealed should send shockwaves throughout the world. We have witnessed the unmasking of the conglomerate behind the so-called free press, whose only desire is chasing profits instead of leads. Bob Woodward, evidently selling his soul to gain “access” to the White House, is an active participant in the continuing lie perpetrated on the American people. A man whose very job is to expose lies, has instead been lying to the very public he is supposed to serve. While most reporters and journalists refuse to name sources to better serve the public, Woodward instead tells us that he did not want to tell the truth about who the original source of this leak is in order to protect himself from having to testify in front of a grand jury—courage indeed. Has it come to this, a reporter lying about a source, not to protect the public’s right to know, but, rather, to deny it. What a disgrace! My hero exposed for what he is: a lying sycophant more interested in self preservation and the preservation of his access to power. After two years of lying, he finally owns up to his deception and reveals that someone in the White House did in fact speak to him two years ago about the Valerie Plame. He acknowledges this after going on talk shows dismissing the gravity of the case; erstwhile being a willing co-conspirator. How convenient that this “confession” aids an accused criminal, one Louis Libby—does the word aiding and abetting sink in yet?

    The truth is that Woodward’s actions are symptomatic of the general state of the press. Reporters have morphed into a tool of power instead of speaking truth to it. In the obsession to “make news”, reporters jumped in the bed of the very people they are supposed to be keeping honest. Moreover, companies such as the new york times and the washington post have embedded in their employees the notion that breadth of reporting is more important than depth of reporting. In the mad dash to capture market share, the modern day news media has settled on a vision of capturing the most amount of readers while making sure to coddle the ruling elite. Sure they will report of some senator who cheated on his wife, but will ignore the actions of the very institution that senator works in that cheats their constituents. News has turned into a snapshot of events which can capture the most attention, instead of a continuous effort to educate and cultivate an informed public. Obsessed with gaining access to news makers, the news media has transformed into whores of the powerful, turning tricks to get two minutes of pleasure with the very people they are supposed to keep in check. Sound bites that tell us nothing, rhetoric reported as news, truth forsaken for an intangible balance. On a scale of news, truth has no balance and counterbalance; truth stands on its own. Yet the state of today’s news media is that of a meek poodle, yelping at its master for a crumb from the table. And they wonder why subscriptions have fallen off, it’s because those you serve are seeing more and more that you are Judas to the public. Unable to bear the cross of truth, you instead sell out for the nearest shekel. Reporters who no longer see the profession as a crusade against tyranny, instead you seek it as a way to get your spot on the stage. Journalists who are more eager to stand in front of the microphone instead of behind it, the silent tool of truth transformed into publicity hounds while you try to land on the new york journal best seller list. Think about that next time you are talking to your agent on a new book deal. For those who might have true passion for journalism, ask yourself if you are really doing today what you came into the business to accomplish when you were in college. For those that have always seen journalism as a means of acclaim, I truly hope that the day will come where you are torn down by your own lack of scruples.

    All this leads back to Bob Woodward. From this day on, I urge all readers and subscribers of the washington post to cancel their subscription TODAY. It pains me that a great paper like the washington post has been reduced to enabling an admitted liar and in the end justifying his stance. Until Woodward has been summarily dismissed from the washington post payroll, a full accounting given of what he testified about to the grand jury, and a full page apology given to the readers, I will NEVER pick up another washington post newspaper again. I have already cancelled my subscription and urge all other readers to do the same until the washington post have resolved this situation as described above. I urge all readers to cease and desist visiting the washingtopost.com, and I urge all businesses that stand for honor and intergrity to stop selling the paper forthwith until a full accounting is given. There is one weapon that the consumer, vote with your wallet and starve the washington post of its revenue; it seems that is the only way to get a whore’s attention.

