You can see the gleam in Dean Singleton's eyes from here. He called it as he saw it, as his canny deal-making had netted him "the crown jewel" of Knight Ridder, the San Jose Mercury News. He bought the Merc, the CC Times, the Monterey (CA) Herald and my favorite Midwest paper and alma mater, the Pioneer Press today, for $1B.
Sure, the Merc, my hometown paper, has fallen on hard times. My god, in the year 2000, not long ago, the Merc pulled in $118 million in recruitment ad revenue. That's before job ads hadn't yet moved to Monster, Yahoo Hot Jobs, craigslist and Simply Hired in huge numbers. Then, the bubble burst. Santa Clara County lost more jobs than it created and recruitment fell to a mere $18 million in 2003. That missing $100 million spelled the end of a number of Knight Ridder careers, and ultimately contributed greatly to the end of KR itself. The Merc was the growth engine -- the largest single carrier of classifieds back in the day -- and could make up for KR's mature markets in Philly, Akron, Saint Paul and the like. But we've moved from several mature papers to a mature company in what's rapidly looking like a mature industry, at light speed.
It looks like the Bay Area's about to become a two-company region, reduced from three, as Knight Ridder abandons its role to Media News and to Hearst. Hearst bought out the Chronicle a few years ago and has struggled with circulation mightily. But it still holds an impressive number -- 400,906 -- which we'll check in on when the industry reports new circ numbers May 8.
But this number -- 702,738 -- is the more impressive one. That's the one Media News CEO Dean Singleton (here) can count among his 18 Northern California (the Bay Area and beyond to Willits and Mendocino) when the purchase from McClatchy Newspapers closes around July 1.
Now two companies holding major sway in newsgathering, opinion-offering and ad selling have raised some anti-trust-like concerns. Indeed, California Attorney General Bill Lockyer had already opened an inquiry into McClatchy's divestment of the California KR properties before this sale was announced. From a competitive point-of-view, observers are sure to raise their eyebrows even higher than they were yesterday. That's because we learned what all the discussions of "the complicated sale" became clear.
In fact, it was Hearst that "bought" the Monterey and Saint Paul papers, and now -- McClatchy-like -- has turned around on the day of sale and "sold" them back to Media News, in exchange for an undisclosed equity interest in non-California Media News properties. So officially, Hearst won't be a partner in the Bay Area newspaper picture, but given its intended partnership elsewhere, observers are sure to raise the questions of how truly competitive they'll be in the Bay Area.
Of course, you can't blame the publishers for circling the wagons, and laying to rest any notion of real daily competition in the newspaper trade. Competitive markets have become as rare as newspaper companies reporting profit improvement. (In fact, Dean Singleton was smart enough to realize that the spoils were small enough that competition in Denver didn't make business sense, joining Scripps in a joint operating agreement there.)
So Hearst and Media News do a little buddying up, spreading the costs of sale out a bit more. The pooling of assets goes much farther of course, even in this convoluted deal. It's not Media News as the buying entity in this transaction, but the California Newspaper Partnership. That partnership, spun out in 1999, has Media News as its lead with a 54% stake, with minority partners Gannett, the country's largest news company, and the Stephens Media Group, publisher of the Las Vegas Review-Journal and about 27 other dailies.
We could go on and on with this game, but here's the truth: the wagons are circling. And with good reason. The battle isn't in the print world, but online.
Many journalists and readers fear that cost-cutting will destroy the papers at which they work and which they depend upon for news. We'll read much more in the days to come about what in fact Media News has done at the 49 papers it's owned, and how it may have treated its bigger properties, in Detroit (News) and Denver (Post) differently and better. We'll see what we can make of that.
The truth is though the cutting isn't about to begin. Remember those stats on Merc recruitment revenue? My stats tell me that the Merc has already cut newsroom staffing by 32% from its 1998 height. The cuts are coming, announced seemingly week, even at two-stock-class papers like the Washington Post.
When I see the gleam and the spirit in Dean Singleton's eye, this is what I wonder: Can he take that fire into the Internet in the same way that Rupert Murdoch has? Can he think about the Internet as a businessman who wants to be more part of the future than the past? Can he redeem the art of journalism in the new media world?
One quote in this morning's Mercury News gave me a bit of hope. Talking to an ASNE editors' group in Seattle, he made the point that newspapers have got to
find ways to monetize editorial content that's given away on the web: ``We have
to get paid for it. We either have to come together as an industry or partner
with Google or Yahoo or whomever. If we don't get paid for it, we aren't going
to continue to be able to produce it.''
Maybe, oddly, it will be Dean Singleton, proprietor of the nation's 4th largest newspaper company, who can figure out how to pry lose some of the new media revenue the Googles, Yahoos and MSNs are leveraging out of Old News' hide.