Poor Chicago

Maybe it’s me: I’m the jinx. Every paper I ever worked for has now folded or faced mortal danger: the Addison (Ill.) Herald-Register (folded), the Detroit Free Press (came close and might as well fold), Chicago Today (which had no tomorrow), the San Francisco Examiner (no longer a real paper), the New York Daily News (resurrected from death), and the Chicago Tribune (now kneecapped). Three of them were owned by Tribune Company, a company I never did much like working for.

After Sam Zell shocked former news machers at Foursquare in his interview with Joanne Lipman – “he didn’t say the word journalism once,” one huffed – I told them, as I’ve blogged here before, that Zell might not be the disrupter you choose, but he’s the disrupter the industry has. Name three others, I challenged them.

Zell asked the right questions – about cost structure, ego, lazy ad sales, bad business practices. The first problem was that he asked them 13 years too late (see Clay Shirky, below). The second problem is that he had no answers, or the answers he had were uninformed. And the problem for the industry is that Zell is all it had to offer as a savior – and that’s saying a mouthful.

What genius has stepped up to rescue sacred journalism’s business? Philadelphia and Minneapolis are disasters. McClatchy keeps arguing, with ear plugs well stuffed and blinders tight, that the problems in the industry are not fundamental but cyclical (as Dave Morgan said to that at my New Business Models for News Summit, “bullshit”). Hearst has stumbled for two generations. Media News is still trying to make its business by cutting. The New York Times Company, for its vaunted leadership, is in many quarters shockingly incompetent (see: Boston). Gannett is as good as it gets in terms of innovation but it didn’t exactly start with pillars of the craft.

No, Rupert Murdoch is now the great shining hope of journalism. Ain’t that a mouthful of irony? After I left the Tribune and Murdoch bought the Sun-Times, a friend went over to work there and his Tribune colleagues sat shiva for him, as if he’d died. Another colleague who went to the National Enquirer was treated with less disdain. But now Murdoch is the one mogul with brains willing to invest in journalism. But note well that he’s investing in national journalism (and has long acknowledged that the local NY Post is just a bully pulpit).

Such is the stewardship of American journalism. And I won’t spare departments below the executive floor. To my peril, I’ve held journalists responsible for not innovating these last 13 years. Ad sales departments did nothing but take orders and had no courage to reinvent models or cannibalize before being cannibalized. Circulation departments did their best to torpedo the internet. Marketing departments never understood the value of journalism in the communities. Unions milked the cow wiht no-show jobs and waste. Analysts and institutional owners and reporters covered the industry never asked the hard questions.

It’s not as if the incumbents’ predecessors were much better. As Andrew Ross Sorkin pointed out the other day, it was Tribune’s former management that made money making this bad deal with Zell, screwing employees. No, it was the predecessors at all these companies who blew the chance to transform and grow journalism for the digital age.

When the history of newspapers is written – it’s about time to, as they’re about to become history – their golden age will probably be pegged between about 1975 (post Watergate, after TV had killed off multiple papers markets leaving monopolies, when cash was flush and was used to feed Pulitzer ego) to 1995 (when the internet earthquake hit and nobody saw the tsunami). But it was – and the Times pegs this more recently – a bubble, a false economy. If there was a golden age of newspapers, I say it was probably two to four decades before that, when cities had many papers, many voices, many views, and papers still spoke for and with the people.

Sound familiar? That’s where we’re headed again with the internet: many voices, many views, and now it’s the people talking.

I asked someone the other day what drastic step a newspaper could take today to stave off utter disaster and death. He laughed at me. Some are looking at stopping publishing a day or two (which is just stupid: news never happens on Mondays?). They can’t sell any assets when no one values them and even suckers can’t borrow money to buy them. Another round of huge cutbacks with no strategy for transformation only damages the product and brand. No, I fear it’s too late.

What saddens me even more is that we are not seeing investment to step into the vacuum. I know people who’ve worked on businesses to try to create new, online-one local news operations but they can’t get funding. I have no doubt that there is a sustainable business in local news. The problem is that, at least for the present, the current and former owners of local news ruined it. Thanks to them, news has cooties.

  • You also left TV Guide off your jinx list of failed publications that you have worked for…glad to see you are back in the states

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  • Danny L. McDaniel

    Nobody mentions the 13 billion dollar debt Zell saddled the Tribune Company with after his purchase of the enterprise. Digital age or not, that is alot of debt maintenace for any business to maintain and finance. This had everything to do with irresponsible and greedy financing for a quick buck than a “dying industry.”

    Danny L. McDaniel
    Lafayette, Indiana

  • Hi Jeff,

    Just heard you on The Diane Rehm Show, the first time I’ve actually heard you speak. You’re right on about the newspaper industry.

    Over the past couple of years, I’ve read some of your columns here and seen you and your commentary elsewhere on the internet. We may have corresponded in the past. It was good to hear your pithy insight into the newspaper industry this morning on NPR.

