Content Bridges

Tale of 3 Newspaper Sales Highlights Market Strategies

As one deadline passes, and the Tribune prudently takes a little more time to juice up the billionaire bingo match-up between Sam Zell and Ron Burkle, it's worth paying attention to two smaller recent sales. Those sales look like a publishers' board game of Monopoly, but they tell us a lot about who's buying, who's selling and why.

The most recent purchase is that of the Danbury News Times by Dean Singleton's MediaNews Group, Inc.. Announced Friday, MediaNews bought it from Community Newspaper Holdings Inc., which just bought it in the fall from Ottaway Newspapers. Ottaway is the community newspaper division of Dow Jones and it unloaded a half-dozen titles last year to raise cash, pay off its Factiva purchase and otherwise invest in digital. Singleton paid more than $75 million for the paper, which sits close to his other properties in southern Connecticut. What makes it work for him can be summed up in a single-word: clustering. He's used the strategy well around the country. The idea is that if you can own several properties in one region, you can wring out lots of efficiencies.

What kind of efficiencies? Consolidated and centralized operations ranging from circulation to advertising sales to news-gathering and to printing. MediaNews just bought the Santa Cruz Sentinel from Community Newspaper Holdings Inc. (also out of the Ottaway sell-off) and one of the efficiencies coming soon there -- printing of the paper at the MediaNews-owned San Jose Mercury News plant.

Of course, that means very early deadlines of 10:30 or so (for late sports and city council meetings), but the money saved can be dramatic, especially as revenues flatten and decline.

Another parallel sale is Tribune's own sale of the Stamford and Greenwich dailies to Gannett for $73 million last month. Said Scott Smith, president of Tribune Publishing:

"The Advocate and Greenwich Time are excellent papers, but do not fit our strategic focus on larger publishing and interactive businesses."

Though a court has held up (probably temporarily) the sale, when it finalizes it will give Gannett the kinds of markets it loves -- smaller community, non-metro ones.

Billionaire Bingo: Nine More Tribune Questions

Thanks to all for the points, questions and comments, on yesterday's post. Here's the next nine questions at this point:

1. So what will the role of former L.A. Times Publisher Jeff Johnson (shown here, left to right, in happier days with editors Dean Baquet and John Carroll) in a post-sale world be, if Ron Burkle gets the prize? Will Johnson, a once-loyal Tribune exec, who was sacked for impudence in publicly resisting budget cuts by CEO Dennis FitzSimons, play an operational role, and have FitzSimons, even for a day or so, reporting to him?

2. Recalling that Knight Ridder top execs walked away with three years pay,  what are the colors of those parachutes for Tribune management?

3. With Brian Tierney and Eric Grilly promising whole new approaches to modern newspapering online and off in Philadelphia and Chris Harte doing the same in Minneapolis, will a Tribune sale give juice to the next generation of independent outsiders bent on seeing these franchises differently and breaking molds?

4. So this week, is it more fun being part of The Chicagoist (which today sports a WSJ Online ad banner across the top of its home page) or the Chicago Tribune?

5. On the lure of an ESOP, is it a good idea for Tribune company staff to keep repeating, "It's not Peoria, it's not 1983," in reference to the much-cited Peoria (Ill.) Journal Star ESOP that left a bunch of reporting and copy-editing slugs early-retired and well-heeled?

Tribune Tower Totters: Nine Questions

Consider this. When the Chandler Trusts, owner of 19% of the company, first pushed to "maximize their investment" in Tribune last June, the share price stood at $33. It dipped and rose, but as Sam Zell's offer looked like it would win the day, we were back to the same number. $33. There's an irony in that, but so much irony abounds in the Tribune's recent tribulations, it's hard to isolate it.

Now of course, it's L.A. billionaires vs. Chicago billionaires, and Tribune shareholders -- if not employees -- look like they will pick up buck or two from the bidding, as Ron Burkle and Eli Broad slug it out with Zell. After the bidding is settled -- we think Saturday when the Tribune board meets -- many questions will remain about the Tribune Company going forward. Nine of them; what's yours?

1. Explain it to me again, how is the debt of $10 billion-plus going to get paid down, as revenues decline and capital expenditures for both the old business (presses, trucks) and the new businesses (ahead-of-the-curve classifieds and editorial publishing platforms) are required? If the proposition includes putting more of the current $2.3 billion in employee pension funds into the deal as an ESOP, aren't the employees doubling down on their prospects at what seems a poor time?
2. When Sam Zell says, "My intention is not to break it up," don't you just hear the inflection on "intention"?
3. If the keys to future growth are the stakes in the classifieds properties, CareerBuilder and Classified Ventures, what's the impact in a change of control of the company? Can Gannett increase its 42.5% in CareerBuilder and take a majority?
4. If one private equity formula is to find the greater fool, which fool do these buyers believe will be standing in the wings?
5. What might be the impact of the sale on the one initiative that has mojo in the industry, the growth of the Yahoo/newspaper consortium, already encompassing 10 chains and more than 22o papers?

