Saturday, July 2, 2011

These are not the good old days for daily newspapers

Originally published in the Bargain Hunter on July 1, 2011.

I fear that in five or in at least 10 years, communities the size of Dover-New Philadelphia will be remembering the good old days when they boasted having their own daily newspapers.

The news over the last several weeks hasn’t been good. Consider:

- Gannett Corp. announced it was laying off another 700 employees at its community newspapers, which I’m assuming includes publications in east central Ohio – in Coshocton, Newark and Mansfield, among others.

- Journal Register Co. CEO John Paton said the value of journalism is “about zero.” Journal Register owns the Lorain Morning Journal and Lake County News-Herald in Ohio and used to own the Times-Reporter. My guess is that Paton’s view is widely held in publishing companies’ corporate board rooms.

- Media General ordered its employees to take off 15 days without pay by the end of the year.

- McClatchey Newspapers has been cutting scores of jobs since Jan. 1.

Here’s what happened in the run-up to the Great Recession:

Beginning in the late ’80s with junk bond financing widely available, publishing companies began to devour privately held community newspapers across the country. Many of those companies assumed tremendous amounts of debt as they formed groups of newspapers. If they weren’t publicly traded, they wanted to be.

As the trend continued into the ’90s and ’00s, the corporate guys used terms such as “synergy” and “clusters” to tout their business strategy. Editors and reporters referred to it as “cookie cutter.”

In my 19 years as editor of The Times-Reporter, I worked for three different owners – Journal Register (1990-2001), Copley Press (2001-2006) and Gatehouse Media (2006 to 2009).

Journal Register, led by the late Bob Jelenic, had a reputation as a vicious cost-cutter. That’s how you maximized profit to pay off the insane debt they assumed to own you.

Jelenic and his gang of corporate types conducted budget reviews for the coming year every October. They were grueling experiences, often lasting into the early morning hours. During one of them, I had to argue my case for increasing our three photographers’ monthly equipment expense by 10 percent.

Back then, JRC didn’t own the equipment photographers used. It was up to the photographer to stay up with current technological trends. But every line item budget increase was scrutinized as if it would single-handedly break the company.

By calling for a 10 percent increase in the equipment budget, I had committed a sin, and it had to be explained.

I told them that I didn’t think increasing the equipment budget from $100 to $110 a month was out of line when photographers were being asked to buy professional camera bodies and lenses for hundreds upon hundreds of dollars.

After 15 or so minutes of back-and-forth, Jelenic looked up from the USA Today he was reading and told his team to move on.

I won that one.

So, in the middle of all this cost-cutting, the Internet exploded and JRC seemed not to have a clue how to deal with it. In fairness, neither did anyone else.

Fast forward to 2006 when newspaper companies were still snatching up properties and paying too much. More budget cutting was on the agenda and orders were given to editors to consolidate and streamline. Cookie cutter anyone?

Oh, and “news” became “content.”

But a cultural sea of change was taking place. The Internet became the preferred provider of that “content.” And most of it was free.

Older readers, meanwhile, remained largely loyal to newspapers, but young people were abandoning print in droves. Advertisers shifted money to platforms that gave them the best bang for their buck.

Want to sell a car or rent an apartment? Craigslist.

What’s on TV? A couple of clicks on the computer gets you the answer.

Researching real estate? Trulia aggregates the information in your local community just fine.

The franchise for local news, however, in communities across the country belonged to and still belongs to the daily newspapers. But they are losing their grip as they continue to cut the cost of content-making because they’re selling fewer papers and ads and because they’re underwater on their assets – big time.

No longer are they sending reporters to school board meetings or to county offices. They’re not looking at the court dockets or covering trials. With newsroom staffing cut by 50 percent or more, it’s impossible to do the kind of journalism they did even in the lean years of the ’90s.

If daily community newspapers were pizzerias, they’d be trying to sell you a pie without the cheese or sauce.

You want toppings? Forget it.

Perhaps JRC’s Paton is right. The value of crust is “about zero.”

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