    BTW, I love your comment about the Tribune co-workers sitting Shiva for their former colleague who went to the Sun-Times.

    Thank you for being at the forefront of the new era of print journalism.


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  • Stop saying this; it’s wrong:

    “McClatchy keeps arguing, with ear plugs well stuffed and blinders tight, that the problems in the industry are not fundamental but cyclical (as Dave Morgan said to that at my New Business Models for News Summit, “bullshit”).”

    As you know, I was there at your conference, and called Dave on his mischaracterization immediately after he spoke. The Pruitt quote he cited was taken wholly out of context (I know; I heard the whole earnings call). Pruitt was talking about many of the effects OF THE LAST YEAR being cyclical. Morgan acknowledged as much to me, but said he wanted to make the general point and Gary’s quote was freshest.

    As recently as yesterday, Pruitt said on Wall Street, “”We recognize that part of our advertising decline is permanent — reflecting the secular shift to the Internet. Another part is temporary — reflecting the cyclical nature of our business in a recession,” Pruitt said.”

    Your comments about earplugs and blinders are beyond cheap shots, Jeff. They’re becoming willful, hurtful lies. Facts matter, dammit.


  • “Rupert Murdoch is now the great shining hope of journalism”

    He controls a product which for now provides an unmet need, detailed business content. FT.com and IBD.com do the same thing. I don’t think one can extrapolate a general news business model from that, other than to say, for-profit general interest journalism is economically unsustainable without subsidy.


  • Howard,
    I apologize then. i did not recall hearing you say that to Dave when I was there. But I have heard Pruitt say similar things at more than one event. I do think that he has at least been very late in recognizing the gravity of the situation.

  • Jeff, since you’re so good at killing off newspapers, is there any chance you could come work for the Union/Tribune? It sorely needs to be put out of our misery.

  • All the scorn heaped on the folks who ran/run newspapers reminds me of the experience of the GM top brass in Washington. Some of it might be deserved, but the implied notion that innovation is easy when you’re running a large organization isn’t fair. Nor is it helpful.

    The fact is that the world is changing in completely new – to us – ways. Organizations that evolved in one environment have a very hard time when that environment changes. The bigger they are, the more costly the change. Auto, Television, Newspapers, Finance, Advertising, Printing companies are all caught in a similar situation. If the whole Investment Banking business can disappear in a couple of weeks, it doesn’t make sense to focus the blame the folks who run newspapers.

    Not to say that they couldn’t have done better. But the Googles and WalMarts are few and far between. It’s always been like that. Probably will always be like that.

    Meanwhile, there are new models starting to emerge. Rupert seems to see some opportunity. His record in making money in the media is pretty good. And there are lots of new experiments on the ground. These days, things can scale very quickly. Google, after all, is only ten years old.

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  • Keith

    A salient point:
    Last night, I was lucky enough to attend a Q&A session with Ted Turner in Atlanta.

    A question asked of Ted: “What is the future of news and media?”

    To paraphrase his response: “It’s way too crowded and nobody can make any money anymore. That’s why I’m now in the restaurant business.”

    Ted Turner didn’t get rich by being stupid.

  • Jo

    An Australian newspaper chain bought Trademe, New Zealand’s equivalent of eBay, for NZD700m (around USD400m) in 2006.

    Do you know how that deal fared?

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  • Mike G

    Go read newspapers from the 20s and 30s and you’ll never believe that their heyday was in the 70s or 80s. Yes, they may have done a lot of solid, New Yorkerish longform reporting then, but the time when they were alive, when they mattered in the lives of their cities, and when newspapers employed the best and brightest– the Menckens, the Ben Hechts, the James Cains– was decades before.

    I’ve noted this here before, but try to think of anything in popular culture that has lasted as long as Blondie. And it even looks just like it did in 1938! Try to imagine something that has been around that long unchanged in any other medium– TV, radio, magazines, anything. (Okay, maybe Paul Harvey.) Try to imagine a TV show lasting since the 50s, with the same haircuts even. That’s all you need to know about how newspapers stopped innovating and attracting new audiences, right there.

  • I thought you were going someplace else with the post until I got to the last line. The way i see it is that newspapers were greatest when they had the most competition. 10 or 15 newspapers in a city. Then local monopolies. Then protected money machines.

    As for the forms that have lasted. That could be seen as evidence of now innovation or evidence of lasting value. I’m going with some stuff of lasting value, surrounded by a lot of other stuff that was a way to make money, but created no real value.

    So if that’s true, then the issue for newspapers and journalists may not be to add features, but to strip away the barnacles.

  • His Girl Friday is a move about the heyday of print. And it’s free. Over the internet.

  • Hi Jeff I am doing a TV piece for Chinese TV on the repercussions of the hacking scandal on the US assets of News Corp, are you available for interview in NYC?

    Regards Nathan