Eyes Full of News: Eyetrack And/Or The Amazing Kreskin

Just what do all those people do online? You know, this strange new human hybrid that looks into screen to learn something, rather than, say, a tablet? It's curious how we torture ourselves with the change from reading to newsprint or calendared magazines to pixels. After all, it's largely the same stuff, absent 70 million or so (what do you say today, Technorati?) blogging blowhards. So of course I enjoyed the new EyeTrack study out of Poynter, as reported by Reuters.

People who use the Internet to read the news have a greater attention span than print readers, according to a U.S. study that refutes the idea that Web surfers jump around and don't read much. The EyeTrack07 survey by the Poynter Institute, a Florida-based journalism school, found online readers read 77 percent of what they chose to read while broadsheet newspaper readers read an average of 62 percent, and tabloid readers about 57 percent.

Basically, online readers pay attention better and comprehend what they are reading better. All somewhat a counterpoint of course to the notion that online is quick, give-me-a-briefing medium, on which Yahoo, AOL, MSN, Google and Topix have built flegling online news aggregation businesses. The inside estimate has been that only 5% of readers click through from those aggregator news sites to the originating publisher. So, as we say in the consulting biz: More research needed. Love the result, though, as someone addicted to digital media. Love those EyeTrack glasses. But the whole thing reminds me of The Amazing Kreskin, a "mentalist" mainstay of the old Ed Sullivan-type variety shows of the '60s and '70s. Oh, Kreskin, what is our newsreader thinking now, about the latest outrage in Tikrit or about Anna Nicole Smith's baby's authentic father?  I'm not sure EyeTrack does that, but maybe in the next rev.

That's LIFE: R.I.P., R.I.P, R.I.P

I couldn't help but be struck this week by Time, Inc.'s final (?!) closure of Life Magazine. Life, the magazine, had moved from iconic to ironic to occasionally moronic. As Time revived it for a third time and turned it into of all things a largely Friday-oriented newspaper supplement, you got the sense it was a Parade Lite or a USAToday Weekend wannabe. And unfortunately, there are only so many Franklin Mint ads to go around.

When I saw Ann Moore, Time Inc's chief speak in New York at SIIA in January, she was proud to unveil a new initiative: having Google digitize the photo legacy of Life, which of course for many years served as the unofficial history of the U.S. Bourke-White, Parks, Eisenstaedt. How will Time harvest value from these photos and how much Google will take, we don't quite know, but we do know there's a lot of value there.

In a sense, Life is worth more dead than alive. It is it's past that is compelling, that is unique and that is proprietary. Putting out a newspaper supplement is, with apologies to the President and Ford Motor, not the way forward.

Moore saw this, as others had seen, but she's acting more quickly to prune off the vestiges of the company, re-allocate spending to where it makes sense at this digital moment -- video, community, celebrity -- and that makes sense. It's a time to move for all old media companies sitting on assets and on opportunities.

We'll miss Life, but the first version, not the subsequent revivals that diminished its value.

Yahoo's Already Getting Crochety

The Netflix story in Thursday's Mercury News had to bring a smile to your face: "Vacation: Take as much as you want, Netflix says." Life, work and the pursuit of liberty. Apparently, the company doesn't keep track of vacation, saying it is so focused on measuring work done -- not time and place spent -- that it decided that vacation policy was so last century.

The article glows with endorsements from some of 300 salaried Netflix employees who enjoy it. Let's hope it's all true, and another good reason to enjoy Netflix.

The funniest thing in the story though was a quote from "a Yahoo spokeswoman", who apparently didn't want to be id'ed. That unwillingness to be quoted in a story about vacation of all things maybe was the first tip that Yahoo is getting old at such an early age.

The cloaked spokeswoman: "We're grownup company, and with over 12,000 employees, and you have to have some semblance of process and procedure." Ouch, that does sound like something you'd hear from Wells Fargo or Gannett or so many others. Sure, it's hard, but big companies so often miss the point of little companies and as they do, they often perform less well, and ironically enough, the market makes them smaller companies. Then there's time for more vacation for all those stressed big-company people.

Newspaper Industry Post-Morton: No Longer Rosy

Apparently the news business no longer needs a John Morton to tell it which which way the wind's blowing. This week John Morton -- inarguably Dean of Newspaper Analysts -- announced the end of his industry standard newsletter.

As Alan Mutter in Newsosaur well put it: "The most authoritative newsletter covering the newspaper industry issued a gloomy prognosis for the business today and then, tellingly, went out of business." Morton closed his Morton-Groves Newspaper Newsletter this week, though he and Miles Groves, his newsletter partner, will both continue their consulting businesses.

Morton began the newsletter in 1976 and turned it from print to digital in 2002. The reason for its apparent demise: low circulation.

I remember reading Morton back in my early days in journalism and now into my days as an industry analyst.

While Morton cites numerous death-spiral stats in his final piece, it had seemed to me that his sanguinity about the business as it began the telling spiral downward from the late '90s on and into aughts was misplaced. Time and again, I'd read his American Journalism Review back-page column and wonder: is he describing the same industry I'm seeing? (Parallel memory: the later-disgraced Merrill Lynch analyst Henry Blodget visiting Knight Ridder New Media and after a day barely looking under the covers, pronouncing Knight Ridder's strategy on target.)

