Posts about newspapers

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?

Anybody want to buy a newspaper?

I’ve said that if I owned a newspaper, I’d sell it (in fact, a prospective student at CUNY just quoted that back to me last night). And now Floyd Norris writes a column in the Times (behind the barbed wire; sorry) asking who would buy one.

There is a venerable Wall Street joke featuring an investor who, having accumulated a large position in an illiquid stock, decides it is time to get out. “Yes, sir,” replies the broker when he is told to sell. “To whom?”

The current situation of Knight Ridder, the owner of newspapers including The Philadelphia Inquirer and The Miami Herald, brings back that joke, albeit painfully….

Mr. Sherman’s problem is one known by many investors who look for cheap stocks: where they see value, others see problems. The consensus Wall Street view of newspapers now is that they are a dying breed, destined to wither under relentless competition from the likes of Google. Profits may be good now, but they will not last, as circulation declines and advertisers seek newer media. An index of newspaper stocks is down 22 percent in 2005.

As long as newspapers keep thinking of themselves as papers, they will shrink. Guaranteed. The question is whether they are the best positioned to get to the other side, to the future of news, and whether they can afford to get there. More on that later….

Don’t they need new blood?

The American Press Institute puts $2 million into a project to find new business models for newspapers but I think they make a few mistakes: First, it’s not about new models for newspapers; it’s about new models for news. Second, the august group they gather for the task, though smart and experienced, are all from the big companies and the old ways. The newspaper industry’s worst fault is that it is insular and rejects new blood. This would have been a chance to find new people (and no, I don’t mean me) who are doing new things in new ways. That, ladies and gentlemen, is where the new models are going to come from, not from the old ways.

: Rafat Ali’s take here. And Rafat’s just the kind of person who should be in this thing.

: LATER: Nancy Wang says:

… the project goals also entail an “assessment of the threat to newspapers, including emerging competition”. Call it semantics, but this line of thinking continues to be insular. Instead of thinking about threats to newspapers, they should be thinking about learning (maybe even partnering) with the emerging competition that seems to be taking away their audiences.

Right. It’s not about the threats to newspapers.

It’s about the opportunties for journalism.

How quaint

Two quotables on this thing we call a newspaper. This one from ArtDodger in the comments on my post below on imploding newspaper circulation:

This business of pureeing trees and wringing cuttlefish to make the day’s transient news permanent seems positively archaic, doesn’t it?

This one from a comment on Attytood [via Porter]

It’s a product you have to go and get in the rain, snow or wind and pull out of the hedge, the leaves or a coin-eating box on a dirty street corner. It’s heavy. It’s big. You’re not interested in 90% of its content. And when you’re done with it, you — literally — have to wash your hands and figure out how to properly dispose of the thing.

: More newspaper quotes here, here, and here. Among them:

Half the American population no longer reads newspapers: plainly, they are the clever half. — Gore Vidal

People everywhere confuse what they read in newspapers with news. — A.J. Liebling

It’s amazing that the amount of news that happens in the world every day always just exactly fits the newspaper. — Jerry Seinfeld

Trees rejoice

The Audit Bureau of Circulations is coming out with its report on newspaper popularity (what else should we call sales) and it’s going to be bad. The Wall Street Journal (free link) sums up the numbers:
: Gannett down 2.5 percent
: Knight Ridder down 2.9 percent
: Tribune Company down 4 percent (not including scandal-scarred Newsday)

More numbers from E&P:

: “McClatchy is breaking its 20-year winning streak this period. Daily circulation dropped around 1% while there was a “steeper decline” on Sunday.”
: Knight Ridder’s breakdown: down 2 percent daily, 3.5 percent Sunday.
: Belo’s Dallas Morning News: down 7 percent.
: Providence Journal down 2 percent.
: Riverside Press-Enterprise down 3 percent daily, 4 percent Sunday.
: Boston Globe down 7.7 percent daily, 7 percent Sunday.
: NYTimes up 0.4 percent daily, 0.1 percent Sunday. “The increases came mostly from the paper’s national effort. Circulation for the New York City area declined.

Youch.

: Notable quotes above.