  • Old Grouch

    (Sneaking in below the comment spam…)

    There is a real disconnect between satisfying a newspaper’s real customers (the advertisers) and the other “customers” (the readers) that gets magnified in true Gresham’s-Law fashion when you add public-held corporation ownership to the mix. Corporate investors look for the maximum return, the way to that (short term) in a stable or shrinking market is to keep cutting costs, and the cost-cutting gets led by the cheapest (in every sense of the word) operator. No, nobody reads the bridge column, or the television listings, or movie reviews, or the detailed stock tables, or… Except they do, and every time management shaves off a feature, or cuts back on coverage, or replaces an experienced reporter with a novice, some reader loses his reason for buying the paper. Until finally you’re left with a content-free wrapper for advertising inserts… that nobody reads.

    Independent owners willing to accept something less than the maximum returns that Wall Street demands might provide enough breathing room for newspapers to reinvent themselves. Taking a little less out right now, and investing it instead, might be enough to stop the decline.

    Local conglomerates? Not likely: In most markets all the broadcast media is out-ot-town chain ownership. And anyway, the broadcasters have even less clue about the web than the newspaper people! (Been to any TV station sites lately? Have anything beyond the weather radar in your bookmarks? Didn’t think so…)

    So there’s an opportunity for web+print. Give the hardcopy away! Change those “subscriptions” to “delivery charges,” for those who still want it. And there’s nothing wrong with beefing up the newsroom: The net’s infinite space is just what you needed to counteract that shrinking news hole. Post all those pictures you didn’t have room for, and the stories that didn’t fit, and the details that got cut. Put someone to work writing obituaries again. (A lot of readers frowned when you turned the obituary page into just another advertising section.) Bring back all that “for the record” stuff: The police and fire runs, births and deaths, new corporations, quarterly reports, school lunch menus… all the agate that you didn’t have room for before, and you can simply link to now. And take comments. After all, it’s just bytes!

  • Ravo

    Fitzgerald the “big wind from Chicago” spends $20 million of taxpayer money …..

    “in vain pursuit of a crime, and could only manage to indict Scooter Libby for not remembering who told him about something that didn’t happen.

    The irony is that this investigation into the fluff from an airhead’s navel came about because first the New York Times and then The Post demanded it, nurtured it and gave the story mouth-to-mouth resuscitation every time it began to fade into the mist along the Potomac.


  • Jim S

    News doesn’t mix with the desires of the Wall Street analysts any more than health care ever will. This is the reality that Jeff doesn’t address. Corporations aren’t the begin all and end all of how things should be managed.

  • So, now a bunch of former and current Knight Ridder editors (including some that I have worked with or for) have banded together to advance a slate of alternative candidates for the board who will look out for quality journalism, community values, and apple pie.

    If every one of the people who signed the letter sells every mutual fund, stock, and any other investment that they’ve been squirreling away for their retirement or kids’ college fund, then they would have more credibility to me. Would even be interesting to see how much KRI stock comprises their total current investment portfolio. Guessing not much — I’d also guess that outside of forced 401-K matches, few of them probably have much newspaper stock at all. Folks, duplicity is equally hollow in the newspaper business as it is in politics.

    The local buyer thing seems a bit more realistic, given that there may be some of the monied class who are willing to put up with 20-30% margins, gradually diminishing to retail levels over the years. Why not take this to its logical conclusion, and have newspapers function like sports arenas and get the taxpayers to fund them! While I think that newspapers are providing a vast majority of the so-called “free” quality content on the web (at least that outside the realm of opinion/blogs), a different business model will have to emerge to fund this other than charity.

  • Menlo Bob

    The Merc has made a habit of buying up several small time local papers. These owners are either estatic over their good fortune or fearing that the details of the buyout is about to bring them down too. Circulation now stands at a little more than half of its main rival the San Francisco Chronicle and the Chronicle is sinking faster. Interestingly, Philip Anchutz’s purchase of the SF Examiner might yet prove to be a very savy move–free, local and a name brand.

  • A great overall analysis, though I might disagree in some points.