His basic message, often offered as I recall: Newspapers are going through a rough patch, but in the end, their value will prove out.

Most of my memories of the column are hazy, but here are a few examples culled from the archives:

Electile Dysfunction: NAA's Misfire

Electile Dysfunction. I have to give proper credit for that term to The Black Sheep sandwich shop in Amherst.

Lots of dysfunction to report of course, but I liked the one posted by Kate Kaye on ClickZ today:

Anyway, a small ad caught my eye on the homepage of Campaigns & Elections Magazine. It's a Newspaper Association of America ad, touting paper sites as a good place to reach voters.

OK, so far, so good.

The thing is, the NAA is totally missing the point from there. The ad links to a brochure-ware style landing page with blurbs about how the trade group is helping newspapers reach out to political consultants and media buyers.

The post points out that NAA is targeting a good market -- those who run campaigns and spend ad dollars -- with its ad on the Campaign and Elections website, but that when you click through the content reads like it is directed at newspaper publishers, not campaign ad buyers. Confusion in message and in targeting.

Good points. I'd add that the campaign pushes print, print, print and notes the competition for ad dollars is "broadcast." Yes, but there is something called the Internet and its use by politicos was well-covered, indeed by newspapers in the '06 go-round.

In fact, in the '06 election My Space became the New Iowa. Remember George Allen's Macaca Moment and how Jon Tester staffer Andy Tweeten caught incumbent Montana Senator Conrad Burns looking like a mid-20th century relic , both on YouTube. Recall all the stories on John McCain and Mark Warner also using the video channel to create an image. Think about what Slate started doing in re-mixing campaign ads.

And look no farther than newspaper websites, which began using social networking to enable interactive campaign presences online.

Eric Grilly Chooses the Liberty of Philly.com

Out of the Yahoo consortium stew pot and into the Philly frying pan?

Eric Grilly shocked many newspaper web watchers with his announcement this week. He's leaving his job as MediaNews Group Interactive president and taking over as president of Philly.com for Philadelphia Media Holdings, the upstart, locally owned independent media company that bought the Philadelphia Inquirer and Philadelphia Daily News out of the Knight Ridder dissolution.

Grilly (right) had become a member of the MediaNews exec committee last year, just as that company rocketed from little-known hard-charger to the fourth largest newspaper company in the U.S.
His boss, MediaNews CEO Dean Singleton used his well-known powers of persuasion to force the newspaper industry to confront hard realities. The biggest reality: Yahoo, Google and MSN have beaten the newspaper companies in the games of audience-building and channel creation. The consequence: Newspaper companies had to partner with the competition to make a new future.

So Singleton pushed a major deal with Yahoo. The first step was around recruitment ads, and Yahoo! HotJobs. Next up will be a farther-ranging agreement. While Singleton did the pushing, Grilly has done a lot of the pulling. Along with such leaders as Lincoln Millstein of Hearst and Wes Jackson at Belo, they've pulled nine newspaper companies -- never an easy task! -- together. And then pulled some more to get a doable deal done with Yahoo.

So why move on to Philly? Grilly, who turned 36 this week, gave himself a gift of liberty.

Bridgin': Missing Leaders, Curing Newsroom Glooms, Adam Smith Revisited and the Meaning of "Walter Reed"

LOOK WHO IS MISSING? Where have all the news people gone, long time passing? Check out the PC Mag's "50 Most Important People on the Web." Lots of innovation, hipness, Second (and maybe Third) Lives, iconoclasts, naysayers, billionaires....but not one news industry person among them. Isn't it time some news innovators joined the engineers, pontificators and even politicians? Surely, there's enough intellectual power to power someone newsy into next year's Top 50 list, to join the likes of Steve Jobs, Nick Denton, Meg Whitman, Michael Arrington and Tina Tequila.

SALVE FOR NEWSROOM GLOOMINESS: With all the cutbacks, outsourcing, offshoring and predictions of more and worse to come, it's no surprise that those inhabiting newsrooms are a little down, a wee bit depressed. Of course, those of us who came out of them would smirk and say, what's new. Glass half-empty or half-full? Standard newsroom response: Yeah management owns all the glasses and they should fill 'em up.

Still skeptical (okay, cynical) journalists, who tend a bit to the dark side produce the journalism we use daily. For those intent on reforming the trade -- and bringing a bit of light in -- Leonard Witt's PJNet.org (for Public Journalism) is worth a read. In today's post. Here's his first recommendation:

The Readership Institute has done studies and finds that as a group newsroom cultures tend to be passive/ defensive or aggressive, defensive types, neither of which are conducive to change. So issue number one. Change your attitude. Become offensive and aggressive.

Twelve more good -- and maybe more doable -- ideas follow. Post them in a newsroom near you.

ADAM SMITH AND NEWSPAPERING: I forgot to point out what I thought was a milestone "Red All Over" column in the Wall Street Journal by megacapitalist Steve Rattner. It ran in mid-February and did a great job of laying out the financial straits newspaper companies are in. When Rattner wrote isn't news to anyone reading this blog, but his message to the WSJ audience is an important one.