    Specifically, I think alt-weeklies and suburban/exurban newspapers have at least somewhat more of a future than big dailies.


    Because they’re doing exactly what the big dailies have lost track of — covering and analyzing local news in depth.

  • Robert Feinman,

    With all due respect, media companie DO NOT answer to Wall Street. See part of my initial comment above. When most high profile executives fail to deliver stock performance they get fired – often with the Big Media leading the charges. See Michael Eisner at Disney, Carly Fiorina at Hewlett Packard, etc. I am pretty sure that the NYT was involved in that disgusting Eisner pile-on.

    While the Times loses readers, its board stays and they lay off workers. When Newsweek botched the Piss-Koran story, its competitors DEFENDED them. Every other “Wall Street” company tries to capitalize on its competition’s failings, but not in Big Media.

    To be fair, Wall Street mostly gives them a free pass. Usually shareholder performance demands come from state pension funds, Goldman Sachs, etc. There are too many leftist ideologues running those outfits without the stones to take shots at Sulzberger et alia. Could you imagine CALPERS ever criticizing the NYT’s Board – no matter how much money its pension fund is losing? For the same reason you won’t find any Google criticism in the Times because Eric Schmict is pals with Artie.

    “Wall Street” is not the problem, but rather arrogant ideologues who are trying to exempt themselves from the laws of economics.

  • Old Grouch

    Isn’t the Times’s corporate structure a two-tier arrangement that gives control to Pinch & family, with the other shareholders simply along for the ride? I doubt if CALPERS or Sachs hold much Times stock if that’s the arrangement.

    And “Wall Street” is exactly what precipitated the Knight Ridder sale:

    [T]he head of Private Capital Management, a Florida investment firm and KRI’s largest shareholder, wrote a letter to the board demanding a break up or sale. —Rosen’s post

  • Lloyd Fassett

    I believe the comments are misdirected. The story of the broken business model in newspapers is not about content, but about the application of technology.

    It was an innovation to print and distribute – 500,000; 1,000,000 newspapers a day a long time ago. Now all kinds of markets like newspapers and network television are fragmenting. Enough readers aren’t finding enough relevant content to keep reading. And the volume of advertisering across all channels is pushing down the return on advertising.

    What would turn around the newspaper industry is a printing process that allowed for individual papers to be created per person – along with contextual per person advertising – distributed correctly to each subscriber daily. Expensive? Sure – monumentally. Difficult? You bet. But, if a newspaper could charge 5X more per add, and 2X more per subscriber that would be a lot of money too. And there still is a decent cash flow to finance the development of this kind of technology. You want a stretch goal? Figure out a way to do pay for performance advertising through coupon redemption.

    The failure of the industry isn’t in arguing over content – go ahead and include all the subscribed blogs, follow up comments, birth/death announcements linked to your address, whatever the reader likes for this format. The opportunity in the industry is a new printing process that lets readers control the their content and delivering it in a newspaper format.

  • “What would turn around the newspaper industry is a printing process that allowed for individual papers to be created per person – along with contextual per person advertising – distributed correctly to each subscriber daily.”

    It’s called the internet. And no one is going to pay more for information anytime soon. Today is about quicker and cheaper. Not about a more lengthy, costly process to get the news I want. It won’t fly.

  • In the not very distant future “electric paper” – basically a piece of very thin film – is going to arrive. It will have 72DPI resolution and be video compatible. It will hook up to a cell phone or a wireless enabled I-pod and it will feed RSS/video pod casts/tailored ads to the “front page”. It will update either automatically or when you hit refresh. It will cost $100.00 when it’s launched and $10.00 within a couple of years.

    Newspapers will then largely cease to exist.

  • That is a wishful fiction of newspapering: that local is a virtue.

    That might be so in New York, but out here in the middle, local is still a virtue. It’s a virtue most newspapers don’t see, however, perhaps because they are all waiting for their plane ticket to the big leagues.

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